White v. Bloomberg

Decision Date18 July 1974
Docket NumberNo. 73-1960,73-1960
Citation501 F.2d 1379
PartiesLeon H. WHITE, Appellee, v. Warren M. BLOOMBERG, Postmaster, United States Post Office Department to be known as The United States Postal Service, et al., Appellants.
CourtU.S. Court of Appeals — Fourth Circuit

Jean A. Staudt, Atty., U.S. Dept. of Justice (Irving Jaffe, Acting Asst. Atty. Gen., George Beall, U.S. Atty., Kathryn H. Baldwin, Atty., U.S. Dept. of Justice, on brief), for appellants.

Kenneth A. Reich, Baltimore, Md. (Robert M. Bell, Garber A. Davidson, Jr., David F. Tufaro and Piper & Marbury, Baltimore, Md., on brief) for appellee.

Before WINTER, CRAVEN and WIDENER, Circuit Judges.

CRAVEN, Circuit Judge:

This suit by a wrongfully discharged postal employee raises an ancillary question of procedure under the Back Pay Act of 1966, 5 U.S.C. 5596. Four months after the district court awarded plaintiff a summary judgment for reinstatement and back pay, the Postal Service attempted to raise an issue of failure to mitigate damages, contending that the period of entitlement to back pay should be reduced because plaintiff had not made reasonable efforts to obtain substitute employment. The district judge refused to reopen the judgment and added post-judgment interest to the amounts due plaintiff. The Postal Service appealed from both rulings. We affirm.

The Baltimore Post Office discharged Leon White on October 30, 1970, for failing to pay a debt claimed by the postal employees' credit union. After exhausting his administrative remedies, White filed this suit for reinstatement and back pay in the district court. 1 On June 23, 1972, the district court granted plaintiff's motion for summary judgment. White v. Bloomberg, 345 F.Supp. 133 (D.Md.1972). The court's opinion was accompanied by an order in these words:

The defendant United States Postal Service shall without delay reinstate plaintiff and pay to him back pay from the date of his discharge, namely, October 30, 1970, to the date of his reinstatement in accordance with the opinion of this Court filed this 23rd day of June, 1972.

The Postal Service reinstated White Six days later, and the parties began discussions over the exact amount he would receive under the Back Pay Act. 2 Some time in October 1972 the Postal Service first informed White's counsel that the back pay award would include only the period from October 30, 1970, the date of discharge, to August 5, 1971, the date of the final administrative action, because White had not actively sought substitute employment after his administrative appeal failed. 3 At plaintiff's request the district judge met with counsel and took the problem under advisement. On May 4, 1973, he entered the order from which this appeal was taken. White v. Bloomberg, 360 F.Supp. 58 (D.Md.1973). Judge Kaufman held that his order of June 23, 1972, was a final money judgment that only lacked 'simple mathematical calculations,' and that the Postal Service's belated attempt to raise the mitigation issue must be regarded as a motion to reopen the judgment under Rule 60(b). He then refused to reopen the judgment, but also considered the merits, expressing the opinion that White had satisfied the Back Pay Act's mitigation requirement by actively pressing his claim for reinstatement. We think he acted rightly but not for the assigned reasons. The district court also ruled on a second dispute that had surfaced after summary judgment was entered, holding that plaintiff was entitled to recover post-judgment interest on his back wages.

The Mitigation Issue

The Back Pay Act provides as follows:

(b) An employee of an agency who, on the basis of an administrative determination or a timely appeal, is found by appropriate authority under applicable law or regulation to have undergone an unjustified or unwarranted personnel action that has resulted in the withdrawal or reduction of all or a part of the pay, allowances, or differentials of the employee--

(1) is entitled, on correction of the personnel action, to receive for the period for which the personnel action was in effect an amount equal to all or any part of the pay, allowances, or differentials, as applicable, that the employee normally would have earned during that period if the personnel action had not occurred, less any amounts earned by him through other employment during that period; and

(2) for all purposes, is deemed to have performed service for the agency during that period, except that the employee may not be credited, under this section, leave in an amount that would cause the amount of leave to his credit to exceed the maximum amount of the leave authorized for the employee by law or regulation.

Although the Act itself does not authorize deductions based on an employee's failure to seek substitute employment, the Court of Claims has held that the common law rules of mitigation apply. Urbina v. United States, 192 Ct.Cl. 875, 428 F.2d 1280 (1970); Schwartz v. United States, 149 Ct.Cl. 145, 181 F.Supp. 408 (1960). Under this doctrine, the employer can reduce its back pay obligation by the amount the employee could have earned if he had made reasonable efforts to find another job. 11 S. Williston, Law of Contracts 1358-59 (Jaeger ed. 1968); NLRB v. Moss Plaining Mill Co., 224 F.2d 702 (4th Cir. 1955). In this case neither White nor the defendants raised the issue of mitigation prior to the entry of summary judgment, and each now argues that the other bore the burden of proof with respect to this issue. Because defendants did not appeal the initial back pay award, however, they may not now assert plaintiff's failure of proof on this issue as a bar to recovery. 4 And, though mitigation is ordinarily considered an affirmative defense that must be pleaded and proved by the employer, e.g., Florence Printing Co. v. NLRB, 376 F.2d 216 (4th Cir.), cert. denied, 389 U.S. 840, 88 S.Ct. 68, 19 L.Ed.2d 104 (1967); Williston, supra, 1360; 5 C. Wright & A. Miller, Federal Practice and Procedure 1273 (1969), we rest our decision on other grounds.

Defendants contend that judicial proceedings for reinstatement and back pay under the Act must be bifurcated, and that the judgment of June 23 ordering reinstatement and back pay was valid as to the former and void as to the latter. At the very least, they insist that the back pay order may be valid but empty of significant effect because subject to being reduced, or even wiped out, by application of the law of mitigation. They say that following a judicial reinstatement order, the initial computation of back pay must be made by an agency, subject to limited judicial review if the employee is dissatisfied with the administrative award. Taking this view of procedure under the Act, defendants urge us to hold that the judgment requiring the Postal Service to pay back pay to plaintiff did not destroy the right to insist on mitigation and thus to deny back pay for eleven of the twenty months that White was out of work. On such a theory an order allowing back pay means little or nothing: it is simply background against which the parties then begin to litigate the mitigation issue.

Defendants did not present this procedural argument to the district judge prior to the entry of summary judgment. White's complaint clearly raised the issue of back pay. Both parties moved for summary judgment, but neither sought to limit the court's decision to the issue of liability or suggested that there was a genuine issue on damages that would justify a partial summary judgment under Fed.R.Civ.P. 56(c). The defendants' only reference to the issue of back pay was a brief paragraph in the memorandum supporting their motion for summary judgment. It contended that the United States is an indispensable party in an action for back pay and that the district court therefore lacked jurisdiction to award back pay against the Postal Service. Plaintiff's memorandum responded to this point by suggesting that if the court lacked jurisdiction to award back pay, it could order reinstatement without mentioning back pay or the Back Pay Act. Defendants neither pursued this alternative nor suggested that the court should confine its decree to reinstatement for any other reason. When the district judge entered summary judgment for White and ordered the Postal Service to reinstate him with back pay, the defendants missed another opportunity to salvage the mitigation issue for administrative determination. Instead of filing a motion to have the judgment amended under Rule 59(e), defendants filed a notice of appeal from the entire judgment and asked for a stay of the back pay order pending appeal. Nor did they seek to have the judgment reopened under Rule 60(b) when they discovered that plaintiff's counsel viewed the summary judgment as an actual award of back pay, as indeed, it purports to be. Because the parties had proceeded under different assumptions about the scope of the judicial proceeding, defendants might have been entitled to relief on the grounds of mistake, inadvertence, or excusable neglect under Rule 60(b)(1), but they have never asked for a chance to litigate the mitigation issue in the district court. 5 Indeed, they have not suggested that we should remand the case for this purpose.

Despite their failure to ask the district court to reserve the question of failure to mitigate on the amount of back pay and to limit the summary judgment to a theoretical determination of entitlement to back pay, or even to reinstatement only, defendants contend that the judgment must be so limited because the district court lacked power to make a specific award under the Back Pay Act. Defendants abandoned their contention that the district court lacked jurisdiction to award back pay by choosing not to appeal the summary judgment, which resolved that issue in plaintiff's favor. 6 Now they base their contentions solely on the language of the Act and the Civil Service Commission's...

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