United States of America v. City of New York
Filing
1571
ORDER granting 1467 Motion for Settlement; granting 1525 Motion to Amend/Correct/Supplement. For the reasons discussed in the accompanying Memorandum and Order: * Objections filed by claimants 200000216, 200000323, 200000459, 200000896, 20 0000431, 200000337, and 200007062 to the Monetary Relief Consent Decree and/or Proposed Relief Awards List are SUSTAINED. Additionally, Plaintiffs' request that claimant 200000337 be moved from the Hispanic Priority Hire List to the Black Prior ity Hire List is GRANTED; the court hereby MODIFIES its June 13, 2013, Order (Dkt. 1147, as modified by Dkt. 1235) accordingly. Plaintiffs are DIRECTED to see that claimant 200000337 receives notice documents regarding Plaintiff-Intervenors' In junctive Relief and Nonhire Victim Subclasses, and that he be permitted to submit a compensatory damages claim should he wish to do so. * All other objections are OVERRULED; and * Plaintiffs' Joint Motion for Final Entry of Amended Monet ary Relief Consent Decree (Dkt. 1467) and Plaintiffs' Joint Motion to Amend Attachments E & F to Amended Monetary Relief Consent Decree (Dkt. 1525) are GRANTED. The Amended Monetary Relief Consent Decree (Dkt. 1468), Attachments A through D the reto (Dkts. 1468-1 to -4), and Second Amended Attachments E & F (Dkts. 1468-1 and -2) are hereby deemed FINALLY APPROVED AND ENTERED. The Amended Proposed Relief Awards List (Dkt. 1468-1) is APPROVED as the Final Relief Awards List. Ordered by Judge Nicholas G. Garaufis on 3/11/2015. (Day, Lori)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA,
Plaintiff,
MEMORANDUM & ORDER
-andTHE VULCAN SOCIETY, INC., for itself and on
behalf of its members, JAMEL NICHOLSON, and
RUSEBELL WILSON, individually and on behalf
of a subclass of all other victims similarly situated
seeking classwide injunctive relief;
07-CV-2067 (NGG) (RLM)
ROGER GREGG, MARCUS HAYWOOD, and
KEVIN WALKER, individually and on behalf of a
subclass of all other non-hire victims similarly
situated; and
CANDIDO NUÑEZ and KEVIN SIMPKINS,
individually and on behalf of a subclass of all other
delayed-hire victims similarly situated,
Plaintiff-Intervenors,
-againstTHE CITY OF NEW YORK,
Defendant.
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NICHOLAS G. GARAUFIS, United States District Judge.
This Memorandum and Order addresses the Amended Monetary Relief Consent Decree
(“AMRCD” or “Decree”) (Dkt. 1468). Plaintiff United States of America (the “United States”),
Plaintiff-Intervenors’ Nonhire and Delayed-Hire Victim Subclasses1 (“Plaintiff-Intervenors”),
1
The Nonhire Victim Subclass is represented by named Plaintiff-Intervenors Roger Gregg, Marcus Haywood, and
Kevin Walker; the Delayed-Hire Victim Subclass is represented by named Plaintiff-Intervenors Candido Nuñez and
Kevin Simpkins. In July 2011, the court certified these two opt-out remedial subclasses of black firefighters and
firefighter applicants for litigation of certain questions common to claims for individual compensatory, make-whole
relief, under Federal Rule of Civil Procedure 23(b)(3) and (c)(4). (July 8, 2011, Mem. & Order (Dkt. 665).) The
court declined to certify any subclass with regard to the issue of mitigation of damages. (June 6, 2011, Mem. &
1
and Defendant City of New York (the “City”) have jointly moved the court to finally approve
and enter the Decree in order to resolve the claims of the United States and Plaintiff-Intervenors
(collectively, “Plaintiffs”) for backpay and the monetary value of fringe benefits, including
prejudgment interest thereon, lost by black and Hispanic applicants for the entry-level firefighter
position at the New York City Fire Department (“FDNY”) due to employment practices held by
this court to create a disparate impact in violation of Title VII of the Civil Rights Act of 1964
(“Title VII”), 42 U.S.C. §§ 2000e, et seq., as amended.2 (Joint Mot. for Final Entry of AMRCD
(Dkt. 1467).) The court provisionally approved and entered an earlier version of the Decree—
the Monetary Relief Consent Decree (“MRCD”) (Dkt. 1435)—on June 30, 2014.
(June 30, 2014, Order (Dkt. 1437).) The United States has also filed revised versions of two
attachments to the AMRCD—a Second Amended Attachment E, “Notice of Individual Monetary
Relief Award” (Dkt. 1525-1), and a Second Amended Attachment F, “Acceptance of Individual
Monetary Relief Award & Release of Claims” (Dkt. 1525-2). In sum, the parties jointly ask that
the court approve (1) Second Amended Attachments E and F; along with (2) the AMRCD; (3)
Attachment A to the AMRCD, the “Amended Proposed Relief Awards List” (“APRAL”)
(Dkt. 1468-1), which sets forth proposed individual awards to each claimant; and (4) three other
Order (Dkt. 640) at 18-24.) To any extent that the instant settlement agreement may go beyond the issues with
respect to which Plaintiff-Intervenors’ subclasses have been certified, Plaintiffs may still enter into the Decree on
behalf of individual claimants pursuant to the United States’s independent statutory authority to seek relief for the
victims of employment discrimination, 42 U.S.C. § 2000e-5(f)(1), without the need for class certification. See Gen.
Tel. Co. of the Nw., Inc. v. EEOC, 446 U.S. 318, 323-326 (1980).
2
The court also held these employment practices to have created a disparate impact under the New York State
Human Rights Law and New York City Human Rights Law, in connection with claims brought by PlaintiffIntervenors on behalf of a class of black applicants to the FDNY. (See Jan. 13, 2010, Mem. & Order (“Disparate
Treatment Op.”) (Dkt. 385).)
2
attachments to the AMRCD—namely, Attachments B, C, and D thereto.3 (Joint Mot. to Amend
Attachments E & F to AMRCD (Dkt. 1525).)
At a fairness hearing held October 1, 2014 (the “Fairness Hearing”), the court heard oral
argument by the parties in support of final entry of the Decree, and by objecting claimants in
opposition to the same and/or to their proposed individual awards. (Oct. 10, 2014, Min. Entry.)
The court has also received claimants’ written objections. The court has considered all of the
objections and, while sustaining several individual objections, concludes that none warrant
denial of final approval and entry of the Decree. Accordingly, for the reasons discussed below,
the court GRANTS Plaintiffs’ Joint Motion for Final Entry of Amended Monetary Relief
Consent Decree, and GRANTS Plaintiffs’ Joint Motion to Amend Attachments E & F to
Amended Monetary Relief Consent Decree. Accordingly, the Amended Monetary Relief
Consent Decree (Dkt. 1468); Attachments A through D thereto (Dkts. 1468-1 to -4), including
the Amended Proposed Relief Awards List; and Second Amended Attachments E and F
(Dkts. 1525-1 to -2) are hereby deemed FINALLY APPROVED AND ENTERED.
I.
BACKGROUND
The factual and procedural background of this case is extensive. The events relevant to
the issues currently before the court will be summarized here; a full recount can be found in the
court’s previous rulings.
In 2007, the United States brought suit against the City, alleging that certain aspects of
the City’s policies for selecting entry-level firefighters for the FDNY violated Title VII. (Compl.
(Dkt. 1).) Specifically, the United States alleged that the City’s pass-fail and rank-order use of
3
Attachment B to the AMRCD is the “Amended Declaration of Ed Barrero” (Dkt. 1468-2); Attachment C is a
“Notice of Monetary Relief Settlement & Fairness Hearing,” “Instructions for Filing an Objection Prior to the
Fairness Hearing,” and a blank “Objection Form” (Dkt. 1468-3); and Attachment D is a cover letter notifying each
claimant of the amount of his or her proposed individual award (Dkt. 1468-4).
3
Written Exams 7029 and 2043 had an unlawful disparate impact on black and Hispanic
candidates for entry-level firefighter positions. (See id. ¶ 1.) The Vulcan Society, Inc. and
several individuals intervened as plaintiffs, alleging similar disparate impact claims and also
alleging claims of disparate treatment on behalf of a class of black entry-level firefighter
candidates, bringing all claims under federal, state, and local laws. (See Sept. 5, 2007, Mem. &
Order (Dkt. 47) (granting motion to intervene).)
Proceedings were bifurcated. In July 2009, the court granted summary judgment in favor
of the United States’s and Plaintiff-Intervenors’ Title VII disparate impact claims, finding the
City liable. (July 22, 2009, Mem. & Order (“Disparate Impact Op.”) (Dkt. 294).) The court also
determined the practical effect of this discrimination, i.e., the total number of entry-level
firefighters who would have been appointed or who would have been appointed earlier absent the
discrimination, referred to as the “shortfall.” (Id. at 16-23.) Specifically, the court concluded
that 293 additional black and Hispanic applicants would have been appointed as entry-level
firefighters absent the discriminatory examinations, and that 249 black and Hispanic entry-level
firefighters who were appointed would have been appointed earlier—approximately 69 years
earlier, in aggregate—absent the discrimination. (Id. at 20-22, 27.) Subsequently, in
January 2010, the court granted summary judgment in favor of Plaintiff-Intervenors’ various
disparate treatment claims, and Plaintiff-Intervenors’ disparate impact claims brought pursuant to
the New York State Human Rights Law (“NYSHRL”) and New York City Human Rights Law
(“NYCHRL”). (Jan. 13, 2010, Mem. & Order (“Disparate Treatment Op.”) (Dkt. 385).) On
appeal, the Second Circuit vacated the court’s summary judgment ruling only with respect to
Plaintiff-Intervenors’ disparate treatment claims, finding that a trial was needed to determine
4
whether the City had acted with discriminatory intent. See United States v. City of New York,
717 F.3d 72, 89-91 (2d Cir. 2013).
Proceeding to the remedial phase of the case, the court issued an Initial Remedial Order
(Dkt. 390), setting forth a preliminary outline thereof. The Initial Remedial Order explained that
Plaintiffs were entitled to two broad categories of relief: (1) prospective injunctive relief to
ensure future compliance with Title VII; and (2) individual compensatory, “make whole” relief
for the individual victims of the disparate impact of the City’s hiring process. Over the City’s
objection, the court ruled that individual compensatory relief would include retroactive seniority
for individual delayed-hire victims. (Id. at 22-31.) Compensatory relief would also include
monetary relief and priority hiring relief. The Initial Remedial Order set forth the broad contours
of eligibility for individual relief, including the existence of additional eligibility criteria for
priority hiring relief as compared to monetary relief. (See id. at 15-22.) The court also held that
the number of priority hires would be limited to 293 positions, because that was the shortfall
number determined in the disparate impact liability opinion. (Id. at 25-27.)
In May 2012, the City sent notice and claim forms to all black and Hispanic individuals
who had taken the two exams; approximately 5,000 individuals submitted claim forms seeking
individual relief. (Mem. in Supp. of Joint Mot. for Provisional Entry of MRCD & Scheduling of
Fairness Hr’g (“Mem. in Supp. of Provisional Entry”) (Dkt. 1434) at 6.) In a series of
subsequent opinions culminating in the Final Relief Order (Dkt. 1012), the court set the final
parameters for determining which of these individuals were victims of the City’s discriminatory
practices and therefore eligible for individual relief. In August 2013, the court concluded the last
of its eligibility determinations, and ultimately ruled that 1,470 claimants were eligible for
5
monetary relief.4 (See Feb. 22, 2013, Mem. & Order (Dkt. 1059); May 2, 2013, Mem. & Order
(Dkt. 1106); May 9, 2013, Mem. & Order (Dkt. 1112); June 3, 2013, Mem. & Order (Dkt. 1135);
June 7, 2013, Mem. & Order (Dkt. 1144); Aug. 9, 2013, Mem. & Order (Dkt. 1182);
Aug. 9, 2013, Order (Dkt. 1184); Aug. 19, 2013, Order (Dkt. 1190); Sept. 3, 2013, Order
(Dkt. 1195); Sept. 11, 2013, Order (Dkt. 1201); Nov. 18, 2013, Order (Dkt. 1236);
Dec. 11, 2013, Am. Mem. & Order (Dkt. 1251).)
Prospective Injunctive Relief: The court held a remedial-phase bench trial in
August 2011, addressing the need for and scope of permanent injunctive relief. (See Findings of
Fact as to Injunctive Relief (Dkt. 741); Oct. 5, 2011, Mem. & Order (Dkt. 743).) The court then
ordered prospective injunctive relief in a Remedial Order and Partial Judgment, Permanent
Injunction, & Order Appointing Court Monitor (“Remedial Order”) (Dkt. 765). After the Second
Circuit directed modification of certain provisions of the Remedial Order, see United States v.
City of New York, 717 F.3d at 95-99, the court issued a Modified Remedial Order and Partial
Judgment, Permanent Injunction, & Order Appointing Court Monitor (“Modified Remedial
Order”) (Dkt. 1143) on June 6, 2013, which incorporated the Second Circuit’s modifications as
well as proposed amendments from the appointed Court Monitor and the parties. The parties and
the Court Monitor continue to work actively to ensure the City’s compliance with the provisions
of the Modified Remedial Order. (See, e.g., Court Monitor’s Tenth Periodic Report (Dkt. 1533);
Court Monitor’s EEO Report (Dkt. 1463); Court Monitor’s Recruitment Report (Dkt. 1464).)
Individual Compensatory Relief: As noted above, the court’s Initial Remedial Order
explained that individual victims of the City’s disparate impact discrimination would be entitled
4
Four hundred thirty-six of those 1,470 claimants were also held eligible for priority hiring relief, having satisfied
the court’s eligibility criteria and having passed Written Exam 2000. (See June 13, 2013, Order (Dkt. 1147);
Nov. 18, 2013, Order (Dkt. 1235).)
6
to compensatory relief, including (1) monetary relief, (2) priority hiring relief, and (3) retroactive
seniority.5 Subsequently, the court addressed priority hiring relief and retroactive seniority in
greater detail. (See, e.g., Apr. 19, 2012, Mem. & Order (Dkt. 861).) Then, in a Final Relief
Order (Dkt. 1012), which was issued in October 2012, after a four-day fairness hearing, the court
set forth final guidelines governing, inter alia, priority hiring and the awarding of retroactive
seniority relief. The first 121 priority hires were appointed as probationary firefighters in
July 2013 (see Court Monitor’s Fifth Periodic Report (Dkt. 1198) at 2; Court Monitor’s Status
Report (Dkt. 1243) at 7), and additional priority hires have been appointed in subsequent classes
(see Court Monitor’s Eighth Periodic Report (Dkt. 1412); Court Monitor’s Tenth Periodic
Report). The City began providing retroactive seniority relief, except for retroactive pension
benefits, in July 2013.6 (See Aug. 20, 2014, Ltr. (Dkt. 1450) at 1.)
With respect to the category of monetary relief, the court ruled in the Final Relief Order
that eligible claimants would be entitled to (1) wage backpay; (2) the monetary value of fringe
benefits; (3) prejudgment interest on (1) and (2); and (4) for eligible black claimants only,
compensatory damages for noneconomic harm.7 (Final Relief Order; see also Sept. 24, 2012,
Mem. & Order (Dkt. 974); June 3, 2013, Mem. & Order (Dkt. 1134).) In April 2014, the City
began to make offers of judgment under Federal Rule of Civil Procedure 68 to the 293 individual
5
The City’s liability for compensatory, “make whole” relief was unaffected by the Second Circuit’s reversal of this
court’s disparate treatment summary judgment ruling, as the entitlement to compensatory relief flowed directly from
the disparate impact liability. (See Mar. 8, 2012, Mem. & Order (“Backpay Summ. J. Op.”) (Dkt. 825) at 62 (noting
that the outcome of the City’s appeal of the disparate treatment opinion would not affect any noneconomic damage
determinations).)
6
The City intends to award retroactive pension benefits at the same time it issues individual monetary relief awards
of backpay and fringe benefits to claimants (the monetary relief that is the subject of this Memorandum and Order).
(See Aug. 20, 2014, Ltr. (Dkt. 1450) at 1.)
7
The United States did not assert a claim for compensatory damages for noneconomic harm; only PlaintiffIntervenors did so. (See Apr. 10, 2012, Ltr. (Dkt. 850) at 2 n.2.)
7
claimants who sought noneconomic damages (see Apr. 2, 2014, Ltr. (Dkt. 1287)), and to date, all
but four of those claimants have either accepted the Rule 68 offers of judgment or otherwise
settled their claims with the City, or have had their claims adjudicated by Special Masters after
individual hearings. The Decree that is the subject of this Memorandum and Order seeks to
resolve Plaintiffs’ remaining monetary claims—those for backpay, fringe benefits, and
prejudgment interest.
With respect to these claims, some additional background is in order. In
September 2010, the United States, joined in part by Plaintiff-Intervenors, had moved for
summary judgment regarding the City’s total monetary liability for backpay, benefits, and
interest. (Pl.’s Mot. for Summ. J. with Respect to Backpay & Benefits (Dkt. 534); see Pl.Intervenors’ Mem. of Law in Supp. of Mot. for Summ. J. with Respect to Class-Wide Back Pay
(Dkt. 540).) The court denied Plaintiffs’ motion, but held that, given that backpay for each of
eight damages categories would be based on the already-determined shortfalls,8 Plaintiffs had
established the amount of pre-mitigation wage backpay owed by the City through 2010.9
(Mar. 8, 2012, Mem. & Order (“Backpay Summ. J. Op.”).) Specifically, the court found that
Plaintiffs had established that the gross losses in wages were $62,202,409 for black nonhire
candidates from Exam 7029; $33,754,299 for Hispanic nonhire candidates from Exam 7029;
$18,193,080 for black nonhire candidates from Exam 2043; $11,403,654 for Hispanic nonhire
candidates from Exam 2043; $1,015,579 for black delayed-hire firefighters from Exam 7029;
8
The eight damages categories accounted for the distinct disparate impacts the court found the City’s employment
practices had on eight different groups of individuals: (1) black nonhire candidates from Exam 7029; (2) Hispanic
nonhire candidates from Exam 7029; (3) black nonhire candidates from Exam 2043; (4) Hispanic nonhire candidates
from Exam 2043; (5) black delayed-hire firefighters from Exam 7029; (6) Hispanic delayed-hire firefighters from
Exam 7029; (7) black delayed-hire firefighters from Exam 2043; and (8) Hispanic delayed-hire firefighters from
Exam 2043.
9
The City would be liable for a separate amount of aggregate backpay, to be determined at a later date, for the
period of January 1, 2011, through the date the priority hires would join the FDNY. (Backpay Summ. J. Op.
at 46 n.12.)
8
$1,228,608 for Hispanic delayed-hire firefighters from Exam 7029; $487,987 for black delayedhire firefighters from Exam 2043; and $411,187 for Hispanic delayed-hire firefighters from
Exam 2043—which amounted overall to a total aggregate sum of $128,696,803 in pre-mitigation
wage backpay liability. (Id. at 35, 45-47.) These amounts are also illustrated in the below chart.
Exam 7029
Black Nonhire
Candidates
Hispanic Nonhire
Candidates
Black Delayed-Hire
Firefighters
Hispanic DelayedHire Firefighters
TOTAL
Exam 2043
Both Exams
$62,202,409
$18,193,080
$80,395,489
$33,754,299
$11,403,654
$45,157,953
$1,105,579
$487,987
$1,503,566
$1,228,608
$411,187
$1,639,795
$98,200,895
$30,495,908
$128,696,803
As noted above, these amounts were based on the numbers of shortfall nonhires and
delayed hires in each damages category that resulted from the discriminatory practices at issue,
which the court had previously determined in its Disparate Impact Opinion (Backpay Summ. J.
Op. at 21-22, 42); and on the calculations of Dr. Siskin, the expert for the United States,
regarding (1) the wages each shortfall would have earned, discounted for attrition, and (2) the
wage losses from the total loss of months for the delayed hires, discounted for attrition. (Id. at
16-45.) In other words, the amounts set for each damages category reflected the court’s
determination of the numbers of black and Hispanic individuals who would have been hired, or
who would have been hired earlier, in the absence of discrimination. For example, the aggregate
amount of backpay available to black claimants was set at a higher amount than that available to
Hispanic claimants because the court had determined that the City’s use of Written Exams 7029
and 2043 had a greater discriminatory impact on black as compared to Hispanic firefighter
candidates. (Final Relief Order at 9.)
9
The court also held that the City would have the chance to reduce these amounts by
proving in individual proceedings that claimants had either mitigated their losses through interim
employment or violated their duty to mitigate.10 (Backpay Summ. J. Op. at 48-51.)
Furthermore, the court determined that the City’s liability for the loss of fringe benefits should be
valued by expenses that the claimants actually incurred (specifically, health care premiums paid
by claimants and their actual out-of-pocket medical expenses) (id. at 39), and set eligibility
criteria for individual monetary relief (see id. at 51-57). (See also Aug. 20, 2012, Mem. & Order
(Dkt. 946) (denying motion for reconsideration as to fringe benefits and noting ways claimants
may prove their expenses).)
The court’s Final Relief Order reiterated these findings and set forth the framework
governing the individual compensatory relief claims process. It also addressed the method of
allocating the $128,696,803 in pre-mitigation wage backpay among the victims of the
discriminatory practices. (See Final Relief Order at 8-12; see also June 3, 2012, Mem. & Order
(Dkt. 888).) Because the number of eligible claimants would likely exceed the hiring shortfalls
caused by the employment practices, the aggregate backpay amount allotted to each damages
category would be divided proportionately among eligible claimants in that category. Each
claimant’s gross award would then be reduced by a proportion—known as the “backpay
reduction ratio” or “probability of hire”—of that claimant’s interim earnings. This took into
account the fact that claimants would likely not be receiving a full shortfall’s back wages, and
rather a proportional share. (See Final Relief Order at 9-10; June 3, 2012, Mem. & Order at 915.) After the completion of the individual proceedings, prejudgment interest would be added to
each claimant’s net backpay and fringe benefits awards for each year of his or her backpay
10
In an August 22, 2012, Memorandum and Order (Dkt. 952), the court further outlined the parameters surrounding
the City’s ability to prove individual claimants’ mitigation or failure to mitigate.
10
period, with interest compounded annually. (Final Relief Order at 12.) The court appointed four
Special Masters to oversee the individual claims process. (See Mem. & Order Confirming
Appointment of Special Masters (Dkt. 883); Final Relief Order at 15-17.)
The portion of the claims process dedicated to the adjudication of individual monetary
relief began in earnest in April 2013. (See June 24, 2013, Report and Recommendation (“R&R”)
of the Special Masters (Dkt. 1150) at 3-12.) In August 2013, the parties reported that they
anticipated settling the individual monetary claims, and accordingly, they sought a stay of most
case-related deadlines; the court stayed generally the individual monetary claims process.
(Aug. 21, 2013, Order (Dkt. 1191) (Filed Under Seal).) At that time, the parties expected that
this final portion of the claims process, should it continue, would require at least an additional
twelve months. (June 24, 2013, R&R of the Special Masters at 2, 8.)
The parties did reach an agreement to settle the Plaintiffs’ claims for backpay and fringe
benefits, including interest thereon.11 In June 2014, the parties jointly moved the court to
provisionally approve and enter the Monetary Relief Consent Decree. (Joint Mot. for
Provisional Entry of MRCD & Scheduling of Fairness Hr’g (Dkt. 1433).) Submitted with the
MRCD was a Proposed Relief Awards List (“PRAL”) (MRCD, Attachment A (Dkt. 1435-1)),
which set forth each claimant’s proposed individual monetary award consistent with the
allocation methodology agreed to in the MRCD. (See MRCD ¶¶ 13-14.) The court
provisionally approved the MRCD on June 30, 2014. (June 30, 2014, Order.) Notice of the
MRCD and PRAL was sent to the 1,470 claimants the court had previously found eligible for
monetary relief, along with objection forms and instructions for presenting an objection. The
1,470 eligible claimants also received notice of the October 1, 2014, Fairness Hearing, and were
11
The settlement also resolves the United States’s claims for its taxable costs related to bringing the case. (Mem. in
Supp. of Provisional Entry at 9.)
11
informed of their right to present objections in person or through counsel if they chose to do so.
The parties received written objections from 101 claimants. (See Joint Mot. for Final Entry of
AMRCD at 3.)
Plaintiffs then filed the amended Decree (the AMRCD), which they jointly moved the
court to finally approve and enter. (See Joint Mot. for Final Entry of AMRCD.) The AMRCD,
as compared to the MRCD, contains a technical change regarding the entity (the City versus the
court-appointed Claims Administrator) that will be issuing payments to claimants for the fringe
benefits and interest portions of their awards; the change does not affect the substance of the
Decree.12 (See Mem. in Supp. of Final Entry of AMRCD & Resp. to Objs. (“Mem. in Supp. of
Final Entry”) (Dkt. 1469) at 2.) Plaintiffs also recommended that the court sustain seven of the
written objections received from claimants. (Id. at 2, 20-23.) Plaintiffs also submitted an
Amended Proposed Relief Awards List (“APRAL”) (AMRCD, Attachment A (Dkt. 1468-1)),
incorporating changes to the allocation of the funds to individual claimants necessitated if those
seven objections are to be sustained by the court. (Joint Mot. for Final Entry of AMRCD.) The
parties request that the court approve the APRAL as the Final Relief Awards List. (Id.; Mem. in
Supp. of Final Entry at 2.)
At the Fairness Hearing held October 1, 2014, the parties argued in support of final entry
of the AMRCD, and certain claimants lodged verbal objections thereto.13 (Oct. 10, 2014, Min.
12
The AMRCD also included certain amended attachments.
13
In March 2014, Plaintiff-Intervenors and the City reached an agreement to settle Plaintiff-Intervenors’ disparate
treatment claims through injunctive relief (see Mar. 18, 2014, Ltr. (Dkt. 1281)), and on April 22, 2014, they jointly
moved for preliminary approval and entry of the Proposed Stipulation and Order (“Intent Stipulation”) (Dkt. 12911), to resolve those claims. (Apr. 22, 2014, Ltr. Mot. (Dkt. 1291).) They moved for final entry of the Intent
Stipulation on September 22, 2014. (Mot. for Final Entry of Proposed Stipulation & Order Resolving Intentional
Discrimination Claims (Dkt. 1470).) The October 1, 2014, Fairness Hearing dealt with final approval of both the
AMRCD and the Intent Stipulation. (See Oct. 10, 2014, Min. Entry.) On February 20, 2015, the court held a
supplemental fairness hearing with respect to the Intent Stipulation; the motion for final entry thereof remains
pending.
12
Entry.) The court received two exhibits into evidence (see Fairness Hr’g, Ex. 1 (Dkt. 1487)
(Filed Under Seal); Fairness Hr’g, Ex. B (Dkt. 1488)), and held the record open until
October 15, 2014, at 5:00 p.m., for any additional written statements in support of or in
opposition to final approval and entry of the AMRCD. In addition to the 101 objections to the
MRCD previously submitted,14 the court received three additional objections by that deadline.
(See Oct. 15, 2014, Ltr. (Dkt. 1491); Oct. 17, 2014, Ltr. (Dkt. 1494); Additional Written
Submissions (Dkt. 1494-1).)
The United States has now filed newly-revised versions of two attachments to the
AMRCD—a Second Amended “Notice of Individual Monetary Relief Award,” and a Second
Amended “Acceptance of Individual Monetary Relief Award & Release of Claims”—and the
parties jointly ask that the court approve these second amended attachments along with the
AMRCD, the APRAL, and the other attachments to the AMRCD.15 (Joint Mot. to Amend
Attachments E & F to AMRCD.)
14
These 101 written objections are filed under seal at Appendix B to the Memorandum in Support of Final Entry
(Dkts. 1469-2 (Objection-Exhibits 1-50) and 1469-3 (Objection-Exhibits 51-101)), and publicly-filed, redacted
versions are available at Dkts. 1548-1 (Objection-Exhibits 1-50) and 1548-2 (Objection-Exhibits 51-101). When the
court cites to “Obj-Ex. __” or “Obj.-Exs. __” herein, it refers to these written objections. Certain of these objections
were submitted on the form that was labeled as intended for objections to the Intent Stipulation, see supra note 13;
however, the parties construed these objections as substantively challenging the Decree, and the court has
considered them in its analysis.
15
Upon review of Second Amended Attachments E and F, the prior versions of these documents, and the United
States’s letter transmitting the amended attachments, the court agrees that the amendments are minor and reflect
only technical changes that will ultimately benefit claimants by providing additional information regarding (1)
taxation and tax withholdings of claimants’ awards and (2) claimants’ ability to accept or reject retroactive pension
benefits. These amendments accordingly do not require a supplemental notice and objection period, and the court
APPROVES them for final entry in connection with the Decree.
13
II.
THE DECREE
The Decree reflects the parties’ agreement as to the City’s aggregate liability for
monetary relief for each damages category with respect to backpay, fringe benefits, and
prejudgment interest. (See Mem. in Supp. of Provisional Entry at 15-16; AMRCD at 3; id. ¶ 12.)
The Decree also sets forth an allocation methodology apportioning that aggregate backpay,
fringe benefits, and interest among claimants.16 (Mem. in Supp. of Provisional Entry at 16;
AMRCD at 3.) The PRAL, which was included as an attachment to the MRCD, was prepared by
the court-appointed Claims Administrator, and shows the result of the allocation methodology as
applied to each claimant. (Mem. in Supp. of Provisional Entry at 16; see also PRAL.) Similarly,
the APRAL, which was included as an attachment to the AMRCD, was prepared by the Claims
Administrator, and shows the result of the allocation methodology as applied to each claimant
should the court sustain the objections of seven claimants as recommended by Plaintiffs.17 (Joint
Mot. for Final Entry of AMRCD at 2-3; see also APRAL.)
A.
Aggregate Amount of Monetary Relief
Under the AMRCD, the City will pay to eligible claimants a total of $80,964,657.97 in
backpay; $11,091,952.25 in interest on backpay; $6,209,618.53 in fringe benefits; and
$832,129.54 in interest on fringe benefits—amounting to a total settlement sum of
16
The United States and Plaintiff-Intervenors agreed upon the allocation methodology. The City chose not to
participate in negotiations over the allocation methodology, and has no objection to it. (Mem. in Supp. of
Provisional Entry at 16; AMRCD at 3.)
17
As previously explained, the AMRCD differs from the MRCD in two ways: (1) it incorporates an administrative
change, reflecting that the City will be issuing payments to Claimants for the backpay portions of their awards, from
which required withholdings will be made, and the Claims Administrator will be issuing payments to claimants for
the fringe benefits and interest portions of their awards; and (2) it includes certain amended attachments. For
example, Attachment A to the AMRCD, the Amended Proposed Relief Awards List, incorporates changes to the
Proposed Relief Awards List reflecting the United States and Plaintiff-Intervenors’ recommendation that the court
sustain the objections of seven claimants to their initial allocation of settlement funds. (See Joint Mot. for Final
Entry of AMRCD at 2-3.) As with Second Amended Attachments E and F, see supra note 15, the court finds that
these amendments do not require a supplemental notice or objection period. They do not substantively affect the
fairness of the Decree or implicate claimants’ substantive interests.
14
$99,098,358.29. The amounts include interest accruing through the end of 2014. (AMRCD
¶ 12.) This is divided between damages categories as follows.
Damages Category
Aggregate
Backpay
Amount
Exam 7029 Nonhire Claimants
Black Exam 7029 Nonhire
$38,818,871.58
Claimants
Hispanic Exam 7029 Nonhire
$17,079,828.56
Claimants
Exam 2043 Nonhire Claimants
Black Exam 2043 Nonhire
$15,495,383.14
Claimants
Hispanic Exam 2043 Nonhire
$8,359,839.74
Claimants
Exam 7029 Delayed-Hire Claimants
Black Exam 7029 Delayed-Hire
$444,509.77
Claimants
Hispanic Exam 7029 Delayed-Hire $443,638.42
Claimants
Exam 2043 Delayed-Hire Claimants
Black Exam 2043 Delayed-Hire
$175,039.37
Claimants
Hispanic Exam 2043 Delayed-Hire $129,547.39
Claimants
$80,946,657.97
TOTAL
Interest on
Aggregate
Backpay
Amount
Aggregate
Fringe Benefits
Amount
Interest on
Aggregate Fringe
Benefits Amount
$5,892.695.44
$2,564,188.85
$389,243.26
$2,595,446.30
$1,394,558.83
$211,693.69
$1,562,726.43
$1,314,375.43
$132,556.20
$843,099.03
$821,484.33
$82,847.60
$93,679.44
$30,677.17
$6,465.14
$93,495.80
$36,121.84
$7,612.60
$6,212.16
$24,600.69
$873.08
$4,597.65
$23,611.39
$837.97
$11,091,952.25
$6,209,618.53
$832,129.54
(Id.)
B.
Allocation of Monetary Relief
Pursuant to the Decree, aggregate funds were allocated among claimants by the Claims
Administrator, according to a methodology devised by the United States and PlaintiffIntervenors. (AMRCD at 3.) The result of this allocation is illustrated in the PRAL and
APRAL.18 The allocation methodology, which is discussed below, is described in greater detail
in the Declaration of Ed Barrero (“Barrero Decl.”) (MRCD, Attachment B (Dkt. 1435-2)
(describing the methodology of generating the PRAL)) and the Amended Declaration of Ed
18
As explained above, the APRAL reflects the result of the allocation methodology as applied to each claimant
should the court sustain the objections of seven claimants to the MRCD and PRAL, as Plaintiffs recommend.
15
Barrero (“Am. Barrero Decl.”) (AMRCD, Attachment B (Dkt. 1468-2) (describing the
methodology of generating the APRAL)).
1.
Allocation of Backpay to Nonhire Claimants
In allocating backpay among nonhire claimants, the Claims Administrator was provided
with each eligible nonhire claimant’s interim earnings, including: (1) the earnings listed on his or
her Social Security Administration (“SSA”) earnings statement; (2) any payments made by the
City to the claimant for unemployment insurance or workers’ compensation; and (3) any
additional earnings of particular claimants who had railroad employers. (Barrero Am. Decl. ¶ 7.)
The Claims Administrator averaged each nonhire claimant’s annual interim earnings during the
applicable backpay period (2001-2011 for Exam 7029 nonhire claimants; and 2005-2011 for
Exam 2043 nonhire claimants). (Id. ¶ 8.) Nonhire claimants who failed to respond to requests
for authorizations and/or information regarding their interim earnings were assumed to have
earned the maximum amount of average interim earnings.19 (Id. ¶ 9.) Nonhire claimants’
average interim earnings were sorted into seven bands with respect to each exam. The earnings
bands were based on average annual earnings of firefighters who were hired from the two exam
lists during the relevant damages periods; each band corresponds to 15% of actual average
annual earnings of firefighters hired from the respective exam list. (Tr. at 13:24-14:3.)20 In
numbers, this means that for Exam 7029, each approximately $11,500 of average interim
19
Specifically, when initially performing these calculations, i.e., those reflected in the PRAL, nineteen nonhire
claimants were assumed to have earned the maximum amount of interim earnings. Subsequently, five claimants—
each of whom had failed to respond to a May 13, 2014, mailing inquiring whether they had worked for a railroad
employer—submitted objections and/or responses that the parties recommend the court treat as objections, which
demonstrate that these five claimants did not receive any earnings from a railroad employer. (Mem. in Supp. of
Final Entry at 21-22.) Accordingly, Plaintiffs then had complete earnings information for these five claimants, and,
consistent with Plaintiffs’ recommendation that the court sustain their objections, used those claimants’ actual
interim earnings in calculating the backpay awards reflected in the APRAL. The APRAL therefore reflects the
assumed maximum amount of interim earnings for the fourteen nonhire claimants for whom the parties still lack
complete interim earnings information. (See Barrero Am. Decl. ¶¶ 3, 10.)
20
Citations to “Tr.” refer to the transcript of the October 1, 2014, Fairness Hearing.
16
earnings constitutes a single band; for Exam 2043, each approximately $9,200 of earnings
constitutes a single band. (Barrero Am. Decl. ¶ 10; id., Ex. B.) Each interim earnings band was
then allocated between one (for the greatest amount of earnings) and seven (for the least amount
of earnings) points, and each claimant was allotted the number of points applicable to his or her
earnings band. (Id. ¶ 10.) The Claims Administrator determined the monetary value of each
point by dividing the aggregate backpay amount of each nonhire damages category by the total
number of points allocated to claimants in each of those categories. (Id. ¶ 11.) Each claimant
was then allotted the monetary value of his or her points. (Id.) For example, the value of one
point for black Exam 7029 nonhire claimants was $25,707.86. The 50 black Exam 7029 nonhire
claimants who were sorted into the minimum average annual interim earnings band—$11,390.85
or less—received seven points, so their back pay awards are therefore $179,955.04. The 23
black Exam 7029 nonhire claimants who were sorted into the maximum average annual interim
earnings band—$68,345.15 or greater—each received one point, and therefore their back pay
awards are $25,707.86.21 (See id. ¶ 12; id., Ex. B.)
2.
Allocation of Backpay to Delayed-Hire Claimants
In allocating backpay among delayed-hire claimants, the Claims Administrator was
provided with each delayed-hire claimant’s “months of delay,” which refers to the number of
months between (1) the first FDNY Academy class appointed off the list of the exam for which
the claimant is eligible for relief and (2) the date of the FDNY Academy class to which the
claimant was in fact appointed. (Id. ¶ 13.) The Claims Administrator then determined the sum
total months of delay experienced by all claimants in each delayed-hire damages category, and
determined the value of each month of delay by dividing the aggregate backpay award with
21
For an illustration of the results of the allocation methodology as to each nonhire damages category, see Exhibit
B to the Amended Declaration of Ed Barrero.
17
respect to that delayed-hire damages category by the total months of delay experienced by
claimants in that category. (Id. ¶¶ 14-15.) Each delayed-hire claimant’s proposed backpay
award equals the value of one month of delay multiplied by his or her specific months of delay.
(Id. ¶ 16.) For example, black Exam 7029 delayed-hire claimants experienced a total of 2,901
months of delay. Given the aggregate backpay amount of $444,509.77 allocated to that damages
category under the AMRCD, one month of delay for these claimants is valued at $153.23. (Id.,
Ex. C.) A claimant who was delayed 12 months will therefore receive backpay in the amount of
$153.23 multiplied by 12, or $1,838.76.22
3.
Allocation of Fringe Benefits
Fringe benefits as allocated under the AMRCD consist of two components. First, all
eligible claimants are provided a fixed, minimal fringe benefits award; second, in addition to the
fixed award, eligible claimants who submitted a fringe benefits claim by May 9, 2014, are
allocated a proportion of their claimed fringe benefits, subject to a cap. (Id. ¶ 18.)
The fixed awards consist of a pro rata distribution to all eligible claimants of
approximately 20% of the fringe benefits settlement amounts. (Tr. at 16:11-15.) Specifically, all
Exam 7029 nonhire claimants, regardless of race, receive a fixed award of $1,400; all Exam
2043 nonhire claimants, regardless of race, receive a fixed award of $960; and all delayed-hire
claimants, regardless of race or exam, receive a fixed award of $50. (Id. ¶ 19.)
The Claims Administrator calculated the claimed fringe benefits by examining each
claimant’s fringe benefits claims form, and reviewing other relevant documentation submitted by
22
The total months of delay and the value of one month of delay are set forth, with respect to each delayed-hire
damages category, in Exhibit C to the Amended Declaration of Ed Barrero.
18
the claimant.23 (Id. ¶ 21.) The Claims Administrator then computed both (1) the mean (average)
claimed fringe benefit expenses and (2) the standard deviation of the claimed fringe benefit
expenses for claimants in the three damages groups used to allocate fixed awards (Exam 7029
nonhire claimants, regardless of race; Exam 2043 nonhire claimants, regardless of race; and
delayed-hire claimants, regardless of race or exam). (Id. ¶ 22.) The Claims Administrator set a
fringe benefits cap for each damages group at the mean plus two standard deviations, i.e., the
97.5th percentile, of the amount of claimed expenses. (Id.) With respect to each damages
category, and treating any claimants whose claimed fringe benefits were in excess of the cap as
having claimed the cap, the Claims Administrator calculated the ratio of aggregate claimed
fringe benefits expenses to settlement funds that remained after paying out fixed awards; these
ratios were applied to each claimant’s claimed expenses to determine his or her additional award.
(Id. ¶¶ 22-23.) As an example, $2,099,388.95 fringe benefit settlement funds remained for black
Exam 7029 nonhire claimants after paying out their fixed shares, and, after application of the
cap, $2,943,427.50 in aggregate claimed fringe benefits expenses were claimed by this group of
claimants. Therefore, pursuant to this methodology, black Exam 7029 nonhire claimants will
receive 0.713246327 of their claimed fringe benefits expenses in addition to their $1,400 fixed
award.24 (See id., Ex. F.)
4.
Interest
Finally, the Claims Administrator calculated the total interest due on the aggregate
backpay and fringe benefits amounts and also allocated that interest among claimants. (Id. ¶ 25.)
23
As the parties instructed the Claims Administrator not to seek to verify fringe benefits claimed on the fringe
benefits claims forms, it reviewed other documentation only with respect to benefits that were not included in the
fringe benefits claims form. (Id. ¶¶ 20-21.)
24
For additional information regarding allocation of fringe benefits, see Exhibits D through F to the Amended
Declaration of Ed Barrero.
19
The interest rate applied was the average market yield on the United States one-year constant
maturity Treasury yield during the relevant damages period. (Id. ¶ 26.) As the damages period
varied between damages categories, therefore, the rates also varied slightly between damages
categories. (See id.) Specifically, the rates applied to each category were as follows: (1) for all
Exam 7029 nonhire claimants, 1.864561 (the average market yield over a damages period of
January 1, 2001, through April 25, 2014); (2) for all Exam 2043 nonhire claimants, 1.73963
(same over a damages period of January 1, 2005, through April 25, 2014); (3) for all Exam 7029
delayed-hire claimants, 1.753729 (same over a damages period of January 1, 2004, through
April 25, 2014); (4) for all Exam 2043 delayed-hire claimants, 0.499455 (same over a damages
period of January 1, 2008, through April 25, 2014). (Id.; see also id., Ex. G.) The interest was
then compounded annually through the end of 2014, to determine the total aggregate interest.
(Id. ¶ 26.) The parties agreed that interest would cease to accrue after the end of 2014. (Tr.
at 16:25-17:1.)
Interest on backpay was allocated among nonhire claimants through the use of earnings
bands, allocation of points, and point-per-value calculations; and among backpay claimants by
determining the amount of interest associated with each month of delay. (Id. ¶ 29.) Interest on
fringe benefits was allocated proportionally in relation to each claimant’s total fringe benefits
award as compared to the aggregate amount of fringe benefits relief awarded to all claimants in
that claimant’s damages category. (Id. ¶ 30.) In sum, interest was allocated among claimants
proportionally based on their backpay and fringe benefits awards. (See Mem. in Supp. of
Provisional Entry at 21.)
20
C.
Notice of MRCD
In accordance with the provisionally-approved MRCD, the 1,470 claimants held by the
court to be eligible for monetary relief, see supra pages 5-6, received notice via first-class mail
and email of (1) the settlement, (2) their individual proposed monetary relief awards, and (3) the
Fairness Hearing, as well as an objection form.25 (See Mem. in Supp. of Final Entry at 3-5; Tr.
at 17:2-4.) This notice is sufficient to ensure the fairness of the Decree because, given the
posture of this case, no other individuals’ interests are affected by the Decree.26
D.
Notice, Acceptance, and Payment of Awards
Upon final entry of the Decree, all claimants who are provided with an award of
monetary relief will be provided with notice via first-class mail and email of their awards,
instructions for submitting an acceptance form, and tax forms. (AMRCD ¶¶ 24-29.) To receive
25
By Order issued May 16, 2013, the court ruled that no claims forms submitted after June 10, 2013, would be
considered for relief. (May 16, 2013, Order (Dkt. 1118).) Therefore, these 1,470 claimants and the parties represent
the entire universe of individuals with any interest in the Decree.
26
Because the Decree resolves the damages claims of certified subclasses, the court must ensure that notice of any
proposed class settlement was directed “in a reasonable manner to all class members who would be bound by the
proposal.” Fed. R. Civ. P. 23(e)(1). The court finds that the notice that was provided satisfies Rule 23(e)’s notice
requirement. All class members who are eligible for relief pursuant to the court’s prior rulings have been provided
sufficient notice and an opportunity to present any objections for the court’s consideration. See Fed. R. Civ.
P. 23(e)(1)-(2).
The parties suggest that the notice that was provided was also intended to comport with section 703(n) of Title VII,
42 U.S.C. § 2000e-2(n). (See Mem. in Supp. of Final Entry at 3-5.) Section 703(n) establishes a bar to collateral
attack of any employment practice that implements, and is within the scope of, a litigated or consent judgment or
order resolving an employment discrimination claim, by any person who had actual notice of the proposed order and
a reasonable opportunity to present objections. 42 U.S.C. § 2000e-2(n)(1)(A)-(B). (See also Mem. in Supp. of Final
Entry at 3 n.6.) However, the section specifically does not apply to “members of a class represented or sought to be
represented in such action, or . . . members of a group on whose behalf relief was sought in such action by the
Federal Government.” 42 U.S.C. § 2000e-2(n)(2). Here, the only individuals who have received notice of the
MRCD are precisely these: members of a class represented in the present action, and/or members of a group on
whose behalf relief is being sought by the United States. Therefore, section 703(n) is inapposite here. The parties
are correct that pursuant to section 703(n), the court’s Final Relief Order, which set forth final parameters for
individual relief and eligibility requirements, is not subject to challenge by nonparties who received notice thereof.
(See Mem. & Order Addressing Objs. to Proposed Relief Order (Dkt. 1011) at 5.) However, section 703(n) does not
itself bar nonparties from challenging the Decree. Rather, because the instant Decree merely settles and allocates
relief that the court already found appropriate in its Final Relief Order (which is itself protected by section 703(n)),
the Decree does not affect the interests of nonparties; it is for that reason that they did not require notice of the
MRCD.
21
an individual monetary award, a claimant must return an acceptance form and any required tax
forms no later than 45 days after final entry; failure to do so will constitute a rejection of the
offer or relief.27 (Id. ¶¶ 30-31.)
The City will issue payments for backpay awards; the Claims Administrator will issue
payment for fringe benefits and interest awards. (Id. ¶ 38.) The City will withhold from
claimants’ backpay awards all taxes, child support liens, and employee pension contributions for
any claimants who were awarded retroactive seniority by the court.28 (Id. ¶ 39.) The City and
Claims Administrator will issue individual monetary award payments by no later than 150 days
after final entry of the Decree. (Id.)
E.
Service Awards
The Decree provides for service awards of $15,000 to each of the seven individuallynamed Plaintiff-Intervenors, separate and apart from any monetary or other relief to which they
may be entitled, as well as a $50,000 service award to the Vulcan Society, Inc., which is to be
used to “forward its not-for-profit mission.” (Id. ¶ 46.)
F.
Costs and Attorneys’ Fees
Under the Decree, the City bears all costs incurred by the Claims Administrator in its
implementation of the Decree, including the costs of all notification procedures. (Id. ¶ 50.)
27
Claimants who show good cause for failing to meet the 45-day deadline must submit their acceptance and tax
forms within 75 days after final entry of the Decree. (AMRCD ¶ 35.)
28
The City will pay the employer portion of pension contributions and taxes thereon; these will not be withheld
from the individual monetary awards. The parties dispute whether individual claimants or the City should be held
responsible to pay taxes on the employee pension contribution. They have submitted this dispute to the court (see
United States’s Mot. for Order Requiring City to Pay Interest Due on Claimants’ Minimum Employee Pension
Contributions (Dkt. 1456); Pl.-Intervernors’ Ltr.-Br. on Interest Charges on Back Contributions from Non-Hires and
Delayed Hires (Dkt. 1459)); an order resolving this dispute will issue separately, on a future date.
22
The City will reimburse the United States $150,000 in taxable costs pursuant to 28 U.S.C.
§ 1920. Otherwise, the United States will bear its own attorneys’ fees and all expenses related
to the Decree. (Id. ¶¶ 51-52.)
The Decree does not include a provision of attorneys’ fees to counsel for PlaintiffIntervenors. Instead, it provides that Plaintiff-Intervenors and the City will negotiate in good
faith regarding a payment of attorneys’ fees and costs; if they are unable to agree, the dispute
will be submitted to the court. (Id. ¶ 53.)
III.
LEGAL STANDARD
In reviewing a consent decree or settlement that resolves a pattern and practice action
brought by the United States under Title VII, and that includes the claims of a certified class or
classes, courts consider whether the proposed decree is lawful, fair, reasonable, adequate, not the
product of collusion, and consistent with the public interest.29 See, e.g., United States v. North
Carolina, 180 F.3d 574, 581 (4th Cir. 1999); United States v. N.Y.C. Bd. of Educ., 85 F. Supp.
2d 130, 157 (E.D.N.Y. 2000), vacated and remanded on other grounds by Brennan v. N.Y.C. Bd.
of Educ., 260 F.3d 123 (2d Cir. 2001); United States v. New Jersey, Nos. 88-CV-5087 (WGB),
88-CV-4080 (MTB), 87-CV-2331 (HAA), 1995 WL 1943013, at *9-11 (D.N.J. Mar. 13, 1995);
Vulcan Soc’y of Westchester Cnty., Inc. v. Fire Dep’t of White Plains, 505 F. Supp. 955, 961-62
(S.D.N.Y. 1981); see also Fed. R. Civ. P. 23(e)(2).
29
The Second Circuit recently held in SEC v. Citigroup Global Markets, Inc., 752 F.3d 285, 294 (2d Cir. 2014),
that “the proper standard for reviewing a proposed consent judgment involving an enforcement agency requires that
the district court determine whether the proposed consent decree is fair and reasonable, with the additional
requirement that the ‘public interest would not be disserved’ in the event that the consent decree involves injunctive
relief,” and rejected the district court’s inclusion of “adequacy” in the standard it had applied. However, even
assuming that the SEC v. Citigroup Global Markets, Inc. standard would apply in a Title VII case brought solely by
the United States and not involving any certified class, Federal Rule of Civil Procedure 23(e) must also be satisfied
here, and therefore this court must find that the Decree is “fair, reasonable, and adequate” in order to approve it.
Fed. R. Civ. P. 23(e)(2).
23
The Second Circuit instructs that “voluntary compromises of Title VII actions enjoy a
presumption of validity” and “should therefore be approved ‘unless . . . [they] contain[]
provisions that are unreasonable, unlawful, or against public policy.’” Kirkland v. N.Y. State
Dep’t of Corr. Servs., 711 F.2d 1117, 1128-29 (2d Cir. 1983) (quoting Berkman v. City of New
York, 705 F.2d 584, 597 (2d Cir. 1983)) (alterations in Kirkland). This court will thus consider
whether any objection to the Decree “has sufficient merit to overcome the presumption of
validity accorded to the relief agreement.”30 (See Mem. & Order Addressing Objs. to Proposed
Relief Order (Dkt. 1011) at 6.) It is the objectors’ burden to establish that the Decree should not
be approved. See United States v. New Jersey, 1995 WL 1943013, at *11 (“Once a district court
has provisionally approved a consent decree resolving a Title VII action, . . . the decree becomes
presumptively reasonable, so that an individual who objects to entry of the decree ‘has a heavy
burden of demonstrating that the decree is unreasonable.’” (quoting Williams v. Vukovich, 720
F.2d 909, 921 (6th Cir. 1983))). A district court’s approval of a Title VII settlement agreement is
reviewed for abuse of discretion. Kirkland, 711 F.2d at 1129.
To be approved, the settlement agreement must be both substantively and procedurally
fair. McReynolds v. Richards-Cantave, 588 F.3d 790, 803-04 (2d Cir. 2009). With respect to
procedural fairness, the Second Circuit has directed the district court to “pay close attention to
the negotiating process, to ensure that the settlement resulted from arm’s-length negotiations and
that plaintiffs’ counsel . . . possessed the necessary experience and ability, and have engaged in
30
In connection with the issuance of the Final Relief Order, the court also applied a standard set forth in Kirkland v.
New York State Department of Correctional Services, 711 F.2d 1117, 1132 (2d Cir. 1983)—specifically, the court
decided it was appropriate to “review[] objections and ultimately ask[] whether the proposed remedies were (1)
‘substantially related to the objective of eliminating the alleged instance of discrimination’ and (2) did not
‘unnecessarily trammel the interests of affected third parties.’” (Mem. & Order Addressing Objs. to Proposed Relief
Order (Dkt. 1011) at 6 (quoting Kirkland, 711 F.2d at 1132).) Because the court has already determined that
monetary relief consisting of backpay and fringe benefits satisfies this standard (see id. at 6-7), the court need not
apply it again here. Instead, the court will consider whether the Decree and award allocation are fair, reasonable,
adequate, lawful, not the product of collusion, and consistent with the public interest, and whether any objection has
sufficient merit to overcome the presumption of validity.
24
the discovery, necessary to effective representation of the class’s interests.” Id. at 804 (alteration
and internal quotation marks omitted).
In determining whether a consent decree is substantively fair, the Supreme Court has held
that courts should “weigh[] the plaintiff’s likelihood of success on the merits against the amount
and form of relief offered in the settlement.” Carson v. Am. Brands, Inc., 450 U.S. 79, 88 n.14
(1981); see also Kirkland, 711 F.2d at 1129. Courts in the Second Circuit frequently look to the
nine Grinnell factors, or an appropriate subset thereof, in assessing proposed class action
settlements; the Second Circuit has endorsed the propriety of consideration of those factors in
class actions alleging discrimination. See Plummer v. Chem. Bank, 668 F.2d 654, 659 (2d Cir.
1982). These factors include: “(1) the complexity, expense and likely duration of the litigation;
(2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of
discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages;
(6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to
withstand a greater judgment; (8) the range of reasonableness of the settlement fund in the light
of the best possible recovery; [and] (9) the range of reasonableness of the settlement fund to a
possible recovery in light of all the attendant risks of litigation.” City of Detroit v. Grinnell
Corp., 495 F.2d 448, 463 (2d Cir. 1974) (internal citations omitted).
IV.
DISCUSSION
A.
Fairness and Adequacy of the Decree
As explained in detail above, this action has a complicated procedural history, and its
remedial phase alone has involved a number of aspects. The Decree, which is the subject of the
court’s current consideration, deals only with wage backpay, fringe benefits (medical expenses),
and interest thereon. It does not deal with priority hiring, retroactive seniority, compensatory
25
damages for noneconomic harm, or any injunctive relief and/or ongoing monitoring by the court
and the court-appointed Monitor, nor does it impact in any way the court’s prior rulings
regarding those aspects of relief. The Decree itself is comprised of two main features: (1) the
parties’ agreed-upon aggregate settlement amounts as to backpay, fringe benefits, and interest,
with respect to each damages category; and (2) a methodology allocating these aggregate
amounts to eligible, individual claimants. For the reasons discussed below, the court finds the
Decree to constitute a fair, reasonable, and adequate resolution of Plaintiffs’ claims for
individual monetary relief as to backpay, fringe benefits, and interest thereon—one which is
lawful, not the product of collusion, and consistent with the public interest.
1.
The Decree
Typically, when assessing the fairness and adequacy of a proposed consent decree, the
court would balance the apparent merits of the plaintiff’s case against the settlement offer. See
Carson, 450 U.S. at 88 n.14 (1981); Kirkland, 711 F.2d at 1129. Many of the Grinnell factors
also speak to such a balancing approach. See Grinnell, 495 F.2d at 463 (factors the court should
consider include, inter alia: “(4) the risks of establishing liability; (5) the risks of establishing
damages; (6) the risks of maintaining the class action through the trial; . . . (8) the range of
reasonableness of the settlement fund in the light of the best possible recovery; [and] (9) the
range of reasonableness of the settlement fund to a possible recovery in light of all the attendant
risks of litigation” (internal citations omitted)). But as the parties note, Plaintiffs have already
prevailed on the merits: This court found the City’s pass-fail and rank-order use of Written
Exams 7029 and 2043 to violate Title VII’s disparate impact provisions. Additionally, the court
has already determined that the total (maximum) amount of the City’s liability for wage backpay,
26
prior to reduction for mitigation through interim earnings or claimants’ failure to mitigate their
damages, is approximately $128 million.
Accordingly, when assessing the Decree generally, including the overall agreed-upon
settlement amounts, the court will consider pursuant to the balancing methodology: (1) whether
the backpay settlement amount approximates the $128 million figure less claimants’ mitigation
and failure to mitigate; (2) whether the fringe benefits and interest settlement amounts
approximate what claimants would receive in aggregate should the claims process continue; and
(3) should the settlement amounts in fact equal a lesser number, whether the circumstances
warrant that result in light of the other Grinnell factors. The parties represent that the
approximately $81 million in total backpay, as well as the smaller aggregate backpay amounts
allotted to each damages category, represent their best estimates of what the City’s total backpay
liability would be after the completed claims process assessed claimants’ interim earnings and
failure to mitigate, less an approximately 15% discount for settlement. (See Mem. in Supp. of
Provisional Entry at 15; Tr. at 20:19-24, 21:19-25.) Similarly, the approximately $6.2 million in
aggregate fringe benefits and $12 million in total prejudgment interest under the settlement also
represent “an approximately fifteen percent discount from the parties’ best estimates of the
City’s total exposure if the parties had continued to litigate Claimants’ individual monetary
relief.” (Mem. in Supp. of Provisional Entry at 15.)
Upon consideration of the other Grinnell factors, the court finds that this approximately
15% discount from the City’s likely post-mitigation liability is fair, reasonable, and adequate.
Absent this settlement, resolving claimants’ individual monetary claims would take at least
another year. (Id. at 9.) Resolving these claims presently will speed relief to claimants who have
been waiting years for relief—these claimants took the unlawful exams twelve and fifteen years
27
ago, and the case has been pending in this court for eight years. Increased speed is therefore
desirable.31 Additionally, avoiding the continued use of the claims process eliminates a material
burden on claimants, who would be subjected during that process to additional discovery,
individual hearings before Special Masters, motions to dismiss for failure to comply with
discovery requests, and motions to reduce awards for failure to mitigate damages. (Id. at 15; see
also, e.g., June 24, 2013, R&R of the Special Masters; Aug. 22, 2012, Mem. & Order (Dkt.
952).) The increased speed of recovery and the elimination of additional discovery and other
burdens to claimants—not to mention the savings of time and expense as to the court, the parties,
and the Special Masters—weighs in favor of approval of the Decree. See Grinnell, 495 F.2d at
463 (the court should consider: (1) “the complexity, expense and likely duration of the litigation”
and (3) “the stage of the proceedings and the amount of discovery completed”).
Furthermore, the court considers the generally positive response by claimants to the
Decree. See id. (factor (2): “the reaction of the class to the settlement”). Written objections
were submitted by 102 claimants, and one additional claimant who did not submit a written
response appeared at the Fairness Hearing. However, four of the written objection forms
contained substantively positive statements regarding the Decree. (See Obj.Exs. 13, 22, 27, 98.)32 Therefore, in the court’s calculation, only 6.7% of eligible claimants
31
The parties also note that “the greater the amount of time that passes in the case, the greater the risk that
deserving Claimants will become unreachable due to changes in their contact information that are not communicated
to the parties or the claims administrator.” (Mem. in Supp. of Provisional Entry at 15 n.11.)
32
As discussed below, one of these four claimants requests that his race be adjusted on the parties’ records to reflect
that he identifies as black, not Hispanic, and the court is granting this request. See infra pages 54-55. (See also
Obj.-Ex. 13 at MRCD_OBJ_000054.) However, this claimant also responds that he has no objection to the Decree,
so the court takes this claimant to provide a positive statement, overall, in favor of the Decree. (Id. at
MRCD_OBJ_000052.) As previously noted, supra note 14, these Objection-Exhibits are filed at Dkts. 1469-2,
1469-3, 1548-1, and 1548-2.
28
(98 out of 1,470), a relatively small percentage, have in fact objected to the Decree. This also
weighs in favor of final approval and entry.
The final Grinnell factor—“the ability of the defendants to withstand a greater
judgment”—weighs neither in favor of nor against final approval. Grinnell, 495 F.2d at 463
(factor (7)). It is true that the City could, as a practical matter, withstand a greater judgment.
However, as the City’s liability is funded by the public by way of tax dollars, there is also some
interest to the public in minimizing unnecessary expense. Therefore, this factor is ultimately
neutral.
Other criteria for final approval of the Decree are also satisfied. The Decree is both
lawful and consistent with the public interest, as it implements individual relief that the court has
already found appropriate pursuant to Title VII. (See Mem. & Order Addressing Objs. to
Proposed Relief Order; Aug. 20, 2012, Mem. & Order; Backpay Summ. J. Op.) There is nothing
to suggest that the Decree is the product of collusion or otherwise procedurally tainted. In fact,
quite to the contrary: Counsel to all parties are experienced and extremely well-informed
regarding the issues in this case—and notably, claimants’ interests are protected in connection
with this settlement by the United States33 as well as by counsel for two different subclasses—
and have engaged in fierce litigation for nearly a decade. See McReynolds, 588 F.3d at 804.
Notably, attorneys’ fees to subclass counsel are not resolved by the Decree, further reducing any
concern of collusion.
33
Certain courts have suggested that the presence of a governmental participant weighs in favor of finding a
proposed settlement agreement to be fair and reasonable. See Officers for Justice v. Civil Serv. Comm’n of City and
Cnty. of San Francisco, 688 F.2d 615, 625 (9th Cir. 1982); United States v. State of New Jersey, 1995 WL 1943013,
at *11. The presence of the United States in this action and its role in negotiating the instant settlement, with its
interest in protecting the rights of all claimants, both black and Hispanic, makes the court only more comfortable
with the Decree.
29
2.
Allocation Methodology
The prior analysis does not consider the Decree’s allocation methodology. Neither the
Carson general balancing approach nor the Grinnell factors provide much guidance with respect
to the court’s review of this methodology, so the court will instead assess whether the
methodology is, in a general sense, lawful, consistent with the public interest, fair, reasonable,
and adequate with respect to individual claimants. Ultimately, the court finds that these criteria
are met, in large part because of the allocation methodology’s consistency with prior court
rulings as to individual relief.
a.
Assignment of Claimant into Damages Category
All claimants were assigned to one of the eight damages categories, based on (1) the race
identified on his or her claim form; (2) the court’s determination of the examination for which
the claimant is eligible for relief; and (3) the court’s determination regarding the claimant’s
status as a nonhire or delayed-hire claimant. (Mem. in Supp. of Provisional Entry at 16-17.)
Claimants eligible for relief on the basis of both Exam 7029 and Exam 2043 were assigned to the
Exam 7029 damages category, in order to compensate them for the entire time period during
which they suffered damages. (Id. at 17.) This is lawful, appropriate, fair, and reasonable as
consistent with the court’s prior rulings, including the directive in the Final Relief Order that
each claimant must be placed into the appropriate damages category as the first step in the
individual claims process. (See Final Relief Order at 10-11; see also Backpay Summ. J. Op.
(holding that each damages category suffered a discrete loss); June 3, 2012, Mem. & Order
at 4, 9, 13 (same); Nov. 18, 2013, Order (Endorsed Ltr.) (Dkt. 1235) (noting that claimants
identify as either black or Hispanic on their claims forms).) See also supra pages 5-6 (noting
court’s eligibility determinations).
30
b.
Allocation of Backpay to Nonhire Claimants
Between May 2012 and June 2014, during the individual claims process, the parties
collected information regarding eligible claimants’ interim employment earnings, and claimants
submitted individual claims for lost fringe benefits. (Mem. in Supp. of Provisional Entry at 8.)
Specifically, the United States obtained interim earnings information, as reflected in claimants’
Social Security Administration (“SSA”) earnings statements, for all but one claimant; the parties
were unable to determine this claimant’s interim earnings because he did not submit an executed
authorization form for his SSA statements despite numerous attempts to reach him. (Id.)
Additionally, the City identified unemployment insurance and workers’ compensation payments
that it made to claimants who had worked for the City; and the parties obtained railroad earnings
information for claimants who indicated they worked for a railroad employer, because those
earnings were not included on SSA earnings statements. (Id. at 8-9.) At the time they moved for
provisional entry of the MRCD, the parties believed that eighteen claimants had failed to respond
to discovery requests by the City or a May 13, 2014, mailing inquiring as to railroad
employment; accordingly, they lacked complete interim earnings information from nineteen total
claimants (those eighteen claimants plus the one claimant who failed to execute his SSA
authorization form). (See Mem. in Supp. of Final Entry at 21.)
As explained above, pursuant to the Decree’s allocation methodology, the Claims
Administrator was provided with interim earnings data with respect to each eligible nonhire
claimant, and it averaged each nonhire claimant’s annual interim earnings over the backpay
period. Nonhire claimants’ average annual interim earnings were sorted into seven earnings
bands for each exam. Each earnings band was allocated between one and seven points; each
claimant was allotted the number of points applicable to his or her earnings band; and then each
31
claimant received his or her proportion of the total backpay amount allotted to each damages
category based on the total number of points assigned. See supra Part II.B.1. Claimants for
whom the parties lacked complete information as to interim earnings were assumed to have
earned the maximum amount of interim earnings, and assigned to the one-point earnings band.
(Mem. in Supp. of Provisional Entry at 18; Mem. in Supp. of Final Entry at 21.)
This allocation methodology meets the relevant standard for approval. The court’s prior
rulings made clear that in a litigated resolution of the monetary claims, mitigation of the City’s
damages due to claimants’ interim earnings (or their failure to mitigate) would have to be
determined on individual bases. (See, e.g., Backpay Summ. J. Op. at 36-37, 45-46, 48-51;
June 3, 2012, Mem. & Order at 9-14; June 6, 2011, Mem. & Order (Dkt. 640) at 18-25.) The
point-value system appropriately uses individual claimants’ earnings data, consistent with this
interest in individual determination, while at the same time sufficiently simplifying the process in
order to allow the settlement to proceed, and thus alleviating the burdens that a full claims
process would place on claimants. See supra Part IV.A.1. (See also, e.g., Tr. at 25:11-26:1.)
The point values that were assigned to the earnings bands approximate the ratios of awards that
claimants could have been expected to receive if the individual claims process had gone through
to its conclusion. (Mot. for Provisional Entry at 19; Tr. at 13:19-23.) Specifically, because the
earnings bands were based on the average annual earnings of actual firefighters hired off the
applicable exam, as were the aggregate settlement amounts, the earnings bands approximated the
claimants’ percentage mitigation. (Mot. for Provisional Entry at 18-19.) In other words, if the
parties had continued to litigate, the backpay award for a claimant with 75% mitigation would
have been half that of a claimant with 50% mitigation; the backpay award for a claimant with
25% mitigation would have been three times that of a claimant with 75% mitigation. (Id. at 19.)
32
Plaintiffs represent that the earnings bands and point values were “chosen in order to maintain
this award ratio for Claimants as closely as possible.” (Id.) Indeed, under the point-value
methodology, a claimant with 25% mitigation received 6 points, and a claimant with 75%
mitigation received 2 points—as such, the 25% mitigation claimant does in fact receive a
backpay award three times that of the 75% mitigation claimant. (See id. (chart of earnings bands
for nonhire claimants).)
Additionally, the settlement’s treatment of claimants who did not respond to discovery
requests is appropriate. As the court explained at a May 7, 2014, status conference, it would be
unfair to other claimants (claimants who did fulfill their discovery obligations) to
overcompensate claimants who did not do so with a windfall to which they were not entitled, as
that windfall would reduce the amount of all other claimants’ awards. (May 7, 2014, Status
Conf. Tr. at 10:5-25.)
Thus, based on the point-value system’s close approximation of what claimants would
receive in a full, litigated claims process, and the benefits that inhere from avoiding the
continuation of such a process, the court finds the backpay allocation to nonhire claimants to be
fair, reasonable, adequate, lawful, and consistent with the public interest.
c.
Allocation of Backpay to Delayed-Hire Claimants
Plaintiffs explain that the parties were “in the midst of gathering information to enable
such individualized determinations on the backpay and fringe benefits, when [they] agreed in
principal to settle these claims,” and thus they lacked complete interim earnings information for
delayed-hire claimants at the time of settlement. (Tr. at 23:4-7, 26:2-3.) Therefore, the
allocation of backpay settlement funds to delayed-hire claimants does not take into account
33
interim earnings. Instead, delayed-hire claimants in each damages category were allocated
backpay proportionately based on their individual months of delay.
A pro rata allocation based on months of delay is consistent with the court’s prior
decisions (June 3, 2012, Mem. & Order at 12; Final Relief Order at 9, 11-12), and it is both
equitable and legally appropriate (June 3, 2012, Mem. & Order at 12). Ingram v. Madison
Square Garden Ctr., Inc., 709 F.2d 807, 812 (2d Cir. 1983) (finding that the “fairer procedure”
where qualified claimants outnumber lost job openings is to “compute a gross award for all the
injured class members and divide it among them on a pro rata basis”); see also Robinson v.
Metro-North Commuter R.R. Co., 267 F.3d 147, 161 n.6 (2d Cir. 2001) (approving of class-wide
computation of monetary relief where the number of qualified class members exceeds the
number of openings lost to the class), overruled in part by Wal-Mart Stores, Inc. v. Dukes, 131
S. Ct. 2541 (2011). Moreover, the allocation methodology’s failure to account for individual
claimants’ actual interim earnings—which would have occurred had the claims process gone
through to its litigated conclusion—does not prevent the court from approving the Decree. By
allocating funds based on claimants’ months of delay, the settlement accounts for individual
circumstances to a reasonable (and significant) degree, while also accounting for the current
posture of the claims process and the interest in easing burdens to claimants. Accordingly, the
court approves this methodology.
d.
Allocation of Fringe Benefits
In prior rulings, the court held that the City’s fringe benefits liability would be valued by
the health care premiums and out-of-pocket medical expenses actually incurred by eligible
claimants, and which they would not have incurred had they been on the City’s health insurance
plan. (Backpay Summ. J. Op. at 39-40; Aug. 20, 2012, Mem. & Order (Dkt. 946) at 1.) The
34
court also noted that although claimants would have to prove their actual expenses, documentary
evidence might not necessarily be required to do so. (Aug. 20, 2012, Mem. & Order at 3-4.)
In January 2013, claimants were first notified that they may be eligible to receive
compensation for expenses paid for health insurance and medical care, and they were advised
that they should gather and organize documentation in order to prove such expenditures. (See
Mem. in Supp. of Final Entry at 26; id., App’x E at 1.) On December 2, 2013, during the
individual claims process, claimants were sent a Fringe Benefits Claims Form, setting a
February 3, 2014, deadline for return of the form. (See, e.g., Obj.-Ex. 57 at
MRCD_OBJ_000453.) Finally, in April 2014, claimants were given another chance to submit a
claim for fringe benefits and were informed that no additional materials would be accepted after
May 9, 2014. (See Mem. in Supp. of Final Entry, App’x E at 2-4; see also Mem. in Supp. of
Provisional Entry at 9.)
As described in greater detail above, the Decree allocates the aggregate fringe benefits
settlement amounts via two components: All claimants receive a pro rata distribution of
approximately 20% of the fringe benefits settlement; and claimants who submitted fringe
benefits claims forms and/or additional documentation prior to May 9, 2014, receive a proportion
of their claimed expenses, subject to a cap set at the 97.5th percentile of claimed expenses. The
parties explain that they instituted this “two-pronged approach” in order to maintain consistency
with the court’s ruling that fringe benefits must be calculated on an individualized basis, based
on actually-incurred expenses, “while also recognizing that the fringe benefits claims process
was interrupted by the settlement agreement reached in this case.” (Tr. at 16:16-21; see also
Mem. in Supp. of Provisional Entry at 20-21.) The court agrees that this approach strikes an
appropriate balance between adherence to the court’s prior directives, including individualized
35
treatment, and enjoyment of the benefits of the settlement process, including avoidance of a full,
litigated claims process. Additionally, the use of the claimed expenses cap ensures that sufficient
funds remain in the pool to compensate appropriately all individuals who submitted such a claim;
and the parties’ instruction that the Claims Administrator not verify information on submitted
claims forms, supra pages 18-19 and note 23, eases a burden on claimants, and is consistent with
prior court directives. (See Aug. 20, 2012, Mem. & Order at 3-4.) Accordingly, the court
approves this portion of the allocation methodology under the applicable standard.
e.
Calculation and Allocation of Interest
The court’s prior rulings held that prejudgment interest, at a rate equal to the average
United States one-year constant maturity Treasury yield, would be added to each claimant’s net
backpay and fringe benefits awards for each year of his or her backpay period, and compounded
annually. (June 3, 2012, Mem. & Order at 11, 15; Final Relief Order at 11-12; see also 28
U.S.C. § 1961(a).) The Decree’s calculation of interest on aggregate settlement amounts is fully
in keeping with this ruling (see Mem. in Supp. of Provisional Entry at 21), and as the Decree
allocates these aggregate interest amounts proportionally to claimants based on their backpay and
fringe benefits awards (id.), see also supra Part II.B.4 (describing interest calculation and
allocation), the allocation is both consistent with the court’s prior Orders and equitable.
B.
Objections
As noted above, 103 claimants submitted written objections to the Decree (four of which
were substantively favorable) and/or to their proposed individual awards, and/or spoke in
opposition thereto at the Fairness Hearing. For the reasons discussed below, the court
SUSTAINS objections by seven claimants: objections by claimants 200000216, 200000323,
200000459, 200000896, and 200000431 regarding the use of their actual average annual interim
36
earnings, versus assumed maximum interim earnings, in the calculation of their backpay awards;
claimant 200000337’s objection regarding the discrepancy between the race indicated on his
claim form and that used by Plaintiffs in calculating his individual award; and
claimant 200007062’s objection requesting the withdrawal of his claim. The court
OVERRULES all other objections. As the court is sustaining the same seven objections that
Plaintiffs recommend be sustained, the court APPROVES the Amended Proposed Relief Awards
List as the Final Relief Awards List.
1.
Settlement Amounts and Overall Allocation
a.
Settlement Amounts
Eight claimants submitted objections that appear to challenge either the aggregate
settlement amount of $99,098,358.29 or the per-damages-category sub-aggregate amounts.
(Obj.-Exs. 7, 9, 33, 41, 54, 71, 90, 92.) Specifically, claimant 200000214 objects to the total
settlement amount’s being lower than the approximately $128 million, not accounting for
mitigation, that the court held the City liable to pay in wage backpay through the end of 2010.
(Obj.-Ex. 7.) Several claimants appear to object that backpay amounts do not account for items
such as overtime, vacation or holiday pay, and potential promotions. (Obj.-Exs. 9, 54, 90; see
also Obj.-Ex. 33 (“Not enough back pay.”).) Three of these claimants object to the use of
damages categories and/or the distinctions being made between them: Claimant 200006382
contends that Exam 2043 should not receive less than Exam 7029 (Obj.-Ex. 92; Tr. at 89:15-24
(Sonera)); claimant 200002572 argues that claimants should not be categorized, because all were
equally discriminated against (Obj.-Ex. 71); and claimant 200001140 objects that it is a violation
of the Equal Protection Clause to distinguish between claimants on the basis of race (Obj.Ex. 41).
37
None of these objections provides grounds for the court to reject the Decree. The $128
million figure was a pre-mitigation number; under applicable law and the court’s prior Orders,
should the claims process proceed absent settlement, the City will be permitted to prove that
claimants mitigated their damages or failed to do so—and the total amount of aggregate backpay
would thus likely be substantially reduced. (See Backpay Summ. J. Op. at 48-49; June 3, 2012,
Mem. & Order; Aug. 22, 2012, Mem. & Order.) Furthermore, as explained above, the settlement
reflects an approximately 15% discount off the City’s expected total liability, a discount that the
court finds fair, reasonable, and adequate, given the desirability of speeding recovery and
avoiding the continuation and completion of a burdensome claims process. Additionally, as the
court explained in its prior rulings, each damages category has experienced a discrete economic
loss as a result of that category’s unique hiring shortfall. (June 3, 2012, Mem. & Order at 9, 13.)
Therefore, it is appropriate that the settlement draw distinctions between damages categories to
reflect these distinct losses. Moreover, the Decree’s use of damages categories does not draw
distinctions based on race, but rather based on claimants’ status as victims of the City’s
discrimination. (See Mem. & Order Addressing Objs. to Proposed Relief Order at 8 (drawing
these distinctions in providing “make-whole” relief does not implicate the Equal Protection
Clause (citing Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 374 n.61 (1977); Acha v.
Beame, 531 F.2d 648, 656 (2d Cir. 1976))).) Finally, the aggregate settlement amounts, like the
$128 million in maximum total backpay, which serves as a ceiling from which to assess the
settlement, do account for overtime, specialty, and non-entry level pay. (See Tr. at 102:4-17;
Backpay Summ. J. Op. at 29.) Accordingly, these objections are OVERRULED.
38
b.
Allocation Generally
Several claimants raise objections regarding the allocation of aggregate settlement funds.
Five claimants argue that the settlement funds should be distributed evenly between all claimants
or raise similar contentions. (Obj.-Exs. 41 (“[A]ll of the rejected candidates were equally
damaged in reputation stature and good standing in their communities.”), 71 (“It didn’t affect one
person more than the other. We were all affected . . . .”), 73; see also Obj.-Exs. 38 (suggesting
that nonhire claimants should not receive greater awards than delayed-hire claimants), 92
(arguing that claimants eligible on the basis of Exam 2043 should not receive lower awards than
those eligible due to Exam 7029); see also Tr. at 89:15-24 (Sonera).) It is equitable and
appropriate that, as between nonhire and delayed-hire claimants eligible for relief in connection
with the same exam, and all else being equal, nonhire claimants receive a greater individual
award. Having never been hired by the FDNY, nonhire claimants experienced a greater loss in
wages than those claimants who were eventually appointed. Similarly, Exam 7029 claimants
generally experienced a greater loss than Exam 2043 claimants, because they took the
discriminatory exams years earlier. For these reasons, as well as those explained directly above
(e.g., the court’s findings that each damages category experienced a discrete economic loss as a
result of that category’s unique shortfall, and that it is therefore appropriate for the settlement to
draw distinctions reflecting these different losses), these objections are OVERRULED.
One claimant who was appointed to the FDNY in July 2013 as a priority hire objects that
priority hires should receive greater awards than nonhire claimants. (Obj.-Ex. 40.) Specifically,
claimant 200001113 explains that he “believe[s] those that have been hired as priority hires
proved that they should have been as of the original test, and therefore should be paid a higher
percentage than those who have not been hired or made it through FDNY’s process . . . .” (Id.
39
(emphasis in original).) But the differences in economic loss experienced by nonhire claimants
versus delayed-hire claimants are not echoed as between nonhire claimants who have been
successful in their bids to become priority hires at the FDNY versus those who have not.
Furthermore, the monetary relief eligibility criteria requires claimants to have been qualified for
appointment to the FDNY at the time they took the exams; the eligibility criteria for priority
hiring relief, however, requires that these individuals be presently qualified for appointment.
Therefore, a claimant’s failure to qualify for priority hiring relief does not mean that the claimant
would not or should not have been appointed at the time of the original examination. Instead, the
eligibility criteria set for monetary relief was meant to ensure that all claimants who would
receive such relief were, in fact, qualified for appointment at the former time.
Claimant 20000113’s objection is therefore OVERRULED.
Finally, six claimants object on the basis that the allocation methodology is nontransparent or confusing. (Obj.-Exs. 21, 71, 73, 80, 81, 85; see also Tr. at 88:2-17 (Guest).) The
court disagrees. Although the allocation methodology is complex, it is not opaque; Plaintiffs’
filings in support of entry of the Decree explain the methodology and its rationale in sufficient
detail (as does the instant Memorandum and Order). Accordingly, these objections are
OVERRULED.
2.
Backpay Allocation Methodology
a.
Backpay Awards’ Failure To Equal What Claimants Would Have
Earned as Firefighters
The vast majority of objections are, in sum and substance, that individual awards do not
equal what claimants would have earned as firefighters. Certain delayed-hire claimants object
that their backpay awards do not equal what they would have earned as firefighters during their
respective months of delay. (Obj.-Exs. 1, 10, 24, 34, 36, 38, 42, 51, 55, 56, 58, 59, 62, 66, 71,
40
72, 74, 76, 79, 80, 83, 84, 85, 86, 87, 88, 90, 91, 94, 95, 97, 99; Additional Written Submissions
(Dkt. 1494-1) at 1-4; see also Tr. at 70:5-21 (Duarte), 86:19-23 (Waite).) Others object on the
grounds that their awards do not equal what they would have earned during their months of delay
minus their actual interim earnings. (Obj.-Exs. 20, 43, 70, 101; Tr. at 87:13-88:12 (Guest); 91:218 (Roldan).)
Similarly, a number of nonhire claimants submitted objections that their backpay awards
do not equal what they would have earned during their damages period, or the same minus
interim earnings. (Obj.-Exs. 4, 6, 7, 16, 18, 44, 49, 54, 57, 61, 67; see also Tr. at 66:24-67:9
(Velez).) One nonhire claimant contends that “[a]t minimum, the award should equal the amount
a fireman makes annually as per their current contract multiplied by the twelve years it took to
settle this lawsuit.” (Obj.-Ex. 100.) Certain claimants, both delayed hires and nonhires, argue
further that their backpay awards should take into account all premium, holiday, vacation, sick,
overtime, top grade, promotional, and other specialty pay that they lost out on during the time
they were not working as firefighters. (Obj.-Exs. 20, 37, 45, 48, 51, 65, 71, 72, 75, 81, 84, 85,
87; see also Tr. at 71:13-20 (Foster).)
Again, none of these objections provides a basis for the court to deny final entry of the
Decree. Claimants are neither entitled to individual backpay awards that equal what they would
have earned as firefighters, nor what they would have earned as firefighters less actual interim
earnings, because the number of eligible claimants far exceeds the number of shortfall positions.
The City cannot be held liable for more than the amount of injury it inflicted, which is what
would occur if all eligible claimants were to receive backpay in the amount that they would have
earned as firefighters. (See June 3, 2012, Mem. & Order at 6 (“[T]he measure of the
compensation that injured persons should receive should ‘be equal to the injury’ that the City’s
41
actions inflicted.” (citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 418 (1975))); see also
id. at 7.) Indeed, even if the claims process were to proceed through to its conclusion, the salary
that would have been earned by the 293 shortfall hires—the total amount of pre-mitigation
backpay lost to nonhire claimants—would be split between the 995 nonhire claimants who were
found eligible for monetary relief.34 (See id. at 9.) Similarly, the salary that was lost to the 249
shortfall delays during their hypothetical months of delay would be split among the 475 delayedhire claimants who were found eligible for monetary relief. (See id. at 12.) Furthermore, as
noted above, the aggregate settlement amounts from which claimants’ backpay awards are
derived do, in fact, account for overtime, specialty, and non-entry level pay. See supra Part
IV.B.1.a. (See also Tr. at 102:4-17.) Accordingly, these objections are OVERRULED.
b.
Interim Earnings Methodology
Five claimants have objected that interim earnings should not be considered when
calculating backpay awards. (Obj.-Exs. 5, 29, 35, 41, 60.) For example, claimant 200001025
writes that by taking interim earnings into account, he is being “hurt for making more money”
(Obj.-Ex. 35), and claimant 200001920 states that the same is unfair because if he had been hired
by the FDNY, he would not have had to settle for his current job (Obj.-Ex. 60). These objections
are OVERRULED. As discussed above, if the claims process were to continue, claimants’
awards would be reduced by their interim earnings and/or by their failure to mitigate damages.
34
Even more specifically, the shortfall salary amounts attributable to each nonhire damages category (114 black
Exam 7029 shortfall nonhires; 62 Hispanic Exam 7029 shortfall nonhires; 72 black Exam 2043 shortfall nonhires;
and 45 Hispanic Exam 2043 shortfall nonhires) would need to be split by eligible claimants within that category,
even before a reduction for interim earnings or failure to mitigate. (See June 3, 2012, Mem. & Order at 5-6;
Backpay Summ. J. Op. at 5-6, 7-8.) The shortfall salary amounts attributable to each delayed-hire damages category
(68 black Exam 7029 firefighters who were delayed in their start dates, leading to a total of 20.03 years of lost
wages; 86 Hispanic Exam 7029 firefighters who were delayed in their start dates, leading to a total of 23.11 years of
lost wages; 44 black Exam 2043 firefighters who were delayed in their start dates, leading to a total of 14.08 years of
lost wages; and 51 Hispanic Exam 2043 firefighters who were delayed in their start dates, leading to a total of 12.36
years of lost wages) too would need to be split by eligible claimants within that category. (See Backpay Summ. J.
Op. at 6-7, 41-42.)
42
Title VII imposes a duty on victims of discrimination to mitigate their damages; the City would
be permitted to prove mitigation and reduce its liability. (See Backpay Summ. J. Op. at 48-49;
June 3, 2012, Mem. & Order; Aug. 22, 2012, Mem. & Order.)
Claimant 200002056 objects to the placement of nonhire claimants’ average interim
earnings into earnings bands and the use of the point system in determining nonhire claimants’
individual backpay awards. (Ex. 67; Additional Written Submissions (Dkt. 1494-1) at 5-8; Tr.
at 67:10-22 (Velez); Fairness Hr’g, Ex. 1.)35 This claimant is correct that the court’s prior
rulings held that interim earnings would be calculated on individual bases. However, as
discussed above, the court finds that the point-value system appropriately accounts for
individuals’ interim earnings—and indeed closely approximates the ratios of aggregate backpay
liability that individual claimants would receive in a fully litigated claims process—while at the
same time alleviating the burden to claimants of such a process, and allowing for enjoyment of
the benefits of settlement. Accordingly, this objection is OVERRULED.
3.
Individual Backpay Awards
a.
Interim Earnings Calculation: Individual Delayed-Hire Claimant
Claimant 200000901, a delayed-hire claimant, objects to the way his interim earnings
were purportedly used in calculating his backpay award. (Obj.-Ex. 31 (arguing that the
claimant’s military base pay only, and not combat, hostile fire, or “BAH” pay, should be taken
into consideration in calculating his interim earnings).) But interim earnings were not used to
calculate this claimant’s backpay award. As described above, delayed-hire claimants’ backpay
awards were calculated pro rata, based on claimants’ months of delay. Accordingly, this
claimant’s objection is OVERRULED.
35
One delayed-hire claimant also appears to object to the use of interim earnings bands (see Tr. 91:4-5 (Roldan));
however, as explained above, interim earnings were not used to calculate backpay awards for delayed-hire claimants
and as such, neither were earnings bands. This objection is accordingly OVERRULED.
43
b.
Interim Earnings Calculations: Individual Nonhire Claimants
Eight nonhire claimants raise issues regarding the specific calculations of their own
average annual interim earnings. (Obj.-Exs. 8, 12, 14, 15, 30, 46, 53, 57.) Three of these
objections lack merit. Claimant 200001293 appears to contend that income he used to attend
school during his damages period should not be included in his average annual interim earnings
(Obj.-Ex. 46); claimant 200001806 argues that his interim earnings should have been calculated
by reference to his net, not gross, annual earnings (Obj.-Ex. 57); and claimant 200001689’s
objection is unclear (Obj.-Ex. 53). First, the allocation methodology does not discount any
claimant’s interim earnings for any type or category of expenses, so the failure to do so for
claimant 200001293’s tuition expenses is not unfair. Indeed, discounting interim earnings for
certain types of expenses (such as schooling) would require both a great deal more information
from all claimants and determinations by either the parties or the court as to what types of
expenses warrant such treatment. This would involve additional time and complication, thus
divesting the settlement of many of its benefits, and would not necessarily result in a more
equitable result; as there is no readily evident way to determine which types of expenses would
deserve such discounting, this would likely result in somewhat arbitrary determinations. Second,
all claimants’ interim earnings were calculated on a gross income basis; the treatment of claimant
200001806’s interim earnings on this same basis was therefore fair and equitable.36 Finally,
claimant 200001689’s objection is unclear; it therefore provides no basis for the court to consider
a recalculation of this claimant’s award. These three objections are therefore OVERRULED.
The remaining five claimants in this category submitted objections, or responses that
Plaintiffs recommend that court treat as objections, to the effect that their backpay awards should
36
And as the parties note, the court used gross firefighter income to calculate aggregate backpay amounts, and the
parties used claimants’ gross income to estimate the City’s likely total liability after a fully litigated claims process.
(See Mem. in Supp. of Final Entry at 24 (citing Backpay Summ. J. Op. at 29, 43).)
44
not have been calculated assuming they had earned the maximum average annual interim
earnings during their damages periods. (Obj.-Exs. 8, 12, 14, 15, 30; see Mem. in Supp. of Final
Entry at 20-22.) Plaintiffs also recommend that the court sustain these objections.37 (Mem. in
Supp. of Final Entry at 20-22.) As discussed above, at the time Plaintiffs sought provisional
entry of the MRCD and filed the PRAL with the court, they lacked complete interim earnings
information for nineteen claimants, including the five claimants at issue (claimants 200000216,
200000323, 200000459, 200000896, and 200000431). Specifically, Plaintiffs believed that these
five claimants had failed to respond to the City’s discovery requests or to a May 13, 2014,
mailing inquiring whether they had worked for a railroad employer. (Id. at 21.) However, one
of these claimants (claimant 200000431) objected that he had not failed to respond to the
discovery requests; upon receiving the objection, Plaintiffs realized that this claimant had in fact
timely responded to the discovery request and indicated that he had not worked for a railroad
employer. (Id. at 21-22; see Obj.-Ex. 14.) Accordingly, claimant 200000431’s objection is
SUSTAINED.
The other four claimants submitted objection forms and/or returned responses to the
May 13, 2014, mailing inquiry—but only after the May 23, 2014, deadline set by the mailing—
confirming that they had not worked for a railroad employer, and that the interim earnings
information held by the parties was therefore complete as to them. Claimants 200000216 and
200000459 returned their forms on July 7, 2014, and July 11, 2014, respectively. (Mem. in
Supp. of Final Entry at 22; Obj.-Exs. 8, 15.) Claimants 200000323 and 200000896 returned their
forms on July 28, 2014, and August 12, 2014, respectively, along with their timely objections to
the Decree. (Obj.-Exs. 12, 30.) Although these responses were submitted after the May 23,
2014, deadline set by the May 13, 2014, mailing inquiry, three factors lead the court to excuse
37
The City does not oppose this position. (See Mem. in Supp. of Final Entry at 1.)
45
this delay and sustain these claimants’ objections. First, the May 13, 2014, mailing inquiry set a
relatively short deadline (10 days); second, the court-approved notice sent to these claimants
regarding the Decree and their proposed individual awards informed them that should they
“provide the outstanding requested information regarding . . . interim earnings, the Court may
agree to provide . . . an increased backpay award” (see MRCD, Attachment D (Dkt. 1435-4) at 23); and third, given the significant consequences to these claimants of assuming maximum
interim earnings—indeed, the difference to some of these claimants in using actual earnings
versus assumed maximum earnings is the difference between receiving the greatest versus least
number of points, and results for all of them in an approximately $100,000 to $150,000
difference in backpay award—fairness warrants that the court sanction the use of their actual
interim earnings. Accordingly, these objections are SUSTAINED.
c.
Calculation of Months Delay: Delayed-Hire Claimants
Two delayed-hire claimants raise issues regarding the months-of-delay figures that were
used to calculate their individual backpay awards. (Obj.-Exs. 76, 77.) First, claimant 200003152
states that he “was on both 7029 and 2043 lists. [I]t says months of delay is 23 months. It[’]s
actually 7 years.” (Obj.-Ex. 76.) This objection is OVERRULED. Although
claimant 200003152 took both exams (see Mem. in Supp. of Final Entry at 25), he was found
eligible by this court only with respect to Exam 2043, and he did not object to that determination.
(See June 6, 2013, R&R of Special Master Cohen (Dkt. 1145-1); Aug. 9, 2013, Mem. & Order.)
Accordingly, the 23 months-of-delay figure used to calculate claimant 200003152’s individual
backpay award is correct.38
38
Claimant 200003152 was actually hired by the FDNY on April 11, 2006 (see APRAL at 34); the first FDNY
Academy class was hired with respect to Exam 2043 on May 25, 2004.
46
Second, claimant 200003312 objects that he was actually appointed to the FDNY on
July 29, 2013, yet his months of delay (44) were calculated as though he had been appointed
several years earlier, on January 20, 2008. (Obj.-Ex. 77.) Claimant 200003312 presents unique
factual circumstances, which caused Special Master Cohen to recommend that the court hold
claimant 200003312 eligible pursuant to an equitable exception, although he had originally
concluded that claimant 200003312 did not meet the eligibility criteria set forth by the court; the
court adopted this recommendation. (Apr. 18, 2013, R&R of Special Master Cohen (Dkt. 10983); June 7, 2013, Mem. & Order.)
Specifically, Special Master Cohen explained in his Report and Recommendation that
claimant 200003312 took and passed Exam 2043. (Apr. 18, 2013, R&R of Special Master
Cohen at 7.) However, before he completed the hiring process, claimant 200003312 was called
to active duty by the United States Marine Corps; when he completed his military service, he
took and passed the physical exam, and was inserted into the Exam 2043 eligible list, with list
number 4882.5. (Id.) The City represented that with this list number, claimant 200003312
would have been considered for appointment to the January 2008, class, had he not been on
active military duty at that time. (Id.) Due to his military service, the claimant was first
considered for the January 2009, class, to which he was offered a position; however, before he
was able to begin at the Fire Academy, the City cancelled the January 2009, class due to
budgetary reasons. (Id.) Claimant 200003312 did not meet the definition of either “Nonhire
Claimant,” because he passed Exam 2043 and did not receive a list number higher than 5646, or
“Delayed-Hire Claimant,” because he was never in fact appointed as an entry-level firefighter;
however, had it not been for claimant 200003312’s military service combined with the City’s
cancellation of the January 2009, class, he would have met the definition of “Delayed-Hire
47
Claimant.” (Id. at 8.) Accordingly, Special Master Cohen recommended, and the court agreed,
that claimant 200003312 be granted monetary relief and retroactive seniority as a delayed-hire
claimant. (Id.; June 7, 2013, Mem. & Order.) Due to the unusual circumstance, claimant
200003312 was also granted priority hiring relief, as he had never actually been appointed as
entry-level firefighter ((Apr. 18, 2013, R&R of Special Master Cohen (Dkt. 1098-3);
June 7, 2013, Mem. & Order), and he was ultimately appointed to the July 2013, class as a
priority hire. (Mem. in Supp. of Final Entry at 26.)
The parties explain in their memorandum that claimant 200003312 was assigned an
appointment date of January 20, 2008, for purposes of calculating his delayed-hire backpay
award, because that would have been his appointment date had it not been for his military
service. (Id.) The court agrees that January 20, 2008, is the appropriate hire date for the
calculation of this claimant’s backpay award, as the further delay experienced by
claimant 200003312 beyond January 20, 2008, is attributable to claimant 200003312’s military
service, and not solely to the City’s discrimination.39 Accordingly, claimant 200003312’s
objection is OVERRULED.
39
The parties also contend that to calculate this claimant’s backpay award using his actual July 2013, appointment
date would “unfairly dilute[] the aggregate settlement amount to the detriment of the other Delayed-Hire Claimants
in his damages category.” (Mem. in Supp. of Final Entry at 26.) Although the court finds the parties’ other
rationale sufficient, the court also notes that claimant 200003312’s 44-month delay is, aside from five claimants who
were hired in July 2008, and who thus experienced 49 months of delay, the longest period of delay experienced by
Exam 2043 delayed-hire claimants. (See generally APRAL.) To calculate this claimant’s award using a July 2013,
appointment date, would correspond to approximately 110 months of delay, or 2.66% of the total months of delay
(4,134, including the additional months that would be attributable to this claimant) experienced by those in this
claimant’s damages category (Hispanic Exam 2043 delayed-hire claimants). (See Am. Barrero Decl., Ex. C.)
Additionally, this would result in his receiving 2.5 times the backpay award of other claimants in his damages
category who were called for appointment on January 20, 2008. As the further delay experienced by
claimant 200003312 beyond January 20, 2008, is attributable to claimant 200003312’s military service, and not
solely to the City’s discrimination, such inconsistency between individuals who are similarly situated, in relevant
part, would be inappropriate.
48
4.
Fringe Benefits
Four claimants raise objections regarding their individual fringe benefits awards, and
request that their individual fringe benefits awards be increased to account for additional medical
expenses. (Obj.-Exs. 17, 39, 46, 57.) Claimant 200001078 objects that he “filed a claim for
medical expenses and it[’]s not calculated into my settlement.” (Obj.-Ex. 39.) This appears to
relate to a $5,800.00 LASIK bilateral eye surgery. (Id. at MRCD_OBJ_000288.)
Claimant 200001293 “request[s] additional $13,000 for charges accrued by overnight hospital
stay for both C-section child births . . . .” (Obj.-Ex. 46.) Claimant 200000471 also requests that
various additional medical expenses, which he acknowledges were untimely submitted, be
incorporated into the calculation of his award.40 (See Obj.-Ex. 17 at MRCD_OBJ_000087; see
also Tr. at 93:4-16, 94:8-19 (Darby).) Claimant 200001806 submits a spreadsheet claiming an
additional $50,460.51 in out-of-pocket medical expenses. (Obj.-Ex. 57 at
MRCD_OBJ_000433.)
Plaintiffs contend that these objections should be overruled on the grounds that the
additional expenses were untimely submitted. (See Mem. in Supp. of Final Entry at 26-27.)
Specifically, claimant 200001078’s additional expenses were submitted on May 28, 2014;
claimant 200001293’s additional expenses were submitted in August 2014; and
claimant 200000471’s additional expenses were submitted in July and August 2014. (Id. at 27.)
It appears that claimant 200001806’s additional expenses were submitted on August 14, 2014.
(Obj.-Ex. 57 at MRCD_OBJ_000433.)
40
The court also notes that claimant 20000471 appears to believe that his proposed fringe benefits award consists
only of the fixed share (see Obj.-Ex. 17 at MRCD_OBJ_000089); however, his proposed fringe benefits award also
includes claimed actual medical expenses timely submitted by this claimant—the fixed award for Exam 2043
nonhire claimants, including claimant 200000471, is $960, see supra Part II.B.3, and his proposed fringe benefits
award is greater than that amount. (See APRAL at 8.)
49
The court agrees with Plaintiffs. Claimants were originally notified in January 2013, that
they may be eligible to receive compensation for expenses paid for health insurance and medical
care, and advised at that time that they should gather and organize documentation in order to
prove such expenditures. (See Mem. in Supp. of Final Entry at 26; id., App’x E at 1.) Moreover,
claimants were sent a Fringe Benefits Claims Form, which stated clearly that the deadline for
returning the form and claiming such expenses was February 3, 2014 (see, e.g., Obj.-Ex. 57 at
MRCD_OBJ_000453); and, in April 2014, after the original deadline had passed, claimants were
given yet another chance to submit a claim for fringe benefits, and were informed via email and
postcard that no additional materials would be accepted after May 9, 2014 (see Mem. in Supp. of
Final Entry, App’x E at 2-4). Although these claimants were given an additional, three-month
grace period to submit materials after the original deadline passed, they failed to do so. Indeed,
they were originally notified of the need to collect information in support of fringe benefits
claims over fifteen months before the final May 9, 2014, deadline.
The claimants have presented no explanation that justifies or excuses the failure to meet
the final deadline.41 (See, e.g., Obj.-Ex. 17 at MRCD_OBJ_000087 (noting that the claimant
“came across” the documentation “by chance”); Tr. at 93:4-16 (Darby).) Moreover, the three
factors that led the court to sustain the objections of five claimants regarding the calculation of
their backpay awards assuming that they had earned the maximum average annual interim
earnings during their damages periods, supra Part IV.B.3.b, are not present here. As explained
directly above, claimants were given a great deal of time to collect the information at issue;
claimants were never notified that additional fringe benefits claims submitted as objections may
41
Additionally, the spreadsheet submitted by claimant 200001806 conflicts with that claimant’s prior sworn
statement. This claimant submitted a fringe benefits form that was received by the Claims Administrator on
January 27, 2014, in which he responded that he had paid $0 in premiums and $0 in out-of-pocket medical expenses
in each of the years 2001-2013. (Obj.-Ex. 57 at MRCD_OBJ_000456-68.) He certified under the penalty of perjury
that these responses were true and correct. (Id. at MRCD_OBJ_000468.)
50
be considered by the court; and a substantially smaller amount of money is at issue, such that
failing to award these claimants their additional expenses will not result in patent unfairness.
Accordingly, the court OVERRULES these four claimants’ objections.
5.
Deductions from Individual Awards
Claimant 200001975 objects to the withholding of employee pension contributions and
interest thereon from her individual award. (Obj.-Ex. 63 (“I do not think that the settlement is
fair or adequate if I have to pay out to the employer that discriminated against me in the first
place pension and interest.”).) The court held that eligible priority hires and delayed-hire
claimants would be entitled, as part of retroactive seniority relief, to retroactive pension benefits.
(Final Relief Order at 14-15; Apr. 19, 2012, Mem. & Order.) That relief is, as a general matter,
outside the scope of the Decree. As noted above, the City began to provide other aspects of
retroactive seniority relief in July 2013; it has not yet begun to award retroactive pension
benefits, and but it intends to do so at the same time it issues claimants’ individual monetary
relief awards pursuant to the Decree. See supra page 7 and note 6. (See also Aug. 20, 2014,
Ltr.)
During a firefighter’s employment, both the employee and the City are required to make
contributions to the FDNY pension fund. (United States’s Mem. in Supp. of Mot. for Order
Requiring City to Pay Interest Due on Claimants’ Minimum Employee Pension Contributions
(“Mem. in Supp. of Pension Interest Mot.”) (Dkt. 1457) at 6).) According to the City, retroactive
funding of a claimant’s pension requires four elements: (1) the minimum employee pension
contribution that the claimant would have made had the claimant been hired on his or her
presumptive hire date; (2) interest on the claimant’s minimum employee contribution; (3) the
employer contribution the City would have made had the claimant been hired on his or her
51
presumptive hire date; and (4) interest on the City’s employer contribution. (Aug. 20, 2014, Ltr;
see also Mem. in Supp. of Final Entry at 28.) The City agrees that it must pay the employer
contribution and interest thereon, so only the employee pension contribution and interest thereon
are at issue here.
Notably, the parties dispute who—the individual claimant or the City—should be
required to pay into the pension system the back interest on the minimum employee contribution,
and the United States has moved for an order requiring the City to do so. (United States’s Mot.
for Order Requiring City to Pay Interest Due on Claimants’ Minimum Employee Pension
Contributions (Dkt. 1456).) This is not resolved by the Decree, and the court will determine in a
separate decision whether the City or claimants must pay this interest. If the court determines
that the City is responsible for such interest, those amounts will not be withheld from claimants’
backpay awards; if the court determines that claimants are instead responsible, such withholding
will be appropriate. Accordingly, this portion of Claimant 200001975’s objection is
OVERRULED.
The Decree does, however, provide that individual awards to claimants granted
retroactive seniority will be reduced by employee pension contributions. (See Mem. in Supp. of
Final Entry at 28-29; AMRCD ¶ 39.) This is appropriate. Title VII make-whole relief is
intended to place claimants “as near as may be, in the situation [they] would have occupied” had
there been no discrimination. Albemarle Paper Co. v. Moody, 422 U.S. 405, 418-19 (1975)
(internal quotation marks and citation omitted); Ingram v. Madison Square Garden Ctr., Inc., 709
F.2d 807, 811 (2d Cir. 1983) (“In fashioning a remedy for employment discrimination, ‘the court
must, as nearly as possible, recreate the conditions and relationships that would have been had
there been no unlawful discrimination.’” (quoting Int’l Bhd. of Teamsters v. United States, 431
52
U.S. 324, 372 (1977))). It is not intended to make victims more (or less) than whole. (Backpay
Summ. J. Op. at 39 (citing Teamsters, 431 U.S. at 364).) Had delayed-hire claimants or priority
hires been hired earlier, in the absence of discrimination, they would have been required to make
minimum employee contributions to the FDNY pension fund, in the form of regular paycheck
deductions. (Mem. in Supp. of Pension Interest Mot. at 6, 10; Tr. at 29:5-17.) Therefore, it is
appropriate that claimants who receive retroactive pension benefits have their minimum
employee contributions withheld. Additionally, claimants will have an opportunity to reject an
award of retroactive pension benefits, and any claimant who does so will avoid having the
employee contributions withheld. (Mem. in Supp. of Final Entry at 29.) Accordingly, the
remaining portion of claimant 200001975’s objection is OVERRULED.
Similarly, two claimants raise issues regarding the taxation of their individual awards.
(Obj.-Exs. 47, 48.) These objections do not provide grounds for the court to deny final entry of
the Decree, as the Internal Revenue Code requires employers to withhold income and FICA
taxes from Title VII backpay awards, whether awarded by judgment or settlement. Noel v. N.Y.
State Office of Mental Health Cent. N.Y. Psychiatric Ctr., 697 F.3d 209 (2d Cir. 2012).
Accordingly, these objections are OVERRULED.
6.
Other Objections to Individual Awards
A number of claimants submitted objections regarding their individual awards more
generally. Eleven claimants object that their individual awards are too low when compared to
the total settlement amount of approximately $99 million, or compared to other claimants’
awards, or generally (without explanation). (Obj.-Exs. 1, 21, 32, 33, 42, 52, 56, 58, 64, 78, 93.)
As discussed above, the court finds the allocation methodology utilized in the calculation of
claimants’ awards to be fair and reasonable, and these claimants have provided no basis for
53
finding that the calculation of their individual awards was flawed in any way. Accordingly,
these objections are OVERRULED.
7.
Eligibility Category
Claimant 200000095, who took both Written Exam 2043 and 7029, asks the court to
reconsider its decision holding him eligible with respect to only Exam 2043. (Obj.-Ex. 2; see
Jan. 22, 2013, R&R of Special Master Cohen (Dkt. 1044-1); Feb. 22, 2013, Mem. & Order;
May 2, 2013, Mem. & Order.) Pursuant to the Final Relief Order, a claimant is only eligible for
relief in connection with each examination if he satisfied “mandatory, minimum qualifications at
the time [he] applied for a position of entry-level firefighter,” which included the requirement
that he had “obtained citizenship by four years after the date of the establishment of the relevant
eligible list: the relevant eligible list for Exam 7029 was established on November 15, 2000; and
the relevant eligible list for Exam 2043 was established on May 5, 2004.” (Final Relief Order at
7.) Claimant 200000095 was held not eligible for relief in connection with Exam 7029 because
he had not yet received citizenship by the necessary date. (See Obj.-Ex. 2.)
Claimant 200000095 did not file an objection with Special Master Cohen or the court at the time
that he was informed of this eligibility determination; he did not seek an equitable exception to
the eligibility criteria. Therefore, claimant 200000095’s objection is OVERRULED.
Claimant 200000337 has informed the court that his notice of award listed him as a
Hispanic claimant, but he identifies as black, not Hispanic. (Obj.-Ex. 13 at
MRCD_OBJ_000054.) An examination of the claim form originally submitted by this claimant
in this action illustrates that he did, in fact, indicate his race as black. (Id. at
MRCD_OBJ_000057.) The United States reports that the discrepancy is due to an
administrative error on its part. (Mem. in Supp. of Final Entry at 23.) Notably, the Special
54
Master’s recommendation finding claimant 200000337 to be eligible for relief, which was
adopted by the court, did not mention his race; it referenced only the exam eligibility
recommendation. (Jan. 22, 2013, R&R of Special Master Cohen; Feb. 22, 2013, Mem. & Order;
May 2, 2013, Mem. & Order.) Accordingly, as claimant 200000337’s failure to raise this issue
earlier is due to no fault on his part, the court instructs the United States to correct its error at this
time. Claimant 200000337’s objection is SUSTAINED; he shall be awarded relief as a black
Exam 2043 nonhire claimant. Additionally, Plaintiffs’ request that claimant 200000337 be
moved from the Hispanic Priority Hire List to the Black Priority Hire List (Mem. in Supp. of
Final Entry at 23) is GRANTED; the court hereby MODIFIES its June 13, 2013, Order
Approving Priority Hires Lists (Dkt. 1147, as modified by Dkt. 1235) accordingly. Plaintiffs are
also DIRECTED to see that claimant 200000337 receives notice documents regarding PlaintiffIntervenors’ Injunctive Relief and Nonhire Victim Subclasses, and that he is permitted to submit
a compensatory damages claim should he wish to do so.
8.
Objections Outside Scope of the Decree
The majority of the remaining objections fall outside the scope of the Decree, as
explained below. Therefore, they provide no basis for denial of final approval and entry thereof.
a.
Priority Hiring Process
Four claimants raise objections relating to the priority hire process. (Obj.Exs. 3, 28, 50, 87.) Claimant 200000107 objects that when he took the original exam, he was
younger and in better shape, and would have had no problem passing the physical tests; however,
now, he is having a difficult time with those requirements to entry to the Fire Academy. (Obj.Ex. 3.) Claimant 200000861 appears to contend that he was not provided legally required
accommodations for a disability when he took Exam 2000 in connection with the priority hiring
55
process. (Obj.-Ex. 28; Oct. 15, 2014, Ltr. (Dkt. 1491).) Claimant 200001461 objects that he
feels that the FDNY is biased against priority hire candidates, or that the priority hiring process
has been unfair due in part to his being older than when he originally took the discriminatory
exam. (Obj.-Ex. 50; Tr. at 63:23-66:2 (Patrick).) Claimant 200005610, a delayed-hire claimant,
objects that priority hire candidates did not have to obtain 30 college credits, as he states was
required in connection with his appointment off the Exam 2043 list. (Obj.-Ex. 87.)
These objections are all outside the scope of the agreement that is currently under
consideration. Criteria governing eligibility for priority hiring relief, and the rationale
underlying that criteria, has been set forth by the court in its previous orders (e.g., Final Relief
Order at 12-14; Mem. & Order Addressing Objs. to Proposed Relief Order at 6-7, 10-11; Initial
Remedial Order at 19-21), and is affected in no way by the Decree. Nor do other complaints
related to the priority hiring process, such as allegations of bias in the FDNY, affect the court’s
contemplation of the Decree; these types of issues should be brought to the attention of the Court
Monitor, who oversees the implementation of priority hiring relief and the Modified Remedial
Order. As these objections are not relevant in the present context, they are OVERRULED.
b.
Retroactive Seniority
Twelve claimants raise objections relating to retroactive seniority relief. (Obj.Exs. 6, 20, 29, 45, 48, 65, 69, 81, 85, 87; Additional Written Submissions (Dkt. 1494-1) at 1-4;
Tr. at 91:19-24 (Roldan).) The majority of these claimants object, in substance, that the Decree
does not provide compensation for pension contributions and other seniority lost as a result of
their delayed hiring or failure to have been hired. (Obj.-Exs. 6, 20, 29, 45, 48, 65, 69, 81, 87;
Additional Written Submissions (Dkt. 1494-1) at 1-4; see also Tr. at 71:4-13 (Foster).)
Claimant 200001359, who is a nonhire claimant, writes that he “should be eligible to qualify for
56
a vested pension calculated by the amount of years I was awarded by the court.” (Obj.-Ex. 48.)
Claimant 200005403 asks whether he will receive retroactive seniority under the Decree. (Obj.Ex. 85.)
As with priority hiring relief, retroactive seniority relief is outside the scope of the
Decree. The court separately ruled that delayed-hire claimants and nonhire claimants awarded
priority hiring relief would receive both retroactive “benefits seniority,” which includes, inter
alia, seniority for purposes of calculating an individual’s salary or other pay, pension benefits,
and future accrual or leave, and retroactive “competitive seniority,” which includes seniority that
is used for, inter alia, transfers, special assignments, promotions, and layoffs/recall. (Final Relief
Order at 14-15.) Accordingly, these claimants are, independent of the Decree, receiving
effective compensation for various types of seniority lost due to the City’s discrimination. And
the court’s determination that nonhire claimants who are not ultimately hired as priority hires
will not receive such relief is not presently up for reconsideration; nor is it related to the Decree
in any way. In sum, these objections are outside the scope of the Decree, and they are
OVERRULED.
c.
Compensatory Damages for Noneconomic Harm
Four claimants raise objections relating to compensatory damages for noneconomic loss.
(Obj.-Exs. 7, 57, 85; Tr. at 99:3-13 (Calzado).) For example, claimant 200001806 states that he
“object[s] to Hispanic claimants not being eligible to [receive] compensatory damages,” and that
to distinguish between black and Hispanic claimants is itself discrimination. (Obj.-Ex. 57.)
Similarly, one claimant stated at the Fairness Hearing that he felt it was unfair that Hispanic
claimants were not eligible to receive compensatory damages awards. (Tr. at 99:3-13
(Calzado).) Claimant 200005403 appears to object that he had not yet received payment from
57
the City in connection with the offer of judgment he accepted on his compensatory damages
claim.42 (Obj.-Ex. 85.)
First, the court notes that only black claimants are eligible for noneconomic damages
because only Plaintiff-Intervenors (who represent subclasses of black firefighters and firefighter
applicants), and not the United States (who brought claims on behalf of both black and Hispanic
candidates), sought such damages in this action. (See Apr. 10, 2012, Ltr. at 2 n.2.) Moreover,
claimants’ noneconomic damages claims are in no way addressed by the Decree; instead, these
claims are being resolved on individual bases through Rule 68 offers of judgment and individual
hearings before the Special Masters. See supra pages 7-8. Noneconomic damages are outside
the present scope, and accordingly, these objections are OVERRULED.
d.
Punitive Damages
One claimant objects on the grounds that the Decree does not provide relief in the form of
punitive damages. (Obj.-Ex. 48.) Punitive damages are outside the scope of the Decree; no
claims for punitive damages are settled thereby. Indeed, punitive damages are not available for
disparate impact Title VII liability; rather, they are available only in the case of intentional
discrimination. See 42 U.S.C. § 1981a(a)(1). Accordingly, this objection is OVERRULED.
e.
Miscellaneous Objections Outside Scope of the Decree
The court has also received a number of objections to additional miscellaneous issues that
are outside the scope of the current settlement agreement.
A number of these are related to intangible losses that claimants feel are attributable to
the City’s discrimination, such as the lost opportunity to have fulfilled one’s dreams, or to have
42
As claimant 200000403’s objection is dated August 3, 2014 (Obj.-Ex. 85), and the court approved payment to
claimant 200000403 in connection with his acceptance of the City’s Rule 68 offer of judgment on August 14, 2014
(see Aug. 14, 2014, Order (Dkt. 1448); Notice (Dkt. 1348)), the court assumes that payment has now been made. If
claimant 200000403 has not yet received payment on his compensatory damages offer of judgment, he should
contact the Claims Administrator to follow up on this issue.
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worked for the City. (Obj.-Exs. 23, 36, 37, 47, 60, 82, 92.) Other claimants note that they
suffered embarrassment, settled for a less desirable job, lost recreational or family time that was
spent doing overtime as a result of having a less remunerative career, were unable to qualify for a
mortgage and purchase a home, or live in a less desirable neighborhood than might have been
possible if hired as a firefighter. (Obj.-Exs. 37, 47, 57, 60; Tr. at 74:19-75:1 (Holder).) One
delayed-hire claimant objects that she accrued student loan debt in connection with the pursuit of
a master’s degree, a degree she would not have pursued had she been hired by the FDNY earlier.
(Obj.-Ex. 63; Tr. at 59:15-60:2, 60:19-24, 62:2-18 (Whyte); see also Tr. at 75:2-6 (Holder).)
Another claimant notes that he paid higher interest on consumer debt and student loans due to
lack of access to a credit union, and he seeks reimbursement for the difference. (Obj.-Ex. 57.)
As statements outside the scope of the Decree, none of these provide the court with a
basis for denying final approval and entry thereof, and they are all OVERRULED.
9.
Positive Responses
Four claimants submitted objection forms that include, in substance, statements in
support of the settlement agreement. (Obj.-Exs. 13 (“At this time no objection thank you[.]”), 22
(“Not an objection at this time[.]”), 27 (“I’m in agreement with the amount I am supposed to
receive[].”), 98 (“Basis of my objection: None – I accept[].”).) As positive statements, these do
not provide any reason for the court to reject the Decree.
10.
Blank Forms and Unclear Objections
Four objection forms were blank (Obj.-Exs. 11, 19, 26, 68), and the court is unable to
determine the basis for the objections submitted by three additional claimants (Obj.-Exs. 25, 82,
89 (“My story needs to be heard. List # 1947 2043 Exam.”)). These provide no basis for the
court to reject the Decree; they are OVERRULED.
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11.
Request To Withdraw Claim
Claimant 200007062, a delayed-hire claimant, filed an objection seeking to withdraw his
claim for relief, and asking that he have no further involvement with the case. (Obj.-Ex. 96 (“I
DO NOT want any back pay . . . nor any months added for delay . . . . I DO NOT want my name
associated whatsoever with this lawsuit, [and wish to] have my name removed from any
involvement pertaining to this case.”).) The court sees no reason not to permit
claimant 200007062 to withdraw his claim; accordingly, claimant 200007062’s objection is
SUSTAINED. Additionally, in accordance with the claimant’s wishes, the City shall revoke any
retroactive seniority already granted and shall not award retroactive pension benefits to
claimant 200007062. Plaintiffs are further DIRECTED to see that the Claims Administrator
replies to claimant 200007062’s email, confirming that the court has granted his request, and
attaching a copy of this Memorandum and Order. However, claimant 200007062’s objection
does not provide any grounds for the court to deny final approval and entry of the Decree.
C.
Service Awards
Case law supports the award of incentive, or service, awards to class representatives, if
“related to the personal risk incurred by the [class representative] or any additional effort
expended by the [class representative] for the benefit of the lawsuit.” Dupler v. Costco
Wholesale Corp., 705 F. Supp. 2d 231, 245 (E.D.N.Y. 2010) (citing Parker v. Time Warner
Entm’t Co., 631 F. Supp. 2d 242, 279 (E.D.N.Y. 2009)); see also Roberts v. Texaco, Inc., 979 F.
Supp. 185, 200 (S.D.N.Y. 1997). The Decree provides service awards of $15,000 to each of the
seven individual Plaintiff-Intervenors and a $50,000 award to the Vulcan Society. PlaintiffIntervenors have dedicated their time and effort over a significant number of years in pursuit of
this litigation—indeed, the Vulcan Society, Candido Nunez, Roger Gregg, and Marcus Haywood
60
filed the original EEOC complaints that formed part of the basis for the United States’s initiation
of the lawsuit in 2002 and 2005, respectively. (See July 17, 2007, Ltr. Mot. to Intervene
(Dkt. 19).) As all Plaintiff-Intervenors have expended sufficient time and effort in the
prosecution of this action to justify these awards, and no objections have been lodged, the court
APPROVES the service awards.
V.
CONCLUSION
Accordingly, for the reasons discussed above:
Objections filed by claimants 200000216, 200000323, 200000459, 200000896,
200000431, 200000337, and 200007062 to the Monetary Relief Consent Decree
and/or Proposed Relief Awards List are SUSTAINED. Additionally, Plaintiffs’
request that claimant 200000337 be moved from the Hispanic Priority Hire List to
the Black Priority Hire List is GRANTED; the court hereby MODIFIES its
June 13, 2013, Order (Dkt. 1147, as modified by Dkt. 1235) accordingly.
Plaintiffs are DIRECTED to see that claimant 200000337 receives notice
documents regarding Plaintiff-Intervenors’ Injunctive Relief and Nonhire Victim
Subclasses, and that he be permitted to submit a compensatory damages claim
should he wish to do so.
All other objections are OVERRULED; and
Plaintiffs’ Joint Motion for Final Entry of Amended Monetary Relief Consent
Decree (Dkt. 1467) and Plaintiffs’ Joint Motion to Amend Attachments E & F to
Amended Monetary Relief Consent Decree (Dkt. 1525) are GRANTED. The
Amended Monetary Relief Consent Decree (Dkt. 1468), Attachments A through
D thereto (Dkts. 1468-1 to -4), and Second Amended Attachments E & F
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/s Nicholas G. Garaufis
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