Elliott v. Group Medical & Surgical Service

• Citation: 714 F.2d 556
• Decision Date: 16 September 1983
• Docket Number: Nos. 81-2356,82-2235,s. 81-2356
• Parties: 32 Fair Empl.Prac.Cas. (BNA) 1451, 32 Empl. Prac. Dec. P 33,813 Jack ELLIOTT, et al., Plaintiffs-Appellees-Cross Appellants, v. GROUP MEDICAL & SURGICAL SERVICE, et al., Defendants, Group Hospital Service, Inc., Defendant-Appellant-Cross Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 556

714 F.2d 556

32 Fair Empl.Prac.Cas. (BNA) 1451,

32 Empl. Prac. Dec. P 33,813

Jack ELLIOTT, et al., Plaintiffs-Appellees-Cross Appellants, v. GROUP MEDICAL & SURGICAL SERVICE, et al., Defendants, Group Hospital Service, Inc., Defendant-Appellant-Cross Appellee.

Nos. 81-2356, 82-2235.

United States Court of Appeals, Fifth Circuit.

Sept. 16, 1983.

Seay, Gwinn, Crawford, Mebus & Blakeney, John F. McCarthy, Jr., Jerry K. Warren, Dallas, Tex., for defendants.

Mandell & Wright, Eliot P. Tucker, Houston, Tex., for plaintiffs-appellees-cross appellants.

John F. McCarthy, Jr., Jerry K. Warren, Dallas, Tex., for defendant-appellant-cross appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before THORNBERRY, GEE and REAVLEY, Circuit Judges.

GEE, Circuit Judge:

The Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. ("ADEA"), was enacted on December 15, 1967 (effective June 12, 1968), following the completion of a study by the Secretary of Labor required by Congress when it enacted the Civil Rights Act of 1964. ¹ The ADEA's announced goal is the "elimination of discrimination from the workplace," Lorillard v Background and Procedural History

                Pons, 434 U.S. 575, 577, 98 S.Ct. 866, 868, 55 L.Ed.2d 40 (1978), by "[p]romoting employment of older persons based on their ability rather than age ... [and] prohibit[ing] arbitrary age discrimination in employment."  29 U.S.C. § 621(b).   To this end, the ADEA provides statutory protection to individuals aged forty through seventy.   Id., § 631(a).   This appeal concerns a suit brought pursuant to the ADEA by six protected former employees (collectively referred to as "appellees") of Group Hospital Service, Inc.  ("Hospital Service"), appellant.   In the district court, the jury found, inter alia, that these former employees had been willfully discriminated against because of age.   Concluding that the evidence adduced at trial was insufficient to support the jury's verdict, we reverse the judgment of the district court
                

Two major contentions are before us. The first concerns the sufficiency of the evidence to support the jury's finding of age discrimination and certain attendant procedural issues. The second centers upon the propriety of a prophylactic order of the district court. The district court denied appellees' motion for liquidated damages. However, it granted a motion for a supersedeas bond to protect appellees' interest in the event this court determined that that ruling was in error. ²

Because the procedural posture of the present action is somewhat complicated and because our resolution of the procedural issues guides our analysis, we delineate the facts as developed below with some care. The record reflects that sometime during April of 1978 Walter Hachmeister learned that he was president-elect of Hospital Service, an insurance company incorporated under the laws of Texas and doing business as Blue Cross-Blue Shield of Texas. ³ In preparation for his role as president Hachmeister began to assemble a management Under this reorganization a number of top executives in the Marketing Division were purged: (1) Richard Galen was replaced as an Assistant Vice President; (2) George Spradley was relieved of his duties as Manager of National Accounts; (3) Robert Heffer was replaced as Houston North District Manager; (4) Duane Thompson was replaced as Sales Training Director; and (5) Jack Elliott was ousted as Regional Sales Manager for the Houston Region. In addition, subsequent to the reorganization, Max Tipton was replaced as Manager of the Abilene Regional Office. ⁵ Each of the above-mentioned executives were within the ADEA's protected age group. More, each, with the exception of Tipton, was either given notice of termination or terminated between October 1978 and January 1979, ⁶ and filed notice pursuant to 29 U.S.C. § 626(d) with the Department of Labor of his intent to sue Hospital Service, Group Medical and Surgical Service, and Group Life and Health Company. Tipton filed a corresponding notice on June 29, 1979. On October 22, 1979, these former employees The defendant companies answered that appellees were indeed terminated and that they were within the ADEA's protected age group at the time of their termination. In addition to conceding that appellees had been replaced by persons outside of the ADEA's protected age group, they urged that Group Medical and Surgical Service and Group Life and Health Company were improperly joined as party defendants. At the close of appellees' case in chief, the district court instructed a verdict as to all defendants except Hospital Service. Hospital Service, in turn, moved to dismiss the claims of Elliott, Galen and Heffer for failure "to fulfill the jurisdictional prerequisites required to maintain an action under the provisions of the Age Discrimination in Employment Act of 1967." See Fed.R.Civ.P. 12(b)(6). In sum, Hospital Service urged that the district court did not have jurisdiction to entertain the complaints of these parties because they had failed to file a notice of intent to sue within 180 days after the occurrence of the discriminatory action complained of. See 29 U.S.C. § 626(d)(1). Appellant also argued that plaintiffs Galen, Tipton and Spradley had failed to establish a prima facie case. See Price v. Maryland Casualty Co., 561 F.2d 609 (5th Cir.1977). The district court carried the former motion with the case and denied the latter.

                team and to review the company's past performance. 4  Hachmeister's analysis concluded that Hospital Service could increase both the efficiency of its sales operations and its market penetration by consolidating its Life and Marketing Divisions so as to eliminate overlapping in their respective sales functions.   In consequence, Hachmeister implemented a plan to accomplish this goal upon assuming the presidency
                acting in concert, filed suit in the United States District Court for the Southern District of Texas.   The gravamen of their complaint was that they had been willfully discriminated against because of age
                

At the close of its case in chief, Hospital Service proffered the following motion: "to dismiss on the grounds that plaintiff failed to make a prima facie case." ⁷ The district court permitted the case to go to the jury. In response to special issues, the jury found that Hospital Service had discriminated against each of the named plaintiffs by discharging him from his employment because of his age and that the discharges were willful. The jury awarded damages aggregating over one million dollars to the plaintiffs in amounts for which the district court subsequently entered final judgment, adding attorneys' fees and costs. As noted above, the district court declined to award liquidated damages despite the jury's finding of willfullness. Both parties appealed, On motion, the district court entered a Stay Order pending appeal, on condition that Hospital Service post security in an amount equal to the award. Subsequent to this order plaintiffs moved the district court to require additional security, contending that more was necessary in order to satisfy the potential judgment on appeal should we determine that an award of liquidated damages was required. The district court entered an order granting the motion and required appellant to post additional security.

                Hospital Service from the adverse judgment, asserting evidentiary insufficiency;  appellees from the refusal of the court to award liquidated damages, claiming a legal right to additional liquidated damages in an amount equal to the jury's damage award.   See note 2, supra.
                

Procedural Issues

A. Motion for Directed Verdict?

Our threshold consideration concerns which issues have been preserved on appeal. If, as appellees suggest, appellant's motion at the conclusion of all the evidence did not constitute a motion for directed verdict then we are precluded from considering Hospital Service's request for a reversal of the district court's judgment. See Thomas v. City of New Orleans, 687 F.2d 80, 83 (5th Cir.1982). Initially, appellees' briefs urged that Hospital Service's motion "preserves no error because it refers to only one plaintiff and because it fails to specify which plaintiff defendant contends failed to prove a prima facie case." In this connection appellees also advanced the ancillary argument that the motion lacked the required specificity to be properly considered a motion for directed verdict. See Fed.R.Civ.P. 50(a). In the alternative, appellees contended that at most Hospital Service's motion preserved only the motion made at the close of appellees' case in chief--that Galen, Tipton and Spradley failed to prove a prima facie case. This argument suggests that our analysis is confined to an examination of whether a prima facie case was in fact established and no more.

Upon reflection appellees concede, and we agree, that appellant's reference to a single plaintiff was no more than a slip of the tongue in the heat of trial and that the intended object of the motion was the entire opposing array. Appellees insist, however, that this concession does not vitiate their argument that Hospital Service is barred from questioning the sufficiency of the evidence in this court because its motion for dismissal for want of a prima facie case does not rise to the specificity required of a motion for directed verdict, its motion for judgment n.o.v. notwithstanding. See Maxey v. Freightliner Corp., 665 F.2d 1367 (5th Cir.1982). More, appellees maintain their stance that in any event our analysis is confined to whether the elements of a prima facie case are present and no more.

The law in this circuit, as generally elsewhere, is that "the sufficiency of the evidence supporting a jury verdict is not reviewable on appeal ... unless a motion for directed verdict was made at the close of all the evidence by the party seeking that review." Quinn v....