Sperling v. Hoffmann-La Roche, Inc.

Decision Date30 April 1996
Docket NumberCiv. Action No. 85-2138 (HAA).
Citation924 F. Supp. 1346
PartiesRichard SPERLING, Frederick Hemsley, and Joseph Zelauskas, individually and on behalf of all other persons similarly situated, Plaintiffs, v. HOFFMANN-LA ROCHE, INC., a New Jersey corporation, Defendant.
CourtU.S. District Court — District of New Jersey

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Schwartz, Tobia, & Stanziale, Ben H. Becker, Montclair, NJ, Leonard N. Flamm, New York City, for Plaintiffs.

Crummy, Del Deo, Dolan, Griffinger & Vecchione, John A. Ridley, Richard S. Zackin, J. Timothy McDonald, Newark, NJ, for Defendant.

OPINION

HAROLD A. ACKERMAN, District Judge.

This is a putative class action brought by former employees of Hoffmann-La Roche, Inc. ("Roche"), alleging violations of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq.

On February 4, 1984, Roche discharged or demoted approximately 1,100 employees pursuant to a reduction in force ("RIF"), known as Operation Turnabout. Based on Roche's conduct during the RIF, Richard Sperling, one of the employees and a named plaintiff in this case, filed an age discrimination charge with the Equal Employment Opportunity Commission ("EEOC") on behalf of himself and all employees similarly situated. Thereafter, on May 7, 1985, Sperling, along with the other named plaintiffs, filed this action on behalf of themselves and all others similarly situated, alleging, among other things, that the defendant discriminated against them in violation of the ADEA. Subsequently, 476 of the over 1,100 employees affected in the RIF opted-in as members of the putative class.

Now before the court are motions by both parties. Plaintiffs move, pursuant to Federal Rule of Civil Procedure 42(b), for an order bifurcating the trial in this case into two stages: (1) a Stage I trial regarding the issue of whether Roche engaged in a pattern or practice of age discrimination against the class; and (2) a series of Stage II trials that would address the liability and damages issues relating to the individual plaintiffs. Defendant Roche moves for summary judgment dismissing plaintiffs' pattern-or-practice claim.

These matters were referred to the Special Master appointed in this case.1 The Special Master submitted an opinion (1) granting plaintiffs' motion for bifurcation; and (2) denying defendant's motion for summary judgment dismissing plaintiffs' pattern-or-practice claim.2

On May 26, 1995, oral argument was heard on Roche's appeal from this decision. In Plaintiffs' Brief in Opposition to Roche's Appeal from the Special Master's Denial of Roche's Motion for Summary Judgment Regarding Plaintiffs' "Pattern or Practice" Claims hereinafter "Plaintiffs' Pattern-or-Practice Opposition Br.", plaintiffs "requested a continuance, pursuant to Federal Rule of Civil Procedure 56(f), to complete discovery and present the full panoply of its pattern or practice evidence in opposition to this motion." See Plaintiffs' Pattern-or-Practice Opposition Br. at 25. After being informed by the Special Master that such discovery would be completed in early December, I granted plaintiffs' request in a Letter Opinion & Order dated November 2, 1995. The parties completed the filing of their supplemental submissions in early January 1996.

Because the resolution of these motions involve questions of law only, I must review the Special Master's opinions de novo. See Prudential Ins. Co. of America v. U.S. Gypsum Co., 991 F.2d 1080, 1086 n. 11 (3d Cir. 1993) (citing Stauble v. Warrob, Inc., 977 F.2d 690, 697 (1st Cir.1992)). In addition, due to the granting of plaintiffs' request pursuant to Federal Rule of Civil Procedure 56(f), there is an issue presently before the court that the Special Master did not have the opportunity to address, i.e., whether or not, given the "full panoply" of plaintiffs' pattern-or-practice evidence, a reasonable jury could find that Roche engaged in a pattern or practice of discrimination.3 When ruling on this issue, the standard of review is obviously the same standard that is applicable to the motion for summary judgment on which the Special Master did rule.

After summarizing the procedural history of these motions and the Special Master's opinions, I will address the issues presented by Roche's motion for summary judgment dismissing plaintiffs' pattern-or-practice claim and the subsequent Rule 56(f) supplementation of the record. As will be discussed, the resolution of this motion moots plaintiffs' motion for bifurcation.

I. Procedural History and the Special Master's Opinions

Plaintiffs moved before the Special Master for an order, pursuant to Federal Rule of Civil Procedure 42(b), bifurcating the trial in this case into two stages: (1) a Stage I trial regarding the issue of whether Roche engaged in a pattern or practice of age discrimination against the class; and (2) a series of Stage II trials that would address the liability and damages issues relating to the individual plaintiffs. In response to this motion, Roche moved for summary judgment on plaintiffs' pattern-or-practice claim. Because the granting of Roche's motion would moot plaintiffs' bifurcation motion, the parties and the Special Master considered the two motions together. In an opinion, dated August 30, 1994, the Special Master held that plaintiffs' motion for bifurcation should be granted and defendant's motion for summary judgment dismissing plaintiffs' pattern-or-practice claim should be denied.

The factual background on which the Special Master based his rulings in this opinion is as follows:

Roche is a large New Jersey drug manufacturer with a European parent. In the mid 1980s, Roche's parent directed it to reduce costs, partly by reducing the size of its workforce. Roche carried this order out in two ways. First, it eliminated certain job types altogether. A number of plaintiffs apparently were terminated in consequence. Second, it reduced the number of employees in each department. A Roche task force prepared a set of guidelines to instruct managers in individual departments when these managers were deciding whom to release. The "line" managers then made termination decisions, apparently without further direction from senior Roche executives.
Roche claims that the RIF was a "one-shot" occurrence, and plaintiffs offer no evidence that Roche is contemplating another series of large scale dismissals. There is also little evidence that Roche systematically violated the ADEA before the date of the RIF or immediately thereafter. Thus plaintiffs' case turns on whether Roche violated the ADEA in connection with the RIF.
Roche's RIF guidelines explicitly directed its managers not to discriminate on the basis of age, race or sex when making termination decisions. Plaintiffs claim that the guidelines nevertheless left the individual managers with considerable discretion. The managers allegedly exercised this discretion, sometimes consciously and sometimes not, in contravention of the guideline's explicit anti-discrimination directives and in contravention of the law; that is, Roche's managers terminated plaintiffs on account of their age. Plaintiffs also claim that Roche violated the ADEA in connection with planning the RIF as well as executing it.

Opinion of Special Master, August 30, 1994, at 2-3 hereinafter "Pattern-or-Practice Opinion".

Roche made two arguments in support of its motion for summary judgment dismissing plaintiffs' pattern-or-practice claim.

First, Roche argued that pattern-or-practice claims are appropriate as a matter of law only where the class plaintiffs seek to enjoin the defendant from engaging in existing or threatened discriminatory behavior. Because Operation Turnabout has been completed and because the guidelines seemingly have no further application, there is, according to Roche, no illegal behavior to enjoin. Therefore, Roche argued that plaintiffs can challenge the RIF under the ADEA, but not in the form of a pattern-or-practice case.

The Special Master did not find this argument persuasive. If an employer is found to have engaged in a pattern or practice of discrimination, then class action plaintiffs are entitled to classwide, prospective injunctive relief. The Special Master correctly noted, however, that other benefits accrue to the plaintiffs upon a finding that an employer engaged in a pattern or practice of discrimination. Specifically, "when a pattern or practice of discrimination is found, the persuasion burden on the issue of whether the employer discriminated against individual class members shifts to the defendant." Pattern-or-Practice Opinion at 6. Thus, the Special Master held that, in addition to obtaining injunctive relief, "a principal point of permitting class action plaintiffs to attack a pattern or practice of unlawful behavior is to shift the persuasion burden." Id. at 9 (emphasis in original). In addition, "the Supreme Court's grounds for shifting the persuasion burden apply as strongly when class action plaintiffs primarily seek money as when they also seek an injunction against continuing violation of the law." Id. at 10. Therefore, the Special Master rejected Roche's argument that pattern-or-practice cases are not proper where there is no claim for injunctive relief against existing or threatened unlawful behavior.

Second, Roche argued that, as a matter of law, a "one-shot" event cannot constitute a pattern or practice of discrimination. Therefore, according to Roche, because Operation Turnabout was a one-shot event (i.e., there is no evidence that Roche has engaged in other large scale dismissals or that Roche has systematically violated the ADEA before or after the RIF), plaintiffs' pattern-or-practice claim must be dismissed and plaintiffs' motion for bifurcation must be denied. The Special Master held that a one-shot event could not constitute a "practice" because "a `practice' is the consistent application of a policy through time."...

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