Opinion ID: 3009935
Heading Depth: 1
Heading Rank: 6

Heading: Starceski's Cross-Appeal

Text: Starceski asserts that the district erred in denying his motion for pre-judgment interest and reinstatement. For the reasons discussed below, we will vacate the district court's denial of pre-judgment interest, but affirm its refusal to grant reinstatement.
The district court reasoned that an award of pre-judgment interest is precluded in an ADEA case when liquidated damages are awarded for willfulness because the purpose of liquidated damages [like pre-judgment interest] is . . . to compensate plaintiff for the loss of the use of his funds up to trial, [making] an award for both liquidated damages and prejudgment interest . . . double compensation for the same loss. Starceski, No. 91-0454, slip op. at 8. As the district court recognized, this Court has not yet decided whether pre-judgment interest may be awarded along with liquidated damages. The courts of appeals that have decided this issue are divided. Compare Criswell v. Western Airlines, Inc., 709 F.2d 544, 556-57 (9th Cir. 1983) (liquidated damages and pre-judgment interest serve different functions in making ADEA plaintiffs whole), aff'd on other grounds, 472 U.S. 400 (1985); Reichman v. Bonsignore, Brignati & Mazzotta, P.C., 818 F.2d 278, 281-82 (2d Cir. 1987) (same); Lindsey v. American Cast Iron Pipe Co., 810 F.2d 1094, 1102 (11th Cir. 1987) (same); with Powers v. Grinnell Corp., 915 F.2d 34, 41 (1st Cir. 1990) (an award of liquidated damages precludes recovery of pre-judgment interest as that would constitute double recovery); Hamilton v. 1st Source Bank, 895 F.2d 159, 165-66 (4th Cir. 1990) (same); Burns v. Texas City Refining, Inc., 890 F.2d 747, 752-53 (5th Cir. 1989) (same); Coston v. Plitt Theatres, Inc., 831 F.2d 1321, 1336-37 (7th Cir. 1987) (same), vacated on other grounds, 486 U.S. 1020 (1988); Rose v. National Cash Register Corp., 703 F.2d 225, 230 (6th Cir.) (same), cert. denied, 464 U.S. 939 (1983); Gibson v. Mohawk Rubber Co., 695 F.2d 1093, 1102 (8th Cir. 1982) (same); Blim v. Western Elec. Co., Inc., 731 F.2d 1473, 1479-80 (10th Cir.), cert. denied, 469 U.S. 874 (1984). This circuit split is a consequence of two competing theories concerning Congress's purpose in providing liquidated damages for willful violations of the ADEA. We think the Supreme Court's decision in Thurston, 469 U.S. at 125, guides us in answering this question. There it stated that liquidated damages are punitive in nature and designed to deter willful conduct. If awards of pre-judgment interest are compensatory, and liquidated damages are punitive, a concomitant grant of both is appropriate because pre-judgment interest serves the statutory goal of making Starceski whole, i.e., it compensates him for the discriminatory wrong that he has suffered, while liquidated damages would punish Westinghouse, the wrongdoer, for its willful violation of the ADEA. Accordingly, we reject the reasoning of those courts that believe Congress intended to incorporate into the ADEA all of the damage provisions of the Fair Labor Standards Act (FLSA), including its prohibition of concomitant awards for pre-judgment interest and liquidated damages. See Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 715 (1945) (FLSA plaintiff cannot recover both liquidated damages and pre-judgment interest because the former serve as compensation for delay in payment of sums due under the Act).14 Rather, we are persuaded by the reasoning of the courts of appeals for the second, ninth and eleventh circuits, who rely on Thurston, supra, to permit awards of both liquidated damages and pre-judgment interest.15 After Thurston, this Court held 14 . The ADEA incorporates the FLSA's liquidated damages provision, but adds a requirement of willful conduct. 29 U.S.C.A. § 626(b). For a general discussion of the legislative history showing Congress's selective incorporation of FLSA provisions into the ADEA, see Sperling v. Hoffman-LaRoche, Inc., 24 F.3d 463 (3d Cir. 1994). 15 . Although the courts of appeals for the sixth, eighth and tenth circuits have determined that an ADEA plaintiff cannot recover both liquidated damages and pre-judgment interest, these courts rendered their decisions before Thurston and, as of yet, have not revisited this issue in light of Thurston's statement that liquidated damages are punitive in nature. See, e.g., Smith v. World Ins. Co., 38 F.3d 1456, 1467 n.5 (8th Cir. 1994) (question not properly before the Court because party appealing agreed with district court that after Thurston liquidated damages were not a bar to pre-judgment interest, casting doubt on the circuit's decision in Gibson). The Court of Appeals for the Eleventh Circuit, one of those that had originally decided an ADEA plaintiff could not recover both liquidated damages and pre-judgment interest, overruled its prior decision after Thurston, reasoning: The Thurston decision . . . confirms the Ninth Circuit's approach in Criswell and undermines the assumptions of the other circuits' decisions, including ours in O'Donnell. See Bonura v. Chase Manhattan Bank, N.A., 629 F.Supp. 353, 363-66 (S.D.N.Y. 1986) (Thurston clarifies that prejudgment interest does not provide a double recovery to victims of age discrimination who have proven their entitlement to liquidated damages as well as back-pay.). Lindsey, 810 F.2d at 1102 n.7. that liquidated damages are punitive in nature. See Turner v. Schering-Plough Corp., 901 F.2d 335, 346 (3d Cir. 1990); Blum v. Witco Chemical Corp., 829 F.2d 367, 382 (3d Cir. 1987); Rickel v. C.I.R., 900 F.2d 655, 666 (3d Cir. 1990). We have also recognized that the purpose of an award of pre-judgment interest is 'to reimburse the claimant for the loss of the use of its investment or its funds from the time of the loss until judgment is entered.' Berndt v. Kaiser Aluminum & Chemical Sales, Inc., 789 F.2d 253, 259 (3d Cir. 1986) (quoting Arco Pipeline Co. v. SS Trade Star, 693 F.2d 280, 281 (3d Cir. 1982)). We are unable to reconcile Thurston's statement that liquidated damages are punitive with a denial of pre-judgment interest designed to compensate for loss of the time value of money. Thus, we are not persuaded by the reasoning of those courts of appeals which believe that Congress's incorporation of some of the FLSA's damage provisions into the ADEA was meant to preclude an award of damages for both willfulness and pre-judgment interest.16 Given this view of the law and the fact that Westinghouse points to no unusual circumstances in favor of a discretionary denial of pre-judgment interest, we will reverse the district court's denial of Starceski's motion for pre-judgment interest and remand for a quantification of the pre-judgment interest due him. See Green v. USX Corp., 843 F.2d 1511, 1530 & n.16 (3d Cir. 1988). 16 . The difficulty with the FLSA incorporation argument is compounded by the ADEA requirement of willfulness, which is not found in the FLSA.
Starceski also contends that the district court erred in denying his request for reinstatement. We have held that the decision to grant reinstatement or its alternative, front pay, is within the sound discretion of the district court. Maxfield v. Sinclair Int'l, 766 F.2d 788, 796 (3d Cir. 1985) (Since reinstatement is an equitable remedy, it is the district court that should decide whether reinstatement is feasible.), cert. denied, 474 U.S. 1057 (1986). In determining whether to grant either reinstatement or front pay, we have suggested that district courts should take into consideration the ADEA's purpose to make aggrieved plaintiffs whole by restoring them to the position they would have been in had the discrimination never occurred. Id. Although reinstatement is the preferred remedy to avoid future lost earnings because it is consistent with the ADEA's make-whole philosophy, we have concluded that reinstatement is not feasible in cases where there may be no position available at the time of judgment or the relationship between the parties may have been so damaged by animosity that reinstatement is impracticable. Id. Here, we initially note that Starceski failed to object when the trial judge instructed the jury on front pay, even though he intended to make a motion for reinstatement.17 17 . Neither party raised as an issue on appeal the use of a general verdict. In that verdict, the jury awarded compensatory damages of $267,268.55, an amount that appears to include at least some element of front pay. Starceski is not entitled to both reinstatement and front pay. In any event, the district court found that reinstatement was not a viable option due to the lack of available positions and given the animosity between the parties. We cannot say that finding is clearly erroneous. Moreover, on this record, we see no abuse of discretion in the district court's decision to deny Starceski the remedy of reinstatement. The district court was in a much better position [than us] to determine whether or not reinstatement was feasible based on the testimony and evidence at trial. Brunnemann, 975 F.2d at 180. Accordingly, we will affirm the district court's denial of Starceski's motion for reinstatement.