Roebuck v. Yellow Freight System, Inc.

Decision Date18 July 1988
Docket NumberNos. 87-1036,87-1061,s. 87-1036
PartiesUnpublished Disposition NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. Harry T. ROEBUCK, Plaintiff-Appellee, Cross-Appellant, v. YELLOW FREIGHT SYSTEM, INC., an Indiana corporation, Defendant-Appellant, Cross-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

Before ENGEL, Chief Judge, and MERRITT and KRUPANSKY, Circuit Judges.

PER CURIAM.

Defendant Yellow Freight Systems appeals a judgment entered upon a jury verdict in favor of plaintiff Harry Roebuck in Roebuck's age discrimination suit tried in the United States District Court for the Eastern District of Michigan. Plaintiff Roebuck cross-appeals the exclusion of certain evidence at trial.

Defendant Yellow Freight conducts business as a carrier of general commodities by motor vehicle. In 1971, at the age of 51, plaintiff Roebuck was hired as a sales representative by Yellow Freight, where he worked until his termination in 1978. The parties are in dispute as to the quality of Roebuck's work, with Yellow Freight alleging that it was substandard, and Roebuck alleging that his work was at least satisfactory. While Roebuck was employed with Yellow Freight, the company underwent a substantial shift in its business by shipping smaller loads. Yellow Freight contends that Roebuck's adaptation to the altered sales strategies required under the new system was very poor, and he was placed under surveillance. Roebuck was terminated on October 2, 1978.

Roebuck then brought suit in the Wayne County, Michigan Circuit Court alleging that his discharge was unlawful as violative of Michigan's Elliott-Larsen Act, M.C.L.A. Sec. 37.2101 et seq. 1 Yellow Freight subsequently removed the state action to the United States District Court for the Eastern District of Michigan, based on diversity jurisdiction. The first trial commenced in 1983 and resulted in the grant of the defendant's motion for a directed verdict. On appeal, however, our court reversed that judgment, finding that the lower court had employed an incorrect standard in assessing plaintiff's evidence of age discrimination. See Roebuck v. Yellow Freight Systems, Inc., No. 83-1621 (6th Cir. Dec. 10, 1985). That case was, therefore, remanded to the district court for a new trial. Following a second trial, concluded in September 1986, the jury rendered a verdict in favor of Roebuck in the amount of $150,000. To this the trial judge subsequently added prejudgment interest and the final award was fixed at $299,034.11 plus costs and attorney fees.

On this appeal, defendant Yellow Freight raises a number of claims of error on the part of the district court in: (1) failing to grant a directed verdict on Roebuck's age discrimination claim when Roebuck's evidence of satisfactory job performance was inadequate; (2) excluding evidence essential to the defense; (3) giving a jury instruction which was an incorrect statement of the law, self-contradictory, and which improperly shifted the burden of persuasion to Yellow Freight; (4) refusing to enter a partial directed verdict severing Roebuck's right to back pay after he voluntarily retired; (5) excluding evidence of Roebuck's net worth and passive income; (6) considering Roebuck's claim for lost pension, since that claim is preempted by ERISA; and (7) allowing Roebuck to collect prejudgment interest back to the date of the filing. On cross-appeal, Roebuck argues that the court erred in excluding evidence regarding a similarly situated Yellow Freight employer.

I.

Yellow Freight's assertion that the district court erred in failing to grant a directed verdict was predicated primarily upon its assertion that the undisputed evidence was overwhelming that Roebuck's job performance was inadequate. Harry Roebuck, born in 1920, had worked for thirty years as a freight salesman and was hired by Yellow Freight on July 1, 1971. He was fired October 2, 1978, purportedly for cause in failing to maintain and live up to the expectation of his employer that he would produce new business and increase the business in the accounts to which he had been assigned. Yellow Freight relies particularly upon our decision in Chappell v. GTE Products Corp., 803 F.2d 261 (6th Cir.1986), and the observation of Judge Jones therein, at page 265 that

Jury control devices such as judgment n.o.v. or directed verdict have been recognized by courts as applicable in certain age discrimination cases due to the possibility that sympathy for the plaintiff may present an overriding but impermissible factor in a jury verdict for plaintiff.

In determining whether the trial court erred in refusing to direct a verdict, courts must consider each case in its own context, viewing the evidence most favorably to the prevailing party. While we agree with the observation in Chappell and other like cases, we conclude, after a very careful examination of all of the evidence, that the district judge did not err in declining to direct a verdict here, or in refusing to grant a judgment notwithstanding the jury verdict in favor of plaintiff. Without undertaking a complete recital of all the evidence, suffice it to say that, viewing the evidence most favorably to the non-movent, Roebuck's immediate superior, terminal manager William Steepe and his successor, Ivan Waterbury, embarked upon a conscious program of favoritism toward the younger salesmen to the consequent prejudice of the older and more experienced salesmen such as plaintiff Roebuck. There is credible evidence that Roebuck's superiors tolerated lower sales by younger salesmen and that particularly Steepe, but also Waterbury, had expressly viewed the age of a fellow salesman, then 57, as being a detriment to his promotability. This evidence, combined with proof controverting the employer's claim of plaintiff's misconduct required the trial court to submit the ultimate question to the jury. This required the jury to determine, among other things, whether the company's basis for discharge was real or a pretextual mask for its bias against Roebuck on account of his age.

II.

In its appeal, Yellow Freight asserts that the trial judge erred in admitting, as part of plaintiff's proof of damages, evidence of lost retirement benefits occasioned by Roebuck because of his termination. In short, as part of Roebuck's claim for overall damages, he alleged a loss of past and future pension benefits under Yellow Freight's pension plan. Since that plan was unquestionably an "Employee Pension Benefit Plan" within the meaning of and subject to the terms of the Employees Retirement Income Security Act, 29 U.S.C. Sec. 1001 et seq., Yellow Freight alleges that it was improper for Roebuck to have sought and presumably received damages, because of the preemptive language of section 514(a) of that statute, 29 U.S.C. Sec. 1144(a). In particular, Yellow Freight places reliance upon the broad preemptive scope given section 514 by the Supreme Court in Shaw v. Delta Airlines, Inc., 463 U.S. 85 (1983), and more recently in Metropolitan Life Ins. Co. v. Taylor, --- U.S. ----, 107 S.Ct. 1542 (1987), and Pilot Life Ins. Co. v. Dedeaux, --- U.S. ----, 107 S.Ct. 1549 (1987).

Whatever might have been Yellow Freight's right to challenge the inclusion of loss of pension benefits as part of Roebuck's damage claim, we are fully satisfied that under the existing law in our circuit we should decline to consider that argument because it was not at any time presented to the district court or otherwise raised as an objection to the introduction of the evidence in question. See Sigmon Fuel Company v. Tennessee Valley Authority, 754 F.2d 162 (6th Cir.1985). We have specifically refused to consider claims concerning the inappropriate formulation of damages on several occasions when such claims were not made before the district court. See, e.g., Young v. Langley, 793 F.2d 792 (6th Cir.1986); Boich v. Federal Mine Safety & Health Review Com'n, 704 F.2d 275 (6th Cir.1983); Harrington v. Vandalia-Butler Bd. of Ed., 585 F.2d 192 (6th Cir.1978). Further we cannot agree with Yellow Freight's claim that the issue of ERISA preemption, in the context of damage calculations, is jurisdictional, hence allowing us to reach this issue for the first time on appeal. Appellant's citation to International Longshoremen's Ass'n, AFL-CIO v. Davis, 476 U.S. 380 (1986), is inapposite. We find no evidence that ERISA was ever intended to preempt the trial court's diversity jurisdiction in an age discrimination case premised on state law. The question therefore is not one of jurisdiction, which plainly exists here over the subject matter in dispute. It is a question of the measure of damages.

III.

Yellow Freight also contends that the district court erred in its award of prejudgment interest, particularly given the speculative nature of the future damages awarded. Appellant argues that since the purpose of prejudgment interest is to provide compensation to the winning party for the delay in obtaining his funds, no interest should be charged on funds that the plaintiff had only become entitled to after the period in which interest was awarded.

In a diversity case, a federal court is bound to follow state law on the question of prejudgment interest. Bailey v. Chattem, Inc., 838 F.2d 149 (6th Cir.1988). Both parties and the district court understood that the question of whether front pay awards should be treated as a lump sum for purposes of awarding prejudgment interest has no clear answer under Michigan law. However, we believe that the district court followed the more reasonable position.

The court noted that while some Michigan cases hold that prejudgment interest is not appropriate for damages which...

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