Paolella v. Browning-Ferris, Inc.

• Decision Date: 03 July 1997
• Docket Number: Civil Action No. 94-7364.
• Parties: Michael PAOLELLA, Plaintiff, v. BROWNING-FERRIS, INC., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

973 F.Supp. 508

Michael PAOLELLA, Plaintiff, v. BROWNING-FERRIS, INC., Defendant.

Civil Action No. 94-7364.

United States District Court, E.D. Pennsylvania.

July 3, 1997.

Jay R. Levenberg, Law Offices of Jay R. Levenberg, Jenkintown, PA, for Plaintiff.

John E. Caruso, Montgomery, McCracken, Walker & Rhoads, Philadelphia, PA, Mark M. Wilcox, Drinker, Biddle and Reath, Phila, PA, Browning Ferris, Inc., Defendant.

MEMORANDUM

GAWTHROP, District Judge.

This wrongful discharge diversity action arises from the termination of Plaintiff Michael Paolella's employment with Defendant Browning-Ferris, Inc. At trial, the plaintiff argued that the defendant fired him in retaliation for his demands that it cease its deceptive billing practices. The jury found for Plaintiff, and awarded him $ 732,000 in damages. The defendant now renews its Motion for Judgment as a Matter of Law under Fed.R.Civ.P. 50, or, in the alternative, moves for a new trial pursuant to Fed.R.Civ.P. 59. In the event the court grants the defendant's Motion for a New Trial, Plaintiff moves for a new trial on damages. Additionally, Defendant moves to correct an omission in civil judgment. See Fed.R.Civ.P. 60(a).

In its Renewed Motion for Judgment as a Matter of Law, Defendant argues that Plaintiff failed to prove that it committed an illegal act, and that he failed to show a causal link between his protest and his termination. The defendant also contends that Plaintiff may not benefit from the public policy exception to the employment-at-will doctrine because he participated in the alleged illegal activity. In its Motion for a New Trial, Defendant maintains that this court improperly instructed the jury on reliance, and thus impermissibly shifted the burden of proof. It also argues that Plaintiff's recovery is barred by the efficient breach doctrine, and that the jury's verdict as to both liability and damages is against the weight of the evidence. Finally, in its Motion to Correct an Omission in Civil Judgment, Defendant asserts that the court should amend its judgment to reflect the front pay and back pay figures found by the jury. Plaintiff contests each of these arguments. Upon the following reasoning, I shall deny the defendant's Renewed Motion for Judgment as a Matter of Law. I also shall deny the parties' motions for a new trial, provided that Plaintiff accepts a remittitur of damages to $ 600,000. I shall grant Defendant's Motion to Correct a Clerical Omission.

I. Background

Defendant Browning-Ferris, Inc. ("BFI") is a Delaware corporation in the trash-hauling and recycling business. In November, 1989, Plaintiff Michael Paolella signed an employment agreement with BFI, and began working as a sales supervisor in King of Prussia, Pennsylvania. BFI later promoted Mr. Paolella to sales manager and transferred him to Delaware. In 1992, BFI switched invoicing systems. Under this new system, BFI told its customers that it was simply passing along its costs, while in fact it was charging substantially more, all of which increase went to its own profits. The testimony revealed that BFI drafted invoices in which it exaggerated the amount customers paid for landfill costs by fabricating the weight of their trash. Plaintiff testified that he believed this system to be unethical and illegal, and that he orally expressed his concerns to BFI's Delaware district manager, Ronald Hanley, and to the head of the Atlantic region, Mr. Snyder. BFI demoted Mr. Paolella in the fall of 1992, and fired him on January 17, 1994. BFI maintained that it fired Mr. Paolella because of his poor performance. Mr. Paolella countered that he was fired for making repeated protests about BFI's billing practices.

After a four-day trial, the jury found for Plaintiff, and awarded him $ 732,000 in damages. The court then requested that the jury specify the amount of back pay and front pay included in that award. The jury informed the court that it was awarding Plaintiff $ 135,000 in back pay, and $ 597,000 in front pay. Now before the court are Defendant's Renewed Motion for Judgment as a Matter of Law, or, in the alternative, Motion for a New Trial, Plaintiff's Motion for a New Trial, and Defendant's Motion to Correct an Omission in Civil Judgment. Delaware law governs this dispute.¹

II. Standard of Review

Under Fed.R.Civ.P. 50(b), a court should grant judgment as a matter of law "only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference," insufficient evidence exists "from which a jury reasonably could find liability." Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir.1993). In deciding whether sufficient liability evidence exists, "the court may not weigh the evidence, determine the credibility of the witnesses, or substitute its version of the facts for the jury's version." Id. Yet more than a mere scintilla of evidence must support the finding of liability. See id.

The Federal Rules permit district courts to order new trials "for any of the reasons for which new trials have heretofore been granted in actions at law in the Courts of the United States." Fed.R.Civ.P. 59(a). These reasons include prejudicial errors of law and verdicts against the weight of the evidence. See Maylie v. National R.R. Passenger Corp., 791 F.Supp. 477, 480 (E.D.Pa.), aff'd, 983 F.2d 1051 (3d Cir.1992). A district court has broad latitude to order a new trial for prejudicial errors of law. See Klein v. Hollings, 992 F.2d 1285, 1289-90 (3d Cir.1993). By contrast, a court's discretion to order a new trial for a verdict contrary to the weight of evidence is more limited. It should so order only if it reasonably concludes that to allow the jury's verdict to stand would result in a "miscarriage of justice." Id. at 1290 (quoting Williamson v. Consolidated R. Corp., 926 F.2d 1344, 1348 (3d Cir.1991)). A court may order remittitur if it detects "no clear judicial error or `pernicious influence,'" but the verdict nonetheless "shock[s] the conscience of the court." Kazan v. Wolinski, 721 F.2d 911, 914 (3d Cir.1983).

III. Discussion

A. Renewed Motion for Judgment as a Matter of Law

Defendant's Renewed Motion for Judgment as a Matter of a Law raises several whistleblower issues. First, if an employee complains about illegal conduct, as opposed to mere questionable conduct, is he protected by Delaware's whistleblower exception to the employment-at-will doctrine? I conclude that he is. Second, does that protection extend to an employee even if his protests are only within the company? Under the circumstances of this case, I conclude that Plaintiff is protected. Third, is a plaintiff totally barred from recovery if he himself participated in his employer's illegal acts? Here, I conclude it is not a total bar, but that it does call for some reduction in Plaintiff's damage award. Fourth, and finally, did too much time elapse between Plaintiff's internal complaints and his termination to permit an inference of causation? I conclude that this was a jury question, on which they were fully charged, and which was fully argued, and that there was sufficient evidence of record to support their implicit finding of causation.

1. Criminal Activity

A preliminary issue is whether Plaintiff produced sufficient evidence to permit a jury to find reasonably that BFI had engaged in criminal activity. Under Delaware law,

A person commits theft when, with the intent ... [to deprive the owner of the property or appropriate it], he obtains property of another person by intentionally creating or reinforcing a false impression as to a present or past fact, or by preventing the other person from acquiring information which would adversely affect his judgment of a transaction.

11 Del.C. § 841. After receiving a charge with this statutory language, the jury found that BFI had obtained greater fees, the property of others, by creating a false impression that the rate increase reflected higher landfill costs alone. N.T. of Oct. 3, 1996, at 101. That is a crime. As such, it is explicit; it is recognizable.

There was sufficient evidence for a rational jury to conclude that BFI had engaged in this criminal activity. Mr. Paolella testified that Mr. Hanley told the sales force that he intended to use the waste authority's 25% rate increase to improve profits. N.T. of Sept. 30, 1996, at 64-70. Mr. Hanley also personally instructed Mr. Paolella to lie to a customer, Edward B. DeSeta, and all other customers about the average weight used to calculate their bills. N.T. of Sept. 30, 1996, at 88. Mr. Paolella's supervisor, Stephen Sanko, told him to fabricate weight tickets for another customer, Dempsey's Diner. N.T. of Oct. 1, 1996, at 20. Geoffrey Schenck, a former BFI employee, corroborated Mr. Paolella's testimony about the billing system, and the DeSeta and Dempsey Diner incidents. N.T. of Oct. 1, 1996, at 54, 56, 57-60, 62. Thus, a jury reasonably could have found that BFI intentionally had used misleading invoices to convince customers that increased landfill costs alone accounted for their steeper bills.

2. Protection of Internal Whistleblowers

I have found no Delaware court case addressing the question of whether an employee, terminated for internally blowing the whistle on criminal conduct, may benefit from the public-policy exception to the doctrine of employment-at-will. On an issue of first impression, a court sitting in diversity "must forecast the position the supreme court of the forum would take." See Clark v. Modern Group, Ltd., 9 F.3d 321, 326 (3d Cir.1993). In so doing, "a federal court must be sensitive to the doctrinal trends of the state whose law it applies, and the policies which inform the prior adjudications by the state courts." Becker v. Interstate Properties, 569 F.2d 1203, 1206 (3d Cir.1977), cert. denied, 436 U.S. 906, 98 S.Ct. 2237, 56 L.Ed.2d 404 (1978).

The Supreme Court of Delaware has held that every...