Gaddy v. Abex Corp.
| Decision Date | 16 October 1989 |
| Docket Number | No. 88-3119,88-3119 |
| Citation | 884 F.2d 312 |
| Parties | 50 Fair Empl.Prac.Cas. 1333, 51 Empl. Prac. Dec. P 39,335, 14 Fed.R.Serv.3d 1023 Carolyn GADDY, Plaintiff-Appellee, v. ABEX CORPORATION and Miguel Solis, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Randall D. Schmidt, Mandel Legal Aid Clinic, Carolyn Gaddy, Chicago, Ill., for plaintiff-appellee.
Michael D. Freeborn, Elizabeth D. Sharp, Margaret S. Garvey, Freeborn & Peters, Chicago, Ill., for defendants-appellants.
Before CUMMINGS, POSNER and KANNE, Circuit Judges.
The defendants, Abex Corporation and Miguel Solis, appeal from a decision in favor of plaintiff, Carolyn Gaddy, on her Title VII (42 U.S.C. Sec. 2000e et seq.) claim. Plaintiff initially filed a complaint alleging discrimination on the basis of race and sex under both Title VII and 42 U.S.C. Sec. 1981. Plaintiff's claims of race discrimination were tried to a jury. At the close of plaintiff's case, defendants moved for a directed verdict on plaintiff's race discrimination claims which was granted by Judge McMillen and is not challenged by plaintiff here on appeal. Plaintiff's sex discrimination claims were tried to Judge McMillen, after which he entered judgment in favor of the defendants. Plaintiff filed a motion to amend findings of fact and conclusions of law under Rule 52(b), or, in the alternative, for a new trial pursuant to Rule 59(a)(2). Defendants then filed a motion for fees pursuant to Rule 11 against plaintiff, her individual attorneys and the Edwin F. Mandel Legal Aid Clinic of the University of Chicago Law School. During the pendency of these motions, Judge McMillen retired and the case was reassigned to Judge Prentice H. Marshall. Judge Marshall granted plaintiff's motion for new trial on the sex discrimination claims and denied defendants' motion for Rule 11 sanctions without prejudice to renew it at the conclusion of the new trial.
After the second bench trial, Judge Marshall ruled in favor of the plaintiff on her sex discrimination claims awarding her relief of reinstatement, back pay, lost overtime pay, prejudgment interest, lost seniority, attorneys' fees and costs, and an injunction against the defendant from taking any future retaliatory action against plaintiff for filing this suit. Defendants challenge the propriety of Judge Marshall's rulings on the post-trial motions, as well as the judgment in favor of the plaintiff. We affirm in part, reverse in part and remand for further proceedings.
Abex is a manufacturer of composition brake shoes for railroad cars. Gaddy was hired by Abex on June 14, 1976, as a bargaining unit laborer and promoted to a non-bargaining unit position of quality control technician on September 17, 1977. Prior to her layoff, Gaddy was employed as part of a seven employee process control department which consisted of a "mix" side where raw materials were combined, in which Gaddy worked, and a "press" side where the mix was formed into brake shoes. By September 1982, four male employees in the process control department were laid off leaving Gaddy and two male employees, O.D. Woods and Roberto Iniquez remaining in that unit.
The second defendant in this case, Miguel Solis, was Gaddy's supervisor in quality control. One of Solis' duties required him to determine which employees would be given overtime work. This was apparently in his discretion, although the evidence at trial indicated it was Abex's general policy to divide overtime evenly among employees. Gaddy alleges that Solis discriminated against her on the basis of sex in the distribution of overtime hours as evidenced by his statement that Gaddy should not work overtime because she was a mother and her children needed her at home. On appeal, defendants challenge only the amount of overtime awarded, but not their liability for overtime. Gaddy also alleges that Solis sexually harassed her on two occasions.
In August of 1982, the plant superintendent, Thomas Boyd suffered debilitating medical problems and was replaced by Stephen Angstadt. Due to declining business, Angstadt was required to lay off another employee in Gaddy's department and chose Gaddy after conferring with Solis. No one was hired to replace the plaintiff and the plant was later sold by Abex to ABC Rail in July of 1987. Gaddy filed a charge of employment discrimination on the basis of her race and sex with the Equal Employment Opportunity Commission ("EEOC") on November 12, 1982 and received her right to sue letter on August 4, 1983. This suit followed on October 27, 1983.
Judge McMillen retired following the first trial of plaintiff's claims before ruling on plaintiff's motion to amend the findings of fact or alternatively for new trial and defendants' motion for Rule 11 sanctions. Prior to retiring, however, Judge McMillen referred the motion for fees to a magistrate with the following explanation:
As the attorneys have been advised, the attorneys representing the defendants performed some legal services for me while this case was pending which were not charged for and which were concluded before trial. I consider the nature of the services to be privileged, but the fact remains that I was provided with valuable services for which I am morally indebted to the defendants' attorneys. On the other hand, I have been acquainted with the plaintiff's attorney, Mrs. Kamp, for some time, have great respect for the work she and the Mandel Legal Aid Clinic are engaged in (which my daughter also participated in as a student at the University of Chicago Law School), and would have some conflict of interest in deciding contested issues of fact which might be based upon her credibility.
(R.99) Both parties acknowledge that Judge McMillen disclosed his relationship with the defendants' law firm on at least one other occasion prior to trial, although plaintiff never filed a motion for his recusal nor did she raise the issue of disqualification in her motion for a new trial or amended findings of fact. Defendants, however, contend that Judge Marshall granted plaintiff's motion for new trial solely on the ground that Judge McMillen should have recused himself because of the appearance of impropriety as provided under 28 U.S.C. Sec. 455(a) even though no motion for recusal existed.
Plaintiff proposes two sources of authority for Judge Marshall's decision to grant a new trial. Rule 59 of the Federal Rules of Civil Procedure allows a judge to grant a new trial in his discretion, while Rule 63 allows a judge who is required to perform judicial duties in a case in which findings of fact and conclusions of law are already filed by a previous judge to grant a new trial in the succeeding judge's discretion if unable to perform those duties for failure to preside over the trial. In explanation of the order granting a new trial Judge Marshall stated he felt it inappropriate to rule on plaintiff's motion to amend findings of fact when he did not preside at the trial, although he stated that the factual findings were contradictory on their face. Specifically, Judge Marshall noted, Judge McMillen had found no evidence to link Miguel Solis to the decision to lay off plaintiff despite the fact that the layoff notice for Gaddy was signed by Solis. Secondly, Judge McMillen found that Gaddy was only equally qualified as the two male employees who were not laid off, while it was uncontested that Gaddy had trained the two other employees and was the informal leader of their unit. Finally, Judge McMillen found that Gaddy had been terminated based on her level of seniority while the defendant had admitted that seniority was not a factor in lay-offs for non-bargaining unit employees. Judge Marshall further concluded it would be inappropriate to rule on the defendants' request for sanctions when he was unable to observe the credibility of the parties in the trial below.
In reviewing a grant of a new trial, we will not substitute our judgment for that of the district judge absent a clear showing of an abuse of discretion. Hahn v. Becker, 588 F.2d 768, 771 (7th Cir.1979). An order for a new trial is not an abuse of discretion if supported by even a single ground. Juneau Square Corp. v. First Wis. Nat. Bank, 624 F.2d 798, 809 (7th Cir.1980). While we are somewhat disturbed by a district judge, other than the trial judge, occupying essentially the same vantage point as this Court in reviewing findings of fact, concluding that he has "scant confidence" in the findings and granting a new trial, we cannot say that it was an abuse of discretion to do so in the unusual circumstances of this case.
In granting the new trial, Judge Marshall did not articulate with clarity the precise grounds upon which he relied, instead citing generally the above inconsistent findings of fact and the disclosed conflict of interest of Judge McMillen, explaining, "When all of these factors are taken into account, we have concluded that the case should be retried." Judge Marshall then explained that The reason on which he most clearly relied was the inability to determine whether the action was frivolous for the Rule 11 motion for sanctions without having presided at the trial and observed the parties and their counsel.
Rule 11 countenances a two-prong inquiry into the attorneys' conduct: (1) a subjective element, whether the action was filed for any improper purpose and (2) whether the attorney failed to make an objectively reasonable inquiry prior to bringing the action. Mars Steel Corp. v. Continental Bank, 880 F.2d 928, 931 (7th Cir.1989). Determining the appropriateness of Rule 11 sanctions is a...
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