Promisel v. First American Artificial Flowers, Inc., 1339

• Citation: 943 F.2d 251
• Decision Date: 04 September 1991
• Docket Number: No. 1339,D,1339
• Parties: 60 Fair Empl.Prac.Cas. (BNA) 380, 57 Empl. Prac. Dec. P 41,050 Alvin PROMISEL, Plaintiff-Appellee, v. FIRST AMERICAN ARTIFICIAL FLOWERS, INC., Defendant-Appellant. ocket 90-7999.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 251

943 F.2d 251

60 Fair Empl.Prac.Cas. (BNA) 380,

57 Empl. Prac. Dec. P 41,050

Alvin PROMISEL, Plaintiff-Appellee, v. FIRST AMERICAN ARTIFICIAL FLOWERS, INC., Defendant-Appellant.

No. 1339, Docket 90-7999.

United States Court of Appeals, Second Circuit.

Argued April 10, 1991.

Decided Sept. 4, 1991.

John A. Craner, Scotch Plains, N.J. (Craner, Nelson, Satkin & Scheer, of counsel), for defendant-appellant.

James Dolan, Hicksville, N.Y., for plaintiff-appellee.

Before CARDAMONE, MAHONEY and WALKER, Circuit Judges.

WALKER, Circuit Judge:

Plaintiff Alvin Promisel, a sixty-three year old sales manager, sued his employer First Artificial American Flowers ("First American") under federal and state anti-discrimination statutes after First American fired him in December 1987 and replaced him with a younger man. First American now appeals from a judgment of the United States District Court for the Southern District of New York (Gerard L. Goettel, Judge ) awarding Promisel lost wages and attorneys fees under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-624 and damages for emotional distress" under the New York Human Rights Law, N.Y.Exec.Law §§ 290-301 after a jury trial. First

                American argues that the district court improperly exercised pendent jurisdiction over the state law claim for emotional distress, and that it was entitled to have the jury's award for lost wages offset by the unemployment and social security benefits that Promisel received.   First American also argues that Promisel failed to prove that its reason for firing him was clearly pretextual.   We reject each of First American's arguments, and affirm the judgment below
                

BACKGROUND

Since this appeal comes to us after a jury verdict in plaintiff's favor, we view the facts of the case in the light most favorable to that party. Alvin Promisel began working for First American as a seller on commission in 1964, and eventually rose to the position of sales manager, supervising five route salespersons. Promisel had an unblemished work performance and attendance record, and by 1987, when the events prompting this lawsuit occurred, he had greatly expanded the distribution base of the company during his seven years as sales manager.

After Promisel was hospitalized for an irregular heartbeat in January 1987, First American and Promisel reached an agreement, effective May 1987, whereby Promisel would work three days a week at reduced pay, and would take six weeks vacation annually, three of which would be unpaid. Under the agreement, Promisel's duties and responsibilities would remain the same.

Unbeknownst to Promisel, First American had apparently been planning his replacement for a number of months. In January 1987, over Promisel's objection, the company sent another salesman to a business meeting in Puerto Rico in Promisel's place. Promisel objected because he had developed First American's Puerto Rican business and had serviced it for years. In September, without telling Promisel, the company hired Harlan Smith, age thirty, to replace him. Smith was told that he was being hired to replace an "older gentleman" because they were looking for "younger blood," someone who was "young and aggressive." First American asked Promisel to train Smith, and he did so.

On December 18, 1987, the day after Promisel left on his agreed-upon vacation, First American fired him in a letter sent to him at his vacation address. The letter stated that he was being terminated because his part-time arrangement was not working out. That day, his job was taken over by Smith.

On June 6, 1988, Promisel filed a charge of discrimination with the New York State Division of Human Rights ("SDHR") and with the federal Equal Employment Opportunity Commission ("EEOC"). The EEOC conceded jurisdiction to the Division of Human Rights, pursuant to 29 C.F.R. § 1626.9, and the latter commenced an investigation. After waiting the required 60 days, and having received no resolution of his charge, Promisel filed the instant action in the Southern District of New York (Goettel, Judge ) under the ADEA, 29 U.S.C. § 626(c). He also asserted violations of New York's Human Rights Law, New York Exec.Law § 296. Promisel's complaint with SDHR was dismissed for administrative convenience on October 27, 1989.

At trial, Judge Goettel instructed the jury that under the ADEA it could only award lost wages and benefits, but that under the pendent New York claim it could award damages for emotional distress. The jury returned a verdict in favor of Promisel for $75,622 in lost wages and $125,000 for emotional distress. First American moved for judgment n.o.v. and a new trial. Promisel cross-moved for interest and attorneys' fees. Judge Goettel denied First American's motions and granted Promisel's. On October 16, 1990, he entered an amended final judgment for lost wages and benefits, emotional distress, and attorneys' fees.

On appeal, First American argues that the court improperly exercised pendent jurisdiction over the New York age discrimination claim and thus lacked subject matter jurisdiction to give an emotional distress

                damage issue to the jury.   First American next asserts that it was error for the district court not to apply unemployment compensation and social security benefits received by Promisel before he reached age sixty-five as an offset against the lost wages damage award.   Finally, First American claims that Judge Goettel erred in denying its motions for summary judgment, a directed verdict, judgment n.o.v. and a new trial, because Promisel presented insufficient evidence that he was not fired because First American was displeased with his part-time working arrangement
                

DISCUSSION

A. Pendent Jurisdiction over Promisel's State Age Discrimination Claims

We note at the outset that First American voices its objection to the court's exercise of pendent jurisdiction over Promisel's state law claim for the first time on appeal. Although we would not normally consider an issue not raised below, the lack of subject matter jurisdiction may be raised at any time, by the parties, or by the court sua sponte. See Fed.R.Civ.P. 12(h)(3); Update Art, Inc. v. Modiin Publishing, Ltd., 843 F.2d 67, 72 (2d Cir.1988); Dunton v. County of Suffolk, 729 F.2d 903 (2d Cir.1984). We therefore must consider the issue.

A federal court's exercise of pendent jurisdiction over plaintiff's state law claims, while not automatic, is a favored and normal course of action. "[I]f, considered without regard to their federal or state character, a plaintiff's claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then, assuming substantiality of the federal issues, there is power in federal courts to hear the whole." United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). A court has the power to exercise pendent jurisdiction over plaintiff's state claims together with his federal claims if they derive from "a common nucleus of operative fact," id., and commonly will exercise it if "considerations of judicial economy, convenience and fairness to litigants" weigh in favor of hearing the claims at the same time. United Mine Workers, 383 U.S. at 726, 86 S.Ct. at 1139. The availability of pendent jurisdiction was codified in 1990 at 28 U.S.C. § 1367(a), which states that "the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution."

Promisel's state law claim under New York Executive Law § 296, which alleges that First American discharged him because of his age, clearly derives from the same nucleus of operative fact as his federal ADEA claim. They both arise from his December 18, 1987, dismissal and replacement by Smith. Yet First American proffers two arguments that Judge Goettel's decision to exercise pendent jurisdiction should nonetheless be disturbed.

First American first argues that 29 U.S.C. § 633(a) prevents a plaintiff from invoking state law in either state or federal court once plaintiff has elected to proceed under the ADEA, as Promisel has done. Second, it argues that New York Executive Law § 297, subd. 9, prevents a plaintiff from maintaining the state law cause of action in "any court of appropriate jurisdiction" once the plaintiff has elected to file a complaint with the SDHR, as Promisel did here. Therefore, according to First American, Promisel is barred from asserting his state claims in federal court as a matter of both federal and state law. We believe that First American has read both 29 U.S.C. § 633(a) and N.Y.Exec.Law § 297 too restrictively.

1. 29 U.S.C. § 633(a)

29 U.S.C. §§ 626 and 633 read as follows, in relevant part:

§ 626(c)(1) Any person aggrieved may bring a civil action in any court of competent jurisdiction ...

(d) No civil action may be commenced by an individual under this section until 60 days after a charge alleging unlawful discrimination has been filed with the Equal Employment Opportunity Commission.

§ 633(a) Nothing in this chapter shall affect the jurisdiction of any agency of any State performing like functions with regard to discriminatory employment practices on account of age except that upon commencement of action under this chapter such action shall supersede any State action.

(b) In the case of an alleged unlawful practice occurring in a State which has a law prohibiting discrimination in employment because of age and establishing or authorizing a State authority to grant or seek relief from such discriminatory practice, no suit may be brought under section 626 of this title before the expiration of sixty days after proceedings have been commenced under the State law, unless such proceedings have been earlier terminated.

The structure of this complicated legislative...