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United States v. City of New York

United States District Court, E.D. New York

March 11, 2015

UNITED STATES OF AMERICA, Plaintiff, and THE VULCAN SOCIETY, INC., for itself and on behalf of its members, JAMEL NICHOLSON, and RUSEBELL WILSON, individually and on behalf of a subclass of all other victims similarly situated seeking classwide injunctive relief; ROGER GREGG, MARCUS HAYWOOD, and KEVIN WALKER, individually and on behalf of a subclass of all other non-hire victims similarly situated; and CANDIDO NUÑEZ and KEVIN SIMPKINS, individually and on behalf of a subclass of all other delayed-hire victims similarly situated, Plaintiff-Intervenors,
v.
THE CITY OF NEW YORK, Defendant.

MEMORANDUM & ORDER

NICHOLAS G. GARAUFIS, District Judge.

This Memorandum and Order addresses the Amended Monetary Relief Consent Decree ("AMRCD" or "Decree") (Dkt. 1468). Plaintiff United States of America (the "United States"), Plaintiff-Intervenors' Nonhire and Delayed-Hire Victim Subclasses[1] ("Plaintiff-Intervenors"), and Defendant City of New York (the "City") have jointly moved the court to finally approve and enter the Decree in order to resolve the claims of the United States and Plaintiff-Intervenors (collectively, "Plaintiffs") for backpay and the monetary value of fringe benefits, including prejudgment interest thereon, lost by black and Hispanic applicants for the entry-level firefighter position at the New York City Fire Department ("FDNY") due to employment practices held by this court to create a disparate impact in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. §§ 2000e, et seq., as amended.[2] (Joint Mot. for Final Entry of AMRCD (Dkt. 1467).) The court provisionally approved and entered an earlier version of the Decree- the Monetary Relief Consent Decree ("MRCD") (Dkt. 1435)-on June 30, 2014. (June 30, 2014, Order (Dkt. 1437).) The United States has also filed revised versions of two attachments to the AMRCD-a Second Amended Attachment E, "Notice of Individual Monetary Relief Award" (Dkt. 1525-1), and a Second Amended Attachment F, "Acceptance of Individual Monetary Relief Award & Release of Claims" (Dkt. 1525-2). In sum, the parties jointly ask that the court approve (1) Second Amended Attachments E and F; along with (2) the AMRCD; (3) Attachment A to the AMRCD, the "Amended Proposed Relief Awards List" ("APRAL") (Dkt. 1468-1), which sets forth proposed individual awards to each claimant; and (4) three other attachments to the AMRCD-namely, Attachments B, C, and D thereto.[3] (Joint Mot. to Amend Attachments E & F to AMRCD (Dkt. 1525).)

At a fairness hearing held October 1, 2014 (the "Fairness Hearing"), the court heard oral argument by the parties in support of final entry of the Decree, and by objecting claimants in opposition to the same and/or to their proposed individual awards. (Oct. 10, 2014, Min. Entry.) The court has also received claimants' written objections. The court has considered all of the objections and, while sustaining several individual objections, concludes that none warrant denial of final approval and entry of the Decree. Accordingly, for the reasons discussed below, the court GRANTS Plaintiffs' Joint Motion for Final Entry of Amended Monetary Relief Consent Decree, and GRANTS Plaintiffs' Joint Motion to Amend Attachments E & F to Amended Monetary Relief Consent Decree. Accordingly, the Amended Monetary Relief Consent Decree (Dkt. 1468); Attachments A through D thereto (Dkts. 1468-1 to -4), including the Amended Proposed Relief Awards List; and Second Amended Attachments E and F (Dkts. 1525-1 to -2) are hereby deemed FINALLY APPROVED AND ENTERED.

I. BACKGROUND

The factual and procedural background of this case is extensive. The events relevant to the issues currently before the court will be summarized here; a full recount can be found in the court's previous rulings.

In 2007, the United States brought suit against the City, alleging that certain aspects of the City's policies for selecting entry-level firefighters for the FDNY violated Title VII. (Compl. (Dkt. 1).) Specifically, the United States alleged that the City's pass-fail and rank-order use of Written Exams 7029 and 2043 had an unlawful disparate impact on black and Hispanic candidates for entry-level firefighter positions. (See id. ¶ 1.) The Vulcan Society, Inc. and several individuals intervened as plaintiffs, alleging similar disparate impact claims and also alleging claims of disparate treatment on behalf of a class of black entry-level firefighter candidates, bringing all claims under federal, state, and local laws. (See Sept. 5, 2007, Mem. & Order (Dkt. 47) (granting motion to intervene).)

Proceedings were bifurcated. In July 2009, the court granted summary judgment in favor of the United States's and Plaintiff-Intervenors' Title VII disparate impact claims, finding the City liable. (July 22, 2009, Mem. & Order ("Disparate Impact Op.") (Dkt. 294).) The court also determined the practical effect of this discrimination, i.e., the total number of entry-level firefighters who would have been appointed or who would have been appointed earlier absent the discrimination, referred to as the "shortfall." (Id. at 16-23.) Specifically, the court concluded that 293 additional black and Hispanic applicants would have been appointed as entry-level firefighters absent the discriminatory examinations, and that 249 black and Hispanic entry-level firefighters who were appointed would have been appointed earlier-approximately 69 years earlier, in aggregate-absent the discrimination. (Id. at 20-22, 27.) Subsequently, in January 2010, the court granted summary judgment in favor of Plaintiff-Intervenors' various disparate treatment claims, and Plaintiff-Intervenors' disparate impact claims brought pursuant to the New York State Human Rights Law ("NYSHRL") and New York City Human Rights Law ("NYCHRL"). (Jan. 13, 2010, Mem. & Order ("Disparate Treatment Op.") (Dkt. 385).) On appeal, the Second Circuit vacated the court's summary judgment ruling only with respect to Plaintiff-Intervenors' disparate treatment claims, finding that a trial was needed to determine whether the City had acted with discriminatory intent. See United States v. City of New York, 717 F.3d 72, 89-91 (2d Cir. 2013).

Proceeding to the remedial phase of the case, the court issued an Initial Remedial Order (Dkt. 390), setting forth a preliminary outline thereof. The Initial Remedial Order explained that Plaintiffs were entitled to two broad categories of relief: (1) prospective injunctive relief to ensure future compliance with Title VII; and (2) individual compensatory, "make whole" relief for the individual victims of the disparate impact of the City's hiring process. Over the City's objection, the court ruled that individual compensatory relief would include retroactive seniority for individual delayed-hire victims. (Id. at 22-31.) Compensatory relief would also include monetary relief and priority hiring relief. The Initial Remedial Order set forth the broad contours of eligibility for individual relief, including the existence of additional eligibility criteria for priority hiring relief as compared to monetary relief. (See id. at 15-22.) The court also held that the number of priority hires would be limited to 293 positions, because that was the shortfall number determined in the disparate impact liability opinion. (Id. at 25-27.)

In May 2012, the City sent notice and claim forms to all black and Hispanic individuals who had taken the two exams; approximately 5, 000 individuals submitted claim forms seeking individual relief. (Mem. in Supp. of Joint Mot. for Provisional Entry of MRCD & Scheduling of Fairness Hr'g ("Mem. in Supp. of Provisional Entry") (Dkt. 1434) at 6.) In a series of subsequent opinions culminating in the Final Relief Order (Dkt. 1012), the court set the final parameters for determining which of these individuals were victims of the City's discriminatory practices and therefore eligible for individual relief. In August 2013, the court concluded the last of its eligibility determinations, and ultimately ruled that 1, 470 claimants were eligible for monetary relief.[4] (See Feb. 22, 2013, Mem. & Order (Dkt. 1059); May 2, 2013, Mem. & Order (Dkt. 1106); May 9, 2013, Mem. & Order (Dkt. 1112); June 3, 2013, Mem. & Order (Dkt. 1135); June 7, 2013, Mem. & Order (Dkt. 1144); Aug. 9, 2013, Mem. & Order (Dkt. 1182); Aug. 9, 2013, Order (Dkt. 1184); Aug. 19, 2013, Order (Dkt. 1190); Sept. 3, 2013, Order (Dkt. 1195); Sept. 11, 2013, Order (Dkt. 1201); Nov. 18, 2013, Order (Dkt. 1236); Dec. 11, 2013, Am. Mem. & Order (Dkt. 1251).)

Prospective Injunctive Relief: The court held a remedial-phase bench trial in August 2011, addressing the need for and scope of permanent injunctive relief. (See Findings of Fact as to Injunctive Relief (Dkt. 741); Oct. 5, 2011, Mem. & Order (Dkt. 743).) The court then ordered prospective injunctive relief in a Remedial Order and Partial Judgment, Permanent Injunction, & Order Appointing Court Monitor ("Remedial Order") (Dkt. 765). After the Second Circuit directed modification of certain provisions of the Remedial Order, see United States v. City of New York, 717 F.3d at 95-99, the court issued a Modified Remedial Order and Partial Judgment, Permanent Injunction, & Order Appointing Court Monitor ("Modified Remedial Order") (Dkt. 1143) on June 6, 2013, which incorporated the Second Circuit's modifications as well as proposed amendments from the appointed Court Monitor and the parties. The parties and the Court Monitor continue to work actively to ensure the City's compliance with the provisions of the Modified Remedial Order. (See, e.g., Court Monitor's Tenth Periodic Report (Dkt. 1533); Court Monitor's EEO Report (Dkt. 1463); Court Monitor's Recruitment Report (Dkt. 1464).)

Individual Compensatory Relief: As noted above, the court's Initial Remedial Order explained that individual victims of the City's disparate impact discrimination would be entitled to compensatory relief, including (1) monetary relief, (2) priority hiring relief, and (3) retroactive seniority.[5] Subsequently, the court addressed priority hiring relief and retroactive seniority in greater detail. (See, e.g., Apr. 19, 2012, Mem. & Order (Dkt. 861).) Then, in a Final Relief Order (Dkt. 1012), which was issued in October 2012, after a four-day fairness hearing, the court set forth final guidelines governing, inter alia, priority hiring and the awarding of retroactive seniority relief. The first 121 priority hires were appointed as probationary firefighters in July 2013 (see Court Monitor's Fifth Periodic Report (Dkt. 1198) at 2; Court Monitor's Status Report (Dkt. 1243) at 7), and additional priority hires have been appointed in subsequent classes (see Court Monitor's Eighth Periodic Report (Dkt. 1412); Court Monitor's Tenth Periodic Report). The City began providing retroactive seniority relief, except for retroactive pension benefits, in July 2013.[6] (See Aug. 20, 2014, Ltr. (Dkt. 1450) at 1.)

With respect to the category of monetary relief, the court ruled in the Final Relief Order that eligible claimants would be entitled to (1) wage backpay; (2) the monetary value of fringe benefits; (3) prejudgment interest on (1) and (2); and (4) for eligible black claimants only, compensatory damages for noneconomic harm.[7] (Final Relief Order; see also Sept. 24, 2012, Mem. & Order (Dkt. 974); June 3, 2013, Mem. & Order (Dkt. 1134).) In April 2014, the City began to make offers of judgment under Federal Rule of Civil Procedure 68 to the 293 individual claimants who sought noneconomic damages (see Apr. 2, 2014, Ltr. (Dkt. 1287)), and to date, all but four of those claimants have either accepted the Rule 68 offers of judgment or otherwise settled their claims with the City, or have had their claims adjudicated by Special Masters after individual hearings. The Decree that is the subject of this Memorandum and Order seeks to resolve Plaintiffs' remaining monetary claims-those for backpay, fringe benefits, and prejudgment interest.

With respect to these claims, some additional background is in order. In September 2010, the United States, joined in part by Plaintiff-Intervenors, had moved for summary judgment regarding the City's total monetary liability for backpay, benefits, and interest. (Pl.'s Mot. for Summ. J. with Respect to Backpay & Benefits (Dkt. 534); see Pl.-Intervenors' Mem. of Law in Supp. of Mot. for Summ. J. with Respect to Class-Wide Back Pay (Dkt. 540).) The court denied Plaintiffs' motion, but held that, given that backpay for each of eight damages categories would be based on the already-determined shortfalls, [8] Plaintiffs had established the amount of pre-mitigation wage backpay owed by the City through 2010.[9] (Mar. 8, 2012, Mem. & Order ("Backpay Summ. J. Op.").) Specifically, the court found that Plaintiffs had established that the gross losses in wages were $62, 202, 409 for black nonhire candidates from Exam 7029; $33, 754, 299 for Hispanic nonhire candidates from Exam 7029; $18, 193, 080 for black nonhire candidates from Exam 2043; $11, 403, 654 for Hispanic nonhire candidates from Exam 2043; $1, 015, 579 for black delayed-hire firefighters from Exam 7029; $1, 228, 608 for Hispanic delayed-hire firefighters from Exam 7029; $487, 987 for black delayedhire firefighters from Exam 2043; and $411, 187 for Hispanic delayed-hire firefighters from Exam 2043-which amounted overall to a total aggregate sum of $128, 696, 803 in pre-mitigation wage backpay liability. (Id. at 35, 45-47.) These amounts are also illustrated in the below chart.

As noted above, these amounts were based on the numbers of shortfall nonhires and delayed hires in each damages category that resulted from the discriminatory practices at issue, which the court had previously determined in its Disparate Impact Opinion (Backpay Summ. J. Op. at 21-22, 42); and on the calculations of Dr. Siskin, the expert for the United States, regarding (1) the wages each shortfall would have earned, discounted for attrition, and (2) the wage losses from the total loss of months for the delayed hires, discounted for attrition. (Id. at 16-45.) In other words, the amounts set for each damages category reflected the court's determination of the numbers of black and Hispanic individuals who would have been hired, or who would have been hired earlier, in the absence of discrimination. For example, the aggregate amount of backpay available to black claimants was set at a higher amount than that available to Hispanic claimants because the court had determined that the City's use of Written Exams 7029 and 2043 had a greater discriminatory impact on black as compared to Hispanic firefighter candidates. (Final Relief Order at 9.)

The court also held that the City would have the chance to reduce these amounts by proving in individual proceedings that claimants had either mitigated their losses through interim employment or violated their duty to mitigate.[10] (Backpay Summ. J. Op. at 48-51.) Furthermore, the court determined that the City's liability for the loss of fringe benefits should be valued by expenses that the claimants actually incurred (specifically, health care premiums paid by claimants and their actual out-of-pocket medical expenses) (id. at 39), and set eligibility criteria for individual monetary relief (see id. at 51-57). (See also Aug. 20, 2012, Mem. & Order (Dkt. 946) (denying motion for reconsideration as to fringe benefits and noting ways claimants may prove their expenses).)

The court's Final Relief Order reiterated these findings and set forth the framework governing the individual compensatory relief claims process. It also addressed the method of allocating the $128, 696, 803 in pre-mitigation wage backpay among the victims of the discriminatory practices. (See Final Relief Order at 8-12; see also June 3, 2012, Mem. & Order (Dkt. 888).) Because the number of eligible claimants would likely exceed the hiring shortfalls caused by the employment practices, the aggregate backpay amount allotted to each damages category would be divided proportionately among eligible claimants in that category. Each claimant's gross award would then be reduced by a proportion-known as the "backpay reduction ratio" or "probability of hire"-of that claimant's interim earnings. This took into account the fact that claimants would likely not be receiving a full shortfall's back wages, and rather a proportional share. (See Final Relief Order at 9-10; June 3, 2012, Mem. & Order at 9-15.) After the completion of the individual proceedings, prejudgment interest would be added to each claimant's net backpay and fringe benefits awards for each year of his or her backpay period, with interest compounded annually. (Final Relief Order at 12.) The court appointed four Special Masters to oversee the individual claims process. (See Mem. & Order Confirming Appointment of Special Masters (Dkt. 883); Final Relief Order at 15-17.)

The portion of the claims process dedicated to the adjudication of individual monetary relief began in earnest in April 2013. (See June 24, 2013, Report and Recommendation ("R&R") of the Special Masters (Dkt. 1150) at 3-12.) In August 2013, the parties reported that they anticipated settling the individual monetary claims, and accordingly, they sought a stay of most case-related deadlines; the court stayed generally the individual monetary claims process. (Aug. 21, 2013, Order (Dkt. 1191) (Filed Under Seal).) At that time, the parties expected that this final portion of the claims process, should it continue, would require at least an additional twelve months. (June 24, 2013, R&R of the Special Masters at 2, 8.)

The parties did reach an agreement to settle the Plaintiffs' claims for backpay and fringe benefits, including interest thereon.[11] In June 2014, the parties jointly moved the court to provisionally approve and enter the Monetary Relief Consent Decree. (Joint Mot. for Provisional Entry of MRCD & Scheduling of Fairness Hr'g (Dkt. 1433).) Submitted with the MRCD was a Proposed Relief Awards List ("PRAL") (MRCD, Attachment A (Dkt. 1435-1)), which set forth each claimant's proposed individual monetary award consistent with the allocation methodology agreed to in the MRCD. (See MRCD ¶¶ 13-14.) The court provisionally approved the MRCD on June 30, 2014. (June 30, 2014, Order.) Notice of the MRCD and PRAL was sent to the 1, 470 claimants the court had previously found eligible for monetary relief, along with objection forms and instructions for presenting an objection. The 1, 470 eligible claimants also received notice of the October 1, 2014, Fairness Hearing, and were informed of their right to present objections in person or through counsel if they chose to do so. The parties received written objections from 101 claimants. (See Joint Mot. for Final Entry of AMRCD at 3.)

Plaintiffs then filed the amended Decree (the AMRCD), which they jointly moved the court to finally approve and enter. (See Joint Mot. for Final Entry of AMRCD.) The AMRCD, as compared to the MRCD, contains a technical change regarding the entity (the City versus the court-appointed Claims Administrator) that will be issuing payments to claimants for the fringe benefits and interest portions of their awards; the change does not affect the substance of the Decree.[12] (See Mem. in Supp. of Final Entry of AMRCD & Resp. to Objs. ("Mem. in Supp. of Final Entry") (Dkt. 1469) at 2.) Plaintiffs also recommended that the court sustain seven of the written objections received from claimants. (Id. at 2, 20-23.) Plaintiffs also submitted an Amended Proposed Relief Awards List ("APRAL") (AMRCD, Attachment A (Dkt. 1468-1)), incorporating changes to the allocation of the funds to individual claimants necessitated if those seven objections are to be sustained by the court. (Joint Mot. for Final Entry of AMRCD.) The parties request that the court approve the APRAL as the Final Relief Awards List. (Id.; Mem. in Supp. of Final Entry at 2.)

At the Fairness Hearing held October 1, 2014, the parties argued in support of final entry of the AMRCD, and certain claimants lodged verbal objections thereto.[13] (Oct. 10, 2014, Min. Entry.) The court received two exhibits into evidence (see Fairness Hr'g, Ex. 1 (Dkt. 1487) (Filed Under Seal); Fairness Hr'g, Ex. B (Dkt. 1488)), and held the record open until October 15, 2014, at 5:00 p.m., for any additional written statements in support of or in opposition to final approval and entry of the AMRCD. In addition to the 101 objections to the MRCD previously submitted, [14] the court received three additional objections by that deadline. (See Oct. 15, 2014, Ltr. (Dkt. 1491); Oct. 17, 2014, Ltr. (Dkt. 1494); Additional Written Submissions (Dkt. 1494-1).)

The United States has now filed newly-revised versions of two attachments to the AMRCD-a Second Amended "Notice of Individual Monetary Relief Award, " and a Second Amended "Acceptance of Individual Monetary Relief Award & Release of Claims"-and the parties jointly ask that the court approve these second amended attachments along with the AMRCD, the APRAL, and the other attachments to the AMRCD.[15] (Joint Mot. to Amend Attachments E & F to AMRCD.)

II. THE DECREE

The Decree reflects the parties' agreement as to the City's aggregate liability for monetary relief for each damages category with respect to backpay, fringe benefits, and prejudgment interest. (See Mem. in Supp. of Provisional Entry at 15-16; AMRCD at 3; id. ¶ 12.) The Decree also sets forth an allocation methodology apportioning that aggregate backpay, fringe benefits, and interest among claimants.[16] (Mem. in Supp. of Provisional Entry at 16; AMRCD at 3.) The PRAL, which was included as an attachment to the MRCD, was prepared by the court-appointed Claims Administrator, and shows the result of the allocation methodology as applied to each claimant. (Mem. in Supp. of Provisional Entry at 16; see also PRAL.) Similarly, the APRAL, which was included as an attachment to the AMRCD, was prepared by the Claims Administrator, and shows the result of the allocation methodology as applied to each claimant should the court sustain the objections of seven claimants as recommended by Plaintiffs.[17] (Joint Mot. for Final Entry of AMRCD at 2-3; see also APRAL.)

A. Aggregate Amount of Monetary Relief

Under the AMRCD, the City will pay to eligible claimants a total of $80, 964, 657.97 in backpay; $11, 091, 952.25 in interest on backpay; $6, 209, 618.53 in fringe benefits; and $832, 129.54 in interest on fringe benefits-amounting to a total settlement sum of $99, 098, 358.29. The amounts include interest accruing through the end of 2014. (AMRCD ¶ 12.) This is divided between damages categories as follows.

(Id.)

B. Allocation of Monetary Relief

Pursuant to the Decree, aggregate funds were allocated among claimants by the Claims Administrator, according to a methodology devised by the United States and Plaintiff-Intervenors. (AMRCD at 3.) The result of this allocation is illustrated in the PRAL and APRAL.[18] The allocation methodology, which is discussed below, is described in greater detail in the Declaration of Ed Barrero ("Barrero Decl.") (MRCD, Attachment B (Dkt. 1435-2) (describing the methodology of generating the PRAL)) and the Amended Declaration of Ed Barrero ("Am. Barrero Decl.") (AMRCD, Attachment B (Dkt. 1468-2) (describing the methodology of generating the APRAL)).

1. Allocation of Backpay to Nonhire Claimants

In allocating backpay among nonhire claimants, the Claims Administrator was provided with each eligible nonhire claimant's interim earnings, including: (1) the earnings listed on his or her Social Security Administration ("SSA") earnings statement; (2) any payments made by the City to the claimant for unemployment insurance or workers' compensation; and (3) any additional earnings of particular claimants who had railroad employers. (Barrero Am. Decl. ¶ 7.) The Claims Administrator averaged each nonhire claimant's annual interim earnings during the applicable backpay period (2001-2011 for Exam 7029 nonhire claimants; and 2005-2011 for Exam 2043 nonhire claimants). (Id. ¶ 8.) Nonhire claimants who failed to respond to requests for authorizations and/or information regarding their interim earnings were assumed to have earned the maximum amount of average interim earnings.[19] (Id. ¶ 9.) Nonhire claimants' average interim earnings were sorted into seven bands with respect to each exam. The earnings bands were based on average annual earnings of firefighters who were hired from the two exam lists during the relevant damages periods; each band corresponds to 15% of actual average annual earnings of firefighters hired from the respective exam list. (Tr. at 13:24-14:3.)[20] In numbers, this means that for Exam 7029, each approximately $11, 500 of average interim earnings constitutes a single band; for Exam 2043, each approximately $9, 200 of earnings constitutes a single band. (Barrero Am. Decl. ¶ 10; id., Ex. B.) Each interim earnings band was then allocated between one (for the greatest amount of earnings) and seven (for the least amount of earnings) points, and each claimant was allotted the number of points applicable to his or her earnings band. (Id. ¶ 10.) The Claims Administrator determined the monetary value of each point by dividing the aggregate backpay amount of each nonhire damages category by the total number of points allocated to claimants in each of those categories. (Id. ¶ 11.) Each claimant was then allotted the monetary value of his or her points. (Id.) For example, the value of one point for black Exam 7029 nonhire claimants was $25, 707.86. The 50 black Exam 7029 nonhire claimants who were sorted into the minimum average annual interim earnings band-$11, 390.85 or less-received seven points, so their back pay awards are therefore $179, 955.04. The 23 black Exam 7029 nonhire claimants who were sorted into the maximum average annual interim earnings band-$68, 345.15 or greater-each received one point, and therefore their back pay awards are $25, 707.86.[21] (See id. ¶ 12; id., Ex. B.)

2. Allocation of Backpay to Delayed-Hire Claimants

In allocating backpay among delayed-hire claimants, the Claims Administrator was provided with each delayed-hire claimant's "months of delay, " which refers to the number of months between (1) the first FDNY Academy class appointed off the list of the exam for which the claimant is eligible for relief and (2) the date of the FDNY Academy class to which the claimant was in fact appointed. (Id. ¶ 13.) The Claims Administrator then determined the sum total months of delay experienced by all claimants in each delayed-hire damages category, and determined the value of each month of delay by dividing the aggregate backpay award with respect to that delayed-hire damages category by the total months of delay experienced by claimants in that category. (Id. ¶¶ 14-15.) Each delayed-hire claimant's proposed backpay award equals the value of one month of delay multiplied by his or her specific months of delay. (Id. ¶ 16.) For example, black Exam 7029 delayed-hire claimants experienced a total of 2, 901 months of delay. Given the aggregate backpay amount of $444, 509.77 allocated to that damages category under the AMRCD, one month of delay for these claimants is valued at $153.23. (Id., Ex. C.) A claimant who was delayed 12 months will therefore receive backpay in the amount of $153.23 multiplied by 12, or $1, 838.76.[22]

3. Allocation of Fringe Benefits

Fringe benefits as allocated under the AMRCD consist of two components. First, all eligible claimants are provided a fixed, minimal fringe benefits award; second, in addition to the fixed award, eligible claimants who submitted a fringe benefits claim by May 9, 2014, are allocated a proportion of their claimed fringe benefits, subject to a cap. (Id. ¶ 18.)

The fixed awards consist of a pro rata distribution to all eligible claimants of approximately 20% of the fringe benefits settlement amounts. (Tr. at 16:11-15.) Specifically, all Exam 7029 nonhire claimants, regardless of race, receive a fixed award of $1, 400; all Exam 2043 nonhire claimants, regardless of race, receive a fixed award of $960; and all delayed-hire claimants, regardless of race or exam, receive a fixed award of $50. (Id. ¶ 19.)

The Claims Administrator calculated the claimed fringe benefits by examining each claimant's fringe benefits claims form, and reviewing other relevant documentation submitted by the claimant.[23] (Id. ¶ 21.) The Claims Administrator then computed both (1) the mean (average) claimed fringe benefit expenses and (2) the standard deviation of the claimed fringe benefit expenses for claimants in the three damages groups used to allocate fixed awards (Exam 7029 nonhire claimants, regardless of race; Exam 2043 nonhire claimants, regardless of race; and delayed-hire claimants, regardless of race or exam). (Id. ¶ 22.) The Claims Administrator set a fringe benefits cap for each damages group at the mean plus two standard deviations, i.e., the 97.5th percentile, of the amount of claimed expenses. (Id.) With respect to each damages category, and treating any claimants whose claimed fringe benefits were in excess of the cap as having claimed the cap, the Claims Administrator calculated the ratio of aggregate claimed fringe benefits expenses to settlement funds that remained after paying out fixed awards; these ratios were applied to each claimant's claimed expenses to determine his or her additional award. (Id. ¶¶ 22-23.) As an example, $2, 099, 388.95 fringe benefit settlement funds remained for black Exam 7029 nonhire claimants after paying out their fixed shares, and, after application of the cap, $2, 943, 427.50 in aggregate claimed fringe benefits expenses were claimed by this group of claimants. Therefore, pursuant to this methodology, black Exam 7029 nonhire claimants will receive 0.XXXXXXXXX of their claimed fringe benefits expenses in addition to their $1, 400 fixed award.[24] (See id., Ex. F.)

4. Interest

Finally, the Claims Administrator calculated the total interest due on the aggregate backpay and fringe benefits amounts and also allocated that interest among claimants. (Id. ¶ 25.) The interest rate applied was the average market yield on the United States one-year constant maturity Treasury yield during the relevant damages period. (Id. ¶ 26.) As the damages period varied between damages categories, therefore, the rates also varied slightly between damages categories. (See id.) Specifically, the rates applied to each category were as follows: (1) for all Exam 7029 nonhire claimants, 1.864561 (the average market yield over a damages period of January 1, 2001, through April 25, 2014); (2) for all Exam 2043 nonhire claimants, 1.73963 (same over a damages period of January 1, 2005, through April 25, 2014); (3) for all Exam 7029 delayed-hire claimants, 1.753729 (same over a damages period of January 1, 2004, through April 25, 2014); (4) for all Exam 2043 delayed-hire claimants, 0.499455 (same over a damages period of January 1, 2008, through April 25, 2014). (Id.; see also id., Ex. G.) The interest was then compounded annually through the end of 2014, to determine the total aggregate interest. (Id. ¶ 26.) The parties agreed that interest would cease to accrue after the end of 2014. (Tr. at 16:25-17:1.)

Interest on backpay was allocated among nonhire claimants through the use of earnings bands, allocation of points, and point-per-value calculations; and among backpay claimants by determining the amount of interest associated with each month of delay. (Id. ¶ 29.) Interest on fringe benefits was allocated proportionally in relation to each claimant's total fringe benefits award as compared to the aggregate amount of fringe benefits relief awarded to all claimants in that claimant's damages category. (Id. ¶ 30.) In sum, interest was allocated among claimants proportionally based on their backpay and fringe benefits awards. (See Mem. in Supp. of Provisional Entry at 21.)

C. Notice of MRCD

In accordance with the provisionally-approved MRCD, the 1, 470 claimants held by the court to be eligible for monetary relief, see supra pages 5-6, received notice via first-class mail and email of (1) the settlement, (2) their individual proposed monetary relief awards, and (3) the Fairness Hearing, as well as an objection form.[25] (See Mem. in Supp. of Final Entry at 3-5; Tr. at 17:2-4.) This notice is sufficient to ensure the fairness of the Decree because, given the posture of this case, no other individuals' interests are affected by the Decree.[26]

D. Notice, Acceptance, and Payment of Awards

Upon final entry of the Decree, all claimants who are provided with an award of monetary relief will be provided with notice via first-class mail and email of their awards, instructions for submitting an acceptance form, and tax forms. (AMRCD ¶¶ 24-29.) To receive an individual monetary award, a claimant must return an acceptance form and any required tax forms no later than 45 days after final entry; failure to do so will constitute a rejection of the offer or relief.[27] (Id. ¶¶ 30-31.)

The City will issue payments for backpay awards; the Claims Administrator will issue payment for fringe benefits and interest awards. (Id. ¶ 38.) The City will withhold from claimants' backpay awards all taxes, child support liens, and employee pension contributions for any claimants who were awarded retroactive seniority by the court.[28] (Id. ¶ 39.) The City and Claims Administrator will issue individual monetary award payments by no later than 150 days after final entry of the Decree. (Id.)

E. Service Awards

The Decree provides for service awards of $15, 000 to each of the seven individuallynamed Plaintiff-Intervenors, separate and apart from any monetary or other relief to which they may be entitled, as well as a $50, 000 service award to the Vulcan Society, Inc., ...


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