Graffam v. Scott Paper Co.

• Decision Date: 02 December 1994
• Docket Number: Civ. No. 93-64-P-C.
• Parties: Ronald E. GRAFFAM, et al., Plaintiffs, v. SCOTT PAPER COMPANY and S.D. Warren Company, Defendants.
• Court: U.S. District Court — District of Maine

870 F. Supp. 389

Ronald E. GRAFFAM, et al., Plaintiffs, v. SCOTT PAPER COMPANY and S.D. Warren Company, Defendants.

Civ. No. 93-64-P-C.

United States District Court, D. Maine.

December 2, 1994.

COPYRIGHT MATERIAL OMITTED

Daniel W. Bates, James B. Haddow, Kenneth D. Keating, Petruccelli & Martin, Portland, ME, for plaintiffs.

William J. Kayatta, Jr., S. Mason Pratt, B. Simeon Goldstein, Pierce, Atwood, Scribner, Allen Smith & Lancaster, Portland, ME, for defendants.

Ray R. Pallas, Pallas & Waldron, Westbrook, ME, for Kathleen M. Woods.

OPINION AND ORDER

GENE CARTER, Chief Judge.

This consolidated case arose from a reduction in force effective on March 13, 1991, in which a number of employees, including Plaintiffs, were permanently discharged from Scott Paper Company's S.D. Warren paper mill in Westbrook, Maine. Plaintiffs, eleven former salaried employees of the mill, allege age discrimination in violation of the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. §§ 621-634 (1985 & Pamph.1994)¹ (Count VI), and the Maine Human Rights Act ("MHRA"), 5 M.R.S.A. §§ 4551-4633 (1989 & Supp.1994)² (Count I). The two remaining counts allege violations based on the "disparate impact" theory of discrimination.³ The case was tried without a jury. Based on the testimony at trial and the exhibits submitted in evidence, the Court makes the following findings of fact and conclusions of law.

I. FACTS

In October of 1990, S.D. Warren Company ("Warren") decided to reduce the number of salaried employees at the Westbrook mill. This decision was brought about, at least in part, by the company's decision to sell the mill and its desire to make the mill more attractive to potential buyers. Tr. at 341. Warren determined that it should be possible to increase its operating profit and thereby enhance its sale prospects by effecting a 20% reduction in the number of salaried employees at the mill. Christain Depo. at 34.

The selection process was devised and implemented with the help of the mill's department heads. All rated employees were placed in job groups for assessment. All Plaintiffs were at least fifty years of age as of March 13, 1991, when they were discharged from their employment at the mill as a result of the downsizing process. The downsizing process resulted in an overall rate of retention of 61% of employees age fifty and older, and an overall rate of retention of 91% of employees under age fifty. Tr. at 6.

II. AGE DISCRIMINATION IN EMPLOYMENT ACT

A. RETROACTIVITY OF THE 1991 AMENDMENTS TO THE CIVIL RIGHTS ACT

In Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989), the Supreme Court reformulated the law it had established almost twenty years earlier in Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), in a number of ways, including the allocation of the burden of persuasion for disparate impact claims. The Wards Cove Court declared that the burden of persuasion remains at all times with the plaintiff.⁴ Prior to Wards Cove, it was settled law that the burden of showing a business necessity shifts to the defendant once disparate impact of an employer's practice has been shown. See, e.g., Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 95 S.Ct. 2362, 2375, 45 L.Ed.2d 280 (1975) (stating that the employer has the "burden of proving that its tests are `job related'"). The Civil Rights Act of 1991 ("CRA") legislatively overruled the burden of proof established in Wards Cove.⁵ The new law shifted the burden of demonstrating business necessity and job relatedness squarely back onto the defendant.⁶

The CRA became effective on November 21, 1991. Although these consolidated lawsuits were filed after the passage of the amendments to the CRA, the unlawful conduct alleged in this case occurred before the Act was passed. Therefore, the Court must determine whether to apply the amendments to the CRA retroactively to Plaintiffs' claims. Instead of clear direction, in the CRA Congress has provided courts with statutory language of compromise which creates an "ambiguity as to whether Congress intended the Act to be generally retroactive." Fray v. Omaha World Herald Co., 960 F.2d 1370, 1376 (8th Cir.1992). Defendants maintain that the amendments to the CRA are inapplicable to this case because the statute's provisions are not retroactive⁷ and, in any event, the amendments do not apply to ADEA.

In general, substantive laws apply prospectively only. Procedural laws, on the other hand, apply both prospectively and retrospectively, unless there is legislative expression to the contrary. The change at issue here involves exclusively changes to the rules controlling the burden of proof which are not clearly substantive or procedural.⁸

Traditionally, courts look to the legislative history of a statute in order to obtain guidance on the propriety of its retroactive application. In this case, the legislative history leaves the issue in a state of confusion. See 137 Cong.Rec.S. 15,483 (daily ed. Oct. 30, 1991) (statement of Senator Danforth, one of the bill's sponsors, that the Act was to apply only prospectively, while another sponsor, Senator Kennedy, expressed disagreement with that view.). Thus, the Court turns to the text of the 1991 CRA which states:

(a) In General. — Except as otherwise specifically provided, this Act and the amendments made by this Act shall take effect upon enactment.

Section 402(a). One implication of this statement is that the amendments apply to all claims not yet decided at the time of enactment. However, the Supreme Court has recently observed that "there is no special reason to think that all the diverse provisions of the CRA must be treated uniformly" for purposes of retroactivity analysis. Landgraf v. USI Film Products, ___ U.S. ___, ___, 114 S.Ct. 1483, 1505, 128 L.Ed.2d 229, 262 (1994) (holding section 102 of the CRA creating the power to recover damages and providing for jury trial did not apply to case pending on appeal on the date of enactment). The Landgraf court "understood the instruction that the provisions are to `take effect upon enactment' to mean that courts should evaluate each provision of the Act in light of ordinary judicial principles concerning the application of new rules to pending cases and preenactment conduct." Id. Section 402(b) goes on to state:

(b) Certain Disparate Impact Cases. —

Notwithstanding any other provision of this Act, nothing in this Act shall apply to any disparate impact case for which a complaint was filed before March 1, 1975, and for which an initial decision was rendered after October 30, 1983.

This provision was specifically designed to exempt Wards Cove, as it appears that virtually no other civil rights case fits the above description. If these amendments to the CRA applied only prospectively, section 402(b) of the Act, which carves out an exception for the Wards Cove case, would be unnecessary.⁹ As some district courts have agreed, the existence of subsection (b) supports the argument that the Act is retrospective.¹⁰

Reading clauses (a) and (b) of section 402 together strongly indicates that the 1991 amendments to the CRA addressing the burden of proof in disparate impact cases apply to cases which were filed after, or which were pending as of, the CRA's effective date. The Supreme Court has stated on numerous occasions that "no provision of a statute should be construed to be entirely redundant." Kungys v. U.S., 485 U.S. 759, 778, 108 S.Ct. 1537, 1550, 99 L.Ed.2d 839 (1988); Arcadia v. Ohio Power Co., 498 U.S. 73, 111 S.Ct. 415, 112 L.Ed.2d 374 (1990). Along the same lines, the Supreme Court has also expressed a hesitancy "to adopt an interpretation of a congressional enactment which renders superfluous another portion of the same law." Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 837, 108 S.Ct. 2182, 2189, 100 L.Ed.2d 836 (1988) (citing cases). In this case, the only interpretation of Section 402 that does not make clause (b) meaningless is that the CRA is applicable to all cases which are filed after, or which are pending at the time of, its enactment, with the exception of Wards Cove.

Moreover, courts have held that where "Congress enacts a statute to clarify the Supreme Court's interpretation of previous legislation thereby returning the law to its previous posture," the act should be given retroactive effect. Ayers v. Allain, 893 F.2d 732, 754-55 (5th Cir.1990), reh'g granted, en banc 898 F.2d 1014 (1990). Accord Mrs. W. v. Tirozzi, 832 F.2d 748, 755 (2d Cir.1987) (holding that amendments to Education of the Handicapped Act should be applied retroactively since they codified "congressional purpose ... which Congress believes the Supreme Court had misinterpreted"); Lussier v. Dugger, 904 F.2d 661, 665-66 (11th Cir. 1990); DeGurules v. Immigration and Naturalization Service, 833 F.2d 861, 863 (9th Cir.1987). Were the Court to decide otherwise, Defendants would reap a windfall from the judicial misinterpretation of disparate impact doctrine. Therefore, this Court holds that the 1991 amendments to the CRA relating to the burden of proof requirements for disparate impact analysis apply to this case.

Defendants further argue that even if the amendments to the CRA apply retroactively, they are inapplicable to ADEA. Because of the similarity between the ADEA and Title VII of the Civil Rights Act, federal courts have historically applied the standards used for Title VII to ADEA. See, e.g., Western Air Lines, Inc. v. Criswell, 472 U.S. 400, 105 S.Ct. 2743, 86 L.Ed.2d 321 (1985); LeBlanc v. Great American, Inc. Co., 6 F.3d 836, 843 (1st Cir.1993). Thus, although Defendants strenuously argue that Congress never meant to change the burden of proof in the ADEA context, the Court is convinced that it is proper to apply the new burden of proof to this case. See Caron v. Scott Paper Co., 834 F.Supp. 33, 36 (D.Me.1993).

B. DISPARATE IMPACT

In order to...