The opinion of the court was delivered by: Debevoise, Senior District Judge
This suit is a disparate impact challenge to a consolidated municipal fire department, the North Hudson Regional Fire & Rescue's (―NHRFR‖) use of residency requirements for hiring. Plaintiffs, the National Association for the Advancement of Colored People (―NAACP‖), the Newark Branch of the NAACP, the New Jersey State Conference of the NAACP, Allen Wallace, Lamara Wapples, and Altarik White*fn1 (collectively, ―Plaintiffs‖) filed this action on April 10, 2007 against the NHRFR pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981, and the New Jersey Law Against Discrimination, N.J.S.A. §§ 10:5-1 to -49. On February 18, 2009, the Court granted the Plaintiffs' motions for class certification and issued a preliminary injunction, barring the NHRFR from hiring from its current eligibility list until it obtained a list that expanded the residency requirement to include residents of nearby Essex and Union Counties and the southern part of Hudson County. The NHRFR filed an interlocutory appeal challenging the portion of this Court's decision that granted the preliminary injunction. On September 21, 2009, while the appeal was pending, the Court granted a motion to intervene filed by six Hispanic firefighter candidates who were on the list from which the injunction prohibited the NHRFR to hire. On March 1, 2010, the Court of Appeals for the Third Circuit sua sponte summarily remanded the matter to the District Court, for further proceedings in light of the Supreme Court's recent decision in Ricci v. DeStefano, 129 S.Ct. 2658 (2009). On March 2, 2010, the Court ordered a briefing schedule and held oral arguments on April 12th. The Court now finds preliminarily that the residency requirement in this case furthers legitimate business goals in a significant way and that the balance of the equitable factors weighs towards vacating the injunction.
The circumstances underlying this litigation are laid out in detail in the Court's February 18, 2009 opinion. See NAACP v. North Hudson Regional Fire & Rescue, 255 F.R.D. 374 (D.N.J. 2009). For the sake of brevity, the Court incorporates by reference the ―background‖ section of that decision, and will refrain from revisiting the majority of the facts contained therein.
The NHRFR is a consolidated municipal fire department and political subdivision of the State of New Jersey that serves several communities in North Hudson County. The NHRFR was formed in 1998 in accordance with the Consolidated Municipal Services Act, N.J. Stat. Ann. 40:48B-1, et. seq., and is essentially a consolidation of the former fire departments of Guttenberg, North Bergen, Union City, Weehawken and West New York (collectively, the ―Member Municipalities‖).
In New Jersey, civil service positions such as firefighter are subject to the examination process administered by the New Jersey Department of Personnel (―DOP‖). N.J.A.C. 4A:4-1.1. As such, to be hired by the NHRFR, a person must apply for and take an examination administered by the DOP. The DOP controls all aspects of the examination, from scheduling to content and scoring. Recently, the DOP administered the firefighter examination in 1999, 2002, 2003, and 2006. Those who take the examination at the same time are ranked on a list based on their test scores on the written, and, sometimes, physical examinations. Based on these scores, the DOP creates eligibility lists from which organizations subject to the New Jersey Civil Service Act, such as the NHRFR, may hire candidates in rank order. N.J.A.C. 4A:4-3.1 & 3.2. When the NHRFR needs to fill a vacancy, it offers the position to the highest ranked person(s) on the list provided to it by the DOP. Passing the DOP test, however, is not the only requirement for inclusion on the NHRFR's list. In order to be placed on the NHRFR's list, a candidate must also live in the Member Municipalities at the time he or she took the test. If the applicant does not live in the Member Municipalities at the time of the administration of the examination, her name will not be placed on the NHRFR's list and, thus, the candidate will not be eligible to be hired by the NHRFR, no matter how high her test score.
The Civil Service regulations authorize the use of residency requirements by municipalities and regionals. N.J.A.C. 4A:4-2.11. Consequently, a number of other municipalities, including Atlantic City, Camden, East Orange, Elizabeth, Hoboken, Jersey City, New Brunswick, Newark, Passaic, Paterson, Camden, East Orange, and Trenton all employ residency requirements.
As of July 2008, according to the NHRFR's EEO-4 form, the NHRFR had 323 full time employees. Of those employees, two were African American, 64 were Hispanic, 255 were white and two identified as other races.*fn2 Of the NHRFR's 323 full time employees, 302 were firefighters. Of these, two were African American, 58 were Hispanic and 240 were white. In 2000, the population of the Member Municipalities was 69.6 percent Hispanic, 22.9 percent white non-Hispanic, and 3.4 percent African American.
Plaintiffs allege that the NHRFR's geography-based hiring plan causes discrimination against African-Americans who reside in the southern part of Hudson County and neighboring Essex and Union counties. The Court found that the NHRFR had a likelihood of success on the merits of its Title VII disparate impact discrimination claim and issued the preliminary injunction on February 18, 2009, which enjoined the NHRFR ―from hiring candidates from its current DOP list*fn3 and from commencing hiring candidates until it obtains a list from the DOP that expands the residency requirement to include residents of Hudson, Essex, and Union counties*fn4 .‖ North Hudson, 255 F.R.D. at 393.
On August 12, 2009, Intervenor-Defendants Alex DeRojas, Alexander Rodriguez, Randy Vasquez, Carlos A. Castillo, and Orlando Duque (―Intervenors‖) filed a third party motion to intervene. Each of the Intervenors is a resident of a Member Municipality and is of Hispanic descent. In 2006, after months of preparation, each of the Intervenors sat for the DOP firefighter examination and earned high scores. On the Member Municipalities List, the Intervenors were ranked at 21, 25, 26, 45, 49, and 70, based on their respective test scores, and other factors, such as veteran status (none of the Intervenors are veterans). Since the NHRFR currently needs to3 hire approximately 35 to 40 new firefighters, the Intervenors argue that it is likely they would have been hired, had the injunction not barred the NHRFR from hiring from the Member Municipalities List. If the NHRFR were to hire from the Tri-County List, the Intervenors would effectively lose their chance to be hired, since their rankings would be significantly altered; for instance, the candidate who was ranked in 21st place on the Member Municipalities List would be ranked at 189th place on the Tri-County List, and so forth. The Intervenors' stated reason for joining the suit was to challenge the preliminary injunction, which they claim has eroded their prospects for employment with the NHRFR. The Court heard oral arguments on the motion to intervene on September 21, 2009 and granted the motion with an oral opinion from the bench.
The facts in the Ricci case are distinguishable from the instant case. Ricci was a disparate treatment case in which the White and Hispanic firefighters charged that the City of New Haven (the ―City‖) had discriminated against them by discarding the examinations in which they were high scorers (discriminatory treatment), and the City defended on the ground that had it applied the test results, it would have been liable to black firefighters on account of the tests' discriminatory impact.
The present case initially was a disparate impact case in which potential black firefighter candidates for positions in the NHRFR asserted that limiting applicant eligibility examinations to residents of the NHRFR's five constituent communities created an adverse impact on African American candidates. The NHRFR defended on the grounds that the statistics failed to show a meaningful disparate impact and that implementation of the expanded geographical area would have an adverse impact upon Hispanics, another minority group. Complicating the situation, six potential Hispanic firefighters intervened in the case to challenge the preliminary injunction which prevents the NHRFR from making hiring decisions based on its current list of eligible candidates.
Whereas in Ricci the defendant City alleged that the examinations had a discriminatory impact, here the Plaintiff NAACP members allege that the hiring scheme has a discriminatory impact. The context in which this suit arises is unique to New Jersey, where a state-wide statutory scheme permits municipal and regional bodies to limit hiring to their geographical area. See N.J.A.C. § 4A:4-2.11. Accordingly, municipalities and regionals have exercised their options. The result of the various residency requirements is to skew the hiring to the racial proportions living in that community. Additionally, some hiring areas have been set by court order or agreement in an effort to ensure the hiring of underrepresented racial or national groups.*fn5 The NHRFR and a Hispanic group are parties to a settlement agreement that disposed of a 2001 disparate impact suit challenging the NHRFR's promotion system. The agreement requires the NHRFR to make efforts to reach and attract qualified applicants of Hispanic origin.
Despite the factual differences between the two cases, the present case, like Ricci, must address the tensions between Title VII's disparate treatment provision and Title VII's disparate impact provision, 42 U.S.C. § 2000e-2(a)(1), and 42 U.S.C. § 2000 2(k)(1)(A)(i). Consequently a detailed examination of Ricci is in order.
In Ricci, the City of New Haven used objective examinations, along with certain other qualifications, to identify firefighters best qualified for promotion. The City's contract with the firefighter's union provided for a written examination accounting for 60% and an oral examination accounting for 40% of an applicant's total score. The City hired Industrial/Organizational Solutions, Inc. (―IOS‖) to develop and administer the examinations. IOS conducted exhaustive studies to develop appropriate written and oral examinations, including special steps to ensure that the examinations would not unintentionally favor white candidates. IOS developed a list of training manuals for each test. The City opened a three-month study period and gave the candidates a list that identified the source materials for the questions. Numerous other measures were adopted to ensure the fairness of the tests and to assist candidates to prepare to take them. Many firefighters studied for months at considerable personal and financial cost.
Candidates took the examination in November and December 2003. Seventy-seven candidates completed the lieutenant examination - 43 whites, 19 blacks and 15 Hispanics. Eight lieutenant positions were vacant at the time of the examination. Under the rule of three,*fn6 this meant that the top 10 candidates were eligible for an immediate promotion to lieutenant. All 10 were white. Subsequent vacancies would have allowed at least 3 black candidates to be considered.
Forty-one candidates completed the captain examination - 25 whites, 8 blacks and 8 Hispanics. Of those, 22 candidates passed - 16 whites, 3 blacks and 3 Hispanics. Seven captain positions were vacant at the time of the examination. Under the rule of three, 9 candidates were eligible for immediate promotion to captain - 7 whites and 2 Hispanics.
These results engendered a bitter public debate.*fn7 Some firefighters and public groups argued that the tests should be discarded because the results showed the tests to be discriminatory. Other firefighters said the examinations were neutral and fair. Each faction threatened a discrimination lawsuit if its position was rejected. Hearings were held, IOS presented a detailed description of the process through which it went to develop the tests; and those demanding that the City reject the results produced witnesses and advocates of their position. Ultimately the City threw out the examinations.
Certain white and Hispanic firefighters who likely would have been promoted based on their test performances sued the City and certain of its officials, charging a violation of both Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., and the Equal Protection Clause of the Fourteenth Amendment. The defendants defended their actions, arguing that if they had certified the results, they would have faced Title VII liability for adopting a practice that had a disparate impact on the minority firefighters. The District Court granted summary judgment for the defendants, and the Court of Appeals affirmed.
The Supreme Court reversed, stating:
We conclude that race-based action like the City's in this case is impermissible under Title VII unless the employer can demonstrate a strong basis in evidence that, had it not taken the action, it would have been liable under the disparate-impact statute. The respondents, we further determine, cannot meet that threshold standard. As a result, the City's action in discarding the tests was a violation of Title VII. In light of our ruling under the statutes, we need not reach the question whether respondents' actions may have violated the Equal Protection Clause.
The process by which the Court reached this result is instructive in the present case. It noted that as originally enacted in 1964, Title VII's principal nondiscrimination provision held employers liable only for disparate treatment; that in Griggs v. Duke Power Co., 401 U.S. 424 (1971) the Court interpreted the Civil Rights Act of 1964 to prohibit, in some cases, employers' facially neutral practices that, in fact are ―discriminatory in operation,‖ id. at 431; and that the Civil Rights Act of 1991 included a provision codifying the prohibition on disparate-impact discrimination. This left the law of disparate impact in the following posture:
Under the disparate-impact statute, a plaintiff establishes a prima facie violation by showing that an employer uses ―a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin.‖ 42 U.S.C § 2000e-2(k)(1)(A)(i). An employer may defend against liability by demonstrating that the practice is ―job related for the position in question and consistent with business necessity.‖ Ibid.Even if the employer meets that burden, however, a plaintiff may still succeed by showing that the employer refuses to adopt an available alternative employment practice that has less disparate impact and serves the employer's legitimate needs. §§ 2000e-2(k)(1)(A)(ii) and (C). 129 S.Ct. at 2673.
The Court began its analysis with the premise that ―[t]he City's actions would violate the disparate treatment prohibition of Title VII absent some valid defense.‖ Id. It then found that ―[a]ll the evidence demonstrates that the City chose not to certify the examination results because of the statistical disparity based on race . . . i.e., how minority candidates had performed when compared to white candidates.‖ Id. The Court proceeded to determine whether the City had a lawful justification for its concededly race-based action. It had to interpret the statute to give effect to both the disparate-treatment and the disparate-impact provisions of the statute.
The Court rejected the petitioner's contention that an employer cannot take race-based adverse employment actions in order to avoid disparate impact liability even if the employer knows its practice violates the disparate-impact provision. It also rejected, as discouraging voluntary compliance, petitioner's suggestion that an employer in fact must be in violation of the disparate-impact provision before it can use compliance as a defense in a disparate-treatment suit.
Similarly the Court rejected respondent's contention that an employer's good-faith belief that its actions are necessary to comply with Title VII's disparate impact provision should be enough to justify race conscious conduct, noting that ―the original, foundational prohibition of Title VII bars employers from taking adverse action ‗because of . . . race.'‖ Id. at 2675. The 1991 disparate impact amendment made no exception in disparate treatment liability for actions taken in a good faith effort to comply with the new disparate impact provision. Such a minimal standard ―could cause employers to discard the results of lawful and beneficial promotional examinations even where there is little if any evidence of disparate impact discrimination [and] would amount to a defacto quota system, in which a ‗focus on statistics . . . could put undue pressure on employers to adopt inappropriate prophylactic measures.'‖ Id. at 2675.
Noting the relevance of Equal Protection Clause cases, the Court cited Richmond v. J.A., Crosson Co., 488 U.S. 469, 500 (1989), for the proposition ―that certain government actions to remedy past racial discrimination actions that are themselves based on race are constitutional only where there is a ―‗strong basis in evidence' that the remedial actions were necessary.'‖ 129 S.Ct. at 2675. The Court adopted ―the strong-basis-in-evidence standard as a matter of statutory construction to resolve any conflict between the disparate treatment and disparate impact provisions of Title VII.‖ Id. at 1276. Applied to the Ricci situation:
If an employer cannot rescore a test based on the candidates' race, § 2000e-2(1), then it follows a fortiori that it may not take the greater step of discarding the test altogether to achieve a more desirable racial distribution of promotion-eligible candidates -- absent a strong basis in evidence that the test was deficient and that discarding the results is necessary to avoid violating the disparate-impact provision.
But the Court did not limit its holding to the examination situation. It held as a general rule that:
We hold only that, under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate impact liability if it fails to take the race-conscious, discriminatory action.
Applying this rule the Court accepted the contention that the racial adverse impact of the test was significant and that the City was faced with a prima facie case of disparate impact liability. Based on how the passing candidates ranked and an application of the rule of three, certifying the examination would have meant that the City could not have considered black candidates for any of the vacant lieutenant or captain positions. However, although these results compelled the City ―to take a hard look at the examinations to determine whether certifying the results would have had an impermissible disparate impact. . . [t]he problem for respondents is that a prima facie case of disparate impact liability -- essentially, a threshold showing of a significant statistical disparity, and nothing more -- is far from a strong basis in evidence that the City would have been liable under Title VII, had it certified the results.‖ Id. at 2678 (citation omitted).
The City would have been subject to disparate impact liability ―only if the examinations were not job related and consistent with business necessity, or if there existed an equally valid, less-discriminatory alternative that served the City's needs but that the City refused to adopt. § 2000e-2(k)(1)(A)(C).‖ Id. The Court reviewed the extensive evidence in the case and found that ―[t]here is no genuine dispute that the examinations were job-related and consistent with business necessity. The City's assertions to the contrary are ‗blatantly contradicted by the record.'‖ Id. As to a less discriminatory alternative, the Court found that the ―[r]espondents also lacked a strong basis in evidence of an equally valid, less-discriminatory testing alternative that the City, by certifying the examination results, would necessarily have refused to adopt.‖ Id. at 2679. To summarize, the Court concluded:
On the record before us, there is no genuine dispute that the City lacked a strong basis in evidence to believe it would face disparate impact liability if it certified the examination results. In other words, there is no evidence - - let alone the required strong basis in evidence - - that the tests were flawed because they were not job-related or because other, equally valid and less discriminatory tests were available to the City. Fear of litigation alone cannot justify an employer's reliance on race to the detriment of individuals who passed the examinations and qualified for promotions. The City's discarding the test results was impermissible under Title VII, and summary judgment is appropriate for petitioners on their disparate-treatment claim.
Because of the procedural and factual differences between Ricci and the present case, Plaintiffs urge that ...