Court Opinion

ID: 8986356
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:50:20.529854+00
Date Added: 2024-06-11T17:10:48.330261
License: Public Domain

MANSMANN, Circuit Judge,
dissenting.
I respectfully dissent because I believe that the district court committed legal error in two respects: (1) in overturning the first jury’s verdict in favor of the plaintiffs and in granting a new trial on the erroneous basis that the testimony of Henry Par-zick was irrelevant and prejudicial and in excluding Parzick’s testimony at the second trial; and (2) in the second trial, by responding to the jury’s questions by language that was incomplete, confusing and misleading with respect to the plaintiffs’ burden of proof in circumstantial cases of employment discrimination. I would reinstate the first jury’s liability verdict for the plaintiffs and remand for a new trial on damages.
I.
We have repeatedly emphasized that direct evidence in the form of a “smoking gun” is not required to prove discrimination. See Lockhart v. Westinghouse Cred*192it Corp., 879 F.2d 43, 48 (3d Cir.1989) (“there is usually no ‘smoking gun’ evidence of intentional discrimination”); Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 895 (3d Cir.) (in banc), cert. dismissed, 483 U.S. 1052, 108 S.Ct. 26, 97 L.Ed.2d 815 (1987) (“[b]ecause the plaintiff may meet in alternate ways his burden to show that age was a determinative factor in his discharge, the plaintiff is entitled to show that the employer’s explanation was pretextual by proffering evidence which is circumstantial or indirect as well as that which shows directly discriminatory animus”); Maxfield v. Sinclair Int’l, 766 F.2d 788, 791 (3d Cir.1985), cert. denied, 474 U.S. 1057, 106 S.Ct. 796, 88 L.Ed.2d 773 (1986) (employer statements to the employee that s/he is being fired because of age will often be difficult to obtain); Dillon v. Coles, 746 F.2d 998, 1003 (3d Cir.1984) (in employment discrimination cases direct evidence of the employer’s motivation is unavailable or difficult to acquire).
The allocation of burdens of proof and persuasion provided in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and Texas Dep’t of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), make clear that not only is “smoking gun” evidence not required, but a specially tailored burden-shifting mechanism is available to a plaintiff who cannot produce direct evidence. See Gavalik v. Continental Can Co., 812 F.2d 834, 853 (3d Cir.), cert. denied, 484 U.S. 979, 108 S.Ct. 495, 98 L.Ed.2d 492 (1987) (proof of discrimination under ERISA employs Burdine burden-shifting mechanism where direct “smoking gun” evidence is unavailable).
I would hold the excluded testimony of Henry Parzick to be both highly relevant and admissible as an admission of a party opponent. The record as a whole provides the context in which the statement is relevant and lays a proper foundation for a party opponent admission under Federal Rule of Evidence 801(d)(2)(D). A more complete review of the evidence produced at the first trial1 makes this clear.
II.
Although the panel majority accurately summarizes the parties’ contentions, additional facts are necessary to explain the relevance of the excluded testimony. While admitting that declining sales had necessitated the reduction-in-force, Westinghouse contended that it was precluded from transferring the plaintiffs to different job progressions by the collective bargaining agreement. Throughout the trial, Westinghouse asserted that it sought conscientiously to conform to the terms of the collective bargaining agreement in terminating the plaintiffs.
At the same time, Westinghouse manager James Borden testified that in deciding to eliminate the negotiation engineers’ job progression, Westinghouse managers Borden and McIntyre had not considered plaintiffs’ ages, pensions or salaries, however, Borden admitted he had recognized “years of service” as an “emotional issue”. Borden testified that Westinghouse staff met weekly over a period of several months to consider reduction-in-force options. According to Borden, executive meetings were also held where Nick Kulokoski, manager of personnel relations, provided guidance on labor laws, the collective bargaining agreement, and compliance with discrimination laws. Despite these numerous meetings, Westinghouse failed to document its assertions that its decision to eliminate negotiation engineers was based solely on economic necessity and that factors such as age, pension, or salary had not been assessed.
Plaintiff Henry Parzick testified that on November 3, 1982, he and other negotiation engineers were called to a meeting with James Borden and their supervisor Thomas Kinlin at which they were informed of their termination. Parzick testified, “[o]ne point of interest after the meeting, I did speak to *193Mr. Kinlin. We just chatted, and he informed me that at [an executive management] meeting he attended ... a discussion was held regarding our termination.” Par-zick then related, over objection, the statements of the unnamed manager and Nick Kulokoski. Parzick also testified that only “management level or above” personnel attended executive meetings. Contrary to the majority’s characterization of Kinlin’s testimony, in answer to plaintiffs’ counsel, Kinlin testified equivocally concerning this conversation, stating that he could have had a “confrontation with Kinlin, ... but that he could not remember it”, however, Kinlin believed “Hank” (Henry Parzick) and did not believe he was lying when he testified. Given the verdict for the plaintiffs, it is highly probable that the jury believed Parzick rather than Kinlin.
III.
Keeping in mind that “smoking guns” are rarely available to the plaintiffs in employment discrimination cases, the evidence proffered at the first trial was clearly sufficient to establish the relevance of Parzick’s testimony. Borden established that staff and management held weekly meetings to discuss layoffs. While he asserted that the plaintiffs’ ages were not considered, he conceded recognition of the emotional impact of the plaintiffs’ long years of service when deciding to terminate the plaintiffs.
Borden also established that Nick Kulo-koski, who allegedly stated “Let’s give it a try. What do we have to lose?”, advised management regarding compliance with the collective bargaining agreement and discrimination laws. Further, a compartmentalized differentiation between Westinghouse’s alleged disregard of the collective bargaining agreement and age discrimination laws ignores the fact that age and seniority often are related and that pensions accrue according to both age and the collective bargaining agreement.
It was certainly for the jury to assess the credibility of Westinghouse’s assertion that it never considered the financial implications of terminating groups of employees, specifically, relative savings in salary and pensions, which are tightly linked with age and seniority. Finally, even if one agrees with the majority that Parzick’s testimony’ was not relevant to the plaintiffs’ affirmative claim of age discrimination, it was undeniably relevant to challenge Westinghouse’s defense that it could not have spread the reduction-in-force across the three engineering job progressions because the terms of the collective bargaining agreement precluded it from doing so. Because the plaintiffs could have met their burden by proving that Westinghouse’s alleged business reasons were pretextual, Parzick’s testimony was improperly excluded as irrelevant.
With respect to the district court’s ruling that Parzick’s testimony was unfairly prejudicial under Federal Rule of Evidence 403, I do not disagree with the panel majority’s use of the abuse of discretion standard of review, but rather with the application of this standard to these facts. To be excluded under Rule 403, evidence must be unfairly prejudicial; mere prejudice cannot suffice because “virtually all evidence is prejudicial or it isn’t material.” Carter v. Hewitt, 617 F.2d 961, 972 n. 14 (3d Cir.1980). Quoting Weinstein, we have stated that evidence is unfairly prejudicial if it
“appeals to the jury’s sympathies, arouses its sense of horror, provokes its instinct to punish,” or otherwise “may cause a jury to base its decision on something other than the established propositions in the case.”
Carter, 617 F.2d at 972.
The declarant’s statement mentioned “violating ... the labor laws of their contract” or “doing something illegal or against the contract.” Even if the illegality referred to age discrimination and not the collective bargaining agreement, the district court found the statement substantially prejudicial because the jury may have viewed Westinghouse managers as a “lawless bunch.”
But Westinghouse itself proffered the defense that it never considered plaintiffs’ ages and at all times conformed to the terms and restrictions of the collective bargaining agreement. So it was certainly *194material to Westinghouse’s defense that it at all times tried to conform to the collective bargaining agreement. Given that Westinghouse repeatedly emphasized such efforts to conform to the collective bargaining agreement, the plaintiffs’ one bit of evidence that Westinghouse may not have so scrupulously concerned itself with the collective bargaining agreement cannot be said to violate the Carter standard.
Logically relevant and not unfairly prejudicial, Parzick’s testimony was admissible as a party opponent admission under Federal Rule of Evidence 801(d)(2)j(D). A statement qualifies as such an admission when
[ it] is offered against a party and is ... a statement by the party’s agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship.
This rule requires that the declarant be both authorized and acting within the scope of employment, when making an admission on behalf of the defendant. See Carden v. Westinghouse Electric Corp., 850 F.2d 996, 1002 n. 6 (3d Cir.1988). Both statements, “[m]aybe we’re doing something illegal or against the contract” and “let’s give it a try ... [wjhat do we have to lose?”, were made by high level executives authorized to speak on behalf of Westinghouse. Both statements were made during a meeting limited to Westinghouse executives which concerned reduction-in-force options. See Cline v. Roadway Exp., Inc., 689 F.2d 481, 488 (4th Cir.1982) (admitting evidence by employees of statements made by “managers, some specifically identified,” at managers meetings indicating some evidence of age discrimination). Cf. Carden, 850 F.2d at 1002 (supervisor’s statement that “they wanted a younger person” failed to identify “they” as foundation for admission); Cedeck v. Hamiltonian Federal Sav. and Loan Ass ’n, 551 F.2d 1136, 1138 (8th Cir.1977) (no admission because declarant unknown).
Moreover, one can infer from their presence at a meeting concerning the impending reduction-in-force that both the unnamed manager and Nick Kulokoski acted within the scope of their employment. For example, Nick Kulokoski, the personnel manager responsible for counsel on legal issues, acted within the scope of his employment when he evidenced Westinghouse’s attitude: “Let’s give it a try. What do we have to lose?” Westinghouse also cannot “compartmentalize this executive as if he had nothing more to do with company policy than the janitor or watchman”. Lockhart, 879 F.2d at 54 (rejecting limited view that a manager not associated with plaintiff’s division could not make admission for company).
Where the employer is a corporate entity, we have recognized that a manager’s comments may not be avoided if later disadvantageous to its litigation posture. Id. (“[w]hen a major company executive speaks, “everybody listens” in the corporate hierarchy ... ”). Contra Staheli v. University of Mississippi, 854 F.2d 121, 127 (5th Cir.1988) (professor uninvolved in tenure decision could not make admission for school concerning denial of tenure); Hill v. Spiegel, Inc., 708 F.2d 233, 237 (6th Cir.1983) (admission made by managers uninvolved in decision to discharge plaintiff made outside the scope of their agency). These facts suffice to lay the foundation that these managers acted within the scope of their employment.
Both the unnamed declarant’s and Nick Kulokoski’s statements constituted party-opponent admissions.2 The admissibility of a Rule 801(d)(2)(D) admission does not depend on the plaintiff’s ability to name a corporate officer making a damaging admission on behalf of the corporation; rather, identification which establishes the requisite foundation suffices. See Dudding v. Thorpe, 47 F.R.D. 565, 571 (W.D.Pa.1969). The name of the unnamed declarant, given the fact that he commented upon the legality of the termination decision, is unnecessary because the characteristics attributa*195ble to the declarant based on the context of the statement satisfy the requirements for a party opponent admission. Id. (authorized statement of an unnamed nurse who observed the alleged tort in the recovery room admissible against the hospital).
Corporations do not proclaim boldly their intent to discriminate and rarely embrace discriminatory statements made by their managers. Yet these people are the ones who act for the corporation and because corporate entities can speak only through employees, managers’ articulations may be the only ones evidencing corporate discriminatory intent. If corporate parties are not immune from making Rule 801(d)(2)(D) admissions, then managers’ statements made in the scope of their employment must be given the effect of an admission.
IV.
To reverse for a confusing or misleading jury instruction, we “must be left with a substantial and ineradicable doubt as to whether the jury was properly guided in its deliberations”. United States v. Traitz, 871 F.2d 368, 383 (3d Cir.), cert. denied, — U.S. -, 110 S.Ct. 78, 107 L.Ed.2d 44 (1989). I am left with such a doubt given the circumstances of the supplemental instruction received by the jury within ten minutes of its defense verdict.
The initial charge instructed the jury on the burden of proof as well as direct and circumstantial evidence. After retiring to deliberate at 12:40 p.m., the jury returned with questions at 4:20 p.m.3 The court correctly reinstructed on the difference between direct and circumstantial evidence, whereupon the jury was dismissed briefly. After the jury reentered at 4:33 p.m., the court gave the following charge:
[In answer to the first question:] No. If it was pure happenstance, if there was no design at all, no reason- why these men’s names should come out and they were older, if it was pure happenstance as I say and not by any design, no, Westinghouse would not be liable.
But if you analyze it, from the very definition that I gave you, it means that that must have been a part of the intention of Westinghouse, because I said to you that age must be a “determining factor.” That means, of necessity, that the employer must have determined that, because you can’t have a “determination” in a vacuum. It has to be somebody’s determination to make it a “determining factor.”
So, therefore, it must be one of the things that influenced Westinghouse. In fact, the thing, one of the things that determined Westinghouse to do the, to act in the way it did.
[In answer to the second question:] No. Because the plaintiff has the burden of proof as I mentioned to you, and if the plaintiff hasn’t proven why they did this, then the plaintiff has not sustained the burden of proof.
Plaintiffs’ counsel then asked the court to reiterate that the plaintiffs could meet their burden of proof with circumstantial evidence. The court complied.4
At this point, another juror asked an additional question “hav[ing] to do with the actual definition of age discrimination”: “If ... Westinghouse laid off older workers and retained younger ones, and if they were all fully qualified, [etc.], is that ... in and of itself age discrimination?” In response, the court stated: “If the age ... was “a determining factor” in making that decision, that would be age discrimination.” The juror responded: “but ... if it was not *196known, it was decided by the individual making this consideration that it was not known why the decision or how the decision was made, why the decision was made to do “this versus this,” the mere fact of laying off the older workers and retaining the younger workers, is that age discrimination? You are saying that that is not, by itself. There has to be an intention on the part of the company ... to discriminate on the basis of age.” The court: “The employer must consider age to be a determining factor in reaching it’s [sic.] decision.” Plaintiffs’ counsel obtained an exception, articulating his concern that the jury “ha[s] left here with a feeling that they need [to] find direct evidence of the employer’s intention, ... and I would ask ... that that question ... be answered ... to include that they can find “intention” and they can find “intentional action” both through direct and circumstantial evidence.”
In my view, this last question evidences at least one juror’s continuing confusion over the relationship between types of evidence and the burden of proof. Because the jury returned a defense verdict within ten minutes of retiring after this last question, I am left with a “substantial and ineradicable doubt” as to whether the instructions allayed the jury’s evident confusion concerning the type of evidence required to meet the plaintiffs' burden of proof. Although the district court repeatedly defined circumstantial evidence, I believe that at least one juror was confused as to whether direct evidence was needed to show Westinghouse’s discriminatory intent and therefore that the jury may have rendered a defense verdict even though it concluded that Westinghouse’s explanation was pretextual.
Based on the foregoing I would summarize my departure from the majority as follows. At the first trial, although I agree with the panel majority that Westinghouse should have had the opportunity to show mitigation of damages, I would reinstate the verdict reached as to liability because I believe the statements made by Westinghouse managers were admissions relevant to age discrimination.
With respect to the second trial, I would reverse because the district court precluded the highly relevant admissible testimony of Henry Parzick and because I am convinced that the charge confused and misled the jury such that the jury believed that the plaintiffs had to prove discriminatory intent by direct evidence.

. Because I would hold that the district court erred in granting a new trial on this issue, I would not have the court reach the question of whether the district court properly excluded this testimony at the second trial. Obviously, I would hold it error for the district court to have subsequently excluded this testimony at the second trial.

. Kinlin’s declaration to Parzick also satisfies Rule 801(d)(2)(D)’s foundation requirements because Kinlin’s statement to Parzick coincided with the meeting at which Parzick was terminated.

. As read into the record by the district court, these questions were:
1. "We are split on our verdict. However, there may be a change of opinion if Westinghouse is still guilty if they [sic.] discriminated by chance rather than by design”.
2. "If a juror says that he does not know why Westinghouse made the decision to layoff employees the way they [sic.] did, should he vote to convict [sic.]?’’
3.“What is evidence? Please define the word evidence.”

. The district court charged: “Circumstantial evidence is just as good as direct evidence, provided it leads you to, to a conclusion ‘by a preponderance of the evidence.’ In other words, it leads you to balance the scales; balances the scales or unbalances them_ You can’t speculate; no, of course.”