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Cowan v. Prudential Insurance Co.

decided: July 22, 1988.

CURTIS COWAN, APPELLANT-CROSS-APPELLEE,
v.
THE PRUDENTIAL INSURANCE CO. OF AMERICA, APPELLEE-CROSS-APPELLANT



Insurance company found to have discriminated on the basis of race in denying sales agent promotion, and United States District Court for the District of Connecticut, Winter, Circuit Judge, sitting by designation, awarded damages of $15,000. Held, that district court did not err in not awarding back pay, that court did not improperly assess compensatory damages, and that court's finding of liability was clearly supported by the evidence. Judgment affirmed.

Oakes, Kearse, and Pierce, Circuit Judges.

Author: Oakes

OAKES, Circuit Judge:

Curtis Cowan appeals the damage award he received in his successful Title VII and section 1981 action in the United States District Court for the District of Connecticut, Ralph K. Winter, Circuit Judge, sitting by designation. Cowan v. Prudential Ins. Co. of America, No. B 81-511 (D. Conn. Sept. 21, 1987). Cowan claims that the district court was in error in not awarding back pay and in considering impermissible factors in calculating compensatory damages. The Prudential Insurance Co. of America ("Prudential") cross-appeals, claiming that the district court's finding of liability was contrary to the evidence and based upon a theory of discrimination expressly rejected by the plaintiff. Because we find no error in either the computation of damages or in the finding of liability, we affirm.

Cowan, who is black, worked as an insurance agent for Prudential in its Stamford, Connecticut, district between 1975 and 1980. During that time the Stamford district promoted four white agents to the position of sales manager, overlooking Cowan despite his active solicitation of promotion and his superior job performance. After Cowan was passed over, his job performance declined, and on January 3, 1980, he resigned.

After a bench trial Judge Winter issued his opinion in two parts, the first addressing only the liability issues and the second, damages. In the first, Judge Winter applied the test articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973), and found that Cowan had made out a prima facie case of racial discrimination for failure to promote, and that Prudential failed to make a persuasive rebuttal case. The opinion added that Cowan had not proven his constructive discharge claim, in that Cowan's resignation was voluntary.

In his opinion on damages, Judge Winter noted that an award of back pay was appropriate, but that Cowan should have earned as much in his sales agent position as he would have had he been promoted. He did award $15,000 in compensatory damages under 42 U.S.C. § 1981.

Our review of the district court's ruling on damages uses two different standards. In considering the ruling on back pay, which is here an essentially factual determination, we use a "clearly erroneous" standard of review. See Anderson v. City of Bessemer City, 470 U.S. 564, 573, 84 L. Ed. 2d 518, 105 S. Ct. 1504 (1985); Albemarle Paper Co. v. Moody, 422 U.S. 405, 424-25, 45 L. Ed. 2d 280, 95 S. Ct. 2362 (1975). In considering the award of compensatory damages, we take a more deferential view, because that award involves not only determinations of fact but also the consideration of subjective and intangible factors properly left to the sound discretion of the factfinder, here the court. See Hunter v. Allis-Chalmers Corp., 797 F.2d 1417, 1424-25 (7th Cir. 1986).

Back Pay

Under the dictates of Title VII, Cowan is presumptively entitled to back pay for wages denied him as a result of Prudential's discriminatory promotion practices. See Cohen v. West Haven Bd. of Police Comm'rs, 638 F.2d 496, 502 (2d Cir. 1980). While back pay is an equitable remedy within the district court's discretion, "that discretion is to be exercised with a view to '"fashion[ing] . . . . the most complete relief possible."'" Id. at 504 (quoting Albemarle Paper Co. v. Moody, 422 U.S. at 421 (quoting 118 Cong. Rec. 7168, 45 L. Ed. 2d 280, 95 S. Ct. 2362 (1972) (remarks of Sen. Williams))); Association Against Discrimination in Employment v. City of Bridgeport, 647 F.2d 256, 288 (2d Cir. 1981), cert. denied, 455 U.S. 988, 71 L. Ed. 2d 847, 102 S. Ct. 1611 (1982).

[G]iven a finding of unlawful discrimination, backpay should be denied only for reasons which, if applied generally, would not frustrate the central statutory purposes of eradicating discrimination throughout the economy, and making persons whole for injuries suffered through past discrimination. The courts of appeals must maintain a consistent and principled application of the backpay provision, consonant with the twin statutory objectives, while at the same time recognizing that the trial court will often have the keener appreciation of those facts and circumstances peculiar to particular cases.

Albemarle Paper Co. v. Moody, 422 U.S. at 421-22, quoted in Association Against Discrimination, 647 F.2d at 288. However, Title VII expressly provides that "[i]nterim earnings or amounts earnable with reasonable diligence by the person . . . discriminated against shall operate to reduce the back pay otherwise allowable." 42 U.S.C. § 2000e-5(g) (1982). Therefore an award of back pay must take into account amounts which Cowan earned or could have earned with reasonable effort.

Here, the district court in essence determined that although an award of back pay was appropriate, the amount of that award was $0, because Cowan would have earned less during the fifty-eight-week liability period (from the time he was passed over for promotion until he resigned) as a sales manager than he would have earned, in the exercise of reasonable diligence, as a sales agent. The court reached this conclusion by comparing the income which Prudential guarantees sales managers with the amount that Cowan earned while diligently working as a sales agent during the same period. Although Cowan might have earned more as a sales manager during the liability period, it was hardly ...


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