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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

DAWN LOESCH, :

:

Plaintiff, : CIVIL ACTION

:

vs. : No. 05-cv-0578

:

CITY OF PHILADELPHIA, :

:

Defendant. :

MEMORANDUM AND ORDER

Joyner, J. June 19, 2008

Presently before the Court are Plaintiff’s Motion to Mold

Verdict and for Counsel Fees (Docs. 69, 87), Defendant’s Response

(Doc. No. 75), and Plaintiff’s Reply (Doc. No. 78). For the

reasons set forth below, the Court GRANTS Plaintiff’s Motion and

awards her attorney’s fees, prejudgment interest, and damages

reflecting the negative tax consequences of receiving her lost

wages in a lump sum.

I. Background

On February 4, 2005, Plaintiff commenced this action by

filing her Complaint claiming that Defendant City of Philadelphia

violated Title VII of the Civil Right Act of 1964, 42 U.S.C. §

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2000e et seq., and the Pennsylvania Human Relations Act, 43 Pa.

Cons. Stat. § 951 et seq.. Specifically, Plaintiff, previously a

paramedic in the City of Philadelphia Fire Department, claimed

that the Department discriminated on the basis of gender when it

terminated her medical command after violations of Department

protocol, but gave similarly situated male paramedics lesser

punishments. After a five-day jury trial, the jury returned a

verdict in Plaintiff’s favor and awarded her $464,037 in back pay

and front pay damages. During trial, at the close of Plaintiff’s

case-in-chief, Defendant had moved for judgment as a matter of

law pursuant to Fed. R. Civ. P. 50(a), which we denied. After

trial, we also denied Defendant’s renewed Motion for Judgment as

a Matter of Law pursuant to Rule 50(b), or in the alternative for

a new trial under Fed. R. Civ. P. 59, or for remittitur. 

Plaintiff now moves for attorney’s fees and to mold the amount

awarded to include prejudgment interest and to reflect the tax

consequences of the lump sum award.

II. Petition for Attorney’s Fees

Plaintiff moves for attorney’s fees, costs and expenses,

which may be awarded under Title VII, in the amount of

$246,482.53 to reimburse Plaintiff’s counsel for work done on her

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successful trial and on post-trial motions. For its part,

Defendant challenges the amount requested by Plaintiff as

excessive, contending: (1) the hourly rates used for each

attorney involved were excessive and unreasonable; (2) the number

of hours claimed to be expended working on the matter were

unjustified and unreasonable; (3) attorney’s fees should be

adjusted downward because the Plaintiff recovered only a fraction

of the amount she sought in damages; and (4) some of the costs

sought to be reimbursed were unreasonable.

A. Legal Standard for Attorneys’ Fee Awards

Title VII and the PHRA give the court the discretion to

award the prevailing party “a reasonable attorney’s fee as part

of the costs.” 42 U.S.C. § 2000e-5(k); see also 43 Pa. Cons.

Stat. §§ 959(d.1)(2), 962(c.2). The Supreme Court has held that

“in the absence of special circumstances a district court not

merely ‘may’ but must award fees to the prevailing plaintiff.” 

Indep. Fed’n of Flight Attendants v. Zipes, 491 U.S. 754, 761

(1989) (citing Newman v. Piggie Park Enter., Inc., 390 U.S. 400,

402 (1968)). Thus, the party seeking attorneys’ fees must show

that (1) she is the prevailing party; and (2) the fee requested

is reasonable.

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To be considered a prevailing party, one must obtain actual

relief on the merits of her claim which “materially alters the

legal relationship between the parties by modifying the

defendant’s behavior in a way that directly benefits the

plaintiff.” Farrar v. Hobby, 506 U.S. 103, 111 (1992). Once the

plaintiff crosses this threshold, the court must determine which

fee is “reasonable.” Hensley v. Eckerhart, 461 U.S. 430, 433

(1983). 

In calculating an attorneys’ fees award, we begin with the

“lodestar” formula, which multiplies “the number of hours

reasonably expended on litigation . . . by a reasonable hourly

rate.” Id. at 433. To determine a reasonable hourly rate, the

court starts with the attorneys’ usual billing rate. Pa. Envtl.

Def. Found. v. Canon-McMillan School, 152 F.3d 228, 231 (3d Cir.

1998). We then consider the prevailing market rates in the

relevant community. Id. With respect to the number of hours

expended, the court should “review the time charged, decide

whether the hours set out were reasonably expended for each of

the particular purposes described and then exclude those that are

‘excessive, redundant, or otherwise unnecessary.’” Id. at 232

(citing Pub. Interest Research Group of N.J., Inc. v. Windall, 51

F.3d 1179, 1188 (3d Cir. 1995)). 

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The party seeking attorneys’ fees has the burden of

producing “evidence supporting the hours worked and the rates

claimed.” Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir.

1990). The burden then shifts to the opposing party to

challenge, by affidavit or brief with sufficient specificity to

give fee appellants notice, the reasonableness of the requested

fee. Id. (citing Hensley, 461 U.S. at 433). Once the adverse

party raises objections to the fee request, the court possesses

considerable discretion to adjust the award in light of those

objections. Id. For instance, after calculating the lodestar,

the court may reduce that amount, “primarily based on the degree

of success that the plaintiff obtained.” Pa. Envtl. Def. Found.,

152 F.3d at 232 (citing Hensley, 461 U.S. at 435). This

adjustment “accounts for time spent litigating wholly or

partially unsuccessful claims that are related to the litigation

of the successful claims.” Rode, 892 F.2d at 1183.

B. Application of Attorneys’ Fees Standard

1. Reasonableness of Hourly Rates

Lead counsel, Norman Perlberger, has requested an hourly

rate of $350.00 per hour for his services during the trial and

post-trial periods of this litigation. Plaintiff also seeks fees

attributable to work performed by Gerald Pomerantz and Mark

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Scheffer at a rate of $350.00 per hour, as well as $300.00 per

hour for Walter Schirrmacher and $250.00 for associate Michael

Jones. Defendant objects to the rates requested by all five

attorneys.

With respect to hourly rates, “the burden is on the fee

applicant to provide satisfactory evidence - in addition to the

attorney’s own affidavits - that the requested rates are in line

with those prevailing in the community for similar services by

lawyers of reasonably comparable skill, experience, and

reputation.” Blum v. Stenson, 465 U.S. 886, 895 n. 11 (1984). 

In support of the requested hourly rates, Mr. Perlberger

submitted an outline of the work histories of the attorneys who

worked on this matter, as well as a copy of the Community Legal

Services (CLS) Attorneys Fees Schedule for 2006, and the

affidavit of Sidney L. Gold, an attorney experienced in age

discrimination and other employment-related cases. Plaintiff

also refers us to this Court’s award of attorneys’ fees in

Tomasso v. Boeing Co., 2007 WL 2753171 (E.D. Pa. Sept. 21, 2007),

another employment discrimination case which also involved a

five-day trial and on which four of the attorneys in this matter

worked. 

The Third Circuit has held that courts may look to the CLS

Fee Schedule in determining a reasonable hourly rate for counsel. 

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We reject Defendant’s argument that the only experience we should 1

consider is that stemming from actual work on employment discrimination

matters. We cannot take such a narrow view, particularly as Mr. Perlberger’s

unquestioned extensive trial experience brings with it courtroom skills that

would apply to a range of practice areas.

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See Maldonado v. Houstoun, 256 F.3d 181, 184, 187 (3d Cir. 2001). 

Under the CLS schedule, attorneys with more than twenty-five

years of experience, such as Mr. Perlberger and Mr. Pomerantz

have, command a rate of $325 to $410 per hour. Beginning with

lead counsel, we find that $350 per hour is a reasonable rate for

Mr. Perlberger, who has been a practicing attorney for thirtyfive years and has extensive trial experience. This rate is well

within the CLS schedule for an attorney with the depth of

experience that Mr. Perlberger has, and as lead counsel Mr. 1

Perlberger did the vast majority of the work in the courtroom

during trial. 

However, we do not find that the evidence submitted by

Plaintiff supports the same $350 hourly rate for Mr. Pomerantz. 

To be sure, Mr. Pomerantz has practiced as long as Mr. Perlberger

and appears to have significant experience in employment

discrimination matters. Nevertheless, an examination of the

billing records reveals that the actual work done by Mr.

Pomerantz does not justify the same billing rate as that

commanded by Mr. Perlberger in this particular case. It appears

that Mr. Pomerantz conducted witness preparation and assisted in

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other trial preparation, and accompanied Mr. Perlberger in the

courtroom. As Defendant points out, at trial Mr. Pomerantz

briefly questioned one witness, but did not make any legal

argument and primarily only assisted Mr. Perlberger with the

presentation of trial documents. Simply put, the type of work he

did in the courtroom does not command the same exact hourly rate

as the lead counsel who was actually questioning witnesses and

addressing the Court in legal argument. See Ursic v. Bethlehem

Mines, 719 F.2d 670, 677 (3d Cir. 1983) (noting that “routine

tasks” performed by experienced partners should not be billed at

usual senior partner rates). The bulk of Mr. Pomerantz’s

substantive work was done outside the courtroom in the form of

witness and trial preparation, and thus we find a more reasonable

rate to be that commanded by Mr. Scheffer, a less experienced

attorney whose work was primarily in the form of depositions and

motion practice. Accordingly, we will award Mr. Pomerantz a rate

of $300 per hour.

An attorney with experience similar to Mr. Scheffer, who had

been practicing for seventeen years at the time of trial, would

command a rate of $275 to $315 under the CLS Fee Schedule. 

However, Plaintiff has requested a rate of $350 per hour for Mr.

Scheffer’s work. While it appears that Mr. Scheffer did

important work on this case - particularly motion practice and

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conducting depositions - Plaintiff has not given the Court a

reason why this work justifies a departure from the CLS Fee

Schedule to the same rate commanded by Mr. Perlberger, who was

lead counsel on this case. We also note that much of the

pretrial discovery work done by Mr. Scheffer appears to be fairly

routine. Accordingly, we will award Mr. Scheffer an hourly rate

of $300, which is squarely within the CLS Fee Schedule for an

attorney with Mr. Scheffer’s experience. 

Turning to Mr. Schirrmacher, according to the CLS Fee

Schedule, an attorney with Mr. Schirrmacher’s experience of

fifteen years at time of trial would command $240 to $300 per

hour. Plaintiff has requested an hourly rate for Mr.

Schirrmacher of $300, at the upper end of the CLS schedule. The

billing timesheets reflect that Mr. Schirrmacher’s work on this

case was primarily limited to document review and writing

correspondence and internal memoranda. Without more evidence

from Plaintiff to guide us, this appears to be work that could

have been done by a lower-level associate. Accordingly, we will

reduce the requested rate for Mr. Schirrmacher to $250 per hour,

which is at the lower end of the CLS Fee Schedule for someone of

his experience-level.

Finally, Plaintiff has inexplicably offered no evidence at

all with respect to the practice areas or experience of Mr.

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We also note with curiosity that in Tomasso, Mr. Scheffer’s rate was 2

reduced from the requested $350 to the same rate requested for Mr. Jones -

again, $250 per hour - because they had the same number of years of

experience. We are willing to give Plaintiff’s counsel the benefit of the

doubt on the matter - particularly because we were able to determine Mr.

Scheffer’s rate without reference to his co-counsel - but we sincerely hope

that the omission of any evidence of Mr. Jones’s experience from the fee

petition was not an attempt to avoid the same reduction that occurred in

Tomasso.

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Jones, even though he appears on the billing timetables submitted

in support of the fee petition. Mr. Gold opined that the

requested rate of $250 was consistent with the prevailing rates

for someone of Mr. Jones’s experience in employment

discrimination matters. However, despite the fact that the $250

rate was approved for Mr. Jones in Tomasso, 2007 WL 2753171 at

*7, we have been given no indication in this case as to why he 2

should fall into the $250 rate category under the CLS schedule

and Plaintiff has not otherwise carried her burden of supporting

the petition with respect to Mr. Jones. While Mr. Gold’s

opinions are respected by the Court, they provide little

enlightenment as to Mr. Jones’s qualifications. Accordingly, we

will reduce the rate requested by Mr. Jones by forty percent to

$150 per hour, which is the rate to which the City appears to

agree. See Rapp v. Cameron, 2002 WL 254504, at *6 (E.D. Pa. Feb.

20, 2002)(reducing hourly rates by fifty percent for attorneys

who had not submitted evidence of their experience or

qualifications).

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In sum, the hourly rates we will use in calculating the

lodestar will be as follows:

Norman Perlberger $350

Gerald J. Pomerantz $300

Mark S. Scheffer $300

Walter Schirrmacher $250

Michael Jones $150

2. Reduction of Number of Hours

When evaluating a fee petition, the Court should exclude

hours that are excessive, redundant, or otherwise unnecessary. 

Rode, 892 F.2d at 1183. “In determining what hours are

reasonably expended on the suit, ‘the most critical factor is the

degree of success obtained . . . . Where a plaintiff has

obtained excellent results, his attorney should recover a fully

compensatory fee.” Blum v. Witco Chem. Corp., 888 F.2d 975, 983

(3d Cir. 1989) (quoting Hensley, 461 U.S. at 435-36).

Plaintiff seeks compensation for her attorneys for a total

of 709.87 hours of work, and submits the attorneys’ computergenerated time sheets to support the request. The request breaks

down by attorney as follows:

Norman Perlberger 266.16

Gerald J. Pomerantz 132.00

Mark S. Scheffer 184.97

Walter Schirrmacher 121.74

Michael W. Jones 5.00

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We also overrule the same objection with respect to Mr. Pomerantz. A 3

quick review of the descriptions in the time sheets indicates that Mr.

Pomerantz actually spent very little billable time reviewing the case, and the

vast majority of his time was spent assisting Mr. Perlberger with witness

preparation and at trial.

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Defendant makes a number of objections to the hours expended by

the counsel listed above. First, Defendant objects to the

roughly sixty hours spent by Mr. Perlberger reviewing case files

to “get up to speed” when he got involved with the matter shortly

before trial. Defendant asserts that it was unnecessary for both

Mr. Scheffer - who handled virtually all the pretrial work - and

Mr. Perlberger to spend the time to become familiar with the

facts of the case when Mr. Scheffer was capable of trying the

case himself. This exact argument was rejected in Tomasso, 2007

WL 2753171 at *5, a case in which Mr. Perlberger also took over

for Mr. Scheffer when it came time for trial. For the reasons

articulated in that decision, we overrule this objection. Simply

put, Mr. Perlberger’s much more extensive trial experience

contributed to a successful result for Plaintiff, and the time

spent reviewing the case was not wasteful or unnecessarily

redundant.3

Defendant’s next objection is that some of Mr. Scheffer’s

pretrial discovery work should have been delegated to Mr. Jones

so that it could be billed at Mr. Jones’s lower associate rate. 

Whether the work done by Mr. Scheffer during this time should

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have been billed at associate rates is a question related to the

reasonableness of Mr. Scheffer’s requested hourly rate, and not

to the reasonableness of the time he expended on the work at

issue. We therefore consider it only in our determination of the

hourly rate above and not in relation to the reasonableness of

the hours expended on that work.

Defendant next objects to the time spent by Mr. Scheffer in

preparing a number of amended complaints, because these were the

product of failures in earlier versions of Plaintiff’s Complaint. 

We will sustain this objection. Plaintiff’s Complaint was

amended twice, the second of which being in response to an Order

granting Defendant’s Motion for a More Definite Statement under

Fed. R. Civ. P. 12(e) because the Complaint was impermissibly

vague. The end result was an Amended Complaint that set forth

the same legal claims as the original Complaint, but which

included the factual details necessary to enable Defendant to

answer which should been included at the outset. The time spent

amending the complaint is similar to time spent on an

unsuccessful claim, which is often eliminated or reduced in

attorney’s fee petitions. It would simply not be reasonable to

charge Defendant for the early errors in Plaintiff’s Complaint,

and therefore we reduce Mr. Scheffer’s compensable time by the

9.27 hours he spent on the Amended Complaints.

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Defendant next asserts that Plaintiff was unnecessarily

represented by both Mr. Scheffer and Mr. Schirrmacher at her

January 24, 2007, settlement conference. Defendant only puts

forth that they both attended, however, and not that they engaged

in redundant work or that one attorney did nothing. Accordingly

we will overrule this objection in part and will award fees for

both attorneys. However, we note that Mr. Scheffer’s time entry

indicates he spent 2.5 hours at the conference, while Mr.

Schirrmacher was there for 2.33 hours. Thus, we will reduce Mr.

Scheffer’s time by .17 hours to resolve the discrepancy.

Defendant’s next objection is that trial preparation time

and trial time were excessive because four different attorneys

were charging fees in the days preceding and during trial, and

that “much of this time . . . was spent performing the same tasks

by more than one lawyer.” Defendant suggests that for the period

from October 23, 2007, to November 1, 2007 - during which 312.52

hours were billed - the hours should be reduced to twenty-four

hours per day during trial (or twelve hours a day for two

attorneys) and twenty hours per day for pretrial work. Defendant

has not, however, identified which trial-related tasks were

redundant. In fact, after a review of the time sheets it appears

to us that the tasks were allocated efficiently - Mr. Scheffer

handled much of the written work, such as responses to Motions in

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We also note that the attack on Mr. Jones and Mr. Scheffer’s time 4

spent in depositions appears to be somewhat disingenuous. Only Dr. Mechem and

Chief Butts are listed in the time sheet descriptions, but Defendant is aware

they were not the only witnesses deposed. Defendant is also easily aware of

which of Plaintiff’s attorneys were actually present, and it speaks volumes

that Defendant is not charging that Mr. Scheffer and Mr. Jones did not in fact

attend the depositions on the challenged dates.

We furthermore take this opportunity to overrule Defendant’s spurious

objection to certain of Mr. Scheffer’s entries based on the fact that they are

round numbers - e.g. “7.5" or 8.0.” To the extent that this objection is that

the descriptions for those dates are insufficiently detailed, we again

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Limine and the points for charge; Mr. Schirrmacher handled much

of the legal research and responses to smaller motions not

handled by Mr. Scheffer; and Messrs. Perlberger and Pomerantz,

who had by far more trial experience, were the only ones to bill

any time during the trial itself, handling courtroom-related

work. Accordingly, we overrule Defendant’s broad objection to

the hours expended shortly before and during trial.

Finally, Defendant objects to a number of miscellaneous time

entries. Many of these objections are simply that the

descriptions of the work done were insufficiently detailed or

specific. In particular, Defendant objects to Messrs. Perlberger

and Pomerantz’s entries which list “trial preparation” and Mr.

Scheffer’s entries listing depositions of unnamed witnesses. We

find that the computer-generated time sheets provide a sufficient

description of the general nature of each activity performed, and

it would not be practicable to describe every iota of every

discrete time period in greater detail. Accordingly, Defendant’s

objection based on lack of specificity is overruled. See 4

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overrule that objection and note that the entries for those dates are quite

specific.

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Washington v. Phila. County Ct. of C.P., 89 F.3d 1031, 1038 (3d

Cir. 1996) (rejecting claim that hours should be reduced because

related time entries were not specific and finding that computergenerated time sheets were sufficient).

We will sustain Defendant’s objections, however, with

respect to three miscellaneous issues. First, we will reduce Mr.

Scheffer’s time by another 1.25 hours which was spent on

correspondence and calls to someone named “Conduri.” This person

does not appear to be connected to the case and Plaintiff has not

provided an explanation. Second, we will subtract one hour from

Mr. Perlberger’s hours for the day of September 14, 2007. On

that day, Mr. Perlberger’s time entry indicates that he attended

the deposition of a Mr. Findlay; however, Mr. Findlay was not

actually deposed in this case. Finally, we reduce Mr.

Pomerantz’s time on October 25, 2007, by two hours. On that day,

Mr. Pomerantz’s time entry indicates that he prepared Joanne Fox

for trial testimony. However, Ms. Fox did not testify at trial,

and thus this “preparation” did not contribute to the success of

Plaintiff’s claim.

In sum, we will subtract one hour from Mr. Perlberger’s

requested time, two hours from Mr. Pomerantz’s time, and 10.69

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hours from Mr. Scheffer’s time. We find the remaining hours to

have been reasonably expended in the pursuit of Plaintiff’s

ultimately successful claim of gender discrimination. 

Accordingly, Plaintiff’s attorneys will be compensated for a

total of 691.18 hours. The number of hours for which each

attorney will be compensated are as follows:

Norman Perlberger 265.16

Gerald J. Pomerantz 130.00

Mark S. Scheffer 174.28

Walter Schirrmacher 121.74

Michael W. Jones 5.00 

3. Lodestar Calculation

Multiplying the number of hours reasonably expended on this

litigation by the hourly rate which we have determined to be

reasonable for each attorney, we arrive at the following lodestar

calculations:

Norman Perlberger (265.16 hours x $350) = $92,806.00

Gerald J. Pomerantz (130 hours x $300) = $39,000.00

Mark S. Scheffer (174.28 hours x $300) = $52,284.00

Walter Schirrmacher (121.74 hours x $250) = $30,435.00

Michael W. Jones (5 hours x $150) = $750.00

The total lodestar amount is $215,275.00. Defendant asserts,

however, that the fee award should be reduced by half of the

lodestar because the jury did not award the compensatory damages

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sought by Plaintiff and Plaintiff only received a fraction of the

amount of front pay that she was seeking.

The Third Circuit has stated that the lodestar may be

reduced for “results obtained” with respect to “wholly or

partially unsuccessful claims that are related to the litigation

of the successful claims.” Rode, 892 F.2d at 1183. In other

words, “where a plaintiff prevails on one or more claims but not

on the others, fees shall not be awarded for time that would not

have been spent had the unsuccessful claims not been pursued.” 

Lanni v. New Jersey, 259 F.3d 146, 151 (3d Cir. 2001). 

Furthermore, the Third Circuit has instructed that, when

determining a reasonable fee, it is permissible to look at “the

amount of damages awarded . . . compared with the amount of

damages requested.” Washington, 89 F.3d at 1042. This is

because “the amount of damages awarded, when compared with the

amount of damages requested may be one measure of how successful

[a] plaintiff was in his or her action.” Gen. Instrument Corp.

v. Nu-Tek Elecs. & Mfg., 197 F.3d 83, 91 (3d Cir. 1999).

Defendant’s argument is essentially that because Plaintiff

was not awarded the full extent of the damages sought on her

discrimination claim, she was not sufficiently “successful” to

merit a fee award of the full lodestar. We disagree. As an

initial matter, we note that Plaintiff did not pursue any legal

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claims on which she was unsuccessful; indeed, she only pleaded

one count each of gender discrimination under Title VII and the

PHRA, on which the jury returned a verdict in Plaintiff’s favor. 

Furthermore, Defendant does not even suggest what time would not

have been expended had compensatory damages not been pursued, and

we are unable to determine how such work could be distinguished

from the work on her successful claims for back pay and front

pay. See Spenser v. Wal-Mart Stores, Inc., 2005 WL 3654381, at

*4 (D. Del. June 24, 2005) (citing Lanni, 259 F.3d at 151)(“As

the time spent on Plaintiff’s successful and unsuccessful claims

cannot be parsed, I am not required to reduce the award of

attorney’s fees to account for unsuccessful claims.”). Finally,

this case is hardly one in which nominal damages were awarded to

a Plaintiff requesting a far greater amount. See Farrar, 506

U.S. at 114. Indeed, the jury’s verdict in excess of $400,000

for Plaintiff is a successful result by virtually any measure,

even ignoring the non-monetary considerations related to

successful vindication of one’s civil rights. Accordingly, as we

cannot find that Plaintiff’s attorneys expended a measurable

amount of time in pursuit of unsuccessful claims, we decline

Defendant’s request to reduce the lodestar. Plaintiff’s

attorneys will be awarded the full lodestar amount of

$215,275.00.

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C. Costs

Plaintiff has requested reimbursement for costs of

$4,650.04, and submitted computer-generated itemized records of

the expenditures. These costs appear to the Court to be

reasonable, and will be added to the attorneys’ fees award. 

Accordingly, the total amount of attorneys’ fees plus costs is

$219,925.04.

III. Motion to Mold the Verdict

In her Motion to Mold the Verdict, Plaintiff requests

prejudgment interest on her back pay award and damages to

compensate for the negative tax consequences stemming from the

fact that her back pay and front pay awards will be paid out in a

lump sum, rather than spread out over time like an ordinary

salary.

A. Prejudgment Interest

Whether to award prejudgment interest, which is intended to

make victims of discrimination “whole,” is within the sound

discretion of the trial court. Booker v. Taylor Milk Co., 64

F.3d 860, 868 (3d Cir. 1995). Awarding prejudgment interest

“serves to compensate a plaintiff for the loss of the use of

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money that the plaintiff otherwise would have earned had he not

been unjustly discharged.” Id. There is a “strong presumption

in favor of awarding prejudgment interest, except where the award

would result in unusual inequities.” Id. 

Defendant argues that awarding Plaintiff prejudgment

interest would be inequitable because, during the back pay

period, she received unemployment compensation and wages from

other jobs. It is true that successful Title VII plaintiffs

generally are “not entitled to a recovery in excess of make-whole

damages.” Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089,

1100 (3d Cir. 1995). But here, the jury took other payments

received during the prejudgment period into account when, after

being instructed in detail about calculation of damages, it

decided on the back pay award that Plaintiff should receive. 

Thus, declining prejudgment interest on the basis of receipt of

other wages would amount to interference with the jury’s

determination of the amount required to make Plaintiff “whole.” 

We refuse to take this step, particularly as we have already

denied Defendant’s Motion for Remittitur. Furthermore, the Third

Circuit has held that, under the “collateral source rule,”

unemployment compensation should not be deducted from a Title VII

back pay award. Craig v. Y & Y Snacks, Inc., 721 F.2d 77, 82 (3d

Cir. 1983). Declining to award prejudgment interest on back pay

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based on Plaintiff’s receipt of unemployment compensation during

the prejudgment period would contravene that holding. 

Accordingly, because we find no “unusual inequities” that would

result from it, we find that Plaintiff is entitled to prejudgment

interest on her back pay award.

If a court decides to award prejudgment interest to the

requesting party, “[t]he applicable prejudgment interest rate is

left to the sound discretion of the Court.” Shovlin v. Timemed

Labeling Sys., Inc., 1997 WL 102523, at *2 (E.D. Pa. Feb. 28,

1997). To determine the applicable interest rate, the Third

Circuit has instructed that the district court may use the rate

contained in the federal post-judgment interest rate statute, 28

U.S.C. § 1961(a), for guidance. Sun Ship, Inc. v. Matson

Navigation, Co., 785 F.2d 59, 63 (3d Cir. 1986). In fact, many

courts have employed this approach in calculating prejudgment

interest. See, e.g., Tomasso v. Boeing Co., 2007 WL 2753171

(E.D. Pa. Sept. 21, 2007); O’Neill v. Sears, Roebuck & Co., 108

F. Supp. 2d 443, 445 (E.D. Pa. 2000); Shovlin, 1997 WL 102523, at

*2. Among other reasons, this approach is desirable because it

is easy to determine the rate by using the rate charts in the

federal statute, and the Treasury bill (“T-bill”) rates found in

28 U.S.C. § 1961 are a “suitable approximation of the available

return for a typical risk-free investment” during the back pay

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 22 of 33
23

period. O’Neill, 108 F. Supp. 2d at 445 (quoting Davis v.

Rutgers Cas. Ins. Co., 964 F. Supp. 560, 576 (D.N.J. 1997)). The

post-judgment interest rate statute provides for the calculation

as follows:

Such interest shall be calculated from the date of the

entry of the judgment, at a rate equal to weekly 1-year

constant maturity Treasury yield, as published by the

Board of Governors of the Federal Reserve System, for

the calendar week preceding.

28 U.S.C. § 1961(a). 

Plaintiff’s expert, Andrew Verzilli, followed this method

(stating explicitly that he was following the court’s analysis in

O’Neill) and provided an estimate of prejudgment interest based

on one-year T-bill rates as reported in the St. Louis Federal

Reserve Bank database. Defendant has not challenged this method,

and we find that it is a reasonable one and adopt the approach. 

Under this approach, Mr. Verzilli calculated prejudgment interest

on Plaintiff’s back pay award to be $28,760. This estimate was

made by dividing the amount of back pay awarded ($249,037.00) by

the amount of time in the prejudgment, back pay period (April 23,

2003 to November 2, 2007, or 4.53 years) to determine a

hypothetical yearly “salary” upon which interest could be

calculated. This approach then applies the interest rate for

each one-year period, as contained in the Federal Reserve

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 23 of 33
24

database, to the amount of back pay that would have accrued to

that point to determine the amount of interest due for that oneyear period. The yearly calculations break down as follows:

Period Back Pay 1 Year T-bill Interest

4/23/03-

4/22/04

$54,975 1.430% $786

4/23/04-

4/22/05

$109,950 3.320% $3,650

4/23/05-

4/22/06

$164,925 4.900% $8,081

4/23/06-

4/22/07

$219,900 4.930% $10,841

4/23/07-

11/2/07

$249,037 2.169% $5,401

TOTAL $28,760

Because we find Plaintiff is entitled to prejudgment interest and 

Mr. Verzilli’s calculations suitably approximate the return on a

risk-free investment during the back pay period, we award $28,760

to Plaintiff in prejudgment interest on her back pay award.

B. Negative Tax Consequences

Finally, Plaintiff seeks an award of damages for the

negative tax consequences she will sustain because her back and

front pay will be paid in a lump sum, as opposed to having been

spread out over the years as it would be if she were continuously

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 24 of 33
 That is to say, damages which compensate for some harm other than 5

lost back pay or front pay, such as mental anguish or emotional distress. 

25

employed by the City. Defendant contends that there is no

precedent for such an award, and takes issue with the speculative

nature of the tax calculations. 

1. Applicability of Award for Negative Tax

Consequences

The Third Circuit has not expressly decided the question of

whether successful Title VII plaintiffs may be awarded additional

damages to compensate for the negative tax impact of a lump sum

payment. See Gelof v. Papineau, 829 F.2d 452, 455 n.2 (3d Cir.

1987)(declining to decide the issue because the defendant had

conceded that the “judgment should properly include the negative

tax impact of a lump sum payment”). However, though it has

declined to approve such an award where the damages are

compensatory or liquidated in nature, the Third Circuit has 5

noted that “[t]he very few cases discussing this issue have found

such treatment appropriate only when damages are for back-pay,

resulting in disparate tax treatment between those wages, had

they been paid when owed, and their payment as a lump sum.” 

Gibson v. City of Paterson, 199 Fed. Appx. 133, 136 (3d Cir.

2006); see also Skretvedt v. E.I. DuPont de Nemours, 372 F.3d

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 25 of 33
We note that, importantly, Plaintiff is not seeking to be immune from 6

any tax payments on the back pay and front pay awards. Rather, she is simply

asking for the difference in tax payments created by the fact that she would

be taxed at a higher percentage by receiving those lost wages in one lump sum. 

Awarding just the difference between the taxes on the lump sum and the taxes

she would pay on that amount if had been spread out over time thus would

26

193, 204 n. 15 (3d Cir. 2004)(declining to provide tax liability

award where tax payments were “completely distinct from any illgotten profits which might properly be made subject to a viable

restitution claim”); O’Neill, 108 F. Supp. 2d at 446-47

(approving award for negative tax consequences for back pay and

front pay, but declining it for compensatory and liquidated

damages).

We fail to see how an award compensating for the negative

tax consequences of receiving lost wages in a lump sum is

different from an award of prejudgment interest. See Arneson v.

Callahan, 128 F.3d 1243, 1247 (8th Cir. 1997) (“If the tax

enhancement remedy is available under Title VII, we find it

analogous to the prejudgment interest remedy as an element of

making persons whole for discrimination injuries.”). As with the

prejudgment interest award, which “serves to compensate a

plaintiff for the loss of the use of money that the plaintiff

otherwise would have earned had he not been unjustly discharged,”

Booker, 64 F.3d at 868, the tax consequences remedy simply

returns to the plaintiff money that she would have had if she not

been terminated. This is well within the remedial structure of 6

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 26 of 33
appropriately put her in the place she would have been had she not been

unjustly discharged.

 This is particularly true where, as in O’Neill, 108 F. Supp. 108 at 7

447, we have calculations of the tax impact of the lump sum award from experts

for both Plaintiff and Defendant. Plaintiff’s tax returns during the back pay

period - which are in the trial record - provide an adequate basis on which to

calculate the negative tax consequences so that the endeavor is not impossibly

speculative.

27

Title VII, which aims to make victims of discrimination whole. 

We therefore agree with the Court’s conclusion in O’Neill, 108 F.

Supp. 2d at 447, that “[s]ince the Third Circuit recognized the

economic necessity of compensating for the lost ‘time value of

money’ in order to comply with the ‘make-whole’ doctrine, the

Third Circuit would likewise compensate the claimant for the

depletion of that money due to the increased taxes to which the

award is subject on account of its being received in a single tax

year.”

Furthermore, the Third Circuit has noted that the “risk of

lack of certainty with respect to projections of lost income must

be borne by the wrongdoer, not the victim,” Starceski, 54 F.3d at

1101 (citing Goss v. Exxon Office Sys. Co., 747 F.2d 885, 889 (3d

Cir. 1984)). Thus, as with prejudgment interest, the mere fact

that there is an element of speculation involved in calculating

the taxes that would have been paid on lost wages does not

provide a sound reason for denying the award. Since it has been 7

already determined that the wages in question were lost as a

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 27 of 33
28

result of Defendant’s unlawful actions, the Defendant “is not

entitled to complain that [the damages] cannot be measure with

the exactness and precision that would be possible if the case,

which he alone is responsible for making, were otherwise.” Story

Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563

(1931). In fact, were we to decline the tax enhancement award,

the Plaintiff would continue to suffer a punishment - the loss of

roughly $46,000, as we discuss below - that resulted directly

from her employer’s unlawful discrimination. Such a result is

plainly contrary to the remedial “make-whole” purposes of Title

VII.

Finally, we note with approval the Court’s discussion in

O’Neill of the appropriateness of the tax enhancement award with

respect to front pay. In approving an award to compensate for

the negative tax consequences of a lump sum award for a

successful ADEA plaintiff, the Court in O’Neill explained:

The argument [in favor of the tax award] is

particularly compelling in the case of front pay, since

the plaintiff has already had his front pay recovery

reduced to present value, on the assumption that he can

now invest the money and receive a yearly return equal

to his lost wages. However, if the plaintiff must pay

a higher tax on the present value of his earnings, this

leaves less for investment. Hence, the plaintiff will

not, in fact, realize an investment gain large enough

to equal the future wages that he is not getting as a

result of the defendant’s discriminatory conduct. . . . 

The goal of the ADEA is to allow plaintiff to keep the

same amount of money as if he had not been unlawfully

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 28 of 33
In closing, we also note that the jury was not instructed to consider 8

the tax consequences of the judgment when calculating back pay and front pay

awards, if any. Had the jury been so instructed, we would be far less

inclined to find the tax enhancement award necessary to make Plaintiff whole.

29

terminated. Compliance with this goal requires

reimbursement for the reduced amount of front pay money

that the plaintiff has to invest as a result of higher

taxes . . . .

O’Neill, 108 F. Supp. 2d at 447. Similarly, the jury in this

case was instructed to discount its front pay award to its

present value, or to an amount that would be “necessary today

when invested to provide plaintiff with the full amount of her

future damages over time.” (Day 5 Tr. 159). As Title VII has

the same “make-whole” objectives as the ADEA, we find that

O’Neill’s rationale for awarding a tax enhancement on front pay

applies with equal force in this case. Accordingly, for all of

the above reasons, we find this award to be appropriate and well

within our discretion “to fashion such relief as the particular

circumstances may require” to make victims of unlawful

discrimination whole. Franks v. Bowman Transp. Co., 424 U.S. 8

747, 764 (1976).

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 29 of 33
30

2. Calculation of Award for Negative Tax

Consequences

The report of Mr. Verzilli that accompanies Plaintiff’s

request for the tax enhancement award concludes that Plaintiff

would pay an additional $87,330 in taxes on the lump sum award. 

This calculation was made by comparing the tax rate on the lump

sum of $464,037 and the $19,400 in other income Plaintiff

actually made in 2007, with the tax rate on her “normal”

paramedic salary of $51,925. According to Mr. Verzilli, this

amounts to a difference in tax rate of 18.82%, and multiplying

that difference by the amount of the lump sum award results in

the requested $87,330.

Defendant, however, suggests that Mr. Verzilli’s

calculations do not accurately reflect the negative tax

consequences of the lump sum award for several reasons. First,

Defendant argues that Mr. Verzilli failed to account for the

impact of Plaintiff’s contingency fee agreement with her

attorneys on the lump sum award. Second, the City contends that

Mr. Verzilli should only have based his calculations on the

amount of the award, and not other income from the back pay

period. Third, the City suggests that Mr. Verzilli used the

highest possible tax rate - married filing separately - for the

lump sum award without justification for doing so. Finally, the

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 30 of 33
Defendant’s calculation was prepared by co-counsel Robert Haurin, who 9

is also a Certified Public Accountant.

Defendant’s estimate of itemized deductions is based on the 10

deductions actually taken by the Plaintiff in the tax years between 2003 and

2006, which averaged $16,806 per year.

31

City points out that Mr. Verzilli used the standard deduction for

calculating the tax rate on the lump sum even though Plaintiff

actually itemized her deductions in her tax filings between 2003

and 2006. Correcting for these defects, Defendant arrives at a

result of $46,746.00 in negative tax consequences.9

The Court agrees with Defendant’s concerns, and finds its

method of calculation to be a better estimator of how Plaintiff

would have filed her taxes had she not been discharged, because

it is better grounded in the actual tax returns from the back pay

period that were in the trial record. The actual calculations

are as follows:

Lump Sum Award $345,542.00

Deductions $16,806.00 10

Taxable Income $328,736.00

Tax $82,863.00

Effective Tax Rate (married

filing jointly)

26.67%

Normal Tax Rate on “normal

salary” of $51,925

12.45%

Tax Increase 14.22%

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 31 of 33
32

Additional tax on lump sum $46,746.00

Accordingly, we shall award Plaintiff $46,746.00 to compensate

for the negative tax consequences of receiving her back pay and

front pay awards in a lump sum.

IV. Conclusion

In sum, we find that Plaintiff’s attorneys are entitled to

be compensated for $219,925.04 in fees and costs, as is reflected

by our calculations of the lodestar. Plaintiff is furthermore

entitled to $28,760 in prejudgment interest and $46,746.00 in tax

consequences, in order to make her “whole” within the remedial

structure of Title VII.

An order follows.

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 32 of 33
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

DAWN LOESCH, :

:

Plaintiff, : CIVIL ACTION

:

vs. : No. 05-cv-0578

:

CITY OF PHILADELPHIA, :

:

Defendant. :

ORDER

AND NOW, this 19TH day of June, 2008, upon consideration

of Plaintiff’s Motion to Mold Verdict and for Counsel Fees (Doc.

Nos. 69, 87), and responses thereto, for the reasons set forth in

the accompanying memorandum, it is hereby ORDERED that the Motion

is GRANTED and Plaintiff is awarded the following:

1. $219,925.04 in attorneys’ fees and costs;

2. $28,760 in prejudgment interest; and

3. $46,746.00 to compensate for the negative tax

consequences of her award.

BY THE COURT:

S/J. CURTIS JOYNER 

J. CURTIS JOYNER, J. 

Case 2:05-cv-00578-JCJ Document 89 Filed 06/25/08 Page 33 of 33