KOSTIC v. Texas A&M University-Commerce et al
Filing
259
MEMORANDUM OPINION AND ORDER granting 246 Motion for Judgment. (Ordered by Judge Barbara M.G. Lynn on 8/13/2015) (skt)
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NENAD M. KOSTIC,
Plaintiff,
v.
TEXAS A&M UNIVERSITY AT
COMMERCE,
Defendant.
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No. 3:10-cv-2265-M
MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff’s Motion for Judgment [Docket # 246]. For the reasons
stated below, the Motion is GRANTED.
I.
FACTUAL BACKGROUND
On December 18, 2014, the jury returned its verdict, finding that Defendant Texas A&M
University at Commerce (“TAMUC”) retaliated against Plaintiff Nenad Kostic (“Kostic”) for
engaging in protected activity under Title VII of the Civil Rights Act of 1964. The jury awarded
Kostic $300,000 in back pay from the period of December 9, 2010, to the date of the jury’s
verdict, December 18, 2014. [Docket #241, p. 11]. The jury declined to award Kostic damages
for past or future pain and suffering, inconvenience, mental anguish, and loss of enjoyment of
life. The jury also made a non-binding finding that Kostic was not entitled to front pay. [Docket
#241, p. 8-9]. Kostic’s Motion for Judgment requests that the Court award Kostic $300,000 in
back pay in accordance with the verdict, and that it additionally award Kostic prejudgment
interest and front pay.
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II.
PREJUDGMENT INTEREST ON BACK PAY
TAMUC does not contest the Court’s award of back pay to Kostic in the amount of
$300,000. However, the parties disagree about prejudgment interest. The Court finds that
Kostic is entitled to prejudgment interest. Thomas v. Texas Dep’t of Criminal Justice, 297 F.3d
361, 372 (5th Cir. 2002) (“Courts should award prejudgment interest whenever a certain sum is
involved” . . . “[r]efusing to award prejudgment interest ignores the time value of money and
fails to make the plaintiff whole.”)
A. The Date Prejudgment Interest Should Begin to Accrue on Kostic’s Back Pay
Award
TAMUC contends that prejudgment interest accrues from February 1, 2011, not
December 9, 2010. Kostic and TAMUC appear to agree that Kostic was officially terminated on
December 8, 2010.1 TAMUC urges, however, that Kostic admitted he was paid through the
following January, but cites no record evidence in support of that assertion. Def.’s Rsp. to Pl.’s
Mot. Judgment, p. 1 [Docket #249]. Based on the evidence before it, the Court concludes that
prejudgment interest should begin accruing on December 9, 2010. See Thomas, 297 F.3d at 371
(“District courts generally should calculate interest on back pay and past damages based on the
date of the adverse employment action.”).
B. The Amount and Rate of Prejudgment Interest
TAMUC argues that any prejudgment interest award should be reduced by $2,000,
because Kostic only asked for $298,000 in back pay, but the jury awarded Kostic $300,000.
TAMUC cites no authority in support of its request to effectively reduce the jury’s award of back
pay by reducing the amount of prejudgment interest. Awarding back pay is not an exact science,
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TAMUC explains that “the chancellor’s decision to ratify the termination was made on December 8, 2010.” Def.’s
Rsp. Pl’s Mot. Judgment, p. 6 [Docket #249]. Kostic states that the termination date was December 8, 2010. Pl.’s
Mot. Judgment, p. 11 [Docket #246].
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and can include compensation in addition to the loss of salary, including overtime, shift
differentials, fringe benefits, and interest. Dibler v. Metwest, Inc., No. 3:95-CV-1046-BC, 1997
WL 222910, at *1 (N.D. Tex. Apr. 29, 1997) (Boyle, J.). Determining back pay involves
“inherent uncertainties” that must be “resolved against the discriminating party.” Id.
Furthermore, “the jury is free to select the highest figures for which there is adequate evidentiary
support.” Mercado–Berrios v. Cancel–Alegria, 611 F.3d 18, 29 (1st Cir. 2010) (quotation and
citation omitted). Here, there was adequate evidentiary support for the jury’s award of back pay
in the sum of $300,000. Accordingly, the Court will not reduce the amount of prejudgment
interest due to the jury’s back pay determination.
Where an action arises under federal law, “it is within the discretion of the district court
to set an equitable rate of prejudgment interest.” Hansen v. Continental Ins. Co, 940 F.2d 971,
984 (5th Cir. 1991); Scott v. Amarillo Heart Grp., LLP, No. 2:12-CV-112-J, 2013 WL 1497047,
at *4 (N.D. Tex. Apr. 10, 2013) (Robinson, J.). Where a claim is governed by a federal statute,
and the statute is silent on the issue of prejudgment interest, “state law is an appropriate source of
guidance.” Hansen, 940 F.2d 984. See also Wesley v. Yellow Transp., Inc., No. 3:05-CV-2266D, 2010 WL 3606095, at *2 (N.D. Tex. Sept. 16, 2010) (Fitzwater, J.) (“In the absence of a
federal statute that establishes the rate of prejudgment interest, state law guides the court’s
discretion in determining the interest rate.”).
Accordingly, the Court looks to Texas Finance Code 304.003(a) and (c), which provide
that prejudgment interest shall accrue at the rate of 5% per year, when the prime rate as
published by the Board of Governors of the Federal Reserve System is less than 5%. The prime
rate for the week ending August 7, 2015, is less than 5%, so the rate of prejudgment interest this
Court will apply is 5%. See Wesley, 2010 WL 3606095, at *2 (applying the 5% interest rate).
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Therefore, the amount of prejudgment interest per day is $41.10. The number of days that have
passed since December 9, 2010, and the date of this Order, August 13, 2015, including
December 9, 2010, but not including August 13, 2015, is 1708 days. 1708 multiplied by $41.10
is $70,198.80.
III.
FRONT PAY
Plaintiff next urges the Court to award Kostic front pay, even though the jury advised that
none should be awarded. “Front pay . . . is intended to compensate the plaintiff for wages and
benefits he would have received from the defendant in the future if not for the discrimination.”
Julian v. City of Houston, Tex., 314 F.3d 721, 729 (5th Cir. 2002). Under Title VII, courts have
discretion to award front pay as part of their authority to provide “other equitable relief as the
court deems appropriate.” 42 U.S.C. § 2000e-5 (g)(1). “[F]ront pay is an equitable remedy for
the district court to determine, [but] the court may empanel an advisory jury.” Mota v. Univ. of
Texas Houston Health Sci. Ctr., 261 F.3d 512, 526 (5th Cir. 2001).
A. The Feasibility of Reinstatement
Although reinstatement is the preferred remedy, front pay may be awarded if
reinstatement is not feasible. Nassar v. Univ. of Texas Sw. Med. Ctr., No. 3:08-CV-1337-B,
2010 WL 3633631, at *2 (N.D. Tex. Sept. 16, 2010) (citing Reneau v. Wayne Griffin & Sons,
Inc., 945 F.2d 869, 870 (5th Cir. 1991)). Here, the parties agree that reinstatement is not feasible
because a hostile relationship existed between Kostic and TAMUC. See Mota v. Univ. of Texas
Houston Health Sci. Ctr., 261 F.3d 512, 526 (5th Cir. 2001) (reinstatement infeasible in light of
“hostile relationship”). During the trial, the Court heard substantial evidence that the
relationship between Kostic and TAMUC was deteriorating before Kostic began to engage in
protected activity, and that throughout the course of Kostic’s termination proceedings and
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subsequent litigation, the relationship worsened. The Court concludes that reinstatement would
not be feasible in this case.
B. Whether Kostic is Entitled to Front Pay
Accordingly, the Court turns to the alternative remedy of front pay. It is within the
discretion of the Court to determine whether to award front pay. Downey v. Strain, 510 F.3d
534, 544 (5th Cir. 2007). Front pay is calculated by the Court “through intelligent guesswork,”
and due to its “speculative character,” district courts are given “wide latitude” in determining
whether it should be awarded, and if so, in what amount. Id. The Fifth Circuit has listed six
factors for a trial court to consider in determining the amount of a front pay award: “(1) the
length of prior employment, (2) the permanency of the position held, (3) the nature of the work,
(4) the age and physical condition of the employee, (5) possible consolidation of jobs, and (6) the
myriad of other non-discriminatory factors which could validly affect the employer/employee
relationship.” Downey, 510 F.3d at 544.
Although front pay is “usually appropriate when a plaintiff is discharged in violation of
ADEA and not reinstated by the court,” Reneau v. Wayne Griffin & Sons, Inc., 945 F.2d 869, 870
(5th Cir. 1991), TAMUC urges the Court to deny Kostic front pay because Kostic would have
been fired from his job anyway, for nondiscriminatory reasons. The Court concludes that the
evidence does not support that conclusion.
TAMUC did present evidence that Kostic’s relationships with other faculty members and
students became strained when they learned that Kostic had been forced to resign, in lieu of
termination, from his previous job at Iowa State University, and that Kostic’s personal
relationships with many TAMUC students and faculty members had deteriorated due to his
approach to his position. However, the Court cannot conclude that the extreme measure of
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revocation of Kostic’s tenure would have occurred due to such friction. TAMUC did not show
that Kostic’s behavior at TAMUC was so egregious as to support revocation. See McKennon v.
Nashville Banner Pub. Co., 513 U.S. 352, 363-63 (1995) (the defendant must “establish that the
wrongdoing was of such a severity that the employee in fact would have been terminated on
those grounds alone”).
Nor can TAMUC claim that Kostic falls under the “after-acquired evidence” exception to
an award of front pay. In McKennon v. Nashville Banner Pub. Co., 513 U.S. 352 (1995), the
Supreme Court held that a defendant may use evidence of a plaintiff’s wrongdoing, acquired
after the date of plaintiff’s wrongful termination, to prove that the plaintiff would have been fired
anyway. Id. at 362. Insofar as TAMUC claimed that Kostic failed to disclose his history at Iowa
State during the hiring process, and that TAMUC would have fired him based on this failure to
disclose, the evidence at trial was to the contrary. The Court heard testimony that before
TAMUC hired Kostic, Kostic disclosed his history at Iowa State to certain TAMUC employees.
Furthermore, information about Kostic’s past at Iowa State was publicly available on the
Internet, obtainable through a simple Google search. TAMUC cannot claim it had no knowledge
of Kostic’s past, nor that Kostic hid his wrongdoing from TAMUC during the hiring process and
that the later discovery of it would have independently justified and caused Kostic’s termination,
nor did TAMUC prove other reasons why that could have occurred.
Courts have also denied front pay where the plaintiff failed to mitigate his damages or
where the plaintiff received large enough punitive or liquidated damages to render front pay
excessive. Neither circumstance is present here. First, Kostic testified, and the Court found his
testimony credible, that since he was fired, he has been engaged in an exhaustive search for
alternative employment. Kostic has been unsuccessful in that search, but a plaintiff does not
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have to actually find another job to have successfully attempted mitigation. West v. Nabors
Drilling USA, Inc., 330 F.3d 379, 394 (5th Cir. 2003). Second, the Court may not limit Kostic’s
front pay award on the basis of a back pay award. Courts have denied front pay when a plaintiff
recovers a significant amount of liquidated or punitive damages. See Walther v. Lone Star Gas
Co., 952 F.2d 119, 127 (5th Cir. 1992). Here, there was no such award, and the Fifth Circuit has
“never held that an award of back pay can have this same effect” of negating front pay. Julian v.
City of Houston, Tex., 314 F.3d 721, 730 (5th Cir. 2002) (reversing district court’s decision to
deny front pay based solely on plaintiff’s back pay award). Accordingly, the Court finds that an
award of front pay is required by the facts of this case.
C. The Amount of Kostic’s Front Pay Award
Turning to the amount of front pay to be awarded, the Court concludes that Kostic should
be awarded front pay corresponding to two additional years of lost employment, based on the
application of the Fifth Circuit’s six-factor test. See Downey, supra, at p.5. Considering “the
myriad of non-discriminatory factors which could validly affect the employer/employee
relationship,” as discussed below, the Court concludes that it is a reasonable assumption that
Kostic would, for legitimate, non-discriminatory reasons, have been employed at TAMUC for
only two additional years after the date of the jury verdict. Downey, 510 F.3d at 544.
Although the friction between Kostic and many members of the TAMUC community was
caused in part by rumors about Kostic’s conduct at Iowa State University, the evidence showed it
was also due to Kostic’s own inability to accept criticism, his often hostile temperament, and his
overly aggressive approach to students and faculty. In light of those issues, and how they were
regarded by others and considered by Kostic, the Court finds it highly probable that Kostic
would not have willingly remained at TAMUC for more than two additional years after the date
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of the jury verdict.
For each year of front pay, Kostic would receive $84,380, comprised of the sum of (1) a
base rounded salary of $75,000, and (2) the value of retirement benefits totaling $9,380. See
Plaintiff’s Trial Exhibit 294. Those sums are subject to an appropriately applied discount rate,
yielding a total of $166,229 in front pay to be awarded to Kostic.
IV.
CONCLUSION
Accordingly, Plaintiff’s Motion for Judgment is GRANTED. A separate judgment will
issue.
SO ORDERED.
August 13, 2015.
_________________________________
BARBARA M. G. LYNN
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF TEXAS
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