1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-24-1995

Abrams v Lightolier Inc.

Precedential or Non-Precedential:

Docket 94-5083

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Recommended Citation

"Abrams v Lightolier Inc." (1995). 1995 Decisions. Paper 80.

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 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 

 N0S. 94-5083 and 94-5110 

 

 BERNARD ABRAMS 

v. 

 LIGHTOLIER INC.; COASTAL FAST FREIGHT, INC.; 

 THE GENLYTE GROUP, INC.; BAIRNCO CORPORATION 

 The Genlyte Group, Inc. 

 Appellant in No. 94-5083 

 Bernard Abrams 

 Appellant in No. 94-5110 

 

 Appeal from the United States District Court 

 For the District of New Jersey 

 (D.C. Civil No. 88-cv-02906) 

 

 Argued: September 12, 1994 

 BEFORE: STAPLETON, ALITO and LEWIS, Circuit Judges

 (Opinion filed March 24, 1995) 

 

 Margaret L. Moses (Argued) 

 Law Offices of Margaret L. Moses 

 85 Livingston Avenue 

 Livingston, NJ 07068 

 and 

 Kathleen C. Goger 

 Susan S. Stinger 

 Stinger & Goger 

 111 Mulberry Street 
 Townhouse D 

 Newark, NJ 07102 

 Attorneys for Appellee/ 

 Cross Appellant 

 Dona S. Kahn (Argued) 

 Richard G. Tuttle 

 Anderson, Kill, Olick & Oshinsky 

 1600 Market Street 

 Suite 1416 

 Philadelphia, PA 19103 

 Attorneys for Appellant/ 

 Cross Appellee 

 

 

 OPINION OF THE COURT

 

STAPLETON, Circuit Judge: 

 This matter is an appeal and a cross-appeal from a jury 

verdict in favor of the plaintiff on his claim under the New 

Jersey Law Against Discrimination ("NJLAD") and in favor of the 

defendant employer on plaintiff's federal Age Discrimination in 

Employment Act ("ADEA") claim. The appeal and cross-appeal raise 

issues concerning the appropriate jury instructions in a pretext 

age discrimination case under New Jersey law, the appropriateness 

of certain evidentiary rulings, the sufficiency of the evidence, 

and the propriety of the awards for back-pay damages, attorneys' 

fees, and costs. We conclude that the district court did not err 

in instructing the jury as to the burden of proof required for 

the NJLAD claim, that any errors with respect to the district 

court's evidentiary rulings were harmless, that the evidence was 
sufficient to support the judgments, and that the district court 

did not abuse its discretion in failing to reduce the back-pay 

and attorneys' fees award. However, we conclude that the 

district court applied the wrong legal standard in determining 

the plaintiff's award of costs. We will therefore remand solely 

on that issue and affirm the district court in all other 

respects.1

I. 

 Bernard Abrams was employed by Lightolier, Inc. 

("Lightolier" or "the employer") from January 1970 until his 

termination on July 3, 1986. Abrams was hired as a Manager of 

Physical Distribution. From 1982 through July 3, 1986, he was 

the Vice President of Coastal Fast Freight, an in-house trucking 

company and subsidiary of Lightolier. In 1981, Abrams organized 

a system for combining the purchasing power of a number of 

companies to obtain significant price reductions. He headed this 

system, known as Team Purchasing, from its inception until late 

1985. During 1983 and 1984, Abrams was also given primary 

responsibility for negotiating real estate transactions for 

Lightolier. Abrams asserted that between 1982 and 1986, he 

received ample salary increases and bonuses. After returning to 

 

1. The district court had jurisdiction over the ADEA claim 

pursuant to 29 U.S.C. §§ 623(a), 626(c) and 28 U.S.C. § 1331 and 

supplemental jurisdiction over the state law claim pursuant to 28 

U.S.C. § 1367. This court has jurisdiction over the appeal 

pursuant to 28 U.S.C. § 636(c)(3) (permitting appeal to Court of 

Appeals from matters tried by consent before U.S. Magistrate 

Judge) and 28 U.S.C. § 1291. 
work following coronary by-pass surgery in the fall of 1985, 

Abrams claimed that Lightolier began to restrict his job 

responsibilities. On July 3, 1986, he was terminated. At that 

time he was fifty-nine years old. Abrams was replaced with a man 

whom he had hired, trained, and supervised. Abrams estimated 

that his replacement was about forty years old. 

 During his tenure with Lightolier, Abrams was 

responsible for dealing with Midland Transportation Company, Inc. 

("Midland"),2 a company that provided trucking services to 

Lightolier. In June 1980, Abrams orally agreed to modify the 

shipping rates in Lightolier's local contract with Midland. The 

companies performed under the oral modification until Midland 

sued Lightolier in 1982, claiming that it was being underpaid 

according to the terms of its written contract. Midland also 

claimed that Lightolier owed it detention charges for waiting 

periods caused by Lightolier's delay. During the Midland 

litigation, Lightolier learned that Abrams and two other 

employees, Richard Petit and John Zarkoski, had accepted various 

favors from Midland or its principals.3 The Midland litigation 

was settled in late June 1986, just before the jury was to return 

 

2. Midland was a successor to the trucking company EZ 

Freight Lines. For ease of reference, we refer to both companies 

as Midland. 

3. Abrams was alleged to have taken bribes from Midland's 

principals and to have received a number of less significant 

favors such as free car repairs. Abrams has consistently denied 

the bribery charge and offered explanations to show that he did 

not act improperly in accepting the other favors. 
its verdict. The Midland litigation cost Lightolier, in 

settlement and attorneys' fees, almost one million dollars. 

 Abrams was not terminated when Lightolier first learned 

of his failure to memorialize the oral modification, of his 

failure to avoid the detention charges, and of the favors he 

accepted from Midland. Instead, he was terminated on July 3, 

1986, soon after the Midland litigation had settled. Michael 

Whelan, who had become president of Lightolier in 1985, informed 

Abrams of the termination. Both Petit and Zarkoski were 

terminated at that time as well. Abrams supervisor at the time 

of his termination was Richard Kurtz. Believing his termination 

was part of a campaign to eliminate older workers, Abrams filed 

charges with the New Jersey Civil Rights Division and the Equal 

Employment Opportunity Commission. Subsequently, Abrams also 

filed a civil action against Lightolier and various parent 

companies and subsidiaries,4 alleging he was terminated because 

of his age in violation of the New Jersey Law Against 

Discrimination and the ADEA.5 The parties consented to trial 

 

4. In addition to Lightolier, the complaint named the 

following companies as defendants: The Genlyte Group, Bairnco 

Corporation, and Coastal Fast Freight. Coastal Fast Freight was 

dismissed by stipulation and Bairnco Corporation was dismissed by 

the court prior to trial. Subsequent to Abrams's termination, 

Lightolier became a subsidiary of The Genlyte Group as a result 

of a corporate merger in 1991. The district court therefore 

entered judgment against Genlyte and it is Genlyte who has filed 

this appeal. For ease of reference, we will refer to both 

Abrams's employer and the appellant/cross-appellee as Lightolier. 

5. Abrams had also asserted a claim of disability 

discrimination which was dismissed by the district court prior to 

trial. Abrams has not appealed from that order and that claim is 

therefore not before this court. 
before a United States magistrate judge. Prior to trial, the 

employer moved for summary judgment in its favor. The magistrate 

judge granted summary judgment in part, dismissing Abrams's claim 

of disability discrimination under the NJLAD and dismissing one 

of the defendants, but denied the employer's motion for summary 

judgment as to the ADEA and NJLAD age discrimination claims. The 

employer also moved for an in limine order excluding certain 

evidence, which the district court granted in part and denied in 

part.6

 Trial was held before a jury. To support his 

contention that Lightolier terminated him because of his age, 

Abrams introduced evidence of prior age-based remarks made by 

Richard Kurtz, his supervisor at the time of his termination, as 

well as evidence that he was replaced by a younger employee, and 

evidence that other older employees at Lightolier had also been 

mistreated by Kurtz. Lightolier submitted evidence that Michael 

Whelan, the president of the company, communicated the 

termination decision to Abrams, that he, rather than Kurtz, was 

responsible for the Abrams's discharge, and that the reason for 

the discharge was Abrams's earlier misconduct in connection with 

the Midland contract. 

 The case was submitted to the jury as a pretext case, 

i.e. a case that does not qualify for special treatment under 

Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). However, the 

 

6. The magistrate judge also severed from this action a 

counterclaim asserted by Lightolier against Abrams. 
court submitted the NJLAD and ADEA claims to the jury under two 

different standards of proof. To prevail on the ADEA claim, 

Abrams had to show that age was the sole motivating factor for 

Abrams's discharge, while he could prevail on the NJLAD claim by 

showing that age was a determinative factor in the discharge 

decision. The jury responded to special interrogatories in the 

following manner. The jury found that the employer's reasons for 

its actions were pretextual; that age was not the sole motivating 

factor for Abrams's termination; that age was a determinative 

factor in his termination; that the employer was liable for back 

pay, future losses, and damages for pain and suffering, but was 

not liable for punitive damages under the NJLAD. The district 

court thus entered judgment in Abrams's favor on the NJLAD claim 

and in Lightolier's favor on the ADEA claim. 

 The employer moved for judgment as a matter of law or 

for a new trial on the ground that the evidence was insufficient 

to support the verdict against it and Abrams moved for an award 

of attorneys' fees. The magistrate judge denied the employer's 

motion for judgment as a matter of law or for a new trial, but 

ordered a remittitur of all but $2500 of the $100,000 award for 

pain and suffering, finding Abrams had established mental 

distress damages only to that extent. Abrams agreed to the 

remitter and an amended order for judgment against the employer 

was entered in the amount of $473,953.45. The magistrate judge 

awarded Abrams attorneys' fees in the amount of $546,379.59 and 

costs of $240.00. Lightolier filed a timely notice of appeal 

from the amended order entering judgment in Abrams's favor on the 
NJLAD claim and the order denying its motion for summary judgment 

on the ADEA and NJLAD claims. Abrams filed a protective crossappeal as to the amended order entering judgment in the 

employer's favor on the ADEA claim and cross-appealed as to the 

order awarding him costs. 

II. 

 Lightolier's arguments on appeal fall into three 

general categories: arguments relating to (1) the appropriate 

standard of proof in a pretext case of age discrimination under 

the NJLAD, (2) evidentiary rulings and the sufficiency of the 

evidence, and (3) the amount of back-pay damages and attorneys' 

fees awarded. Abrams cross-appealed as to the award of costs and 

also filed a protective cross-appeal on the ground that in the 

event the case is remanded for a new trial, his ADEA claim should 

be submitted to the jury under the mixed-motives standard of 

proof. Because we conclude that the instructions as to the NJLAD 

claim were proper and that the magistrate judge's evidentiary 

rulings do not require reversal, we need not reach the issue 

raised by Abrams regarding the standard of proof for his ADEA 

claim. Because we conclude that the magistrate judge applied the 

correct standard in instructing the jury as to the back-pay award 

and in awarding attorneys' fees, but did not apply the correct 

standard in determining the award of costs, we will remand solely 

as to the issue of costs. 

 

 III. Standard of Proof Under the NJLAD
 In instructing the jury as to Abrams's burden for 

establishing Lightolier's liability for his discharge, the 

magistrate judge explained that the standard of proof under the 

NJLAD and ADEA claims differed, stating: 

 As to the federal cause of action . . . 

[i]t is the Plaintiff's burden to prove, by a 

preponderance of the credible evidence, that 

his age was the sole motivating factor for 

the Defendant's decision to terminate his 

employment. . . . 

 * * * 

 Under the terms of the state claim, Mr. 

Abrams must prove by a preponderance of the 

evidence that age was a determinative factor 

in the employment decision. In is not 

necessary under New Jersey law against 

discrimination that age be the sole 

motivating factor. If discrimination on the 

basis of age made the difference in the 

decision, then discrimination in violation of 

the statute has been established. 

 In other words, Plaintiff must prove 

that but for his age he would not have been 

discharged. 

 All right? So under the state law, 

Plaintiff, again, must prove by a 

preponderance of the credible evidence, it is 

his burden of proof, that age was a 

determinative factor in the employment 

decision. 

 It is not necessary under the state law 

claim that age be the sole motivating factor. 

That's the difference. 

App. 110-14. 

 In answering special verdicts, the jury found that 

Abrams had proven that the employer's reasons for his discharge 
were pretextual and that age was a determinative factor in 

Lightolier's decision to discharge him. The jury also found that 

Abrams had not proven that age was the sole motivating factor for 

his discharge. The magistrate judge therefore entered judgment 

in Abrams's favor on the NJLAD claim and in Lightolier's favor on 

the ADEA claim. 

 In instructing the jury that Abrams was required to 

prove that age was the sole motivating factor in order to succeed 

on the ADEA claim, the magistrate judge believed he was following 

the decision of this court in Griffiths v. CIGNA Corp., 988 F.2d 

457 (3d Cir.), cert. denied, 114 S. Ct. 186 (1993). The 

magistrate judge did not adopt that standard for the NJLAD claim, 

however, concluding that the New Jersey Supreme Court would not 

necessarily follow the higher standard of proof he understood 

Griffiths to require. Instead, the magistrate judge concluded 

that the New Jersey Supreme Court would continue to require a 

showing that age was a determinative factor in the adverse 

employment decision. 

 This court sitting in banc recently clarified the 

proper standard of proof for an ADEA pretext case in Miller v. 

CIGNA Corp., No. 93-1773, __ F.3d __ (3d Cir. Jan. 23, 1995). 

There we stated that "in ADEA cases that do not qualify for a 

burden shifting charge under Price Waterhouse v. Hopkins, 490 

U.S. 228 (1989), district courts should instruct the jury that 

the plaintiff's burden is to prove that age played a role in the 

employer's decisionmaking process and that it had a determinative 

effect on the outcome of that process." Miller, slip op. at 3, 
__ F.3d at __. We also noted that to the extent that Griffiths 

v. CIGNA could be read to require an ADEA plaintiff to prove that 

age was the sole motivating factor for the adverse employment 

action, it was overruled. Id. at 17 n.8, __ F.3d at __ n.8. 

 Our review over the issue whether jury instructions 

misstate a legal standard is plenary. Savarese v. Agress, 883 

F.2d 1194, 1202 (3d Cir. 1989) (citations omitted); United States 

v. Adams, 759 F.2d 1099, 1116 (3d Cir.), cert. denied, 474 U.S. 

906 (1985), and cert. denied, 474 U.S. 906 (1985), and cert. 

denied, 474 U.S. 971 (1985). Our task is to "'determine whether 

the charge, taken as a whole and viewed in light of the evidence, 

fairly and adequately submits the issue in the case to the 

jury.'" Adams, 759 F.2d at 1116 (quoting Ayoub v. Spencer, 550 

F.2d 164, 167 (3d Cir.), cert. denied, 432 U.S. 907 (1977)). 

Because New Jersey courts in applying the NJLAD generally follow 

the standards of proof applicable under the federal 

discrimination statutes, see McKenna v. Pacific Rail Service, 32 

F.3d 820, 827 (3d Cir. 1994) (predicting that the New Jersey 

Supreme Court would adopt the clarification for proving a federal 

pretext discrimination case set forth in St. Mary's Honor Ctr. v. 

Hicks, 113 S. Ct. 2742 (1993), to claims arising under the 

NJLAD); Grigoletti v. Ortho Pharm. Corp., 570 A.2d 903, 907 (N.J. 

1990), we agree with Abrams that the New Jersey Supreme Court 

would likely adopt our holding in Miller as the proper standard 

of proof for an age discrimination pretext claim under the NJLAD. 

The magistrate judge's instructions as to that claim were 
therefore proper.7 While we note that the instructions as to the 

ADEA claim may have required Abrams to demonstrate more than he 

was required to under the appropriate standard, Abrams has not 

cross-appealed on that ground and we therefore leave the judgment 

undisturbed as to the ADEA claim. Because Abrams filed only a 

protective cross-appeal as to his ADEA claim, and because we 

conclude below that none of the other grounds for reversal urged 

by Lightolier have merit, we do not reach Abrams's argument that 

his ADEA claim warranted an instruction under the standard of 

proof applicable to mixed-motives Price-Waterhouse cases. 

 IV. Evidentiary Rulings

 Lightolier argues that the magistrate judge erred in 

admitting certain evidence proffered by Abrams and in excluding 

certain evidence that it sought to introduce. We find that the 

evidence was properly ruled upon, or if it was admitted or 

excluded in error, that it did not affect a substantial right of 

Lightolier in this case. The district court's evidentiary 

rulings therefore provide no basis for reversing the jury verdict 

in this case. See Fed. R. Civ. P. 61.8 We also reject 

 

7. We also reject Lightolier's argument that the 

magistrate judge's NJLAD charge was otherwise improper because it 

required only a showing that age was a motivating factor in the 

employment decision. The charge clearly required a showing that 

age was a determinative factor and explained that this meant a 

showing of but-for cause was needed. The charge therefore 

incorporates the standard articulated in Miller. 

8. Rule 61 of the Federal Rules of Civil Procedure 

provides: 

 No error in either the admission or the 

exclusion of evidence . . . is ground for 
Lightolier's contention that the evidence does not support the 

verdict against it and we therefore conclude that the district 

court properly denied Lightolier's motion for judgment as a 

matter of law. 

 Lightolier takes issue with a number of evidentiary 

rulings made by the magistrate judge prior to and during trial. 

Two of these rulings concern the admission of age-based comments 

by Lightolier executives. A related ruling concerns the 

testimony of other Lightolier employees who claimed to have been 

the subject of age-based employment decisions by one of those 

decisionmakers. Another ruling concerns the admission of charts 

prepared by Abrams to represent Lightolier's internal 

organizational structure and the final ruling concerns the 

exclusion of Lightolier's evidence concerning its intent in 

discharging Abrams. 

 When the district court applies the appropriate legal 

standard, evidentiary rulings are subject to the trial judge's 

discretion and are therefore reviewed only for abuse of 

discretion. In re Merritt Logan, Inc., 901 F.2d 349, 359 (3d 

Cir. 1990); Government of V.I. v. Pinney, 967 F.2d 912, 914 (3d 

(..continued) 

granting a new trial or for setting aside a 

verdict or for vacating, modifying, or 

otherwise disturbing a judgment or order, 

unless refusal to take such action appears to 

the court inconsistent with substantial 

justice. The court at every stage of the 

proceeding must disregard any error or defect 

in the proceeding which does not affect the 

substantial rights of the parties. 

Fed. R. Civ. P. 61. 
Cir. 1992). Additionally, application of the balancing test 

under Federal Rule of Evidence 403 will not be disturbed unless 

it is "arbitrary and irrational." Bhaya v. Westinghouse Elec. 

Corp., 922 F.2d 184, 187 (3d Cir. 1990) (internal quotation and 

citations omitted), cert. denied, 501 U.S. 1217 (1991). 

Furthermore, under Federal Rule of Civil Procedure 61 errors in 

the admission or exclusion of evidence can not be grounds for 

reversal or a new trial if they constitute harmless error. 

Finally, when a party fails to timely object to the trial court's 

evidentiary rulings during the proceedings, those rulings are 

reviewed under the plain error standard. United States v. Brink, 

39 F.3d 419, 425 (3d Cir. 1994). 

 A. Evidence of Age-Based Comments and 

 Employment Decisions of Richard Kurtz

 Underlying Abrams's claim that he was discharged 

because of his age is his belief that during the 1980s there 

existed a corporate atmosphere at Lightolier unfavorable to older 

workers and that Richard Kurtz led this "youth movement." Kurtz 

was employed as a plant manager at Lightolier's Fall River 

facility and then as a corporate vice president. He was Abrams's 

supervisor during Abrams's last few months with the company. 

 During the trial, Lightolier objected to two types of 

evidence that Abrams introduced with regard to Kurtz: (1) 

evidence of discriminatory remarks made by Kurtz, and (2) the 

testimony of other older former Lightolier employees who alleged 
that they too had been mistreated by Kurtz. On appeal, 

Lightolier argues that admission of this evidence was improper 

because Kurtz was not a decisionmaker for purposes of Abrams's 

termination and because the evidence was highly prejudicial. We 

reject both arguments. 

 There was sufficient evidence from which a jury could 

reasonably conclude that Richard Kurtz was a decisionmaker for 

purposes of Abrams's discharge. We find it significant that 

Steven Klosk, a former Lightolier human resource manager, 

testified that in documents submitted to the New Jersey Division 

on Civil Rights in response to their investigation of a claim of 

age discrimination filed by Abrams, Lightolier indicated that a 

number of managers, including Kurtz, participated in the decision 

to discharge Abrams. App. 852-53. There was other evidence 

tending to show a connection between Kurtz and the decision to 

terminate Abrams as well.9 We thus have no trouble concluding 

that the jury could have reasonably found that Kurtz played a 

role in Lightolier's decision to discharge Abrams. Evidence that 

Kurtz harbored age-related animus would thus be relevant to 

 

9. This additional evidence included the following: 

evidence that Kurtz was Abrams's supervisor at the time of his 

termination; Kurtz's testimony that he had recommended to another 

Lightolier executive that the leadership of Team Purchasing be 

"rotated" and that he had suggested Doug Pedder as Abrams's 

replacement as chair of Team Purchasing; evidence that when 

Abrams's secretary was assigned to a new president, Kurtz and 

Steven Klosk refused to let Abrams hire a replacement and told 

him to use the typing pool; Abrams's testimony that after he 

fired a subordinate, Kurtz refused to let him fill that position; 

and Abrams's testimony that Kurtz told him in the spring of 1986 

that he would have no more real estate responsibilities. 
determining whether the discharge decision resulted from 

discriminatory motives. See Torre v. Casio, Inc., 42 F.3d 825, 

834 (3d Cir. 1994) (noting that evidence of age-biased comments 

by supervisor could lead to inference that termination decision 

was made because of plaintiff's age); Armbruster v. Unisys Corp., 

32 F.3d 768, 783 (3d Cir. 1994) (same). Indeed, we have held 

that discriminatory comments by nondecisionmakers, or statements 

temporally remote from the decision at issue, may properly be 

used to build a circumstantial case of discrimination. See

Lockhart v. Westinghouse Credit Corp., 879 F.2d 43, 54 (3d Cir. 

1989) (finding age-biased comment relevant even when made 

subsequent to plaintiff's termination); Roebuck v. Drexel Univ., 

852 F.2d 715, 733 (3d Cir. 1988) (upholding admissibility of 

discriminatory comment by decisionmaker made five years before 

denial of tenure). 

 Abrams's testimony that he had overheard Kurtz say to 

another employee "things would begin to hum around here when we 

got rid of the old fogies," App. 518,10 and the testimony of 

another Lightolier employee that she heard Kurtz refer to two 

plant managers as "a dinosaur" and "the old men," App. 712, were 

therefore relevant. For these same reasons, evidence as to 

Kurtz's attitude toward other older employees and the manner in 

which he treated them, was also relevant. See Fuentes v. 

Perskie, 32 F.3d 759, 765 (3d Cir. 1994) (circumstantial evidence 

 

10. Abrams testified that he understood "old fogies" to 

refer to senior management above Kurtz, not older employees in 

general. App. 611-12. 
of discrimination includes evidence "that the employer in the 

past had subjected [the plaintiff] to unlawful discriminatory 

treatment, that the employer treated other, similarly situated 

persons out of his protected class more favorably, or that the 

employer has discriminated against other members of his protected 

class or other protected categories of persons"); cf. Josey v. 

John Hollingsworth Corp., 996 F.2d 632, 641 (3d Cir. 1993) 

(noting that atmosphere in which a company makes its employment 

decision can be circumstantial evidence of discrimination). Both 

the comments and the evidence of how Kurtz treated older 

employees were probative of whether Kurtz harbored a 

discriminatory attitude against older workers, and if credited, 

that evidence made the existence of an improper motive for the 

discharge decision more probable. See Fed. R. Evid. 401 

(definition of relevant evidence). 

 Because we have concluded that this evidence was 

relevant, the only remaining question regarding admissibility is 

whether the magistrate judge should have excluded the evidence 

under Federal Rule of Evidence 403 because its probative value 

was outweighed by its prejudicial impact.11 The magistrate 

judge's determination of admissibility under Rule 403 is reviewed 

for abuse of discretion. Bhaya v. Westinghouse Elec. Corp., 922 

F.2d at 187. Because discriminatory comments by an executive 

connected with the decisionmaking process will often be the 

 

11. Lightolier does not argue that the evidence was 

excludable on any other basis. 
plaintiff's strongest circumstantial evidence of discrimination, 

they are highly relevant and a trial court's decision to admit 

such evidence should ordinarily be upheld. We perceive no basis 

for concluding that the magistrate judge's determination to admit 

Kurtz's age-related comments was an abuse of discretion in this 

case. 

 Lightolier also objected to the testimony of five 

former Lightolier employees who believed they had been mistreated 

by Kurtz because of their age. Lightolier objects that the 

testimony was highly prejudicial because it concerned treatment 

of employees other than Abrams and created the possibility that 

the jury would find against the employer on the basis of these 

accusations without finding that it had discriminated against 

Abrams. Although we find the so-called "testimonials" of former 

employees to be less probative of Kurtz's discriminatory attitude 

and more inflammatory than Kurtz's two age-based comments, we 

cannot conclude that the determination that its probative value 

outweighed its prejudicial impact was "irrational and 

arbitrary."12 See Bhaya v. Westinghouse Elec. Corp., 922 F.2d at 

 

12. Lightolier's reliance on Haskell v. Kaman Corp., 743 

F.2d 113 (2d Cir. 1984), is misplaced. In that case the Court of 

Appeals for the Second Circuit held that the testimony of six 

former employees had been admitted in error because their stories 

did not produce statistically significant evidence of a pattern 

and practice of discrimination and, thus, any probative value was 

outweighed by the prejudicial impact of "'a parade of witnesses, 

each recounting his contention that defendant has laid him off 

because of his age.'" Haskell, 743 F.2d at 122; see also

Moorehouse v. Boeing Co., 501 F. Supp. 390, 393-94 (E.D. Pa.), 

aff'd without op., 639 F.2d 774 (3d Cir. 1980). However, because 

the Haskell plaintiff had admitted the evidence to show a 

"pattern and practice" of discrimination, the court was not 
187. We therefore conclude that the admission of the evidence 

concerning Kurtz provides no basis for a new trial. 

 B. Testimony that Lightolier "Frowned On" Older Workers

 Lightolier also objected to the testimony of Milton 

Hinsch, a former purchasing manager. Hinsch was in his sixties, 

worked at the Norwich, Connecticut plant, and reported to Douglas 

Pedder, Director of Corporate Purchasing. There was no evidence 

that either Hinsch or Pedder had anything to do with the decision 

to terminate Abrams. However, Hinsch testified that in 

connection with his performance reviews, Pedder gave him the 

following explanation about company policy. 

 He did tell me that the company frowned 

on older people, that my raises wouldn't be 

as high as he would like them to be, and that 

the company looked at people with gray hair 

as being in a position where they couldn't do 

much about it because they probably couldn't 

get another job. 

App. 919. Hinsch further testified that there had been several 

discussions with Pedder of the same nature, usually at the time 

of his performance review, and that Pedder repeatedly expressed 

the sentiment that the company frowned on older workers. 

Although Pedder's statement was clearly an out-of-court 

statement, the magistrate judge admitted it under Federal Rule of 

Evidence 801(d)(2)(D), which defines as nonhearsay a statement 

(..continued) 

addressing whether the evidence was probative of a discriminatory 

attitude on the part of the employees' supervisor. See Haskell, 

743 F.2d at 120. 
made by a party's agent concerning a matter within the scope of 

the agent's employment. The magistrate judge concluded that 

Pedder was authorized to discuss Hinsch's salary and the 

company's employment policies with him. Lightolier argues that 

the statement should have been excluded as double hearsay outside 

the scope of Rule 801(d)(2)(D). 

 Where a supervisor is authorized to speak with 

subordinates about the employer's employment practices, a 

subordinate's account of an explanation of the supervisor's 

understanding regarding the criteria utilized by management in 

making decisions on hiring, firing, compensation, and the like is 

admissible against the employer. We so held in Zipf v. American 

Telephone & Telgraph Co., 799 F.2d 889, 894-95 (3d Cir. 1986), 

citing Rules 801(d)(2)(D) and 701. The Seventh Circuit Court of 

Appeals more recently so held in Hybert v. Hearst Corp., 900 F.2d 

1050, 1053 & n.6 (7th Cir. 1990). We perceive no double hearsay 

problem because we do not think the supervisor's explanation, if 

offered through the testimony of the supervisor, would be subject 

to a hearsay objection. 

 Lightolier relies primarily on Carden v. Westinghouse 

Electric Corp., 850 F.2d 996 (3d Cir. 1988). In Carden, this 

court reversed a jury verdict in an age discrimination case on 

the ground that a statement attributed to the plaintiff's 

supervisor had been admitted in error. The plaintiff had been 

told by his supervisor, in the context of not being promoted to a 

position he sought, that the supervisor "thought they wanted a 

younger person." Carden, 850 F.2d at 1001. Over the employer's 
in limine objection, the testimony was admitted. We found that 

the testimony involved "double hearsay" and that the plaintiff 

had not identified a basis for overcoming the hearsay objection 

to the supervisor's account of what the unidentified declarant 

had told the supervisor about the reason for not promoting the 

plaintiff. The statement of the unidentified declarant was being 

offered to show the reason for the particular employment decision 

affecting the plaintiff and, because the declarant was 

unidentified, there was no way of knowing whether he or she was 

authorized by the employer to make such a statement on this 

subject. Because this statement was the only evidence of 

discrimination supporting one of the two theories the jury could 

have chosen to support its verdict, we reversed and remanded for 

a new trial. 

 In Carden, the supervisor's statement was understood to 

refer to a specific declaration made to him about the reason 

underlying a particular employment decision and that declaration 

was offered for its truth without the required foundation. That 

is not the case here. The magistrate judge understandably viewed 

Pedder's statement as his opinion regarding company policy. This 

case is governed by Zipf, not by Carden. 

 

 C. Abrams's Organizational Charts

 Lightolier also argues on appeal that Abrams introduced 

"pattern and practice" evidence that was not relevant to his 

claim and highly prejudicial, and that the admission of this 

evidence requires a new trial. The objectionable evidence 
consists of two handwritten organizational charts that Abrams 

prepared from memory and which purported to contain the job 

titles and ages of the members of Lightolier's management team 

located at company headquarters at the level of vice president or 

above in 1982 and 1985 respectively, and a blow up of a chart 

that appeared in a magazine article written by William Blitzer as 

president of Lightolier which contained the names and job titles 

of Lightolier's upper level management, including Abrams. 

 Lightolier attacks this "statistical evidence" on two 

grounds: that Abrams's used the testimony of other witnesses to 

establish a statistical disparity in the treatment of older 

employees by describing what had happened to the employees listed 

on these charts, and that because the information on this charts 

was, as Abrams admitted, incomplete, the evidence was therefore 

misleading.13 Finally, Lightolier argues that the evidence 

should have been excluded because Abrams brought his claim as an 

individual treatment case and should therefore have been 

precluded from attempting to prove a "pattern and practice" of 

age discrimination. 

 We find Lightolier's arguments unpersuasive. 

Employment discrimination plaintiffs are not precluded from 

introducing statistical evidence as circumstantial evidence of 

 

13. On cross-examination Abrams admitted that the charts 

were incomplete. However, they were not intended to be and were 

not introduced as complete organizational charts of company 

management. For example, his handwritten charts only purported 

to show the managers at or above the level of vice president at 

Lightolier headquarters. 
discrimination in a disparate treatment case. Furnco Constr. 

Corp. v. Waters, 438 U.S. 567, 578 (1978); Bruno v. W.B. Saunders 

Co., 882 F.2d 760, 766-67 (3d Cir.) ("By contrast [to a classaction or pattern and practice case], in individual disparate 

treatment cases such as this, statistical evidence, which may be 

helpful, though ordinarily not dispositive, need not be so finely 

tuned." (internal quotation and citation omitted)), cert. denied, 

493 U.S. 1062 (1989). The cases cited by Lightolier are not to 

the contrary. Gilty v. Village of Oak Park, which Lightolier 

relies on for the proposition that "pattern and practice" 

evidence is irrelevant to an individual pretext claim, simply 

suggests that statistical evidence is only "'collateral to 

evidence of specific discrimination against the actual 

individual.'" Gilty, 919 F.2d 1247, 1252 (7th Cir. 1990) 

(quoting Williams v. Boorstin, 663 F.2d 109, 115 n.38 (D.C. Cir. 

1980), cert. denied, 451 U.S. 985 (1981)). The court in Gilty

did not suggest that such evidence is per se inadmissible. See

Gilty, 919 F.2d at 1253 n.7 (noting that because the court found 

plaintiff's statistical evidence of only collateral importance it 

did not have to rule on the employer's motion to strike). The 

other cases cited by Lightolier are similar; they note the 

relative unimportance of statistical evidence in an individual 

treatment case, but they do not establish a rule that statistical 

evidence is prohibited. See, e.g., King v. General Elec. Co., 

960 F.2d 617 (7th Cir. 1992); Babrocky v. Jewel Food Co. & Retail 
Meatcutters, 773 F.2d 857, 865 n.6 (1985).14 More importantly, 

the charts were not tendered as statistical evidence; they were 

used primarily as testimonial aids to describe the employees' 

positions relative to key decisionmakers. Furthermore, 

Lightolier had the opportunity to cross-examine Abrams as to the 

deficiencies or inaccuracies in his charts and did so vigorously. 

Finally, the only objection Lightolier made regarding the charts 

was to the inclusion of the ages on the handwritten charts, thus 

its objections to the admission of the charts in general is 

reviewed under the plain error standard. Fed. R. Evid. 103(d). 

The admission of these charts was not reversible error. 

 

14. The court's exclusion of statistical evidence in 

Haskell v. Kaman Corp., 743 F.2d 113, 120-21 (2d Cir. 1984), is 

distinguishable because the plaintiff in that case attempted to 

prove discrimination in part through the use of statistical 

disparity and his statistical evidence, because of sample size, 

etc., was faulty. 
 D. Evidence of Lightolier's Intent

 Lightolier's final argument with regard to the 

magistrate judge's evidentiary rulings is that the magistrate 

judge improperly excluded as inadmissible hearsay much of its 

evidence relating to its intent in terminating Abrams. The 

excluded evidence concerned statements made by Lightolier 

president, Michael Whelan, and others about the Midland 

litigation and Abrams's termination. Lightolier claims that this 

evidence was significant because it bolstered admitted testimony 

concerning how and when Whelan reached the decision to terminate 

Abrams, and because it contradicted Abrams's evidence that Kurtz 

was the Lightolier manager responsible for his termination. For 

example, Lightolier sought to introduce the testimony of a number 

of managers who would testify that Whelan had explained to them 

at an executive meeting that he was going to fire Abrams because 

of the Midland affair. The magistrate judge excluded this 

testimony as inadmissible hearsay. 

 Lightolier makes substantial arguments (1) that the 

statements of these witnesses were not hearsay because they were 

not offered to prove the truth of their content, but rather to 

show how early Whelan had made a decision to terminate Abrams; 

and (2) that, if hearsay, they were admissible under Federal Rule 

of Evidence 803(3) to show the speaker's state of mind. See, 

e.g., Keisling v. SER-Jobs for Progress, Inc., 19 F.3d 755 (1st 

Cir. 1994). We are not persuaded, however, that the exclusion of 

this evidence resulted in substantial prejudice. To the 

contrary, we are convinced that the exclusion was harmless 
because the out-of-court speakers, whose statements concerning 

Abrams's discharge others would testify to, were permitted to 

testify directly to what they had said and the excluded evidence 

was therefore only cumulative evidence as to Lightolier's 

intent.15 While it is true that the excluded testimony would 

have bolstered the speaker's credibility, we can not conclude 

that its exclusion was prejudicial to Lightolier's case. We are 

particularly hesitant to find prejudicial error when the admitted 

testimony was corroborative; Lightolier's witnesses all 

maintained that the termination decision was made by Whelan well 

prior to the termination of the Midland litigation and was based 

on the facts learned in that litigation, rather than on Abrams's 

age.16 Despite this evidence, the jury concluded that age was in 

fact a determinative cause of the discharge and we will not 

disturb that finding on this basis. 

 

 

15. For example, Whelan was permitted to testify as to what 

he said in the executive meeting referenced above and the 

managers in attendance were permitted to testify as to what they 

had said prior to and in response to Whelan's explanation. 

16. While we are persuaded that Kurtz's testimony that he 

heard of the decision to terminate Abrams from someone else could 

have been admitted as nonhearsay as it was not offered for the 

truth of the matter asserted (that Abrams was being terminated) 

but as evidence that Whelan, and not Kurtz, had made the 

termination decision, we find this exclusion too was harmless. 

Kurtz was permitted to testify that he did not make the 

termination decision and that he learned of the decision in a 

conversation with others, App. 1386, and Whelan was permitted to 

testify that he was in fact the person who had made the decision. 
 E. Sufficiency of the Evidence

 In addition to Lightolier's objections to specific 

evidence, it argues on appeal that the evidence is insufficient 

to support the jury verdict. A jury verdict will not be 

overturned "unless the record is 'critically deficient of that 

minimum quantum of evidence from which a jury might reasonably 

afford relief.'" Rotondo v. Keene Corp., 956 F.2d 436, 438 (3d 

Cir. 1992) (quoting Dawson v. Chrysler Corp., 630 F.2d 950 (3d 

Cir. 1980) (internal quotation omitted), cert. denied, 450 U.S. 

959 (1981)). Evidence that should have been admitted, but was 

not, may be considered as well. Walter v. Holiday Inns, Inc., 

985 F.2d 1232, 1238 (3d Cir. 1993). 

 We understand Lightolier to argue that the record, 

devoid of the evidence it maintains was improperly admitted and 

bolstered by the evidence that it maintains should have been 

admitted, would not be sufficient to uphold the jury verdict 

against it. While we have already concluded that the magistrate 

judge's evidentiary rulings were not reversible error, we also 

find that the record would support the jury's conclusion that age 

was a determinative factor in the decision to terminate Abrams 

even if some of the objectionable evidentiary rulings had been 

otherwise. Had the magistrate judge admitted the cumulative 

evidence of Lightolier's intent (evidence that we concluded might 

have been excluded in error but which was not shown to have been 

anything other than harmless error), we would still find that the 

record was not "critically deficient of that minimum quantum of 

evidence from which a jury might reasonably afford relief". 
Rotondo v. Keene Corp., 956 F.2d at 438 (internal quotation and 

citation omitted) (internal quotation omitted)). Significantly, 

in addition to evidence that Kurtz harbored age animus and that 

Abrams was replaced by a younger employee, Abrams offered 

testimony to show that Lightolier's proffered reason for his 

discharge was pretextual. Abrams introduced evidence that after 

Lightolier became aware of Abrams's misjudgment and alleged 

wrongdoing in connection with the Midland contract, they did not 

terminate him, but rather gave him additional responsibilities 

and salary increases throughout his remaining years with the 

company. Therefore, the record would still contain evidence from 

which the jury could conclude, as it did, that Lightolier's 

explanation for the discharge was pretextual and that Abrams was 

terminated because of his age. The district court therefore did 

not abuse its discretion in refusing to grant Lightolier's motion 

for judgment as a matter of law or for a new trial. 

 V. Damages and Attorneys' Fees

 In addition to raising issues as to its liability, 

Lightolier also appeals the back-pay and the attorneys' fees 

awards. Lightolier maintains that the jury award for back pay 

should have been reduced by the amount of taxes that would have 

been payable had the same amount been earned by Abrams as income 

and that the award of attorneys' fees should have been reduced 

both to reflect an amount proportional to the damages award and 

for efforts expended on unsuccessful claims. 
 The question of what standard to apply in calculating 

attorneys' fees or costs is a legal question and therefore 

subject to plenary review. Sosebee v. Rath, 893 F.2d 54, 55 (3d 

Cir. 1990). The reasonableness of the amount of the award is 

reviewed only for abuse of discretion if the correct legal 

standard is applied and the findings of fact are not clearly 

erroneous. Northeast Women's Center v. McMonagle, 889 F.2d 466, 

475 (3d Cir. 1989), cert. denied, 494 U.S. 1068 (1990). An abuse 

of discretion will have occurred if no reasonable person would 

adopt the trial court's view. Rode v. Dellarciprete, 892 F.2d 

1177, 1182 (3d Cir. 1990). 

 A. Back-pay Award

 Lightolier sought a reduction in the back-pay award in 

its motion for judgment as a matter of law and, in denying that 

motion, the district court held that a back-pay award under the 

NJLAD likely represented nontaxable income and that as between a 

NJLAD plaintiff and a discriminating employer, the plaintiff 

should receive the benefit of a damages award that may not be 

taxable. Abrams v. Lightolier, 841 F. Supp. 584, 598 (D.N.J. 

1994). Because the district court's holding rested on its 

determination of the legal standard for NJLAD back-pay awards, 

our review is plenary. We will affirm. 

 During trial, Lightolier's expert calculated Abrams's 

lost wages using a twenty-eight percent deduction for taxes that 

would have been owing on the award if it had been earned by 

Abrams as income. Abrams's expert testified to an amount that 
was based on gross income and on cross-examination testified that 

to account for tax liability that figure should be reduced by 

twenty percent, with a five percent margin of error. The 

district court instructed the jury regarding damages for back pay 

in the following manner: 

 Now I am going to explain to you back 

pay and front pay. 

 In calculating the amount of back-pay 

damages to award to the Plaintiff, if you 

decide he is entitled to such an award 

because he was unlawfully discharged, you 

should first determine the period for which 

you will award such damages. 

 * * * 

 . . . Once you have determined the period, if 

any, for which you will award back-pay 

damages, you should next proceed to determine 

the gross amount of wages Plaintiff would 

have earned and the value of the fringe 

benefits Plaintiff would have received during 

that period had he not been discharged. 

 

 Finally, once you have determined these 

gross amounts, you should deduct the 

following amount to arrive at a final figure 

for back-pay damages. 

 Wages or salary or other income actually 

earned or received by the Plaintiff during 

that period. 

App. 121-22 (emphasis added). When the court finished charging 

the jury, Lightolier's counsel objected to the instruction that 

gross pay should be used to determine the back-pay award. App. 

129. The district court refused to alter its charge. 

 In its post-trial motions, Lightolier requested that 

the district court reduce the back-pay award to reflect what 
would have been Abrams's tax liability on the award if it had 

been earned as income.17 Although the district court concluded 

that the back-pay award would not be taxable, it refused to 

reduce it, determining that as between the plaintiff and the 

employer, the plaintiff should reap the benefit of the exclusion 

of the award from income for federal income tax purposes. 

 Lightolier argues that the magistrate judge erred as a 

matter of law in instructing the jury that a back-pay award 

should be based on gross income, and in refusing to reduce the 

award to reflect the absence of tax liability. Lightolier 

maintains that the award is nontaxable and that Abrams will thus 

obtain a windfall by receiving back-pay based on gross income 

without sustaining any tax liability on that amount. Lightolier 

argues that Abrams will therefore be in a better financial 

position than if he had not been discriminated against and seeks 

an adjustment in the back-pay award to reflect Abrams's net 

income or a new trial on damages. Because we find that the 

current law regarding the tax liability on a NJLAD back-pay award 

is not as clear as Lightolier posits, we predict that a New 

Jersey court would uphold an NJLAD back-pay award which was based 

 

17. When, during deliberations, the jury asked whether an 

award to Abrams would be taxable, the magistrate judge again 

explained that a back-pay award should be calculated on gross 

income and that a front-pay award should be calculated on net 

income. App. 1652. As clarified by Lightolier's post-trial 

motions and the district court's resolution of them, the issue 

preserved for appeal was whether net or gross wages should have 

been considered by the jury in awarding back-pay damages, not 

whether the jury should have been instructed as to Abrams's tax 

liability on the award. See Lightolier's Reply Br. at 45 n.33. 
on gross income and we will therefore affirm the back-pay award 

in this case. 

 We find no clear answer in the law of the Supreme 

Court, this circuit, or the New Jersey courts as to whether an 

age discrimination back-pay award under the NJLAD represents 

taxable income. While guidance is provided by the Supreme 

Court's decision in United States v. Burke, 112 S. Ct. 1867, 1873 

(1992), we believe the particular question posed by this appeal 

remains unanswered. 

 In Burke, the Court held that a Title VII back-pay 

award did not fit the exemption for nontaxable personal injury 

damages under the Internal Revenue Code because, while common law 

tort claims encompass "damages for lost wages, medical expenses, 

and diminished future earning capacity on account of the injury, 

[and] also [damages] for emotional distress and pain and 

suffering," as well as punitive or exemplary damages under 

appropriate circumstances, a Title VII back-pay award was 

intended to compensate for "'legal injuries of an economic 

character.'"18 Id. at 1873 (quoting Albemarle Paper Co. v. 

Moody, 422 U.S. 405 (1975)). 

 

18. Under section 104(a)(2) of the Internal Revenue Code 

"the amount of any damages received (whether by suit or agreement 

and whether as lump sums or as periodic payments) on account of 

personal injuries or sickness" is excludable from taxable income. 

26 I.R.C. § 104(a)(2). We note that amendments to Title VII made 

by the Civil Rights Act of 1991 allow a plaintiff to recover 

compensatory and punitive damages and thus throw doubt on the 

continued validity of the Burke holding. See Drase v. United 

States, 866 F. Supp. 1077, 1079 n.1 (N.D. Ill. 1994). 
 The federal statute most analogous to the NJLAD in this 

case is the Age Discrimination in Employment Act. However, it is 

currently unclear whether the Court's holding in Burke applies as 

well to back-pay awards under the ADEA which, unlike pre-1991 

Civil Rights Act Title VII claims, provides for an award of 

punitive damages. Our own precedent, decided prior to Burke, 

holds that such an award is not subject to federal income tax 

under the personal injury damages exception. See Rickel v. 

Commissioner of Internal Revenue, 900 F.2d 655, 658-63 (3d Cir. 

1990) (holding that the ADEA provides a tort-like remedy and that 

ADEA damages should therefore be treated like personal injury 

awards under the Internal Revenue Code). Subsequent to the 

Supreme Court's decision in Burke, other courts have also held 

that ADEA awards are not taxable, distinguishing Burke on the 

ground that ADEA damages are different in substance from the 

damages available under Title VII prior to the 1991 Civil Rights 

Act. See, e.g., Schmitz v. Commissioner of Internal Revenue, 34 

F.3d 790 (9th Cir. 1994) (back-pay and liquidated damages); 

Purcell v. Seguin State Bank & Trust Co., 999 F.2d 950 (5th Cir. 

1993) (back-pay award); Burns v. Commissioner of Internal 

Revenue, T.C. Memo. 1994-284, 67 T.C.M. (CCH) 3116 (T.C. 1994) 

(back-pay and liquidated damages); Bennett v. United States, 30 

Fed. Cl. 396 (Ct. Cl. 1994) (holding that back-pay award is 

nontaxable income and liquidated damages award is taxable). 

Other courts, however, have extended Burke's holding to ADEA 

awards and have found them to be taxable income. See, e.g.,

Commissioner of Internal Revenue v. Schleier, No. 22909-20 (U.S. 
T.C. July 7, 1993) (liquidated damages), aff'd, 26 F.3d 1119 (5th 

Cir. 1994) (table), cert. granted, 115 S. Ct. 507 (1994); Downey 

v. Commissioner of Internal Revenue, 33 F.3d 836 (7th Cir. 1994) 

(settlement award of back-pay and liquidated damages), rev'g 100 

T.C. 624, No. 40 (1993); Shaw v. United States, 853 F. Supp. 1378 

(M.D. Ala. 1994) (liquidated damages); Maleszewiski v. United 

States, 827 F. Supp. 1553 (N.D. Fla. 1993) (settlement award). 

We note that the Supreme Court has recently granted certiorari in 

Commissioner of Internal Revenue v. Schleier, 115 S. Ct. 507 

(1994), to answer just this question. 

 Where there remains some uncertainty as to whether an 

employee will ultimately have to pay taxes on a discrimination 

claim award, we are confident that the New Jersey courts would 

not require that the award be calculated on net income. Cf.

Wachstein v. Slocum, 625 A.2d 527, 536-37 (N.J. Super. Law Div. 

1993) (holding that a jury instruction regarding the nontaxable 

nature of a damage award is not required in claim for retaliatory 

transfer brought under Title VII and NJLAD because law after 

Burke was still unsettled as to whether the award was subject to 

tax liability), certif. denied, 636 A.2d 521 (N.J. 1993). To 

hold otherwise where the law is unclear, places the risk of tax 

liability on the prevailing plaintiff rather than on the 

discriminating employer. That result would not be in keeping 

with the broad remedial policies behind the NJLAD.19 See McKenna 

 

19. Furthermore, we note that it is not altogether clear 

that the nontaxable nature of a back-pay award mandates the use 

of gross income. The parties have failed to cite, and our 

research has likewise failed to uncover, any New Jersey cases 
v. Pacific Rail Service, 32 F.3d 820, 827-28 (3d Cir. 1994) 

(discussing legislative policy). We therefore conclude that the 

district court did not err in instructing the jury to consider 

gross wages in determining Abrams's back-pay award under the 

NJLAD. 

 B. Attorneys' Fees Award

 Under the NJLAD, reasonable attorneys' fees are 

available to a prevailing plaintiff as part of costs. New Jersey 

Stat. Ann. § 10:5-27.1 (West 1993). While the NJLAD does not 

provide further guidance in calculating a proper award, New 

Jersey courts have followed the rules established under the 

federal Civil Rights Attorney's Fees Award Act of 1976, 42 U.S.C. 

§ 1988, in awarding fees pursuant to the NJLAD. See, e.g., Robb 

v. Ridgewood Bd. of Educ., 635 A.2d 586 (N.J. Super. Ct. Ch. Div. 

(..continued) 

indicating that either gross or net income should be used under 

such circumstances. This issue has engendered some disagreement 

in the federal courts as well. Contrast Johnston v. Harris 

County Flood Control Dist., 869 F.2d 1565, 1580 (5th Cir. 1989) 

(holding that nontaxable back-pay award under Title VII should 

"ideally" reflect net income), cert. denied, 493 U.S. 1019 

(1990); Purcell v. Seguin State Bank & Trust Co., 999 F.2d 950, 

960-61 (5th Cir. 1993) (holding that an ADEA back-pay award more 

than twice the amount of net lost wages was excessive because the 

award is not taxable and a reduction to reflect net income was 

therefore proper) with Redfield v. Insurance Co. of North 

America, 940 F.2d 542, 547-48 (9th Cir. 1992) (holding that 

although an ADEA back-pay award is not subject to income tax 

liability, an employer may not refuse to pay an ADEA judgment in 

full on the ground that the amount it withheld reflected the 

amount that the plaintiff would have had to pay as income tax if 

the award had been earned as income); Klein v. Secretary of 

Transp., 807 F. Supp. 1517, 1525 (E.D. Wash. 1992) (following 

Redfield and refusing to reduce ADEA back-pay damages to account 

for tax withholding). 
1993); see also McKenna v. Pacific Rail Serv., 817 F. Supp. 498, 

518-19 (D.N.J. 1993) (using federal caselaw under § 1988 as a 

guide to attorneys' fee claim under NJLAD), rev'd in part on 

other grounds, 32 F.3d 820 (3d Cir. 1994). 

 Lightolier contends that the attorneys' fees award was 

improper in this case because it exceeded the amount of damages 

awarded to Abrams and because it did not properly reflect the 

time spent on claims on which Abrams did not succeed. We find 

both arguments to be without merit. 

 While the amount of the compensatory damages award may 

be taken into account when awarding attorneys' fees to a civil 

rights plaintiff, there is no rule that the fees award may be no 

larger than the damages award. Hensley v. Eckerhart, 461 U.S. 

424 (1983) (rejecting a rule that proportionality of a damages 

award and attorneys' fees award is required). On the contrary, 

the degree of the plaintiff's success will determine the 

appropriate attorneys' fee award. See Farrar v. Hobby, 113 S. 

Ct. 566, 574 (1992) (citing Hensley v. Eckerhart, 461 U.S. 424 

(1983)). The Supreme Court's recent explanation in Farrar that a 

federal civil rights plaintiff who obtains only nominal damages 

is not entitled to an attorneys' fees award, does not abrogate 

this rule. In Farrar, the Court noted that nominal damages 

reflect a vindication of the plaintiff's procedural due process 

rights but likewise reflect the fact that the plaintiff was 

unable to prove she had suffered any compensable injuries. In 

such a case, attorneys' fees are improper because they do not 
reflect the plaintiff's success. Farrar, 113 S. Ct. at 575.20 

Lightolier's citation to Farrar therefore does not support its 

argument that the award of attorneys' fees in this case 

($546,379.59) was improper because it was greater than the 

damages award ($473,953.00). The New Jersey cases cited by 

Lightolier are likewise unavailing, as they simply restate or 

expound on the Hensley rule, or do not concern attorneys' fees 

for discrimination claims. See, e.g., Singer v. State, 472 A.2d 

138 (N.J.), cert. denied, 469 U.S. 832 (1984) (applying Hensley

to a § 1983 claim). We therefore reject Lightolier's 

proportionality argument as a misstatement of the law. 

 Lightolier also argues that the magistrate judge erred 

in not reducing the attorneys fees award to reflect time spent by 

Abrams's counsel on unsuccessful claims. Lightolier is correct 

that a court is to consider the amount of time plaintiff's 

counsel has spent on unsuccessful claims in determining the 

appropriate attorneys' fees award. See Robb v. Ridgewood Bd. of 

Educ., 635 A.2d at 591 (where claims are distinct, time spent on 

unsuccessful claims should not be awarded, but where claims 

"'involve a common core of facts' or are 'based on related legal 

theories'" the trial court does not have to exclude all time 

spent on unsuccessful claims) (quoting Hensley, 461 U.S. at 435). 

However, when the trial court applies the correct legal standard, 

 

20. In Farrar, the jury found a conspiracy to deprive the 

plaintiffs of their constitutional rights, but found there was no 

evidence that any injuries were caused by this civil rights 

violation. 113 S. Ct. at 575. 
the court has discretion in determining the actual fees award. 

Hensley, 461 U.S. at 437; Blum v. Witco Chem. Corp., 829 F.2d 

367, 378 (3d Cir. 1987). Based on our review of record, we are 

convinced that the magistrate judge carefully considered the 

claims on which Abrams did not succeed and made a reasoned 

judgment that the time spent on these claims did not justify a 

reduction in the fees award.21 Finding no abuse of discretion, 

we will affirm the attorneys' fees award. 

 VI. Abrams's Cross-Appeal Regarding the Award of Costs

 In conjunction with his motion for an award of 

attorneys's fees under the NJLAD, Abrams sought an award of costs 

and out-of-pocket expenses totaling $39,834.92, for items such as 

deposition transcripts, trial transcripts, travel, photocopies, 

and other litigation expenses. The district court denied the 

bulk of these expenses and limited Abrams's recovery to $240.00, 

representing those items enumerated as taxable costs under 28 

U.S.C. § 1920.22 The district court limited the allowable costs 

 

21. The magistrate judge concluded that the amount of time 

spent on some of the claims was insignificant and that the facts 

underlying other claims were closely tied to Abrams's NJLAD 

claim. See, e.g., App. 1666-67 ("I don't think there ought to be 

a reduction for unsuccessful claims. . . . The claims that were 

unsuccessful really don't represent any specific component of 

time or effort in this case. In other words, in order to obtain 

a verdict that they obtained on the LAD claim, they had to 

litigate everything else."). 

22. 28 U.S.C. § 1920 provides: 

 A judge or clerk of any court of the 

United States may tax as costs the following: 
on the ground that Federal Rule of Civil Procedure 54(d)(1), 

which incorporates 28 U.S.C. § 1920, limits the award of out-ofpocket expenses in a federal diversity action. The district 

court also concluded that Abrams had received sufficient 

remuneration for the litigation through the generous attorneys' 

fees award and that Lightolier should therefore not be 

responsible for any additional expenses.23 We conclude that the 

(..continued) 

 (1) Fees of the clerk and marshal; 

 (2) Fees of the court reporter for 

all or any part of the stenographic 

transcript necessarily obtained for use 

in the case; 

 (3) Fees and disbursements for 

printing and witnesses; 

 (4) Fees for exemplification and 

copies of papers necessarily obtained 

for use in the case; 

 (5) Docket fees under section 1923 

of this title; 

 (6) Compensation of court appointed 

experts, compensation of interpreters, 

and salaries, fees, expenses, and costs 

of special interpretation services under 

section 1828 of this title. 

 A bill of costs shall filed in the case 

and, upon allowance, included in the judgment 

or decree. 

23. The magistrate judge gave the following explanation in 

denying the majority of out-of-pocket expenses for which Abrams 

sought reimbursement. 

 [E]ven if I were to consider them as 

legitimate items of costs, it is not 

reasonable to expect the defendant to 

reimburse Mr. Abrams for all of this stuff, 

transportation and parking, secretarial 
district court applied the incorrect legal standard and will 

therefore vacate the award of costs and remand for application of 

the correct legal standard. 

 Abrams's request for costs presents an intriguing 

choice of law problem. Where there is a statutory provision 

shifting attorneys' fees and costs in a state statute creating 

the plaintiff's cause of action, a federal court exercising 

diversity or supplemental jurisdiction over that claim should, 

under Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), apply the 

state provision shifting fees and costs in the absence of a 

controlling federal statute, rule, or policy. E.g., Security 

Mut. Life Ins. Co. of New York v. Contemporary Real Estate 

Assoc., 979 F.2d 329 (3d Cir. 1992); McAdam v. Dean Witter 

(..continued) 

assistance, binders, dividers, messenger 

service, paralegal costs--which I believe I 

have already awarded [as part of the 

attorneys' fee award]--meals, telephone 

calls. The only thing that I believe to be 

debatable here is photocopying and 

depositions. But the depositions under the 

federal rules are not reimbursable because 

they['re] about discovery depositions. . . . 

* * * 

 That's the way you tried cases and 

you're getting paid for trying the case, Ms. 

Moses. I am awarding -- I am permitting 

costs to be added to this in the aggregate of 

clerk's fees and the attendance fees of 

witnesses embraced by 28 U.S.C. § 1821. . . . 

 The other request for reimbursement of 

costs is denied. 

App. 1675-76. 
Reynolds, 896 F.2d 750, 774-75 (3d Cir. 1990). On the other 

hand, under Hanna v. Plummer, 380 U.S. 460 (1965), where there is 

a valid applicable Federal Rule of Civil Procedure, it is to be 

applied by a federal court even where the plaintiff's claim is 

based on state law. 

 Rule 54(d)(1) of the Federal Rules of Civil Procedure 

requires the clerk of the court to award certain litigation 

expenses to the prevailing party as a matter of course. These 

routine court "costs" are listed in 28 U.S.C. § 1920, and this 

assessment as a matter of course is made whether the plaintiff's 

underlying claim is federal or state. Under the rules of Erie

and Hanna v. Plummer, Rule 54(d)(1) will thus trump a state cost 

shifting provision with which it conflicts. Cf. Exxon Corp. v. 

Burglin, 42 F.3d 948, 950-52 (5th Cir. 1995) (finding that 

Alaska procedural rule that allows at least minimal recovery of 

attorneys' fees in every civil appeal conflicts with Federal Rule 

of Appellate Procedure 38 which permits recovery of fees only 

when appellee successfully defends a frivolous appeal and holding 

that federal rule must therefore apply in diversity action). 

 There is, however, no federal statute or rule providing 

the rule of decision when a federal court is asked to award 

litigation expenses other than those enumerated as section 1920 

costs. Rule 54(d)(2) recognizes the possibility of awards of 

"attorney's fees and related non-taxable expenses" and 

establishes a procedure for asserting a right to such an award. 

This rule does not provide a rule of decision, however. Rather, 
it and the accompanying advisory committee comment recognize that 

there must be another source of authority for such an award.24

 The reference in Rule 54(d)(2) to another source of 

authority is consistent with the general federal caselaw rule 

that there is no fee or cost shifting except as authorized by 

statute or rule. Alyeska Pipeline Serv. Co. v. Wilderness 

Society, 421 U.S. 240 (1975). That source of authority need not 

be federal law, however. Neither Alyeska nor Rule 54(d)(2), 

precludes a federal court from looking to state law to determine 

the rule of decision as to attorneys' fees in a state law case, 

and Erie requires it to do so. Accordingly, the district court 

should have looked to New Jersey law to determine what nontaxable 

expenses related to attorneys' fees were authorized in this case. 

 Section 10:5-27.1 of the New Jersey Statutes Annotated 

(West 1993), a provision of the NJLAD, provides: 

 

24. Rule 54(d)(2) provides: 

 Claims for attorneys' fees and related 

non-taxable expenses shall be made by motion 

unless the substantive law governing the 

action provides for the recovery of such fees 

as an element of damages to be proved at 

trial. 

Commentary to the 1993 amendment which added paragraph (d)(2), 

clarifies that this new subsection 

 establishes a procedure for presenting claims 

for attorneys' fees, whether or not 

denominated as "costs." It applies also to 

requests for reimbursement of expenses, not 

taxable as costs, when recoverable under 

governing law incident to the award of fees. 

Rule 54(d) advisory committee's note (1993). 
 In any action or proceeding brought 

under this act, the prevailing party may be 

awarded a reasonable attorney's fee as part 

of the cost, provided however, that no 

attorney's fee shall be awarded to the 

respondent unless there is a determination 

that the charge was brought in bad faith. 

New Jersey thus authorizes an award of an "attorney's fee as part 

of the cost," using the exact same wording as the federal civil 

rights fee shifting statute, 42 U.S.C. § 1988, and the Title VII 

fee shifting provision, 42 U.S.C. § 2000e-5(k). 

 We have found no helpful New Jersey Supreme Court or 

Appellate Division cases construing N.J. Stat. Ann § 10:5-27.1. 

However, these courts, as the District Court for the District of 

New Jersey has recently noted in a similar context, "generally 

look to cases interpreting the federal civil rights laws in 

construing the [NJ]LAD." McKenna v. Pacific Rail Serv., 817 

F.Supp. 498, 518-19 (D. N.J. 1993), rev'd in part on other 

grounds, 32 F.3d 820 (3d Cir. 1994). We predict that the Supreme 

Court of New Jersey would do so here, particularly in light of 

the virtual identity of the relevant texts. 

 In West Virginia University Hospitals, Inc. v. Casey, 

499 U.S. 83 (1991), the Supreme Court of the United States held 

that the word "costs" in section 1988 referred to the taxable 

costs referenced in Rule 54(d)(1) and enumerated in 28 U.S.C. § 

1920. We predict that the Supreme Court of New Jersey would read 

"cost" in N.J. Stat. Ann. § 10.5-27.1 to refer to the costs 
recoverable by the prevailing party as a matter of course 

(assuming no judicial directive to the contrary), i.e. those 

costs enumerated in N.J. Stat. Ann. § 22A:2-8 (West 1969).25 

That statute provides no authority for an award of out-of-pocket 

litigation expense other than a specified list of items similar 

to those listed in 28 U.S.C. § 1920.26 Florczak v. United Jersey 

Bank, 591 A.2d 1023, 1024 (N.J. Super. Ct. App. Div. 1991). 

 

25. Rule 4:42-8(a) of the New Jersey Court Rules provides: 

"Unless otherwise provided by law, these rules or court order, 

costs shall be allowed as of course to the prevailing party." 

26. N.J. Stat. Ann § 22A:2-8 provides: 

 A party to whom costs are awarded or 

allowed by law or otherwise in any action, 

motion or other proceeding, in the Law 

Division or Chancery Division of the Superior 

Court is entitled to include in his bill of 

costs his necessary disbursements, as 

follows: 

 The legal fees of witnesses, including 

mileage for each attendance, masters, 

commissioners and other officers; 

 The costs of taking depositions when 

taxable, by order of the court; 

 The legal fees for publication where 

publication is required; 

 The legal fees paid for a certified copy 

of a deposition or other paper or document, 

or map, recorded or filed in any public 

office, necessarily used or obtained for use 

in the trial of an issue of fact or the 

argument of an issue of law, or upon appeal, 

or otherwise; 

 Sheriff's fees for service of process or 

other mandate or proceeding; 
 This leaves us with the issue of whether the New Jersey 

Supreme Court would interpret the phrase "a reasonable attorney's 

fee" broadly enough to include the expenses which Abrams claimed 

but was denied by the district court. Some, like his claim for 

his own personal expenses in traveling to attend the deposition 

of another witness, clearly cannot be squeezed into that rubric. 

See A. J. Tenwood Assoc. v. Orange Senior Citizens Housing Co., 

491 A.2d 1280, 1288 (N.J. Super. Ct. App. Div.), certif. denied, 

501 A.2d 976 (N.J. 1985). In considering Abrams's other claims, 

however, we believe that the New Jersey Supreme Court would look 

to the United States Supreme Court's construction of "attorney's 

fees" in section 1988. 

 In Missouri v. Jenkins, 491 U.S. 274 (1989), the Court 

was presented with the issue of whether a fee for the work of law 

clerks and paralegals could be part of "a reasonable attorney's 

fee" within the meaning of section 1988 and, if so, whether the 

"fee" should be at the market rate charged to private clients or 

limited to the out-of-pocket cost to the attorney. The Court 

held in part: 

 Clearly, a "reasonable attorney's fee" cannot 

have been meant to compensate only work 

performed personally by members of the bar. 

Rather, the term must refer to a reasonable 

fee for the work product of an attorney. 

(..continued) 

 All filing and docketing charges paid to 

the clerk of court; 

 Such other reasonable and necessary 

expenses as are taxable according to the 

course and practice of the court or by 

express provision of law, or rule of court. 

 
Thus, the fee must take into account the work 

not only of attorneys, but also of 

secretaries, messengers, librarians, 

janitors, and others whose labor contributes 

to the work product for which an attorney 

bills her client; and it must also take 

account of other expenses and profit. The 

parties have suggested no reason why the work 

of paralegals should not be similarly 

compensated, nor can we think of any. 

Missouri v. Jenkins, 491 U.S. at 285. The Court further held 

that recovery should be at the market rate billed to private feepaying clients so long as the rate used to compensate the 

attorney was the community rate charged by an attorney who billed 

separately for the work of paralegals and law clerks. Id. at 

288-89. The Court thereby avoided the possibility of double 

payment that would occur if these other costs were subsumed, for 

example as part of ordinary overhead, in the attorney's hourly 

rate. 

 The types of expenses available as part of a reasonable 

attorney's fee is not, however, limitless. We know from West 

Virginia University Hospital that the reading given "attorney's 

fee" in Jenkins, does not include fees paid for expert witnesses 

and other expenses that have traditionally been considered a 

category of litigation expenses distinct from fees payable for 

the legal services of the litigating attorney. Thus, it includes 

only those litigation expenses that are incurred in order for the 

attorney to be able to render his or her legal services. Under 

these rules, the following are generally recoverable under 

section 1988 when it is the custom of attorneys in the local 

community to bill their clients separately for them: 
 (a) reproduction expenses; 

 (b) telephone expenses of the attorney; 
 (c) travel time and expenses of the attorney; 

 (d) postage. 

Harris v. Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994); Associated 

Builders & Contractors of La., Inc. v. Orleans Parish School Bd., 

919 F.2d 374, 380 (5th Cir. 1990); Ramos v. Lamm, 713 F.2d 546, 

559 (10th Cir. 1983); Northcross v. Board of Educ., 611 F.2d 624, 

639 (6th Cir. 1979), cert. denied, 447 U.S. 911 (1980), and cert. 

denied, 477 U.S. 911 (1980); Dickinson v. Indiana State Election 

Bd., 817 F. Supp. 737, 752 (S.D. Ind. 1992). 

 We predict the Supreme Court of New Jersey would adopt 

this same approach. Some of the out-of-pocket expenses for which 

Abrams sought reimbursement consisted of these types of 

recoverable expenses. The district court therefore erred in 

denying recovery because these items were not listed in 28 U.S.C. 

§ 1920.27 We therefore vacate the award of costs and remand to 

the district court for reconsideration. 

 

VII. 

 The district court properly instructed the jury as to 

the standard of proof for a pretext claim of age discrimination 

under the NJLAD by requiring that Abrams prove that his age was a 

 

27. To the extent the district court's attorneys' fees 

award included some of the claimed expenses as overhead, 

compensating Abrams for these expenses directly will result in a 

double recovery. Because the district court is in the best 

position to know which billable expenses it has already included 

in the attorneys' fees award, we leave it to the district court's 

discretion to determine for which out-of-pocket expenses, if any, 

Abrams has already been compensated. 
determinative factor and a but-for cause of the decision to 

terminate him. Likewise, none of the court's evidentiary rulings 

warrant reversal of the jury verdict. We affirm the judgment in 

Abrams's favor on the NJLAD claim and the damages and attorneys' 

fees award in his favor. We remand only as to the award for 

costs and out-of-pocket expenses and instruct the district court 

to recalculate the proper cost award consistent with this 

opinion.