Gross v. Fbl Financial Services, Inc.

• Citation: 588 F.3d 614
• Decision Date: 30 November 2009
• Docket Number: No. 07-1490.,No. 07-1492.,07-1490.,07-1492.
• Parties: Jack GROSS, Appellant/Cross-Appellee, v. FBL FINANCIAL SERVICES, INC., Defendant, FBL Financial Group, Inc., Appellee/Cross-Appellant, Iowa Farm Bureau Federation; Farm Bureau Mutual Insurance Company; William Oddy, Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

588 F.3d 614

Jack GROSS, Appellant/Cross-Appellee, v. FBL FINANCIAL SERVICES, INC., Defendant FBL Financial Group, Inc., Appellee/Cross-Appellant Iowa Farm Bureau Federation; Farm Bureau Mutual Insurance Company; William Oddy, Defendants.

No. 07-1490.

No. 07-1492.

United States Court of Appeals, Eighth Circuit.

Submitted: September 28, 2009.

Filed: November 30, 2009.

Frank B. Harty, Debra L. Hulett, Des Moines, IA, for appellant.

Michael J. Caroll, Des Moines, IA, Beth Townsend, West Des Moines, IA, for appellee.

Before MELLOY, COLLOTON, and BENTON, Circuit Judges.

COLLOTON, Circuit Judge.

This case is before us on remand from the Supreme Court. See Gross v. FBL Financial Servs., Inc., ___ U.S. ___, 129 S.Ct. 2343, 174 L.Ed.2d 119 (2009). We reverse the judgment of the district court and remand for a new trial.

I.

Jack Gross sued his employer, FBL Financial Group, Inc. ("FBL"), alleging that FBL violated the Age Discrimination in Employment Act ("ADEA") and the Iowa Civil Rights Act ("ICRA") by demoting him because of his age in 2003. The case was tried to a jury, and the district court gave one marshalling instruction that applied to both causes of action. The jury returned a verdict in favor of Gross, and awarded him damages of $20,704 in lost past salary and $26,241 in lost past stock options, for a total of $46,945 in lost compensation. The jury awarded no damages for emotional distress, and found that FBL's conduct was not "willful." After trial, the district court denied FBL's motion for judgment as a matter of law based on sufficiency of the evidence, and denied FBL's motion for new trial based on alleged evidentiary errors. The court also denied Gross's motion for attorney's fees. Both parties appealed.

We reversed and remanded for a new trial based on an erroneous jury instruction. Gross v. FBL Financial Servs., Inc., 526 F.3d 356 (8th Cir.2008). A final jury instruction directed that the jury's verdict must be for Gross if two elements were proved by a preponderance of the evidence: (1) that FBL demoted Gross to a position of claims project coordinator, effective January 1, 2003, and (2) that Gross's age "was a motivating factor in [FBL's] decision to demote [Gross]." Addressing the possibility that the employer acted with mixed motives, the instruction further stated as follows: "However, your verdict must be for [FBL] . . . if it has been proved by the preponderance of the evidence that [FBL] would have demoted plaintiff regardless of his age." Final Instruction No. 11 (emphasis added). We interpreted this instruction to mean that once Gross proved by a preponderance of the evidence that age was a motivating factor in FBL's employment decision, the burden of persuasion shifted to FBL to prove that it would have demoted Gross regardless of his age. Gross, 526 F.3d at 360.

We held that the jury instruction impermissibly shifted the burden of persuasion to FBL to prove that age was not the determining factor in its employment decision. Under our circuit precedent prevailing at the time, see Erickson v. Farmland Indus., Inc., 271 F.3d 718, 724 (8th Cir. 2001), Justice O'Connor's concurring opinion in Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989), stated the controlling rule in an age discrimination case. Under that rule, "to justify shifting the burden of persuasion on the issue of causation to the defendant, a disparate treatment plaintiff must show by direct evidence that an illegitimate criterion was a substantial factor in the decision." Id. at 276, 109 S.Ct. 1775 (O'Connor, J., concurring in judgment) (emphasis added). Because Gross conceded that he did not present "direct evidence" of discrimination, we held that the burden of persuasion should have remained with the plaintiff throughout, and the jury should have been charged to decide whether the plaintiff proved that age was the determining factor in FBL's employment action. 526 F.3d at 360. Our opinion implicitly treated Gross's claim under the ICRA together with his claim under the ADEA, given our circuit precedent that the two claims were analytically identical. See King v. United States, 553 F.3d 1156, 1160 n. 3 (8th Cir.2009).

The Supreme Court granted Gross's petition for a writ of certiorari, and held that the burden of persuasion never shifts to the party defending an alleged mixed-motive discrimination claim brought under the ADEA. Gross, 129 S.Ct. at 2348. Our opinion had assumed that the burden of persuasion would shift if the plaintiff presented "direct evidence" of age discrimination, so the Court vacated our opinion and remanded the case for further consideration. The parties have filed supplemental briefs addressing how the case should be resolved on remand.

II.

We conclude that FBL is entitled to a new trial on Gross's claim under the ADEA. Gross has not disputed our conclusion that the jury was likely to interpret the final instruction to shift the burden of persuasion to FBL if Gross proved by a preponderance of the evidence that age was a motivating factor in FBL's decision to demote him. The Supreme Court has clarified that the burden of persuasion never shifts to the defendant in an ADEA case. The final instruction in this case was therefore erroneous. The jury should have been instructed, in substance, that Gross retained the burden of persuasion on his ADEA claim to establish "by a preponderance of the evidence (which may be direct or circumstantial) that age was the `but-for' cause of the challenged employer decision." Gross, 129 S.Ct. at 2351. Because the jury instruction shifted the burden of persuasion on a central issue in the case, the error cannot be harmless. M.M. v. Special Sch. Dist. No. 1, 512 F.3d 455, 459 (8th Cir.2008); West Platte R-II Sch. Dist. v. Wilson, 439 F.3d 782, 785 (8th Cir.2006).

Gross contends on remand that even if a new trial is required on the ADEA claim, the jury instruction was a correct statement of the law under the Iowa Civil Rights Act, and that the jury's verdict should stand with respect to the state law claim. He relies on a recent decision of the Supreme Court of Iowa in Deboom v. Raining Rose, Inc., 772 N.W.2d 1 (Iowa 2009), for the proposition that the plaintiff in a discrimination case under the ICRA need show only that a prohibited criterion was a "motivating factor" in the defendant's employment decision to establish a violation of the ICRA. Gross argues that because the final jury instruction required him to prove by a preponderance of the evidence that his age was a motivating factor in FBL's decision to demote him the jury's verdict was based on a proper instruction under the ICRA.

DeBoom involved an action under the ICRA alleging discrimination based on sex and pregnancy. The trial court in DeBoom correctly charged the jury that the plaintiff must prove that sex and pregnancy "was a determining factor" in the employer's decision to discharge the plaintiff. 772 N.W.2d at 13. The court then gave an instruction that "[p]laintiff's pregnancy was a `determining factor' if that factor played a part in the Defendant's later actions towards Plaintiff. However, Plaintiff's pregnancy need not have been the only reason for Defendant's action." Id. at 13 (emphasis omitted). The Supreme Court of Iowa held that the trial court erred, however, by submitting this additional instruction: "A determining factor need not be the main reason behind the decision. It need only be the reason which tips the scales decisively one way or the other." Id. (emphasis omitted). The latter instruction, said the court, was proper in tortious discharge cases under Iowa law, but imposed on the plaintiff "a higher burden of proof than is required in discrimination cases." Id. The court concluded that the first definitional instruction—that plaintiff's pregnancy was a "determining factor" if it "played a part" in the employer's action—"best corresponds with the burden of proof required in discrimination cases." Id. The state supreme court explained that it was not error for the trial court to instruct that the plaintiff must prove that pregnancy or sex was "a determining factor" in the employment action, id. at 12, 14, but that "it would be easier to use the word `motivating' instead of `determining' in discrimination cases." Id. at 13-14. DeBoom did not discuss age discrimination, but Gross points out that the ICRA addresses age discrimination in the same section with sex discrimination. See Iowa Code § 216.6(1)(a).

Gross reads DeBoom to mean that once a plaintiff establishes that age was a motivating factor in an employer's adverse action, the employer is liable for age discrimination under the ICRA. In other words, as we understand his supplemental brief, Gross suggests that even if the jury is convinced that the employer would have taken the same adverse action in the absence of an impermissible motive, the plaintiff nonetheless establishes a violation of the statute if the jury believes that age was "a motivating factor." On that view, it does not matter whether the district court shifted the burden of proof to FBL to establish that Gross would have been demoted regardless of his age, because Gross need not exclude this possibility, and there is no such defense to liability. We are not convinced that DeBoom transforms Iowa law in this manner.

First, such an interpretation of DeBoom would conflict with the analytical framework for age discrimination cases that the Supreme Court of Iowa has declared for cases in which there is an assertion that the employer was influenced by mixed motives. In Landals v. George A. Rolfes Co., 454 N.W.2d 891 (Iowa 1990), the court applied the same rule for determining liability that this court used prior to the Supreme Court's decision in Gross, namely, the approach of Justice O'Connor's concurring opinion in Price Waterhouse: "Where direct evidence is presented and the employer suggests other factors influenced the...