United States of America v. City of New York

Filing 888

MEMORANDUM AND OPINION. the court adopts the United States method of determining individual backpay awards; grants the United States and the Citys request that all putative priority hires be required to take and pass Exam 2000; grants the parties joi nt request that all individuals who took Exam 2000 receive notice of the anticipated fairness hearing; grants the United States and Plaintiff-Intervenors request that such individuals receive a thirty-day objection period; grants the parties joint re quest to stay consideration of the Special Masters recommendations; grants the United States request that the City reimburse it for the cost of obtaining information from the SSA; and grants the request of Levy Ratner, P.C., and the CCR for leave to represent claimants in the individual claims proceedings, subject to conditions. The court modifies the previously-determined relief phase timeline. The court orders the Special Masters for individual relief and the parties to engage in a meet-and-confer session. See Attached Memorandum and Order. Ordered by Judge Nicholas G. Garaufis on 6/3/2012. (Townsend, Jesse)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA,
MEMORANDUM & ORDER

Plaintiff,
-and-

07-CV-2067 (NGG) (RLM)

THE 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;
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,
-andTHE UNIFORMED FIREFIGHTERS ASSOCIATION
OF GREATER NEW YORK,
A Non-Aligned Party.
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NICHOLAS G. GARAUFIS, United States District Judge.

1

In this Memorandum and Order, the court resolves several issues relating to the
compensatory relief phase of the case.1 After considering the positions of the parties, the court:
approves the United States’ proposed method of awarding backpay damages to individual NonHire and Delayed-Hire Claimants; grants the United States’ and the City’s request that putative
priority hires take and pass Exam 2000 if that exam is held valid; grants the United States’ and
the Plaintiff-Intervenors’ request that priority hires be paid according to their retroactive
seniority as of the date they join the fire academy; grants the parties’ joint request that notice of
the anticipated fairness hearing be given to the individuals who took Exam 2000; grants the
United States’ and Plaintiff-Intervenors’ request that those individuals receive a thirty-day
objection period; grants the parties’ joint request that the court stay consideration of the Special
Masters’ recommendations; grants the United States’ request that the City reimburse it for the
cost of obtaining records from the Social Security Administration; and determines the conditions
under which Levy Ratner, P.C., and the Center for Constitutional Rights may represent claimants
in the individual claims process.
I.

DISCUSSION
A.

Method for Calculating Backpay Awards

The court first considers the parties’ dueling proposals for a method of distributing the
aggregate, pre-mitigation backpay award to individual claimants and reducing that award by
claimants’ interim earnings. The court considers the proposals for Non-Hire Claimants first, and
the proposals for Delayed-Hire Claimants second.
1.

The Method for Non-Hire Claimants

1

The court assumes the reader’s familiarity with the extensive history of this case, and particularly its recent
ruling concluding there is no genuine issue of fact as to the amount of gross, aggregate wage backpay due to eligible
claimants through 2010. (See Mar. 8, 2012 Mem. & Order (Docket Entry # 825) (the “Backpay Op.”) at 46.)
Thorough discussions of the case’s history can be found in several of the court’s rulings. (See id. at 2-12; Oct. 5,
2011 Mem. & Order (Docket Entry # 743) at 2-5.)

2

The three primary disagreements between Plaintiffs and the City in the context of NonHire Claimants are the use of a median hire date to estimate the wages a claimant would have
earned as an entry-level firefighter, whether to use the number of potential claimants or the
number of claimants who have submitted claim forms and actually found to be eligible to
determine the probability that a claimant would have been hired by the FDNY, and the use of an
annualized or aggregate method for comparing a claimant’s gross award to his or her interim
earnings. The court rules on these three issues first and then details the appropriate method in
light of those rulings.
The City urges the court to apply a median hire date to determine the earnings a Non-Hire
Claimant might have received as a firefighter. (May 3, 2012 City Mem. (Docket Entry # 868) at
4.) The Plaintiffs oppose this position. The United States notes that the court had already
accepted the recommendations of its statistical expert, Dr, Siskin, and distributed the estimated
“hiring shortfall candidates across academy classes and calculated the average amount of salary
earned by applicants hired into those classes.” (May 17, 2012 United States Reply Mem.
(Docket Entry # 880) at 3.) The United States estimates that the City’s proposal has the effect of
reducing its previously determined amount of aggregate, pre-mitigation back pay by $ 8 million.
(Id. at 4.) The City, on the other hand, defends its proposal on the basis that Dr. Siskin allocated
shortfall hires across the academy classes for each exam and, to be consistent with that method,
the court must either use a weighted average method of determining a claimant’s potential
earnings or, as a simpler alternative, its proposal of using a median hire date to estimate a
claimant’s potential lost earnings. (See May 17, 2012 City Reply Mem. (Docket Entry # 881) at
6-7.)

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The City’s argument misconstrues the methodology that the court relied upon in its ruling
on backpay liability. The aggregate, pre-mitigation losses for each category of Non-Hire victim
that the court found in that ruling—$62,202,409 for black candidates from Exam 7029,
$33,754,299 for Hispanic candidates from Exam 7029, $18,193,080 for black candidates from
Exam 2043, and $11,403,654 for Hispanic candidates from Exam 2043(see Backpay Op. at
35)—were weighted estimates of loss. These amounts were the United States’ expert’s estimates
of aggregate, pre-mitigation loss, generated through a process that included, inter alia,
multiplying the number of shortfall hires that had been allocated to each academy class by the
average earnings of a firefighter of that class. (Id. at 31-35.) The United States’ proposal for
allocating amounts to individual claimants divides those weighted amounts by the number of
Shortfall Hires, producing weighted averages: “Determine the aggregate back pay of one
shortfall hire from each specific back pay category. This amount is determined by dividing the
amount of money in a specific back pay category by the number of shortfall hires in that
category.” (May 3, 2012 United States Mem. at 3.) Thus, the weighted method that the City
suggests would be acceptable, but simultaneously argues would be more complicated than using
a median hire date, is essentially the method that Plaintiffs propose.2 The court therefore denies
the City’s request for the use of a median hire date as the starting point for estimating potential
earnings, and adheres to the weighted losses that it previously found in its backpay opinion.
The next issue on which the parties disagree is which figure constitutes the correct
denominator to be used to determine an eligible claimant’s probability of being hired. The City
2

The City describes the process of creating a weighted average as thus: “To illustrate the weighted average
approach, consider a simple example where the hiring shortfall is 10 and there are only two hiring classes, with a
shortfall of three in the first class and seven in the second class. If firefighters hired in the first class earned
$100,000 to date and those hired in the second class earned $60,000 to date, the weighted lost earnings figure
applicable to any claimant would be: 3/10 x $100,000 + 7/10 x $60,000 = $72,000. This figure, which takes into
account that a claimant had a 30 percent chance of hire into the first class and a 70 percent chance of hire into the
second class, would be used for all claimants.” (May 17, 2012 City Reply Mem. at 7.)

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argues that the shortfall hires the court has previously found (see Backpay Op. at 18-19) should
be divided by the number of potential claimants (each black or Hispanic test-taker who was not
hired in the relevant exam period but would have been eligible to have been hired) (May 3, 2012
City Mem. at 4). The Plaintiffs propose that the number of shortfall hires be divided by the
number of claimants who have submitted claim forms and been found eligible. (May 3, 2012
United States Mem. at 4.) The City defends its proposal by arguing that using the total number
of eligible potential claimants is more accurate and more equitable, in that it would come closer
to compensating claimants to only the extent of the probability that the claimant would have
been hired, and would prevent any claimant from receiving a “windfall” award. (May 17, 2012
City Reply Mem. at 3-6.) The United States defends its proposal by noting that courts have
consistently used the number of actual eligible claimants to determine the pro rata distribution of
backpay awards under Title VII and by demonstrating that the City’s proposal would likely lead
to a substantial reduction in the City’s liability even before interim earnings are taken into
account, contrary to the court’s backpay summary judgment opinion. (May 17, 2012 United
States Reply Mem. at 5-11.)
In effect, the City’s proposal would divide the aggregate, pre-mitigation backpay into
shares for estimated potential claimants, but then actually award shares of backpay to only the
individuals who have actually made claims and been found eligible; this would leave some
number of shares unclaimed and, presumably, revert-able to the City. The court declines to
adopt this proposal. First, the City’s proposal is contrary to the logic and weight of precedent.
Since the court has already determined that the City has inflicted an injury in the form of a
shortfall hire in the amount of 293 entry-level firefighters (114 hires from among the black
candidates of Exam 7029, 62 hires from among the Hispanic candidates of Exam 7029, 72 hires

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from among the black candidates of Exam 2043, and 45 hires from among the Hispanic
candidates of Exam 2043), the court must follow the dictates of the Supreme Court and “make
persons whole for injuries suffered” because of the City’s violations of Title VII, Albemarle
Paper Co. v. Moody, 422 U.S. 405, 418 (1975); the measure of the compensation that injured
persons should receive should “be equal to the injury” that the City’s actions inflicted, id. at 419,
and the injured persons are those minority candidates who were otherwise eligible to be hired for
the position of entry-level firefighter. In Ingram v. Madison Square Garden Center, 709 F.2d
807, 812-13 (2d. Cir. 1983), the Second Circuit held that individual relief in a Title VII case
should be limited “to those class members who would have filled vacancies had there been no
discrimination.” The Second Circuit has also approved of pro rata distribution of monetary relief
“where the number of qualified class members exceeds the number of openings lost to the class
through discrimination.” Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 161 n.6
(2d Cir. 2000) (emphasis supplied, quotation marks and citations omitted), overruled in part by
Wal-Mart, Inc. v. Dukes, 131 S. Ct. 2541 (2011). The quoted language from the two cases
emphasizes the importance of designing a process that gives relief to those class members who
were qualified to be hired as entry-level firefighters; it would be incoherent with that concept to
consider the entire number of potential claimants, whose eligibility for hire has not been
determined, rather than the number of actually eligible claimants, in dividing the backpay
amounts (and thus, rendering the compensation paid unequal to the injury inflicted).
Second, the City’s proposal defeats a substantial reason to have a claims process, which
was designed so that the court and the parties could determine which minority candidates who
were not hired would have been eligible to be hired. Neither the parties nor the court has a
reliable method of estimating what percentage of the candidates not hired would not have been

6

eligible for hire other than the process designed to determine which candidates were eligible for
hire. While the City speculates that some candidates who would have been eligible for hire
would decline to submit claims forms because they have been hired into well-paying jobs and
therefore lack a financial incentive to participate in the claims process, and thus the number of
actual claimants might understate the number of minority candidates who were eligible to be
hired (May 17, 2012 City Reply Mem. at 4), the court considers it equally likely that many of the
individuals who choose not to submit claim forms would do so because they determine that they
would not be eligible for relief, and thus the number of actual claimants may accurately reflect
the number of minority candidates who were eligible for hire.3 In any case, the claims process is
the process the court and the parties have to evaluate which of the minority candidates who took
the two exams were actually eligible for hire. It was incumbent on the City to come forward
with a proposed process that more accurately determines what percentage of the individuals not
hired were eligible to be hired. It has not proposed any process that would avoid self-selection
bias.4
Finally, the court notes that the City’s concerns about inequity are misplaced. So long as
the City is found liable for no more than the amount of the injury it inflicted—i.e., the aggregate,
pre-mitigation amount of backpay lost due to the hiring shortfalls—the City has received the
equity it is due. Any windfall that an eligible claimant may receive under the Plaintiffs’ proposal
comes not from the City but from other potentially eligible claimants who have chosen not to file

3

The eligibility criteria for monetary relief have been determined by an earlier Opinion and consequently are
public knowledge. (Backpay Op. at 51-52.)
4

The City proposes in its reply memorandum that the court use the number of claimants who submit claim
forms and have been found to be eligible to determine what percentage of the total number of minority candidates
would be eligible. (May 17, 2012 City Reply Mem. at 5-6.) As the court has already noted, because the eligibility
criteria are public knowledge, it is entirely likely that candidates will self-assess whether they are eligible and, if
they determine they are not, will not file claim forms. Thus, the City’s proposal will most likely result in an overly
generous assumption of how many candidates who did not submit forms would have been eligible for hire.

7

claims (or who did not receive notice of this case despite the parties’ efforts). If the court were
to adopt the City’s proposal, then the court would be obligated to impose a far more rigorous,
expensive, and time-consuming process of identifying all eligible individuals and encouraging
them to submit claims. For all of the reasons discussed, therefore, the court adopts the United
States’ proposal and will use the number of claimants found to be eligible in its method of
allocating back pay.5
The third disagreement between Plaintiffs and the City concerns whether a claimant’s
gross award should be compared to his or her interim earnings on an annual basis, or an
aggregate one. The United States advocates for an annualized basis (see May 3, 2012 United
States Mem. at 5; May 17, 2012 United States Reply Mem. at 11-12), while the City advocates
for an aggregate basis (see May 17, 2012 Reply Mem. at 8-10). The court notes the division of
authority on this issue—Leftwich v. Harris-Stowe State College, 702 F.2d 686, 693-94 (8th Cir.
1983), has held that an annual basis is the appropriate method, while Sinclair v. Insurance Co. of
North America, 609 F. Supp. 397, 400-02 (E.D. Pa. 1984), has held that the aggregate basis is
superior. Neither holding is binding on this court.6 The court concludes, however, that the
annual basis is the appropriate method because it more closely mirrors the economic reality that
the claimants would have experienced over the many years since the exams were administered.
Pre-judgment interest will be applied on an annualized basis, see, e.g., Robinson v. Instructional
Sys., Inc., 80 F. Supp. 2d 203, 208 (S.D.N.Y. 2000); O’Quinn v. N.Y. University Med. Ctr., 933

5

The court notes the City’s concern as to what should occur if there are fewer eligible claimants than the
number of shortfall hires (May 17, 2012 City Reply Mem. at 3-4 & n.2), and will consider how to respond to such a
situation if the initial eligibility determinations of the United States suggest that the situation is likely to come to
pass.
6

The court notes also that Taddeo v. Ruggiero Farenga, Inc., 102 F. Supp. 2d 197, 198-99 (S.D.N.Y. 2000),
and Sims. v. Mme. Paulette Dry Cleaners, 638 F. Supp. 224, 229-30 (S.D.N.Y. 1986), the cases from courts within
the Second Circuit that the parties have cited, do not appear to address interim earnings but earnings from
comparable employment that cut off the period of backpay accrual.

8

F. Supp. 341, 345-46 (S.D.N.Y. 1996), and interest should be applied to a principal amount that
is determined on an annualized basis so that claimants’ losses over time are accurately
calculated.
Having resolved the three contested issues discussed above, the court concludes that the
United States’ proposed method for allocating backpay awards to eligible claimants and reducing
those awards by claimants’ interim earnings is appropriate and adopts it. (See May 3, 2012
United States Mem. at 3-6.) The court summarizes each step below, but notes at the outset that
the overarching goal of this process is to divide the aggregate backpay among eligible claimants
pro rata (because the number of eligible claimants will most likely exceed the hiring shortfalls
that the City’s violations of Title VII have produced) and reduce each claimant’s gross award by
that claimant’s interim earnings after reducing those interim earnings by the same fraction of the
aggregate award that the claimant’s gross award represents.
The first step is to place an eligible Non-Hire Claimant in the appropriate category: black
Exam 7029 candidate, Hispanic Exam 7029 candidate, black 2043 Exam candidate, or Hispanic
2043 candidate. The fact-finder must identify the correct category because each category
suffered a unique economic loss produced by that category’s hiring shortfall.
The second step is to calculate the aggregate backpay of one shortfall hire for the specific
backpay category for which the claimant is eligible, by dividing the aggregate backpay losses for
that category by the number of shortfall hires in that hire: for black Exam 7029 claimants,
$62,202,409/114 shortfall hires; for Hispanic Exam 7029 claimants, $33,754,299/62 shortfall
hires; for black Exam 2043 claimants, $18,193,080/72 shortfall hires; and for Hispanic Exam
2043 claimants, $11,403,654/45 shortfall hires.

9

The third step is to calculate each claimant’s pro rata share of the aggregate amount of
backpay (or “gross backpay award”). The fact-finder accomplishes this by dividing the
aggregate backpay loss for each category of Non-Hire claimant by the number of eligible
claimants who have filed claim forms in that category.
The fourth step is to determine the “backpay reduction ratio,” equivalent to the
“probability of hire,” by dividing the amount determined at the third step (the aggregate amount
of backpay divided by the number of eligible claimants) by the amount determined at the second
step (the aggregate amount of backpay divided by the number of shortfall hires). This step
reveals the percentage of the earnings of one shortfall to which each claimant is entitled (premitigation). This is the same percentage as one could find by dividing the number of shortfall
hires of a given category by the number of eligible claimants of that category.
The fifth step is to discount the claimant’s interim earnings by the ratio determined in
step four. The fact-finder will do this by multiplying the claimant’s interim earnings for each
year of the backpay period (as discussed in previous opinions, the fact-finder must make an
individualized finding of each claimant’s interim earnings) by the ratio determined in step four.
This step is necessary so that when the fact-finder compares the claimant’s gross award to his or
her interim earnings, the fact-finder is actually comparing like things; if the ratio were not
applied to the claimant’s interim earnings, the claimant would be prejudiced by the comparison
of a fractional award (found in step three) to the entire amount of the claimant’s actual earnings.
Another way of understanding the need to discount the interim earnings by the ratio is to
consider the ratio as an expression of the chance that a claimant would not have earned those
interim earnings (because it is the chance the claimant would have been hired as a firefighter and
not been employed in the alternative employment which generated the interm earnings.) This

10

step is also consistent with the court’s previous ruling that interim earnings would be reduced by
the ratio of one shortfall hire’s backpay to which each claimant would be entitled. (See June 6,
2011 Mem. & Order (Docket Entry # 640) at 24 n.6.)
The sixth step is to determine each claimant’s net (i.e., post-mitigation) backpay award
for each year of the claimant’s backpay period. Claimants who were Exam 7029 candidates have
a backpay period that commenced February 4, 2001, and Claimants who were Exam 2043
candidates have a backpay period that commenced December 5, 2004. This step has two
components: the fact-finder must first divide the claimant’s pro rata share of the gross backpay
award (determined in step three) by the number of years in that claimant’s backpay period. Next,
the fact-finder must subtract the discounted annual interim earnings (from step five) from the
annual pro rata share of the gross award.
The seventh step is to apply the rate of interest on the United States one-year maturity
Treasury yield, see 28 U.S.C. § 1961(a), to the claimant’s net backpay award for each year of his
or her backpay period and compound the interest annually. (The United States describes the
application of interest to the claimant’s principal amount on page 10 of its memorandum.)
The eighth step is to sum the annual net backpay amounts, and the compounded interest,
to determine the total net backpay award for each claimant.
2.

Method for Delayed-Hire Claimants

The disagreements between the City and the Plaintiffs on the method for determining
individual monetary awards for Delayed-Hire Claimants can be summarized as a dispute over
whether to give a uniform award, equivalent to a few months’ worth of delayed salary, to each
claimant in each category of injured Delayed-Hires (which the City proposes) or to vary the
award to give greater amounts to claimants hired later and lesser amounts to claimants hired

11

earlier (the Plaintiffs’ proposal). (Compare May 3, 2012 City Mem. at 5-7, with May 3, 2012
United States Mem. at 6-9.) Both proposals would operate within the aggregate backpay
amounts for Delayed-Hire Claimants as established by Dr. Siskin and relied upon by the court in
its Backpay Opinion—i.e., neither proposal would expose the City to greater liability than the
amounts listed in the court’s opinion. Moreover, both proposals would allow the City to attempt
to prove the interim earnings of the claimants in conformity with Title VII’s dictates.
Consequently, the court is satisfied that either proposal is legally acceptable, but adopts the
Plaintiffs’ proposal because it finds that varying relief to account for a firefighter’s longer or
shorter wait to be hired is more equitable.7
The court summarizes the steps for determining the backpay awards for individual
Delayed-Hire claimants below. (See May 3, 2012 United States Mem. at 3-6.) The court
prefaces this summary with an explanation that the goal of this process is to divide the aggregate
backpay amounts for each category of claimant based on the number of months a claimant was
hired after the first academy class and reduce each claimant’s gross award by interim earnings
(as with the Non-Hire Claimant process). This process proves an appropriate way to address the
likely situation that more eligible claimants will file claims than actually experienced delay
according to statistical analysis, and so divides the aggregate amount lost in an equitable way.
The proposal divides the aggregate award pro rata by months of delay, rather than by individuals.

7

The court appreciates the City’s eagerness to hue closely to Dr. Siskin’s statistical analysis. (See May 17,
2012 City Reply Mem. at 10-11.) However, Dr. Siskin’s work, while extremely useful in determining the aggregate
number of delayed hires and number of lost years of employment, and thus the aggregate amount of lost wages,
cannot determine which of the Delayed-Hire Claimants were actually injured by the City’s violations of Title VII,
which were unaffected, and which were incidentally helped. Therefore, the court’s design of a remedy is not predetermined by Dr. Siskin’s analysis. In any case, the United States’ proposal relies on Dr. Siskin’s calculations of
total loss and average number of months lost, and so is consistent with Dr. Siskin’s reports. (See May 3, 2012
United States Mem. at 7.)

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The first step is to place an eligible Delayed-Hire Claimant in the appropriate category:
black Exam 7029 firefighter, Hispanic Exam 7029 firefighter, black 2043 Exam firefighter, or
Hispanic 2043 firefighter. As was true with the Non-Hire Claimants, the fact-finder must
identify the correct category because each category suffered a unique economic loss produced by
the delay that category experienced.
The second step is to calculate the value of each month of delay for the Delayed-Hires of
a particular category. This step requires two components: the first is calculating the aggregate
number of months lost by each category of Delayed-Hires by multiplying the number of
firefighters who experienced a hiring delay by the average number of months delayed. From List
7029, 68 black firefighters experienced an average delay of 3.48 months and 86 Hispanic
firefighters experienced an average delay of 3.24 months. From List 2043, 44 black firefighters
experienced an average delay of 3.84 months and 51 Hispanic firefighters experienced an
average delay of 2.88 months. Second, once the fact-finder determines the aggregate number of
months lost in each category of Delayed-Hire Claimant, the fact-finder must determine the value
of each lost month by dividing the aggregate backpay amounts for each category by the
aggregate number of months lost. Black Delayed-Hire firefighters from the 7029 list suffered an
aggregate loss of $1,015,579; Hispanic Delayed-Hire firefighters from the 7029 list suffered an
aggregate loss of $1,228,608; black Delayed-Hire firefighters from the 2043 list suffered an
aggregate loss of $494,169; and Hispanic Delayed-Hire firefighters from the 2043 list suffered
an aggregate loss of $429,590. This step determines the value of each month lost per category of
injured Delayed-Hires.
The third step is to determine the value of each month of delayed hiring for the eligible
claimants in each category. The fact-finder must first calculate the aggregate amount of delay

13

experienced by the eligible claimants of that category by adding together the total number of
months each eligible claimant was hired after the first academy class for that category. The factfinder will next divide the aggregate loss amount for that category by the total number of months
of delay experienced by claimants in that category. This will produce the pro rata value of each
month of delay for the eligible claimants.
The fourth step is to determine each claimant’s gross share of the backpay losses by
multiplying the number of months that claimant’s hiring was delayed (i.e., how many months
after the first academy class he or she started at the fire academy) by the pro rata value of one
month as calculated in step three.
The fifth step is to determine a backpay reduction ratio, much like was done with the
Non-Hire Claimants. The pro rata value of one month of delay for the eligible claimants of each
category (as found in the third step) must be divided by the value of one month of delay for each
Delayed-Hire in that category (as found in the second step). This ratio expresses what
percentage of one month’s worth of delay each claimant of that category would actually receive
as a gross award.
The sixth step is for the fact-finder to determine the discounted interim earnings of the
claimant. The fact-finder first determines the interim earnings the claimant earned between the
first fire academy class hired from his or her list and when he or she joined the fire academy.
The fact-finder must then reduce those interim earnings by the ratio determined in the fifth step.
The seventh step is to determine a net backpay award by subtracting the discounted
interim earnings (from step six) from the claimant’s gross award (as determined in step four).

14

The eighth step is for the fact-finder should then determine an amount of interest on that
net award using the United States one-year constant maturity Treasury yield, referred to in 28
U.S.C. § 1961(a), and compounding the interest annually.
Finally, the court notes the City’s argument that it should be able to prove that a claimant
who experienced “self-induced” delay should not be able to recover, and the United States’
opposition to the City’s position. (See May 17, 2012 City Reply Mem. at 12; May 17, 2012
United States Reply Mem. at 18 n.18.) The parties’ briefing on this issue is insufficient to allow
the court to address it at this time. The City may brief this issue more fully in its June 13, 2012,
memorandum and Plaintiffs may respond to it in their June 22, 2012, briefing.
B.

Priority Hiring

The court considers next two issues relating to the remedy of priority hiring. The first
issue the parties have brought to the court’s attention is the issue of whether putative priority
hires must take and pass Exam 2000 before being considered for hire. The court previously
accepted priority hiring as an appropriate remedy in this case (see Jan. 21, 2012 Mem. & Order
(Docket Entry # 390) at 19-22) but reserved decision on whether claimants who wish to
participate in the priority hiring remedy must take a current, valid, entry-level examination (see
Feb. 1, 2012 Mem. & Order (Docket Entry # 802) at 6 n.4).
The United States and the City both argue that putative priority hires should take the
Exam. Their arguments can be summarized as follows. First, they argue that Title VII requires a
candidate for hiring relief to have fulfilled all non-discriminatory qualifications for employment,
see Franks v. Bowman Transp. Co., 424 U.S. 747, 772-73 n.31 (noting that candidates for hiring
relief must be “presently qualified” to be eligible for such relief), and passing Exam 2000, if the
exam is held to be valid by the court, constitutes one of the non-discriminatory qualifications for

15

employment as an entry-level firefighter. Second, in response to Plaintiff-Intervenors’ argument
that the court should allow candidates who scored a 70 or better on either Exam 7029 or 2043 be
considered eligible for priority hiring (instead of taking and passing Exam 2000), the United
States and the City argue that claimants’ scores on Exams 7029 and 2043 would not provide
useful information on which to base a claimant’s hiring because the use of those exams as passfail screening devices was held to be not job-related or consistent with business necessity (see
Disparate Impact Liability Op. (Docket Entry # 294) at 80, 85), and because the claimants took
those exams between five and thirteen years ago (see id. at 10).
Plaintiff-Intervenors argue that putative priority hires should not be required to take the
new exam if they earned a 70 or better on either of the invalid exams. A score of 70 was the
official passing score for Exam 2043 and a score considered sufficient to succeed at the Fire
Academy for Exam 7029. (See Aug. 12, 2011 City Ltr. (Docket Entry # 706) at 2 n.1.) PlaintiffIntervenors note that Title VII requires that “persons aggrieved by the consequences and effects
of the unlawful employment practice be, so far as possible, restored to a position where they
would have been were it not for unlawful discrimination,” Albemarle Paper Co. v. Moody, 422
U.S. 405, 421 (1974), and that the incumbent firefighters are not required to take a new exam
merely because the ones that they took to secure admission to the FDNY are invalid. Therefore,
the Plaintiff-Intervenors believe that requiring priority hire candidates to take and pass Exam
2000 would be to “require black and Hispanic applicants to overcome an additional hurdle that
was not imposed by other Exam 7029 and Exam 2043 applicants.” (May 3, 2012 Pl.Intervenors Mem. (Docket Entry # 870) at 3.)
The court holds that putative hires must take and pass Exam 2000, if the exam is held to
be valid and if they did not do so during the general administration of the exam. The court

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reaches that conclusion based on the following considerations. First, as the United States argues,
if the exam is held to be valid, then it must be considered one of the current, non-discriminatory
qualifications for becoming an FDNY firefighter. Title VII requires recipients of hiring relief to
meet all current, non-discriminatory qualifications. Franks, 424 U.S. at 772-73 n.31. As
Plaintiff-Intervenors note, the goal of Title VII’s remedial regime is to place a claimant where he
or she would have been had there been no discrimination. Albemarle Paper Co. v. Moody, 422
U.S. at 421. However, contrary to Plaintiff-Intervenors’ argument, this principle militates in
favor of requiring claimants to take Exam 2000 because, if there had been no discrimination, i.e.,
if the City had administered an exam that was consistent with Title VII, then applicants would
have been expected to take and pass that exam before joining the FDNY. Indeed, adopting
Plaintiff-Intervenors’ proposal would result in more people taking advantage of the situation that
exists only because of the City’s violation of Title VII.
Even without these principles of Title VII, the court would be wary of PlaintiffIntervenors’ proposal. The court agrees with the United States and the City that claimants’
scores on Exams 7029 and 2043 cannot be relied upon to indicate the ability to be a firefighter.
Most applicants who took Exam 7029 did so in 1999, and so that exam’s results are stale. More
fundamentally, however, the court has already held that the use of those exams as pass-fail
screening devices is not job-related or consistent with business necessity, i.e., they did not have
any value in determining whether an applicant was qualified to join the FDNY. (Disparate
Impact Liability Op. at 85; see also id. at 53 (“the undisputed evidence paints an extremely
troubling picture of the test construction process and the content that the City sought to test”); id.
at 80 (“the City has presented no evidence that its chosen cutoff scores [including the cutoff
score of 70 for Exam 2043] bear any relationship to the necessary qualifications for the job of

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entry-level firefighter”).) As a consequence of this holding, the court has also permanently
enjoined the City from using either exam in its hiring process. (See Remedial Order (Docket
Entry 765) ¶ 14.) Adopting the Plaintiff-Intervenors’ suggestion would have the effect of
crediting those exams with some job-related function, which the court cannot do. Regarding
Plaintiff-Intervenors’ concerns that claimants are in effect being held to a higher standard than
incumbent firefighters, who were admitted into the FDNY without passing a valid exam (and are
not being asked to take a new exam), the court cannot overturn decisions the City made to hire
now-incumbent firefighters—who are strangers to this case—before that hiring process was
enjoined. The court can only make a prospective decision about what should be done now that
those exams have been held to be invalid, and the court does not consider it inequitable to require
claimants do what every applicant should have had to do, i.e., pass a valid exam.
The court notes two conditions to its ruling. The first, implicit in what it has said above,
is that if Exam 2000 is not valid, then naturally claimants will not be required to take and pass it.
The second is that the court is relying on the parties’ previous representations that a special
administration of Exam 2000 can be held for claimants interested in priority hiring. (See July 29,
2011 United States Ltr. (Docket Entry # 697) at 1-2.) Of course, claimants who have already
taken and passed Exam 2000 during the general administration of the exam will not need to sit
for a second administration of the exam.
The court next considers the dispute between the parties as to whether priority hire
candidates should receive their retroactively higher salary and benefits during their time in fire
academy, or only upon finishing fire academy (with a lump sum payment upon finishing
academy to make up for the year of a lower salary). The court agrees with the City that Title VII
requires that claimants be placed in a position equivalent to the one that they would have been in

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had they not been discriminated against (see May 17, 2012 City Reply Mem. (Docket Entry #
881) at 14 (citing Albemarle)), but the court believes that either proposal would achieve that
goal. The court does not accept the City’s argument that a priority hire would receive a
“windfall” by joining the fire academy and then dropping out before finishing the academy. (See
May 3, 2012 City Mem. (Docket Entry # 868) at 2.) A priority hire who leaves mid-year has
received no more of a windfall than any other firefighter of the priority hire’s seniority would
receive by leaving the FDNY during that year. 8 The court also shares Plaintiff-Intervenors’
concern that the lower initial salary that the City wishes to give priority hires might discourage
claimants from asking to be considered for the priority hiring remedy. Therefore, the court
concludes that priority hires should be paid the salary appropriate for firefighters of their
seniority from the date of their admission to the fire academy.
C.

Issues Relating to Notice of Fairness Hearing

Upon prompting from the court (see Mar. 22, 2012 Order), the parties have considered
whether candidates who took Exam 2000 should receive notice of the court’s intent to hold a
fairness hearing on individual compensatory relief issues. The parties agree that it is advisable
for the candidates to receive notice. (May 3, 2012 City Mem. at 3; May 3, 2012 Pl.- Intervenors
Mem. at 6; May 3, 2012 United States Mem. at 19-20.) The court agrees and orders that notice
be sent to all candidates who took Exam 2000.
The parties do not agree how long recipients of notice of the fairness hearing should be
given to file objections. The United States and Plaintiff-Intervenors believe that the third parties
should be given 30 days (May 17, 2012 Pl.- Intervenors Reply Mem. (Docket Entry # 882) at 6;
8

To the extent the City is suggesting that claimants would be receiving a windfall by being paid more during
their time at the academy than other entry-level firefighters, the court notes that the aggregate amount of backpay
losses takes into account the low salary of firefighters for their first year, because Dr. Siskin calculated average
earnings for a firefighter from each academy class per year, thus accounting for the change in average earnings over
time. (See Mar. 8, 2012 Mem. & Order at 29.)

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May 3, 2012 United States Mem. at 18-19.), while the City believes 45 days is necessary (May 3,
2012 City Mem. at 3). The City appears to argue for 45 days because that was the period the
court gave potential claimants to file claim forms and class opt-outs. (May 17, 2012 City Reply
Mem. (Docket Entry # 881) at 17.) However, the court did so because it was concerned that the
parties would not have current mailing addresses for many potential claimants (some of whom
applied to the FDNY in 1999) and thus the parties would be required to attempt to re-send many
notices. (See Apr. 20, 2012 Mem. & Order (Docket Entry # 861) at 7.) Given that the two
groups of plausibly interested third parties will consist of incumbent firefighters and the
candidates who took Exam 2000, and given that the City will likely have current mailing
addresses for both of those groups, the court concludes that 30 days is a sufficient period for
objections.
D.

The Recommendations of the Special Masters

The Special Masters for individual compensatory relief have filed recommendations on
the structuring of an individual claims process. (See Special Masters Report and
Recommendations (Docket Entry #849).) The parties have asked that the court defer adopting
these recommendations until after the parties have a meet and confer session with the Special
Masters. The court agrees and holds the recommendations in abeyance. The Special Masters
and the parties shall meet and confer within 7 business days of the date of this Memorandum and
Order. (See Mem. & Order Confirming Appointment of Special Masters (Docket Entry # 883)
¶¶ 2.c., 4.)
E.

The Burden of Paying the Social Security Administration

The United States and the City disagree as to which of them should bear the burden of
paying for obtaining earnings information from the Social Security Administration (the “SSA”);

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the information from the SSA is needed to demonstrate the interim earnings of claimants seeking
monetary relief. (May 3, 2012 United States Mem. (Docket Entry # 867) at 1-2; May 3, 2012
City Mem. at 7-8.). The United States has interfaced with the SSA on the cost of gaining
information and the consent forms claimants will sign to authorize the SSA to give information
about their earnings to the United States. (See May 3, 2012 United States Mem. at 4-5.)
However, the United States seeks reimbursement of the fees it will pay to the SSA; it argues that
the costs should be born by the party who has the burden of proving interim earnings—i.e., the
City. (See Backpay Op. at 48 (citing Sims v. Mme. Paulette Dry Cleaners, 638 F. Supp. 224,
231 (S.D.N.Y. 1986).) The City argues that this information should be considered the equivalent
of discovery from an opposing party and thus should be provided to it without cost. (May 3,
2012 City Mem. at 7-8.) The United States (which, for the purposes of this litigation, has always
referred to the Department of Justice and United States Attorney’s Office for the Eastern District
of New York) argues that although the SSA and the Department of Justice are both agencies of
the United States government, the SSA does not share information freely with other agencies of
the government and, as a consequence, SSA records are not in its custody or control, and, thus,
are not discoverable materials. (See May 17, 2012 United States Reply Mem. (Docket Entry #
879) at 3.)
Plaintiff’s argument is the better one. It is the Department of Justice that, for all practical
effect, is the Plaintiff in this case, not the United States government in a collective sense. See 42
U.S.C. 2000e-5(f)(1) (“in the case of a respondent which is a government, governmental agency,
or political subdivision . . . the Attorney General [ ] may bring a civil action against such
respondent.”) The SSA is not a party to the case. Moreover, the fact that the SSA requires the
Department of Justice to obtain the consent of claimants and pay a fee for the records is

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sufficient evidence that the records are not in the custody or control of the Department of Justice
and thus do not qualify as information to be provided as party discovery. See Fed. R. Civ. P.
34(a)(1). These are third-party materials, and cost of obtaining them should fall on the party that
has the burden of proof on interim earnings—i.e., the City.
The City raises the need for other forms of evidence of interim earnings. (May 17, 2012
City Reply Mem. at 18.) Whether information from the SSA is sufficient to prove interim
earnings is a separate issue from who should pay for that information. If the City believes that
Internal Revenue Service records are required, it should include briefing on that issue in the
memorandum it is scheduled to submit to the court on June 13, 2012.
F.

Representation of Individual Claimants

The parties have also sought the court’s resolution of whether counsel for the Subclasses
may represent individual claimants in the anticipated claims proceedings. The United States
intends to participate in these proceedings but does not represent any individual claimant. (Apr.
10, 2012 United States Ltr. (Docket Entry # 850) at 2 n.2.) The Non-Hire Subclass and DelayedHire Subclasses have not been certified as to the issues of individual claimants’ eligibility,
mitigation, or amount of non-economic damages; therefore, Subclass counsel—Levy Ratner,
P.C., counsel to the Non-Hire Subclass, and the Center for Constitutional Rights (“CCR”),
counsel to the Delayed-Hire Subclass—do not represent any individual class member regarding
those issues in their role as Subclass counsel. Levy Ratner and CCR desire to represent those
class members who request their assistance in their individual proceedings. (May 11, 2012 Pl.Intervenors Ltr. (Docket Entry # 872) at 1.) The United States argues that representing both a
Subclass and individual members of that class might pose a conflict of interest. (Apr. 10, 2012
United States Ltr. at 2-3.)

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The court concludes that a conflict of interest would exist only if Levy Ratner or CCR
represented individuals whose claims would be barred by positions that those entities have
previously advocated in their roles as Subclass Counsel. Specifically, an individual who is
ineligible under the minimum criteria for relief that the court adopted—at the urging of all the
parties—should not be represented by either Levy Ratner or CCR. (See Backpay Op. at 51-53
(adopting eligibility criteria agreed to by the parties).) Therefore, the court will permit each firm
to represent individual Subclass members on the following conditions: if approached by an
individual member interested in representation, the firm must provide the class member with the
court-approved eligibility criteria and inform the class member that it will not represent any class
member seeking to amend or avoid those criteria. If a class member agrees to that limitation on
the firm’s ability to represent him or her, and if in the course of representing that individual the
firm determines that the individual’s best argument that he or she is entitled to relief is to
challenge the eligibility criteria, the firm must bring that fact to the individual’s attention and
seek the court’s leave to withdraw from representation of that individual. Finally, each firm may
only represent individual members of the Subclass of which it already serves as Subclass
counsel.
II.

SCHEDULING ORDER
With this Memorandum and Order, the court has ruled on the substantive legal issues that

needed to be resolved before a Proposed Remedial Order and fairness hearing notices could be
drafted. Accordingly, the court modifies the Remedial Phase Timeline (see Apr. 12, 2012
Scheduling Order approving Joint Remedial Phase Timeline (Docket Entry # 844-2)) in the
following ways: the parties shall submit joint proposed Fairness Hearing I notice documents to
the court no later than 14 days after the date of this Memorandum and Order. The parties shall

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confer with the Special Masters to draft a Proposed Relief Order and the United States shall file
the same no later than 30 days after the date of this Memorandum and Order; the Proposed Relief
Order shall, inter alia, fully explain the proposed claims process framework and role of the
Special Masters. If, after a good-faith collaborative effort, the Special Masters disagree with the
Proposed Relief Order’s contents, they shall file a report and recommendation outlining their
disagreements and proposing alternatives to the Proposed Relief Order’s provisions.
III.

CONCLUSION
As set forth above, the court ADOPTS the United States’ method of determining

individual backpay awards; GRANTS the United States’ and the City’s request that all putative
priority hires be required to take and pass Exam 2000; GRANTS the parties’ joint request that all
individuals who took Exam 2000 receive notice of the anticipated fairness hearing; GRANTS the
United States’ and Plaintiff-Intervenors’ request that such individuals receive a thirty-day
objection period; GRANTS the parties’ joint request to stay consideration of the Special
Masters’ recommendations; GRANTS the United States’ request that the City reimburse it for
the cost of obtaining information from the SSA; and GRANTS the request of Levy Ratner, P.C.,
and the CCR for leave to represent claimants in the individual claims proceedings, subject to the
conditions discussed above.
SO ORDERED.
/S/ Nicholas G. Garaufis
NICHOLAS G. GARAUFIS
United States District Judge

Dated: Brooklyn, New York
June 3, 2012

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