Cypen & Cypen
MAY 27, 2010
Stephen H. Cypen, Esq., Editor
1. THANK YOU, DIVISION OF RETIREMENT: On May 24th through 26th, the Florida Division of Retirement sponsored its 31st Annual Police Officers’ and Firefighters’ Trustees’ School in Tallahassee. As usual, the group (Sarabeth Snuggs, Keith Brinkman, Trish Shoemaker, Melody Mitchell, Martha Moneyham and Julie Browning) sponsored a terrific program. The speakers and their topics were beneficial to all trustees, and the materials presented in the handbook provide instant reference and answers to many of your burning questions. If you did not attend this year’s school, you should make plans to be there next year. You will enjoy the program and increase your knowledge ... thus making your job as trustee much easier.
2. PARAMEDICS HAVE RIGHT TO PROCEED INDIVIDUALLY AGAINST CITY FOR OVERTIME: Alvarez and others sued the City of Chicago, claiming that the City systemically miscalculated their overtime pay in a total of ten different ways. The trial judge found that not all claims were common to all plaintiffs. Relying on earlier circuit precedent, the district court dismissed plaintiffs’ collective action as "hopelessly heterogenous," and directed plaintiffs to proceed through arbitration. Because the named plaintiffs had the right to proceed individually, the appellate court reversed the judgment of dismissal. Sifting through the subclaims of each of the myriad plaintiffs is an unenviable task. But plaintiffs were nonetheless entitled to their day in court. Moreover, it appears that here common questions predominated with regard to each theory of liability. The parties had already filed cross-motions for summary judgment on the merits of these common questions. After the district court determines validity of these subclaims, calculation of each plaintiff's award (if any) will be largely mechanical. On remand, given that the claims of the named plaintiffs will still be before it, the district court should consider whether a collective action might be the most efficient judicial resolution of the matter after all. Alvarez v. City of Chicago, Case Nos. 09-2020 and 09-2021 (U.S. 7th Cir., May 21, 2010).
3. U.S. SUPREME COURT RULES ON ERISA ATTORNEY’S FEES: After medical problems forced Hardt to stop working, she filed for long-term disability benefits under her employer’s long-term disability plan. Upon exhausting her administrative remedies, Hardt sued Reliance Standard Life Insurance Co., her employer’s disability insurance carrier, alleging that it had violated the Employee Retirement Income Security Act of 1974 by wrongfully denying her benefits claim. The District Court denied Reliance summary judgment, finding that because the carrier had acted on incomplete medical information, the benefits denial was not based on substantial evidence. Though also denying Hardt summary judgment, the court stated that it found “compelling evidence” in the record that she was totally disabled and that it was inclined to rule in her favor, but concluded that it would be unwise to do so without giving Reliance the chance to address the deficiencies in its approach. Therefore the court remanded to Reliance, giving it 30 days to consider all the evidence and to act on Hardt’s application, or else the court would enter judgment in her favor. Reliance did as instructed, and awarded Hardt benefits. Hardt then filed a motion under a fee-shifting statute that applies in most ERISA lawsuits, and that provides “the court in its discretion may allow a reasonable attorney’s fee and costs … to either party.” Granting the motion, the District Court applied the Circuit’s framework governing attorney’s fee requests in ERISA cases, concluding, among other things, that Hardt had attained the requisite “prevailing party” status. The Fourth Circuit vacated the fees award, holding that Hardt had failed to establish that she qualified as a “prevailing party” under prior circuit precedent that a fee claimant is a “prevailing party” only if he has obtained an “enforceable judgment on the merits ” or a “court-ordered consent decree. ” The circuit court reasoned that because the remand order did not require Reliance to award Hardt benefits, it did not constitute an enforceable judgment on the merits. In reversing, the United States Supreme Court held that (1) a fee claimant need not be a “prevailing party” to be eligible for an attorney’s fees award under ERISA and (2) a court may award fees and costs under ERISA, as long as the fee claimant has achieved “some degree of success on the merits.” Hardt v. Reliance Standard Life Insurance Co. , Case No. 09-448 (U.S., May 24, 2010) .
4. FAILURE TO FILE TIMELY EEOC CHALLENGE TO ADOPTION OF A PRACTICE DOES NOT BAR TIMELY DISPARATE-IMPACT CLAIM CHARGING LATER APPLICATION OF THAT PRACTICE: In 1995, the City of Chicago administered a written examination to 26,000 applicants seeking firefighter positions. In January 1996, the City announced it would draw candidates randomly from a list of applicants who scored at least 89 out of 100 points on the examination, whom it designated as “well qualified.” It informed those who scored below 65 that they had failed and would not be considered further. It informed applicants who scored between 65 and 88, whom it designated as “qualified,” that it was unlikely they would be called for further processing, but that the City would keep them on the eligibility list for as long as that list was used. Four months later, the City selected its first class of applicants to advance, and it repeated this process multiple times over the next six years. Beginning in March 1997, several African-American applicants who scored in the “qualified” range, but had not been hired, filed discrimination charges with the Equal Employment Opportunity Commission, and received right-to-sue letters. They then filed suit, alleging that the City’s practice of selecting only applicants who scored 89 or above had a disparate impact on African-Americans in violation of Title VII of the Civil Rights Act of 1964. The District Court certified a class of African-Americans who scored in the “qualified” range but were not hired. The court denied the City’s motion for summary judgment, rejecting its claim that petitioners had failed to file EEOC charges within 300 days after the unlawful employment practice occurred, and finding instead that the City’s ongoing reliance upon the 1995 test results constituted a continuing Title VII violation. Ultimately, the applicants prevailed on the merits. However, the Seventh Circuit reversed the judgment in their favor, holding that the suit was untimely because the earliest EEOC charge was filed more than 300 days after the only discriminatory act -- sorting scores into “well qualified,” “qualified,” and “not qualified” categories. The later hiring decisions, the Seventh Circuit held, were an automatic consequence of the test scores, not new discriminatory acts (see C&C Newsletter for June 26, 2008, Item 10). On certiorari review by the United States Supreme Court, the Court held that plaintiff who does not file a timely charge challenging adoption of a practice may assert a disparate-impact claim in a timely charge challenging the employer’s later application of that practice, as long as he alleges each of the elements of a disparate-impact claim. The City charged that the decision will result in a host of practical problems for employers and employees alike. The Court, however, must give effect to the law Congress enacted, not assess consequences of each approach and adopt the one that produces the least mischief. It is left to the Seventh Circuit to determine whether the judgment must be modified to the extent that the District Court awarded relief based on the first round of hiring, which occurred outside the charging period even for the earliest EEOC charge. Lewis v. City of Chicago, Illinois, Case No. 08-974 (U.S., May 24, 2010).
5. DISABLED VET NOT ENTITLED TO EARLIER EFFECTIVE DATE OF AWARD: Gaston appealed from a final judgment of the United States Court of Appeals for Veterans Claims denying his claim to an earlier effective date for his award of total disability based on individual unemployability. The appellate court held that under the applicable statute, a veteran is only entitled to an earlier effective date if an increase in his disability occurred during the year before he filed his claim. Because the Veterans Court had concluded the increase in Gaston's disability occurred more than one year earlier than the filing of his claim, it affirmed the judgment. The Veterans Administration correctly interpreted the statute and promulgated a regulation stating that the effective date of any increase in disability compensation will be the earliest date as of which it is factually ascertainable that an increase in disability had occurred if the claim is received within one year from that date; otherwise, the effective date of the increase is the date of receipt of the claim. In fact, Congress enacted the subject provision in 1975, to alleviate the existing strict rule by permitting retroactive payment of increased compensation from the date of increase in disability up to one year when that date is ascertainable. Gaston v. Shinseki, Secretary of Veterans Affairs, Case No. 2009-7104 (U.S. Fed. Cir., May 20, 2010).
6. FEDERAL JUDICIARY LAUNCHES ENHANCED WEBSITE: The Federal Judiciary’s website, www.uscourts.gov, has unveiled a host of enhancements. The site has been redesigned to make it more attractive, accessible and useful to its diverse audience of users. The improvements further the website’s mission of increasing public interest, awareness and understanding of the federal court system and its functions, and to serve as a source for disseminating Federal Judiciary information to the public. The website is a primary source of information on the structure, function and operations of the federal courts. It plays an important role in how the Judiciary communicates to the public, with useful and timely information for students, news media, attorneys, academics, government officials, associations and others -- in the United States and worldwide. The new design reflects input of a wide range of users who expressed their needs, preferences and interests during usability testing and focus groups. Among the enhancements are
Readers should be able to locate some of the actual cases we summarize in the Newsletter. Nobody should rely solely upon another’s analysis of a case.
7. EX-HOOTERS WAITRESS CLAIMS WEIGHT DISCRIMINATION: A former Hooters waitress claims in a discrimination suit that the restaurant placed her on “weight probation,” and counseled her to join a gym so she could fit into her extra-small size uniform. ABAJournal.com reports that waitress Cassandra Smith claims she was 5-foot-8 at the time, and weighed 132.5 pounds. The suit alleges Hooters has only three sizes of uniforms: extra-extra-small, extra-small and small. Smith asserts violations of state laws that bar discrimination on basis of weight discrimination and gender discrimination. (Curiously, Smith alleges that at time she was recruited to work at Hooters in 2008, she weighed “close to 145 pounds” -- presumably, at the same height.) Read the entire slim complaint at http://www.callsam.com/images/stories/news_docs_pics/Complaint_Smith-vs-Hooters.pdf.
8. JUDGE ORDERS FORMER DETROIT MAYOR BACK TO PRISON: He said he was a changed man, but law.com says the judge didn't buy it. Former Detroit Mayor Kwame Kilpatrick is going back to prison for up to five years for hiding his assets and pursuing a lavish lifestyle at the same time he owed the city $1 Million for his role in a text-messaging scandal. In a ruling that drew gasps in the courtroom, Circuit Court Judge David Groner ordered Kilpatrick to serve 18 months to five years in prison for violating terms of his probation by dodging his obligation to pay restitution, concluding that Kilpatrick was beyond rehabilitation and showed no signs of remorse or humility. Kilpatrick has paid about $140,000 of his restitution so far. Prosecutors have spent months trying to convince the court that he had violated terms of his probation by hiding information about his finances. Kilpatrick argued that he could afford only $6 a month in payments. Meanwhile, Kilpatrick was living in a million-dollar home, driving a brand-new Escalade and purchasing elective surgery for his wife. (Hey, everyone has priorities.)
11. OXYMORON: Why are they called " stands" when they are made for sitting?
12. FABULOUS RANDOM THOUGHTS: Can we all just agree to ignore whatever comes after DVDs? I don't want to have to restart my collection.
13. QUOTE OF THE WEEK: “Like almost everyone who uses e-mail, I receive a ton of SPAM every day. Much of it offers to help me get out of debt or get rich quick. It would be funny if it weren’t so exciting.” Bill Gates
14. PLEASE SHARE OUR NEWSLETTER: Our newsletter readership is not limited to the number of people who choose to enter a free subscription. Many pension board administrators provide hard copies in their meeting agenda. Other administrators forward the newsletter electronically to trustees. In any event, please tell those you feel may be interested that they can subscribe to their own free copy of the newsletter at http://www.cypen.com/subscribe.htm. Thank you.
Copyright, 1996-2011, all rights reserved.
Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.