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SHANNON v. FIREMAN'S FUND INSUR. CO.

June 7, 2001

WILLIAM P. SHANNON, PLAINTIFF,
v.
FIREMAN'S FUND INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J..

OPINION AND ORDER

Plaintiff, William P. Shannon, brought this action pursuant to the New York State Human Rights Law ("NYHRL"), N.Y. Exec. Law § 286, and the New York City Human Rights Law (the "City law"), N.Y.C. Admin. Code § 8-107, alleging that the defendant, Fireman's Fund Insurance Company ("Fireman's Fund"), unlawfully terminated him because of his age.*fn1 The case was tried before a jury and on December 22, 2000 the jury returned a verdict in favor of Shannon, awarding him $80,000.00 as compensation for emotional suffering caused by the unlawful termination.*fn2

Fireman's Fund now moves for judgment as a matter of law pursuant to Rule 50(b) of the Federal Rules of Civil Procedure, a new trial pursuant to Rule 59 of the Federal Rules of Civil Procedure, or, in the alternative, remittitur of the jury's compensatory damage award.*fn3 Shannon, in turn, moves for an award of attorneys' fees and other reasonable costs. For the reasons set forth below (1) Fireman's Fund's motion for judgment as a matter of law is denied; (2) Fireman's Fund's motion for a new trial is denied; (3) Fireman's Fund's motion for remittitur of the jury award is granted; and (4) Shannon's motion for attorneys' fees and costs is granted in part and denied in part.

I. BACKGROUND

A. Factual Summary

Shannon was hired as a Senior Inland Marine Underwriter by William H. McGee & Co., Inc. ("McGee") in January 1980. In late 1996 or early 1997, the inland marine, commercial property, and special risk departments of McGee were consolidated to form the Inland Marine/Property Unit (the "Unit"). See Tr. at 626-27. Edward Helfers and Lisa Uzzo took charge of the Unit in January 1997 and promoted Shannon to Head Office Underwriter, assigning him primary responsibility over McGee's Midwest territory.*fn4 See id. at 482-83, 626-27. Other Head Office Underwriters in the Unit included Louis Elias, Erica Mills and Stephanie Reneri. See id. at 482-83, 522-23. Additional underwriters in the Unit included Joseph McKeefry, responsible for catastrophe management, and Frederick Fisher and Donna Campbell, responsible for a package book of property and casualty business referred to as the CML product line. See id. at 104, 106, 603-07, 637-38; see also Plaintiff's Exhibit ("Pl. Ex.") 48.

On April 9, 1999, Fireman's Fund acquired McGee. At the time of the acquisition, a transition team was assembled to "find a way to quickly integrate both the McGee and the Fireman's Fund marine department[s] into one cohesive unit . . . ." Tr. at 589. The transition team sought to restructure the merged company so that it would have the flexibility to adapt to the changing insurance environment. See id. To do so, the company decided to adopt a regional approach to underwriting, increasing the authority of the underwriters in the regional and branch offices by allowing them to sign-off on risks without the approval of the home office. See id. at 591-92. As a result, the Head Office Underwriters were given less responsibility. In accordance with this new approach and after numerous discussions with Mike Miller, Executive Vice-President and Chief Operating Officer for the Marine Profit Center,*fn5 Helfers decided that two of the Head Office Underwriter positions in the Unit would be eliminated. See id. at 131-32. After deciding who would be let go, Helfers received an e-mail on August 26, 1999, from Paul Cocja, a human resources employee, asking him to prepare a staffing analysis — a brief summary explaining the reasons for any staffing decisions/recommendations. See id. at 55-56; Pl. Ex. 47. Where several employees were eligible to be cut, the staffing analysis was to address each employee's skills, performance approval, interviews, profile, and future potential.

See Tr. at 58-59; Pl. Ex. 47. The next day Helfers completed his staffing analysis, indicating that Shannon would be let go because

Bill has an extensive background in inland . . . . Inland is the skill set which is prevalent in the new organization, the area for head office assistance and training will be related property . . . . Louis, Stephanie and Erica have property backgrounds . . . . Stephanie has the greatest future potential with the organization to be redeployed into the field at some junction . . . . Erica has experience in training which will be required going forward.

Pl. Ex. 48.

In September 1999, Shannon, at age sixty-two, as well as Elias, age fifty-four, were fired as part of a reduction-in-force ("RIF") which resulted in the termination of eighty-seven company employees. Both Reneri and Mills, ages thirty-two and forty-four, respectively, were retained. At trial Shannon alleged that his age was a motivating and determining factor in Fireman's Fund's decision to terminate him. The jury apparently agreed.

B. Procedural History

Although Shannon originally filed this action in state court, Fireman's Fund removed the action to federal court on February 28, 2000. Prior to trial, the parties stipulated that Shannon had established a prima facie case of age discrimination under the NYHRL and the City law and thus the only issues to be tried were whether Fireman's Fund's articulated reasons for the termination were a pretext for unlawful discrimination, and if so, what damages has Shannon proven. See Joint Pretrial Order at 3. The parties further agreed that in the event Shannon prevailed at trial, the Court would determine the amount of back and/or front pay to which he is entitled. The trial began on December 18, 2000. At the close of Shannon's case Fireman's Fund moved for judgment as a matter of law with respect to liability as well as Shannon's claim for punitive damages. See Tr. at 496-507. The Court denied the motion as to liability but granted it with respect to punitive damages. See id. On December 22, 2000, the jury found in favor of Shannon and awarded him $80,000.00 as compensation for emotional suffering caused by the unlawful termination. In a decision dated March 1, 2001, the Court found that Shannon was entitled to $240,285.90 in back and front pay. See Shannon v. Fireman's Fund Ins. Co., 136 F. Supp.2d 225 (S.D.N.Y. 2001). Judgment was entered on March 20, 2001, and by stipulation dated March 21, 2001, the parties agreed to stay the execution of the judgment pending the disposition of Fireman's Fund's post-trial motions.

II. DISCUSSION*fn6

A. Motion for Judgment as a Matter of Law*fn7

1. Legal Standard

A court may render judgment as a matter of law when "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue . . . ." Fed.R.Civ.P. 50(a)(1); see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149 (2000). The standard for granting judgment as a matter of law "mirrors" the standard for summary judgment such that the "inquiry under each is the same." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51 (1986); see Reeves, 530 U.S. at 150.

In ruling on such a motion, the trial court is required to

consider the evidence in the light most favorable to the party against whom the motion was made and to give that party the benefit of all reasonable inferences that the jury might have drawn in his favor from the evidence. The court cannot assess the weight of conflicting evidence, pass on the credibility of the witnesses, or substitute its judgment for that of the jury.

Tolbert v. Queens Coll., 242 F.3d 58, 70 (2d Cir. 2001) (quoting Smith v. Lightning Bolt Prods., Inc., 861 F.2d 363, 367 (2d Cir. 1988) (internal quotations and citation omitted)). In making its determination, a court should

review all of the evidence in the record [but] it must disregard all evidence favorable to the moving party that the jury is not required to believe . . . . That is, the court should give credence to the evidence favoring the nonmovant as well as that evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that evidence comes from disinterested witnesses.

Reeves, 530 U.S. at 150-151 (internal quotations and citations omitted); see also Raniola v. Bratton, 243 F.3d 610, 616 (2d Cir. 2001). Thus, judgment as a matter of law should not be granted unless "(1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture, or (2) there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded [persons] could not arrive at a verdict against [it]." DiSanto v. McGraw-Hill, Inc., 220 F.3d 61, 64 (2d Cir. 2000) (internal quotations and citation omitted); see also Epstein v. Kalvin-Miller Int'l, Inc., No. 96 Civ. 8158, 2001 WL 392529, at *2-*3 (S.D.N.Y. Apr. 17, 2001); Hiller v. County of Suffolk, 199 F.R.D. 101, 103 (E.D.N.Y. 2001).

2. Pretext

As noted above, the parties stipulated that Shannon had established a prima facie case of age discrimination under the NYHRL and the City law and thus the primary issue to be tried was whether Fireman's Fund's articulated reasons for the termination were a pretext for unlawful discrimination.*fn8 Once a plaintiff's prima facie case is proven and the employer's non-discriminatory explanation has been given, "the McDonnell Douglas presumptions disappear from the case, and the governing standard is simply whether the evidence, taken as a whole, is sufficient to support a reasonable inference that prohibited discrimination occurred." James v. New York Racing Assoc., 233 F.3d 149, 156 (2d Cir. 2000). At trial, Fireman's Fund asserted that Shannon was terminated because (1) his underwriting background was primarily in inland, a skill set prevalent in the merged company; and (2) in comparison with Elias, Reneri and Mills, he had the least amount of experience in property underwriting, the primary focus of the Unit subsequent to the merger. Fireman's Fund argues that Shannon failed to prove that its proffered reasons for termination were a pretext for unlawful discrimination.

Similar to many plaintiffs who bring discrimination suits, Shannon could not produce direct evidence of an improper discriminatory bias. See Carlton v. Mystic Transp., Inc., 202 F.3d 129, 135 (2d Cir.), cert. denied, 530 U.S. 1261 (2000) ("[A]n employer who discriminates against its employee is unlikely to leave a well-marked trail, such as making a notation to that effect in the employee's personnel file."). However, direct evidence of discrimination is not necessary to prevail in such an action. See Luciano v. Olsten Corp., 110 F.3d 210, 215 (2d Cir. 1997) ("Direct evidence is not necessary, and a plaintiff charging discrimination against an employer is usually constrained to rely on the cumulative weight of circumstantial evidence."). In Reeves, the Supreme Court granted certiorari "to resolve a conflict among the Courts of Appeals as to whether a plaintiff's prima facie case of discrimination, combined with sufficient evidence for a reasonable factfinder to reject the employer's non-discriminatory explanation for its decision, is adequate to sustain a finding of liability for intentional discrimination." 530 U.S. at 140. Reeves concluded that

530 U.S. at 148 (emphasis added). This language makes clear that a plaintiff's prima facie case combined with evidence demonstrating the employer's proffered reason is false will, in most circumstances, be sufficient to sustain a verdict of discrimination. However, the Second Circuit has stated that Reeves "mandates a case-by-case approach, with a court examining the entire record to determine whether the plaintiff could satisfy his `ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff.'" Schnabel v. Abramson, 232 F.3d 83, 90 (2d Cir. 2000) (quoting Reeves, 530 U.S. at 143 (internal quotations and citation omitted)); see also Slattery v. Swiss Reinsurance America Corp., No. 00-7787, 2001 WL 468080, at *6 (2d Cir. May 3, 2001) ("While the Supreme Court has indicated that only occasionally will a prima facie case plus pretext fall short of the burden a plaintiff carries to reach a jury on the ultimate question of discrimination, it has also made clear that such occasions do exist."). In making its decision a court should consider a number of factors, including "the strength of the plaintiff's prima facie case, the probative value of the proof that the employer's explanation is false, and any other evidence that supports [or undermines] the employer's case and that properly may be considered on a motion for judgment as a matter of law." Reeves, 530 U.S. at 149-50. Viewing the record in a light most favorable to Shannon, I find the evidence sufficient to support the jury's finding that Fireman's Fund engaged in unlawful discrimination.

3. The Evidence

a. Shannon's Underwriting Experience

Although Fireman's Fund argues that Shannon's experience was primarily in inland, there was sufficient evidence for the jury to infer that Shannon had an extensive background in underwriting property as well. Shannon testified that prior to coming to McGee he had approximately seven years experience underwriting property policies at Marsh & McLennan and AIG. See Tr. at 143. In addition, Shannon underwrote several property related policies while at McGee, including: (1) the Schlumberger policy;*fn9 (2) coal mining risks arising from McGee's Columbus office; and (3) builder's risks on existing buildings. See id. at 147-48, 153. David Matana, Shannon's supervisor at McGee from September 1986 to January 1997, testified that Shannon underwrote numerous property related risks and was "competent to handle the risks that were presented." Id. at 297. From the time Shannon was appointed Head Office Underwriter until the time he was terminated, Shannon was authorized to consider, review, approve and sign insurance policies up to $10,000,000.00, including those related to property — the highest underwriting authority in the Unit. During that time, Shannon was underwriting and approving a mix of both inland and property related policies.*fn10 Further, from September 1999 through March 1999, while Reneri was absent due to maternity leave, Shannon assumed responsibility over her property-intensive territory. See id. at 177-78. Shannon handled the added responsibility without complaint or criticism. See id. at 68. On March 17, 1999, Shannon received a highly satisfactory performance appraisal from Uzzo, which outlined McGee's developmental plans for Shannon as follows:

To utilize Bill's seasoned and experienced skills in property/inland and to assist in the development of staff. Bill has and will continue to develop new products/procedures to update our manuals.

Pl. Ex. 40.

While Fireman's Fund argues that both Reneri and Uzzo were better suited than Shannon to provide the type of head office support required in the aftermath of the merger, Helfers admitted that there is nothing in any of Shannon's performance appraisals indicating that he needs improvement in the "property area." See Tr. at 73-74. All of Shannon's appraisals were highly favorable. Helfers stated that he had not reviewed the appraisals prior to selecting Shannon for termination and his decision was based on his knowledge of the employees' skills and abilities. See id. at 128-29.

While a court must respect an employer's decision to choose among qualified candidates, it is well recognized that an employer's disregard or misjudgment of a plaintiff's job qualifications may undermine the credibility of an employer's stated justification for an employment decision. See Byrnie v. Town of Cromwell, Bd. of Education, 243 F.3d 93, 103 (2d Cir. 2001); Fischbach v. D.C. Dep't of Corr., 86 F.3d 1180, 1183 (D.C. Cir. 1996); see also Alexander v. Fulton County, Ga., 207 F.3d 1303, 1340 (11th Cir.), reh'g and reh'g in banc denied, 218 F.3d 749 (11th Cir. 2000) (noting that "evidence showing an employer hired a less qualified applicant over the plaintiff may be probative of whether the employer's proffered reason for not promoting plaintiff was pretextual"). Clearly, the jury could infer from both the evidence in the record and its assessment of the credibility of the witnesses that Shannon was equal or perhaps more qualified than either Reneri or Mills. While this inference standing alone may not be enough to prove pretext, in combination with the other evidence discussed below, it certainly has probative value. See Byrnie, 243 F.3d at 103.

b. Fireman's Fund's False Statements to the New York State Division of Human Rights ("NYSDHR")

After being terminated Shannon filed a charge with the NYSDHR. In response to the charge, Fireman's Fund submitted a position statement to the NYSDHR. See Pl. Ex. 61. To summarize, Fireman's Fund stated that Shannon was terminated because

he didn't have experience in any of the three critical areas. [Shannon] did not have experience conducting training or audits; nor did he have experience underwriting real property.

See id. at 5. Fireman's Fund now admits that these reasons were not entirely accurate.

During the trial, both Helfers and Uzzo testified that Shannon had experience underwriting real property. See Tr. at 100, 489-90. Helfers further admitted that any lack of experience in training and audits was not a factor in selecting Shannon for termination.*fn11 See id. at 91, 97. It is undisputed that Helfers met with Elizabeth Franklin, in-house counsel for Fireman's Fund and the drafter of the response, to discuss Shannon's claim. See id. at 94-95. Franklin provided Helfers with a draft of the letter prior to its submission to the NYSDHR, yet no corrections or suggestions were made. See id.

Numerous courts have stated that "a plaintiff may establish pretext and thereby successfully oppose summary judgment [or judgment as a matter of law] . . . by demonstrat[ing] weaknesses, implausibilities, inconsistencies, or contradictions in the employer's proffered legitimate, non-discriminatory reason for its action." Cruse v. G & J USA Publ'g, 96 F. Supp.2d 320, 329 (S.D.N.Y. 2000); see EEOC v. Ethan Allen, Inc., 44 F.3d 116, 120 (2d Cir. 1994); Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 38-39 (2d Cir. 1994); Ramos v. Marriott Int'l, Inc., 134 F. Supp.2d 328, 343 (S.D.N.Y. 2001). Although Fireman's Fund argues that at most, the discrepancies in its explanations for Shannon' termination create a weak issue of fact as to whether the Fireman's Fund's proffered reason for termination was untrue, this evidence may be used by the jury to infer pretext. See Norville v. Staten Island Univ. Hosp., 196 F.3d 89, 97-98 (2d Cir. 1999) (although the Circuit ultimately held that the district court did not err in granting judgment as a matter of law, it recognized that varying justifications are generally enough to suggest pretext and "the job of reconciling [such variations] belongs to the factfinder and is not appropriate for resolution as a matter of law").

c. Simple Statistics*fn12

It is well settled that a plaintiff alleging disparate treatment may introduce statistics as circumstantial evidence of discrimination. See, e.g., Stratton v. Dep't for the Aging, 132 F.3d 869, 877 (2d Cir. 1997); Hollander v. American Cyanamid Co., 172 F.3d 192, 202 (2d Cir.), cert. denied, 528 U.S. 965 (1999); Hudson v. Int'l Bus. Mach. Corp., 620 F.2d 351, 355 (2d Cir. 1980); see also Sweeney v. Bd. of Trustees of Keene State Coll., 604 F.2d 106, 113 & n. 11 (1st Cir. 1979) (statistics add color and may be helpful to an individual claim of discrimination). Because a disparate treatment claim looks at how an employee is treated compared to his similarly situated co-workers, "statistical analyses that compare coworkers who competed directly against each other to receive a benefit, here selection for retention, are appropriate."*fn13 Smith v. Xerox Corp., 196 F.3d 358, 370 (2d Cir. 1999).

Shannon introduced evidence that the five oldest underwriters in the Unit were let go: Joseph McKeefry, age sixty-three; Frederick Fisher, age sixty-three; Donna Campbell, age forty-nine; and William Shannon and Louis Elias, ages sixty-two and fifty-four, respectively. See Tr. at 67, 385, 400; Pl. Ex. 48. On the other hand, Reneri and Mills, the underwriters who were retained, were ages thirty-two and forty-four, respectively. While Fireman's Fund asserts that this simple statistical data has no probative value, if the jury determined that Shannon was in fact equal to or more qualified than either Reneri or Mills, the jury could further infer from these statistics that Fireman's Fund's proffered reason for termination was a pretext for unlawful discrimination. See Norville, 196 F.3d at 95 (finding that a "plaintiff may support an inference of race discrimination by demonstrating that similarly situated employees of a different race were treated more favorably."); Campbell v. Alliance Nat'l Inc., 107 F. Supp.2d 234, 250-51 (S.D.N.Y. 2000) ("Plaintiff may . . . establish pretext by demonstrating that similarly situated employees were treated differently than she was."); see also Stratton, 132 F.3d at 877 (upholding the introduction of simple statistics in a disparate treatment case where they were part of the overall proof and the jury was instructed not to give them any undue reliance).

d. The Staffing Analysis and "Future Potential" Criteria

The August 26, 1999 e-mail from Cocja to Helfers directed him to prepare a staffing analysis, which "should include [an explanation of each] employee's skills, performance approval, interviews, profile, [and] future potential." See Tr. at 55-59; Pl. Ex. 47. One day later, after the decision to terminate Shannon had already been made, Helfers completed his staffing analysis. See Pl. Ex. 48. As noted earlier, Helfers did not review Shannon's performance appraisals prior to selecting him for termination or conduct an interview. See Tr. at 128-29. According to Helfers, his decision was based solely on his knowledge of the employees' skills and abilities. See id.

"While [a court should] not second-guess an employer's hiring [or termination] standards, the reasons for its employment decision, including its alleged reliance on such standards, are subject to scrutiny under [the law], and `[d]epartures from procedural regularity,' for example, `can raise a question as to the good faith of the process where the departure may reasonably affect the decision.'" Stern v. Trustees of Columbia Univ. in the City of New York, 131 F.3d 305, 313 (2d Cir. 1997) (quoting Zahorik v. Cornell Univ., 729 F.2d 85, 93 (2d Cir. 1984)). Although Helfers was directed to consider ...


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