McKnight v. General Motors Corp.

• Decision Date: 11 September 1992
• Docket Number: Nos. 91-2989,91-2990,s. 91-2989
• Parties: 64 Fair Empl.Prac.Cas. (BNA) 1071, 59 Empl. Prac. Dec. P 41,751 Gary McKNIGHT, Plaintiff-Appellant, Cross-Appellee, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1366

973 F.2d 1366

64 Fair Empl.Prac.Cas. (BNA) 1071,

59 Empl. Prac. Dec. P 41,751

Gary McKNIGHT, Plaintiff-Appellant, Cross-Appellee, v. GENERAL MOTORS CORPORATION, Defendant-Appellee, Cross-Appellant.

Nos. 91-2989, 91-2990.

United States Court of Appeals, Seventh Circuit.

Argued June 8, 1992.

Decided Sept. 11, 1992.

Kristi L. Browne, James A. Borrasso, Chicago, Ill., John S. Williamson, Jr., argued, Appleton, Wis., Edna Selan Epstein (argued), Chicago, Ill., for plaintiff-appellant.

Lawrence T. Lynch, Maureen A. McGinnity (argued), George D. Cunningham, Foley & Lardner, Milwaukee, Wis., for defendant-appellant.

Before BAUER, Chief Judge, CUMMINGS, Circuit Judge, and FAIRCHILD, Senior Circuit Judge.

BAUER, Chief Judge.

In this appeal, we review for the second time Gary McKnight's claim that he should be reinstated to his employment at General Motors Corporation ("GM"). We first reviewed his claim in 1990, after he won a jury verdict on a 42 U.S.C. § 1981 claim and a judgment under Title VII. McKnight v. General Motors Corp., 908 F.2d 104 (7th Cir.1990) ("McKnight II "). On the § 1981 claim, the jury awarded McKnight $55,000 in compensatory damages, $55,000 in back pay, and $500,000 in punitive damages. The jury awarded no damages based on impairment of future earning capacity. On the Title VII claim tried before the court, the judge declined to order GM to reinstate McKnight. The only other relief McKnight requested under Title VII was back pay, which was rendered superfluous by the jury's $55,000 back-pay award. McKnight v. General Motors Corp., 705 F.Supp. 464, 468 (E.D.Wis.1989) ("McKnight I ").

We reversed the verdict under § 1981 in light of Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), and remanded those claims to the district court for dismissal. McKnight II, at 908 F.2d at 115, 117. We upheld the Title VII verdict, and affirmed McKnight's back-pay award under that theory. We also directed the court to reconsider its refusal to reinstate McKnight and to determine, if reinstatement was not appropriate, whether McKnight should receive front pay in lieu of reinstatement. Id. We direct interested readers to McKnight I and II for the underlying facts in this case.

On remand, the district court reconsidered its reinstatement order, and again declined to order GM to reinstate McKnight or to award front pay. The court also denied McKnight's motion to reconsider that decision. Written opinions on both decisions were published in McKnight v. General Motors Corp., 768 F.Supp. 675 (E.D.Wis.1991) ("McKnight III "). McKnight appeals, arguing that the court abused its discretion in denying the relief he requests. He also contends that the court disobeyed our instructions in McKnight II on remand because it did not reopen the record and take evidence on McKnight's then-current financial condition, employment status, and his relationships with existing GM employees. McKnight also argues that he was entitled to prejudgment interest, and that the district court abused its discretion in refusing to award it. On cross-appeal, GM argues that the attorneys' fees award entered after trial pursuant to a stipulation by the parties should be reduced in light of our dismissal of McKnight's § 1981 claims. We shall discuss each claim in turn.

Reopening the Record

We do not believe the district court abused its discretion in declining to reopen the record or in refusing to order reinstatement or front pay. In its initial opinion, McKnight I, the district court stated that reinstatement was not appropriate in this case because the relationship between McKnight and GM was acrimonious, and because McKnight preferred not to be reinstated in his former position, but in a corporate finance or banking position. Reinstatement was also inappropriate, it found, because

It is clear that in the instant case the plaintiff has been fully compensated and thereby made whole by the award of compensatory damages, and the defendant has been properly punished by the award of punitive damages. Complete justice requires no more in the context of the remedial purpose of Title VII.

705 F.Supp. at 469. Based on this language, we found that "the district judge declined to order [reinstatement] because the relationship between McKnight and GM had been poisoned by this litigation and also because the award of $500,000 in punitive damages, on top of the compensatory damages awarded, was remedy enough." McKnight II, 908 F.2d at 115.

Because we struck the punitive and compensatory damages, we ordered the district court to reconsider its refusal to order McKnight's reinstatement, or in lieu thereof, to award front pay. Contrary to McKnight's present contention however, we did not order the court to reopen the record and gather new evidence on McKnight's employment status. Our opinion was silent as to whether the record should be supplemented. That decision, together with the decision on the merits, was left to the sound discretion of the trial judge. "A discretionary order will only be set aside if it is clear that no reasonable person could concur in the trial court's assessment." Tennes v. Commonwealth, 944 F.2d 372, 381 (7th Cir.1991). "The district court's decision must strike us as fundamentally wrong for an abuse of discretion to occur." Anderson v. United Parcel Service, 915 F.2d 313, 315 (7th Cir.1990).

The district judge declined to reopen the record for several reasons. He noted correctly that our opinion did not require it. McKnight III, 768 F.Supp. at 678. He also explained that Patterson did not alter the remedies available under Title VII. Finally, he noted that McKnight had a full opportunity at trial to present evidence of his past and future damages and had failed to provide any authority for his position that the district judge was required to reopen the record on remand.

McKnight's reliance on Grafenhain v. Pabst Brewing Co., 870 F.2d 1198, 1201 (7th Cir.1989) and Welborn v. Reynolds Metals Co., 868 F.2d 389 (11th Cir.1989), for the proposition that the district court was required to reopen the record because of our remand, is misplaced. A district court's duties on remand are governed by the opinion ordering it. As Black's dictionary defines it (and as we used the term in McKnight II ), "reconsideration implies reexamination, and possibly a different decision by the entity that initially decided it." Black's Law Dictionary 1272 (6th ed. 1990). Although the district court in Grafenhain, reopened the record to determine the amount of front pay, as GM points out, it only did so after it determined based upon the trial record that front pay was appropriate. Id. at 1202. This is an important distinction--in Grafenhain, the amount of the award was determined in light of a reduction-in-force instituted by the defendant shortly after the plaintiff was wrongly discharged. Because the court found that the plaintiff would have lost his job for legitimate reasons during the RIF, it awarded front pay only for the period between the plaintiff's termination and the RIF. Id.

Similarly, in Welborn, the Eleventh Circuit reversed the district court's judgment that the plaintiff had failed to establish a prima facie case of discrimination. 810 F.2d 1026, 1028 (11th Cir.1987). It remanded the case, and the district court reinstated the plaintiff but awarded back pay of only $1.00 because it found the plaintiff failed to present sufficient evidence at trial to support a larger award. The district court declined to receive additional evidence on back pay, either relating to the pre-trial or post-trial period. Welborn, 868 F.2d at 391. The Eleventh Circuit held that the district court could refuse to hear further evidence relating to the pre-trial period, but that it abused its discretion in refusing to hear evidence supporting a back-pay award from the time of trial until the plaintiff's reinstatement. Id. The court explained that there was no way for the plaintiff to present evidence at trial of her post-trial back-pay damages. Because Title VII is designed to make victims of discrimination whole, claimants are generally entitled to back pay from the date of the adverse employment action until reinstatement. Thus, the plaintiff should have been allowed to present evidence for the post-trial period. Id. at 391. The court also held that the plaintiff should have been allowed to present evidence on her reinstatement status. Id. But these rulings governed a proceeding where the appellate court reversed the trial court's judgment in favor of the defendant, and imposed liability. Because of its earlier judgment, the trial court in Welborn never evaluated the amount of back pay to which the plaintiff was entitled or to what position she should be reinstated. On remand, then, the court was required to evaluate what damages would make the plaintiff whole at the time the damages were awarded.

In this case, our remand was not based upon a reversal of the district court's evaluation of the facts at trial. Rather, because we vacated the § 1981 damages and questioned the completeness of the district court's explanation of its decision to deny reinstatement, we asked the district court to reconsider whether McKnight needed to be reinstated or given front pay to be made whole. This ruling did not require the district court to reopen the record, and we do not believe the court abused its discretion in refusing to do so.

Reinstatement & Front Pay

As to the merits of the district court's refusal to reinstate McKnight, or to award front pay, we again note that this decision is consigned to the sound discretion of the district court. Tennes v. Commonwealth, 944 F.2d 372 (7th Cir.1991); ¹ Grafenhain v. Pabst Brewing Co., 870 F.2d 1198, 1201 (7th Cir.1989). "Under an abuse of discretion standard, the proper inquiry is not how the reviewing court would have ruled if it had been considering the case in the first...