Opinion ID: 3014542
Heading Depth: 2
Heading Rank: 3

Heading: Whether liquidated damages may be assessed

Text: against the School District under the ADEA. Based on the jury’s finding that the School District acted willfully when it violated the ADEA, the District Court invoked the liquidated damages provision of the ADEA and doubled Potence’s award of damages. The School District contends that it cannot be compelled to pay liquidated damages due to its status as a municipality because liquidated damages are punitive in nature. We have not previously considered this issue in the context of the statutory framework of the ADEA. As we must interpret the relevant provisions of the ADEA, the issue is a legal one over which we exercise plenary review. Smith v. Holtz, 210 F.3d 186, 200 (3d Cir. 2000). The ADEA incorporates the enforcement powers, remedies, and procedures of the Fair Labor Standards Act (“FLSA”) set forth in 29 U.S.C. §§ 211(b), 216 (except for subsection (a)), and 217. 29 U.S.C. § 626(b). The enforcement provision of the FLSA expressly provides for imposition of liquidated damages payable “in cases of willful violations of this chapter.” 29 U.S.C. § 626(b). The FLSA further provides that “[a]ny employer who violates [the FLSA] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). Thus, when a jury finds that an employer willfully violated the ADEA, the basic damages award may be doubled under this liquidated damages provision. The School District argues that liquidated damages may not be assessed against municipalities because they are 9 punitive. There is an historical tension between municipal liability and damages imposed as punishment. Cook County v. United States ex rel. Chandler, 123 S. Ct. 1239, 1246 (2003). “Since municipalities’ common law resistance to punitive damages still obtains, ‘[t]he general rule today is that no punitive damages are allowed unless expressly authorized by statute.’ ” Id. (quoting Newport v. Fact Concerts, Inc., 453 U.S. 247, 260 n.21 (1981)). In assessing whether liquidated damages under the ADEA may be imposed against the municipality, represented here by the School District, we must address whether liquidated damages under the ADEA are punitive and, if so, whether the imposition of punitive damages against a municipality is expressly authorized by statute. Both the Supreme Court and this court have held that the liquidated damages provision of the ADEA was intended to be punitive in nature. Trans World Airlines, Inc. v. Thurston, 469 U.S. 105, 126 (1985); Starceski v. Westinghouse Elec. Corp., 54 F.3d 1089, 1095 (3d Cir. 1995). We must therefore examine the language of the statute to make certain that it applies to municipalities. The ADEA makes it unlawful for an employer “to fail or refuse to hire or to discharge” an individual because of his or her age. 29 U.S.C. § 623(a)(1). Included in the ADEA’s definition of employer is “a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State.” 29 U.S.C. § 630(b). The ADEA could not be more explicit in imposing liability for age discrimination against municipalities. Similarly explicit is the ADEA’s contemplation of the imposition of liquidated damages, as it states in pertinent part “[t]hat liquidated damages shall be payable only in cases of willful violations of this chapter.” 29 U.S.C. § 626(b). The FLSA provisions incorporated in the ADEA provide for the imposition of liquidated damages “against any employer (including a public agency),” 29 U.S.C. § 216(b), and the statutory definition of a “public agency” includes “State[s] or political subdivision[s] thereof,” 29 U.S.C. § 203(x). Furthermore, in dictum we assumed without deciding that liquidated damages under the FLSA were available against a municipality. See Brooks v. Vill. of Ridgefield 10 Park, 185 F.3d 130, 137 (3d Cir. 1999); see also Ray v. Iuka Special Mun. Separate Sch. Dist., 51 F.3d 1246, 1253 (5th Cir. 1995) (upholding award of liquidated damages against a school district under the ADEA when the issue on appeal was whether the school district had willfully violated the ADEA); Lee v. Rapid City Area Sch. Dist. No. 51-4, 981 F.2d 316, 319-20 (8th Cir. 1992) (en banc) (remanding for assessment of full liquidated damages against the school district under the ADEA when the issue on appeal was whether the district court erred in discretionarily reducing such damages); Orzel v. City of Wauwatosa Fire Dep’t, 697 F.2d 743, 759 (7th Cir. 1983) (upholding liquidated damages award against municipal fire department under the ADEA when issue on appeal focused on willfulness). In Cook County, the Supreme Court held that under the False Claims Act (“FCA”) treble damages could be imposed against municipalities because ever since the statute’s creation in 1863 its definition of “person” was intended to cover local governments, and Congress did not manifest an intent to limit the scope of that definition when it raised the ceiling on the damages in 1986. 123 S. Ct. at 1243-47. In contrast to the FCA, which does not explicitly identify a municipality as a “person,” the ADEA, in the provisions quoted above, does explicitly include state and local governments in the definition of “employer.” Thus, we need not move beyond the plain language of the statute or go to lengths to consider the historical context of the statute as the Court did in Cook County. Rather, the language of the ADEA itself makes it clear that Congress intended to subject municipalities like the School District to the liquidated damages provision of the ADEA. Inasmuch as the statute expressly authorizes the imposition of liquidated damages against a municipality, even though such damages are punitive in nature, we conclude that the District Court did not err in assessing liquidated damages against the School District. D. Whether the District Court erred in not reducing the damages award by the amount of retirement benefits that would have accrued to Potence. The jury returned a verdict form that awarded $254,000 in damages, and beneath that monetary figure wrote “back 11 pay 3 2/3 years.” App. at 35. The School District asserts that the award, which was intended to be for back pay, erroneously included $97,000 in retirement benefits that legally constitutes front pay. The District Court rejected the School District’s argument that the amount of damages awarded was not supported by the record. The Court stated it would not “second guess the jury and reduce the award because of a remark written in the margin of the verdict which may have no relevance with respect to the actual award.” App. at 15. The verdict form did not require the jury to differentiate between front pay and back pay, and therefore the written note could have had no significance. Potence agrees with the School District that the award was likely based on Potence’s salary schedule computation, which set forth the back pay calculation for 3-2/3 years as including $121,000 in wages, $36,000 in medical coverage, and $97,000 in retirement benefits, App. at 82-94, 209-11, totaling $254,000, the precise amount of damages awarded by the jury. However, the School District provides no case law supporting its contention that retirement benefits are always considered front pay. Potence presented evidence at trial that $97,000 is the amount of the retirement benefits that would have accrued to him during the relevant 3-2/3 years. Potence argues that the jury could have reasonably assumed that he would have worked with the School District until the time when such benefits would vest, making these benefits part of earned back compensation. Because a district court has an obligation “to uphold the jury’s award if there exists a reasonable basis to do so,” and may not “vacate or reduce the award merely because it would have granted a lesser amount of damages,” Evans v. Port Auth. of N.Y. & N.J., 273 F.3d 346, 351-52 (3d Cir. 2001) (internal quotation marks and citations omitted), we will uphold the damages award. E. Whether the District Court abused its discretion in calculating the reasonable rates for attorneys’ fees. We review the reasonableness of an award of attorneys’ fees for an abuse of discretion. Smith v. Phila. Hous. Auth., 107 F.3d 223, 225 (3d Cir. 1997). The party seeking 12 attorneys’ fees has the burden to prove that its request is reasonable. Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). To meet its burden, the fee petitioner must submit evidence to support the hours and billing rates it claims. Id. The School District argues that the following rates awarded were unreasonable and unsupported by the record: $200 per hour for Laputka, $150 per hour for Lentowski, $150 per hour for Sernark-Martinelli, and $85 per hour for paralegals. A reasonable hourly rate is calculated according to the prevailing market rates in the community. Washington v. Phila. County Court of Common Pleas, 89 F.3d 1031, 1035 (3d Cir. 1996). An attorney’s usual billing rate is a good starting point for assessing reasonableness, though it is not dispositive. Maldonado v. Houstoun, 256 F.3d 181, 184-85 (3d Cir. 2001). Laputka and four other attorneys in the area performing the same services submitted affidavits. Their rates ranged from $150 to $250 per hour. It was not an abuse of discretion to apply rates within this range for the three attorneys who worked on this case, regardless of whether they were hired as contract lawyers or were relatively recent law school graduates. This is particularly true when the more junior associates, Lentowski and Sernark-Martinelli, were awarded the lowest rate within the range. With regard to the paralegal rate of $85 per hour, the School District argues that pursuant to recent decisions on fee petitions that assessed paralegal rates at $50 per hour, the District Court should have reduced the rate awarded in the instant case. See, e.g., James v. Norton, 176 F. Supp. 2d 385, 400 (E.D. Pa. 2001). However, in those cases the rates were reduced because it was deemed unnecessary to bill paralegals at senior paralegal rates when evidence showed they engaged in low-level clerical work, such as typing. Id. at 399-400. Laputka’s affidavit indicated that the paralegals involved in the instant case participated in a broader and more complex range of trial-preparation activities. The Court was free to accept Laputka’s affidavit in light of the School District’s failure to provide evidence in support of its objection. We will therefore uphold the reasonableness of the paralegal rate. 13