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March 23, 1982

Henry INGRAM, James Britt, William Moody, and Roy T. Floyd, individually and on behalf of all persons similarly situated, Plaintiffs, and Frances Williams, Edward Milon, Horace Mitchell, Herbert Bruton, Jovino Garcia, Intervenors,
MADISON SQUARE GARDEN CENTER, INC., Madison Square Garden Corporation, Allied Maintenance Corporation, Allied Public Events Service Corporation, and Local# 3 I. B. E. W., Defendants. Shelly L. ANDERSON, James L. Perry, individually and on behalf of all others similarly situated, Plaintiffs, v. MADISON SQUARE GARDEN CENTER, INC., Madison Square Garden Corporation, Allied Maintenance Corporation, Allied Public Events Service Corporation, Local 3 I.B. E. W., Local 54, Service Employees International Union, Defendants

The opinion of the court was delivered by: SAND

This is the latest Opinion in a case which has spawned numerous Opinions. Although the background of this litigation has been summarized in these prior Opinions of the Court, a general restatement of the factual context of this case is appropriate at this concluding stage of the proceedings. For a more detailed discussion of the facts of this case, see Ingram v. Madison Square Garden Ctr., Inc., 482 F. Supp. 414 (S.D.N.Y.1979). *fn1"

Two separate cases were brought by two classes, which together comprise all black and Hispanic persons who have been or will in the future be employed as "cleaners" by the defendants Madison Square Garden Center, Inc. ("Center, Inc."), Madison Square Garden Corporation ("Garden Corp."), Allied Maintenance Corporation ("AMC"), and Allied Public Events Service Corporation ("Allied"). Local # 3, International Brotherhood of Electrical Workers ("Local 3", "the union," "the defendant") was also named as a defendant in these actions.

 Plaintiffs allege that the defendant violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Civil Rights Act of 1866 and 1871, 42 U.S.C. §§ 1981 and 1985 respectively, by engaging in a pattern of hiring and employment practices which made it impossible for class members to secure the higher paying and generally more desirable position of "laborer" at Madison Square Garden ("the Garden"). Prior to the trial, Center, Inc., Garden Corp., AMC and Allied all entered into a proposed Consent Decree which was subsequently approved by the Court. See Ingram, 482 F. Supp. 426 (S.D.N.Y.1979). The consolidated trial of the two actions was limited to the issue of Local 3's liability under the employment discrimination statutes involved.

 In its Opinion of October 3, 1979, the Court dismissed the plaintiffs' § 1985 claims and dealt with the various jurisdictional and statute of limitations issues which the defendant interposed as defenses. See Ingram, 482 F. Supp. 414 (S.D.N.Y.1979). The Court held that the manner in which Local 3 referred workers to the Garden for employment as laborers violated both Title VII and § 1981. The Court agreed with the plaintiffs' contention that the union, which is the bargaining agent for the laborers at the Garden, and which referred prospective employees to the Garden for employment as laborers, employed a completely subjective and standardless referral policy, relying almost entirely on word of mouth favoritism, that operated to discriminate against class members by preventing them from becoming laborers. The Court found that the plaintiffs in the first of the two consolidated class actions, the "Ingram" plaintiffs, were entitled to recover under § 1981 only, while the plaintiffs in the second action, the "Anderson" plaintiffs, were entitled to recover under both Title VII and § 1981.

 On December 13, 1979, the Court filed an Opinion establishing guidelines with respect to damages, and found that, as a general matter, awards of backpay, retroactive seniority, and attorneys' fees are appropriate in this action. See Ingram, 482 F. Supp. 918 (S.D.N.Y.1979). Plaintiffs' request for prospective injunctive relief was granted, subject to certain modifications. The Court explained that class members could demonstrate that they are actual victims by proving a desire for referral as a laborer which was expressed to Local 3 or, alternatively, by proving that they were qualified for a laborer's position and that they would have applied for a referral had it not been for the discriminatory practices. See id. at 922-23. The case was referred to Magistrate Kent Sinclair, Jr. who, in accordance with the general standards outlined in the Opinion, was requested to make recommendations to the Court as to both the entitlement of individual class members to relief and the amount appropriately chargeable to the defendant for attorneys' fees and costs.

 On April 18, 1980, the Magistrate issued "Preliminary Findings" as to retroactive seniority dates for class members who had obtained laborers' positions. These findings were affirmed by this Court on May 5, 1980 without prejudice to such review as the Court should choose to make at the end of the remedial process. See Ingram, Nos. 76-5870, 78-1453 (S.D.N.Y. May 5, 1980).

 On November 21, 1980, the Magistrate issued "Findings of Fact" concerning the desire dates and other eligibility determinations respecting seniority for those class members who had come forward to request affirmative relief.

 On December 8, 1980, Magistrate Sinclair issued an "Interim Order on Monetary Relief" containing a discussion of the backpay formula adopted therein and a summary of the status and expected treatment of open items in connection with the relief aspects of the litigation. The method of computing wage loss which the Magistrate adopted involved comparing each victim's actual compensation with the average compensation of an appropriate group of comparison laborers during the period of discrimination.

 The Magistrate issued "Findings, Conclusions and Recommendations on Back Pay" on July 27, 1981, which contained his final recommendations with respect to relief other than attorney's fees. This report offered resolutions to the remaining remedy issues and proposed specific monetary awards for those class members who were found to be victims of Local 3's discriminatory referral policy.

 On October 23, 1981, the Magistrate issued a "Report Containing Findings and Recommendations Re Plaintiffs' Fee Application." On November 10, 1981, the Magistrate filed two final Orders, one recommending a specific amount for attorneys' fees, and the other denying the defendant's motion to reopen the record.

 All objections to Magistrate Sinclair's findings and recommendations have been deferred until the conclusion of the proceedings before the Magistrate. Both the plaintiffs and the defendant have now submitted such objections pursuant to 28 U.S.C. § 636(b) and the United States District Court for the Southern District of New York Rules for Proceeding Before Magistrates, Rule 7.

 Before discussing these exceptions to the Magistrate's reports, we address the question whether the legal standard for a finding of § 1981 liability has changed since the Court found Local 3 liable under that statute in 1979. The Court will next consider defendant's motion to reopen the record in this action.

 Legal developments since the time this Court issued its Opinion of October 3, 1979 require a further elaboration of the finding of liability under § 1981. Currently pending before the Supreme Court of the United States is a case which squarely poses the heretofore unsettled question of whether the establishment of a prima facie case of a § 1981 violation requires a showing of the defendant's intent to discriminate. See Guardians Ass'n of New York City v. Civil Service Commission of the City of New York, cert. granted 454 U.S. 1140, 102 S. Ct. 997, 71 L. Ed. 2d 291 (1982). Most of the courts which have recently addressed this issue, including the Court of Appeals for the Second Circuit, have concluded that a § 1981 plaintiff must prove purposeful discriminatory intent. See, e.g., Guardians Ass'n of New York City v. Civil Service Commission of the City of New York, 633 F.2d 232 (2d Cir. 1980), cert. granted 454 U.S. 1140, 102 S. Ct. 997, 71 L. Ed. 2d 291 (1982); Crawford v. Western Electric Co., Inc., 614 F.2d 1300, 1309 (5th Cir. 1980); Mescall v. Burrus, 603 F.2d 1266 (7th Cir. 1979); Des Vergnes v. Seekonk Water District, 601 F.2d 9, 15-16 (1st Cir. 1979). The Court of Appeals for the Second Circuit concluded that "objectively viewed, the language, structure and history of § 1981 all point to the conclusion that the statute was simply intended to prohibit purposeful racial discrimination in a wide variety of circumstances, including but not limited to employment discrimination." Guardians Ass'n, supra, at 267 (emphasis added).

 As was indicated in this Court's original liability Opinion, plaintiffs have met their burden of proof even under the heightened standard requiring a showing of discriminatory motive. Ingram, 482 F. Supp. 414, 425 (S.D.N.Y.1979). The statistical disparity between the percentage of black and Hispanic referrals and the percentage of these groups in the labor market surrounding the Garden, the standardless referral "system" employed by Local 3, the dependence on word of mouth recruitment, and the statements and demeanor of those who testified at trial, all convince the Court that the evidence is sufficient to establish a § 1981 violation based on a standard of discriminatory intent. For these reasons and because of the already protracted nature of these proceedings, we do not defer this decision because of the pendency of the Guardians appeal.

 We consider next the defendant's motion to reopen the record in this action in order to put into evidence an affidavit concerning Local 3 referrals, a document labelled "Hiring List plaintiff class as of February 18, 1981, positive responses," and a letter from Garden counsel dated August 13, 1981. The Court, after hearing oral argument on the matter, is entirely in accord with Magistrate Sinclair's statements in his Order of November 10, 1981. No acceptable reason has been advanced by the defendant as to why these documents, which have either themselves been long available or which contain information which has long been available, could not have been the subject of a timely offer of proof. The defendant claims that some of the proffered evidence relates to its argument that the plaintiffs' § 1981 case is time barred since the Court of Appeals for the Second Circuit may, in light of developing case law, reconsider its holdings as to the statute of limitations applicable to civil rights actions, and find that it is one year instead of three years. Aside from the purely speculative nature of defendant's assertion, such evidence is irrelevant in the context of this action. The discriminatory referral policy, which is the basis of defendant's liability, was continuously adhered to during all times relevant to the defendant's argument and was not a single, isolated act as to which even a one year statute of limitations might be a bar. See Ingram, 482 F. Supp. 414, 423 (S.D.N.Y.1979).

 In light of the foregoing discussion, the Court sees no reason to reopen the record in this already protracted litigation. The defendant's motion is therefore denied.


 The plaintiffs have made seven specific objections to Magistrate Sinclair's recommendations. Defendant has objected to virtually every one of the Magistrate's numerous adverse findings and has imposed upon the Court the burden of considering many misleading characterizations of the record as well as numerous patently absurd and frivolous arguments.

 The Court, after de novo review of the evidence as to all matters as to which objections were made, approves all of the Magistrate's findings and recommendations except in the two instances specifically discussed below. This Court is of the opinion that the Magistrate's findings and recommendations have been based on an extremely thoughtful analysis of the issues presented, and a thorough and painstaking consideration of the evidence in the case. We discuss herein only those objections with respect to which further comment by the Court is deemed appropriate.

 Defendant's first objection is that the proceedings before the Magistrate established the spuriousness of plaintiffs' class action. See Defendant Union's Exceptions to Magistrate Sinclair's Findings and Supporting Brief at 5-9 (hereinafter "Defendant's Objections"). Without reciting each of Local 3's characterizations of the evidence, suffice it to say that the Court adheres to its prior findings as to the validity of plaintiffs' proceeding in the form of class actions, as to Local 3's liability, and as to the reasonableness of a cleaner's belief that it would be futile for a class member to seek a laborer referral from Local 3. The Court merely notes that a particular plaintiff's post-trial decision as to whether or not to become a laborer is in no way dispositive of that individual's desires at an earlier time.

 The Court rejects the defendant's contention that it "should not be burdened with a rebuttable presumption of discrimination with respect to each claimant." Defendant's Objections at 15. Local 3's attempts to draw a distinction between the burdens that should be imposed upon a discriminatory employer and a discriminatory union are unconvincing. Once Local 3's liability has been found, it is in the position of a proved wrongdoer. The same factors which would militate in favor of a rebuttable presumption against such an employer-e.g., probability that decisions were made pursuant to the overall discriminatory pattern and superior access to proof-are equally applicable where it is ...

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