Opinion
Cause No. IP98-1609-C-T/G
July 19, 2000
ENTRY ON MOTION FOR SANCTIONS, MOTIONS TO STRIKE AND MOTION FOR SUMMARY JUDGMENT
The Plaintiffs, James R. Smith and Ernest E. Whaley, sue Defendant Borg-Warner Automotive Diversified Transmission Products Corporation ("DTP") under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. This cause is before the court on (1) the Defendant's motion for summary judgment, (2) the Defendant's motion to strike the report of Michael Murphy, (3) the Defendant's motion to strike the affidavit of Neal Lewis and attached summary, (4) the Plaintiffs' motion to strike, and (5) the Plaintiffs' motion for sanctions for destruction of material evidence and for exclusion on other grounds. The court's rulings on these motions are discussed in this entry.
Factual and Procedural Background
Prior to 1997, DTP was engaged in the manufacture of manual transmissions and transfer cases in Muncie, Indiana. On December 31, 1996, DTP sold its manual transmissions division, which resulted in a large scale reduction in force ("RIF"), affecting the jobs of hundreds of hourly and salaried employees, including supervisors. The RIF took place over approximately six months: The first round of lay-offs for salaried employees occurred in the last quarter of 1997; the second and third rounds of lay-offs occurred in the first quarter of 1998. If a supervisor was not retained, he or she was laid off, unless the supervisor had previously been a bargaining unit production employee, in which case his or her seniority may have allowed the supervisor to be transferred into the production unit to avoid being laid off.
Plaintiffs Smith and Whaley were employed as production supervisors prior to the RIF. Both had been promoted to supervisor from the bargaining unit and had enough seniority to allow them to be transferred back into the bargaining unit rather than being laid off. Smith was born on May 8, 1939, which made him 58 years of age, Whaley was born on December 18, 1941, which made him 55 years at the time of the Plaintiffs' transfer/demotion in November 1997. Pete Kohler, DTP's Executive Director, Human Resources testified that production supervisors can be shifted around, though that is not done on a regular basis.
Kohler was hired as DTP's Executive Director, Human Resources in 1995. As of the date of his deposition on August 6, 1999, however, his title had been changed to Vice President, Human Resources. His responsibilities remain the same.
DTP has presented evidence about the evaluation process it used to determine which employees would be affected by the RIF. DTP upper management (Kohler and Product Line Manager Richard Hill), testified to the following: Area managers were to evaluate each supervisor for whom they were responsible based on six areas to determine the supervisor's overall job performance: performance of work, job knowledge, attitude, quantity of work, versatility and initiative; each supervisor was to be given a numerical rating from 1 to 5 (1 being the lowest) in each of the six areas; the ratings were then totaled and the supervisor was ranked against all other supervisors in the plant, allowing DTP to compare supervisors to one another; upper management members Hill, Dave Campbell and Lowell Drill collectively reviewed the overall ratings of supervisors through discussions among themselves as well as with the area managers; and the supervisors with the highest ratings were retained.
The ratings of supervisors in the transmission division, including the Plaintiffs, was performed by area managers, Drill and Hill. As Product Line Manager over the Transmissions Division, Hill was the primary official responsible for reviewing and approving the evaluations of supervisors in the transmission division. Kohler and Hill testified that Smith and Whaley were compared to all other supervisors. Kohler testified that Smith and Whaley were ranked lower than supervisors in other units. DTP has presented a document, Exhibit 7 to Kohler's deposition, which purports to be an overall ranking of the supervisors in the Plaintiffs's division and shows Smith and Whaley at the bottom of the rankings within their division. The Plaintiffs, along with six other supervisors in their division, did not retain their supervisory positions. DTP retained thirty-one supervisors who were more than ten years younger than Smith and twenty-three supervisors who were more than ten years younger than Whaley. Smith identifies the following, among others, as younger supervisors who retained their positions: Bill Bevins, Jr.; Dan Capstick; Bobby Goodman; Steve Michaels and Shane Sherrill. Whaley identifies the following, among others, as younger supervisors who retained their positions: Capstick and Bevins. DTP has offered the affidavit of Scott Bowers, in which Bowers testifies that Bevins was born on February 17, 1952, and Capstick was born on January 14, 1951. ( See Bowers Aff. ¶ 11). This makes them 45 and 46 years of age, respectively, at the time the Plaintiffs were demoted.
The court understands "unit" to be the same as "division".
DTP's Statement of Material Fact No. 53 cites to paragraphs 6 and 7 of Bowers' affidavit in addition to the Kohler deposition Exhibit 7 as supporting the proffered statement of material fact that Plaintiffs along with the 6 employees ranked at the same level or immediately above them in their division did not retain their supervisory positions. The cited paragraphs of Bowers' affidavit, however, merely establish that the RIF occurred and identify eight employees who did not retain their supervisory positions. It says nothing about the rankings of any employees, particularly the Plaintiffs.
Smith alleges that his supervisor James Parker made a statement relating to Smith's age. Smith testified that sometime after Hill told Parker that Smith would be transferred into the bargaining unit, Parker asked him how old he was, Smith told him, and then Parker replied that Smith was just a few months older than he. According to Smith, Parker then stated, "Well, I really doubt if I have a job when this is all over too because they don't want people our age." (Smith Dep. at 32.) Smith understood Parker's use of the pronoun "they" to be referring to DTP in general rather than any particular person. Smith had no reason to believe that Parker himself would discriminate against him because of his age.
On December 4, 1997, a Notice of Charge of Discrimination of Mr. Smith was issued to DTP. The Notice was addressed to Pete Kohler, Personnel Manager. DTP responded to Mr. Smith's charge of discrimination on February 2, 1998, and responded to the Charge of Discrimination of Mr. Whaley on February 4, 1998.
The parties have not directed the court to anything in the record that reflects the date on which Mr. Whaley's Notice of Charge of Discrimination was issued to DTP.
Kohler instructed all management personnel performing the RIF evaluations and executing the RIF to destroy all RIF documents "when this [the RIF] was finished". (Kohler Dep. at 33.) He also instructed his clerical staff to destroy all documents on computers. Kohler testified that the RIF spreadsheets of employee ratings were destroyed "towards the end of the [RIF] process," ( id. at 49), and hard copies of documents were destroyed "as we went along." ( Id. at 38.) Other RIF documents were destroyed towards the end of the process or at the end of the RIF. Only two purported RIF documents survived the widespread document destruction. The first is a copy of the evaluation form used to rate all supervisors. The second is a chart which purportedly reflects the rankings of all supervisors in the Plaintiffs' division who had not already assigned to other areas. ( See Kohler Dep., Ex. 7.) The chart shows the Plaintiffs at the bottom of the ranking.
Kohler testified that he ordered the RIF documents be destroyed for "humanistic" reasons. (Kohler Dep. at 34, 73.) He explained that "[y]ou certainly don't want documents laying around or that could be discovered by someone in the plant that shows their rating. . . ." ( Id. at 34.) As a secondary reason for destroying the documents Kohler added that they served no purpose after the RIF. ( Id.) Kohler has ordered the destruction of documents in other RIF situations. ( Id. at 73.)
Kohler knew when DTP's RIF began that equal opportunity litigation was a potential. He has been involved with prior EEOC litigation as a human resource professional and is aware that when a charge of discrimination is made against an employer, the Equal Employment Opportunity Commission ("EEOC") will ask for documents supporting the employer's position. He also is aware that EEOC claims can move into court and that at some point attorneys for plaintiffs will ask for documents. Kohler understands that if a discrimination claim were brought, he would have to produce documents related to the RIF. He was aware of DTP's documents which outline its responsibility for the retention of employee files.
On November 24, 1998, the Plaintiffs commenced this action against DTP alleging that it demoted them from their salaried supervisor positions to hourly machine operator positions in violation of the ADEA. They allege that DTP knew or recklessly disregarded that its actions were prohibited by the ADEA and that its actions were willful and intentional. They seek relief including compensatory damages, liquidated damages, reinstatement, attorney's fees and costs.
Summary Judgment Standard
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Michas v. Health Cost Controls, 209 F.3d 687, 692 (7th Cir. 2000). The court must construe the evidence and all reasonable inferences based on the evidence in the light most favorable to the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Michas, 209 F.3d at 692. "`A genuine issue for trial exists only when a reasonable jury could find for the party opposing the motion based on the record as a whole.'" Michas, 209 F.3d at 692 (quoting Pipitone v. United States, 180 F.3d 859, 861 (7th Cir. 1999) (citation omitted)).
Discussion
This action is brought under the ADEA which prohibits an employer from discriminating against an individual "because of such individual's age." 29 U.S.C. § 623(a)(1). Because the Plaintiffs have no direct evidence of discrimination in this case, they rely on the McDonnell Douglas indirect, burden-shifting method of proof. See, e.g., McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973); Miller v. Borden, Inc., 168 F.3d 308, 313 (7th Cir. 1999); Fisher v. Wayne Dalton Corp., 139 F.3d 1137, 1141 (7th Cir. 1998). Under this method of proof, the Plaintiffs must demonstrate a prima facie case of unlawful discrimination. See, e.g., Miller, 168 F.3d at 313. If they do, then the burden of production shifts to the Defendant to articulate a legitimate, nondiscriminatory reason for the adverse employment action, in this case their demotion. See id. If the Defendant does so, then the Plaintiffs must prove that the reason offered was a pretext for unlawful age discrimination. See id. The Plaintiffs bear the ultimate burden of persuasion on whether the Defendant intentionally discriminated against them because of their ages. See, e.g., Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248 (1981); Jackson v. E.J. Brach Corp., 176 F.3d 971, 982 (7th Cir. 1999); Chiaramonte v. Fashion Bed Group, Inc., 129 F.3d 391, 398 (7th Cir. 1997), cert. denied, 523 U.S. 1118 (1998).
The Defendant seems to miscomprehend the Plaintiffs' burden under McDonnell Douglas at the summary judgment stage of the proceedings. It argues that if it articulates a legitimate nondiscriminatory reason for its action against the Plaintiffs, "they then must carry their overall burden of persuasion showing that the proffered and allegedly nondiscriminatory reasons are really pretextual," (Def.'s Br. Supp. Mot. Summ. J. at 6 (citing Jackson, 176 F.3d at 983)), and "must show that DTP's adverse employment decision was, in fact, motivated by unlawful discrimination." ( Id. (citing St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502 (1993)). It adds that pretext is not proven "unless it is shown ` both that the reason was false, and that discrimination was the real reason.'" ( Id. (citing St. Mary's Honor Ctr., 509 U.S. at 515) (emphasis in Def.'s Br.). The Defendant confuses the Plaintiffs' burden on summary judgment with their burden at trial.
Earlier this month the Supreme Court reaffirmed its decision in St. Mary's Honor Center that a defendant is not entitled to summary judgment on a plaintiff's age discrimination claim if the plaintiff demonstrates a prima facie case and produces sufficient evidence of pretext. Reeves v. Sanderson Plumbing Prods., Inc., 120 S.Ct. 2097, 2106-08 (U.S. June 12, 2000) (quotation omitted); see St. Mary's Honor Ctr., 509 U.S. at 511 (holding that "rejection of the defendant's proffered reasons will permit the trier of fact to infer the ultimate fact of intentional discrimination . . . [and] upon such rejection, `[n]o additional proof of discrimination is required'"). The Reeves Court wrote: "a plaintiff's prima facie case, combined with sufficient evidence to find that the employer's asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated." Id. at 2108; see also St. Mary's Honor Ctr., 509 U.S. at 511, 524 (explaining that this inference is permissive, not mandatory). St. Mary's Honor Center and Reeves teach that if a plaintiff produces evidence that the employer's reason is phony, this creates a reasonable inference that the real reason was unlawful discrimination and the trier of fact must be allowed to draw this inference, that is, the plaintiff's claims have survived summary judgment. Cf. Jackson, 176 F.3d at 984 (explaining that in the context of a summary judgment motion, if a plaintiff can demonstrate an employer's proffered reasons are phony, then he survives summary judgment and the trier of fact is permitted, though not required, to infer that the real reason for the challenged employment action was intentional discrimination); Sheehan v. Donlen Corp., 173 F.3d 1039, 1046 (7th Cir. 1999) ("once the employee has cast doubt on the employer's proffered reasons for the termination, the issue of whether the employer discriminated against the plaintiff is to be determined by the jury — not the court"); Miller, 168 F.3d at 313 (stating that if the plaintiff discharges his burden of proving pretext then the case proceeds to trial).
A. Prima Facie Case of Age Discrimination
In an age discrimination, reduction in force context, a plaintiff demonstrates a prima facie case by proving that: (1) he is in the protected class of age 40 or older; (2) his job performance met the employer's legitimate expectations; (3) he was discharged or suffered another adverse employment action; and (4) one or more similarly situated and substantially younger employees were treated more favorably. See, e.g., Jackson, 176 F.3d at 982-83; Miller, 168 F.3d at 313. An age difference of at least ten years is presumptively "substantial"; a difference of less than ten years is presumptively "insubstantial." See Hoffman, 2000 WL 793989, at *2; Hartley, 124 F.3d at 892. Borg-Warner does not dispute that the Plaintiffs can establish the first three elements of their prima facie case; its challenge is mounted only as to the fourth element. Its challenge, however, is unavailing.
A number of Seventh Circuit decisions do not explicitly include "similarly situated" in the formulation of the fourth element of the prima facie case. See, e.g., Hoffman v. Primedia Special Interest Pubs., No. 99-3508, ___ F.3d ___, 2000 WL 793989, at *1 (7th Cir. June 21, 2000); Hartley v. Wisconsin Bell, Inc., 124 F.3d 887, 890 (7th Cir. 1997); Taylor v. Canteen Corp., 69 F.3d 773, 779 (7th Cir. 1995). The more appropriate formulation requires the younger employees to be similarly situated.
DTP first complains that Smith and Whaley admit they have no knowledge of the ages of some of the persons whom they identify as younger, similarly situated employees. This really doesn't matter because DTP itself has offered evidence of the birth dates of Bevins and Capstick which establishes that they are ten or more years younger than both Plaintiffs. In addition, DTP implicitly concedes that Michaels, Sherrell and Goodman are substantially younger than both Plaintiffs. ( See Def.'s Br. Supp. Mot. Summ. J. at 10-11) (arguing that "[t]he three people identified by Smith and Whaley who actually are substantially younger andactually retained their jobs as supervisors received higher ratings than Smith and Whaley. Steve Michaels, 39 years of age, Shane Sherrell, 27 years of age, and Bobby Goodman, 41 years of age, all worked in the same division as Smith and Whaley and all were ranked higher than Smith and Whaley.") (emphasis in DTP's brief). DTP also argues that the Plaintiffs lack any evidence about the performance and skill levels of the other supervisors in the Plaintiffs' division. While it is true that the Plaintiffs have not produced such evidence, the court concludes that this lack of evidence does not preclude them from demonstrating a prima facie case. There is evidence, and DTP acknowledges ( see id.), that Bevins, Michaels, Sherrell, Goodman and Capstick all worked as supervisors in the same division as the Plaintiffs and retained their supervisor positions. Though not necessarily fungible as that term is used in Miller v. Borden, 168 F.3d at 313, Kohler testified that production supervisors could be shifted around. Further, DTP has presented evidence that in deciding which supervisors to retain and which ones would be riffed, DTP compared supervisors not only within a division but also plant-wide. This raises a reasonable inference that DTP considered the supervisor positions throughout the plant to be similarly situated-at least similar enough to compare supervisors plant-wide when making its RIF decisions.
Similarly, DTP's objections to the affidavit of Neal Lewis are beside the point because DTP has admitted that two supervisors in the Plaintiffs' division who retained their positions were ten or more years younger than Smith and one was ten or more years younger than Whaley.
DTP further maintains that certain employees were not similarly situated to the Plaintiffs because those other employees were rated higher than Smith and Whaley. The court agrees with the Plaintiffs that DTP is merging its proffered reason for the Plaintiffs' demotion with its challenge to the fourth element of the prima facie case. If an employer's explanation that one employee simply ranked lower than another employee was enough without more to negate a showing that the two employees were similarly situated, it is difficult to imagine how a plaintiff would be able to establish a prima facie case. Recognizing that the Plaintiffs' burden to establish a prima facie case is not "onerous," see Burdine, 450 U.S. at 253; Simpson v. Kay Jewelers, Div. of Sterling, Inc., 142 F.3d 639, 646 (3d Cir. 1998) (explaining that proof that one member outside the protected class was treated more favorably may be sufficient to establish a prima facie case but not at the pretext stage); there is, at the least, an genuine issue of fact as to whether other supervisors in the same division as the Plaintiffs who retained their positions were similarly situated to the Plaintiffs. Thus, the court finds that the Plaintiffs have come forward with sufficient evidence to demonstrate that one or more similarly situated substantially younger employees were treated more favorably. DTP does not dispute that the Plaintiffs can establish the first three elements of their prima facie case; therefore, the court concludes the Plaintiffs can demonstrate a prima facie case of age discrimination.
Vanasco v. National-Louis University, 137 F.3d 962 (7th Cir. 1998), relied upon by DTP in its reply brief for the proposition that a reasonable trier of fact could not infer age discrimination from scant comparative evidence, is inapposite. The plaintiff in Vanasco attempted to prove pretext through a chart identifying the names and ages of individuals considered for tenure and the action taken. Id. at 96-67. The court concluded that the chart, which showed tenure was denied to 6 of 9 applicants over age 50 and to only 4 of 44 applicants under 50, was insufficient to create a reasonable inference of age discrimination. Id. It does not appear that the comparative evidence was offered to demonstrate a prima facie case. Here, in contrast with Vanasco, the trier of fact need not rely on comparative evidence in deciding pretext and the ultimate issue of discrimination.
Since the Plaintiffs have come forward with sufficient evidence of a prima facie case of age discrimination, the burden of production shifts to the Defendant to articulate a legitimate, nondiscriminatory reason for the Plaintiffs' demotion. DTP has discharged its burden by explaining that the Plaintiffs were transferred to the bargaining unit incident to the RIF and because the Plaintiffs received the lowest overall rankings of all supervisors in their division. The Plaintiffs do not challenge the legitimacy of the RIF. They do, however, challenge DTP's evaluation and ranking process. It is here that the court turns to the Plaintiffs' motion for sanctions in which they seek sanctions for alleged spoliation of evidence.
B. Plaintiffs' Motion for Sanctions Due to Spoliation
Plaintiffs move for a default judgment against DTP for its destruction of substantially all of the documents related to the RIF. In the alternative, they request exclusion of all evidence related to the RIF evaluation process. As a third alternative, they ask that the court draw the adverse inference from the document destruction that DTP did not evaluate them lower than younger supervisors who were retained.
The court has the inherent authority to sanction a party for misconduct, including prelitigation spoliation, in order to protect the integrity of the judicial system and prevent abuses of the judicial process. See Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991); Roadway Exp., Inc. v. Piper, 447 U.S. 752, 765-66 (1980); see also Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 78 (3d Cir. 1994). This authority must be exercised "with restraint and discretion." Roadway Exp., 447 U.S. at 764.
A court may sanction a party for spoliation in different ways. A dismissal of a claim or entry of default judgment is the most severe sanction. See, e.g., Allstate Ins. Co. v. Sunbeam Corp., 53 F.3d 804, 806-07 (7th Cir. 1995). Another possible sanction is the exclusion of testimony or other evidence regarding the destroyed evidence. See, e.g., Langley by Langley v. Union Elec. Co., 107 F.3d 510, 515 (7th Cir. 1997). A lesser sanction is the giving of a spoliation or adverse inference instruction to the jury. See, e.g., Townsend v. American Insulated Panel Co., 174 F.R.D. 1, 4 (D.Mass. 1997); Howell v. Maytag, 168 F.R.D. 502, 507 (M.D.Pa. 1996). The measure of sanctions to be imposed, if any, must be proportionate to the conduct and circumstances justifying sanctions. See, e.g., Chambers, 501 U.S. at 44-45; Langley, 107 F.3d at 515.
"[B]ad faith destruction of a document relevant to proof of an issue at trial gives rise to a strong inference that production of the document would have been unfavorable to the party responsible for its destruction." Coates v. Johnson Johnson, 756 F.2d 524, 551 (7th Cir. 1985) (citing S.C. Johnson Son, Inc. v. Louisville Nashville R.R., 695 F.2d 253, 258-59 (7th Cir. 1982); Vick v. Texas Employment Comm'n, 514 F.2d 734, 737 (5th Cir. 1975)). In the spoliation context, "`bad faith' means for the purpose of hiding adverse information." Mathis v. John Morden Buick, Inc., 136 F.3d 1153, 1155 (7th Cir.), cert. denied, 525 U.S. 898 (1998). The rationale for the adverse inference is that a party "who has notice that [evidence] is relevant to litigation and who proceeds to destroy [evidence] is more likely to have been threatened by [that evidence]. . . ." Schmid, 13 F.3d at 78; see Blinzler v. Marriott Int'l, 81 F.3d 1148, 1159 (1st Cir. 1996) ("When the evidence indicates that a party is aware of circumstances that are likely to give rise to future litigation and yet destroys potentially relevant records without particularized inquiry, a factfinder may reasonably infer that the party probably did so because the records would harm its case.") Moreover, "the violation of a record retention regulation creates a presumption that the missing record contained evidence adverse to the violator." Latimore v. Citibank Federal Sav. Bank, 151 F.3d 712, 716 (7th Cir. 1998) (citing Hicks v. Gates Rubber Co., 833 F.2d 1406, 1418-19 (10th Cir. 1987); Favors v. Fisher, 13 F.3d 1235, 1239 (8th Cir. 1994)). 29 C.F.R. § 1602.14 is a record retention regulation and appears applicable to the destroyed RIF documents. See Mathis, 136 F.3d at 1115 (citing 29 C.F.R. § 1602.14 and noting that federal regulations require employers to preserve documents relevant to claims of discrimination).
The regulation provides in relevant part:
Any personnel or employment record made or kept by an employer (including but not necessarily limited to . . . records having to do with . . . demotion, transfer, lay-off or termination . . .) shall be preserved by the employer for a period of one year from the date of the making of the record or the personnel action involved, whichever occurs later. . . .29 C.F.R. § 1602.14.
In response to the Plaintiffs' motion, DTP argues that no sanction is warranted, first claiming that it discarded documentation associated with the RIF "[t]hroughout the RIF and shortly thereafter." (Def.'s Br. Supp. Mot. Summ. J. at 25.) It then argues that sanctions are not warranted because it produced a chart ranking all supervisors in the Plaintiffs' division, what it describes as "the single, most important document relevant to this litigation. . . ." ( Id. at 25.) Next, DTP claims that Kohler ordered that the documents be discarded for "humanistic" reasons and that when he did so, the prospect of litigation was not on his mind. ( Id. at 26.)
In addition, DTP relies on numerous cases, none of which is controlling and all of which are distinguishable. For example, it relies on Bashir v. National R.R. Passenger Corp., 929 F. Supp. 404, 413 (S.D.Fla. 1996), aff'd, 119 F.3d 929 (11th Cir. 1997), in which the plaintiff's motion for sanctions under Fed.R.Civ.P. 37(b)(2) was denied. The motion was denied because the rule was inapplicable-the rule applies to situations when a party violates a court order regarding disclosure or discovery and the court had not ordered the defendant to produce the evidence sought by the plaintiff. Id. Further, the court disagrees with the Bashir court's conclusion that where "credible alternative evidence exists", a party's failure to preserve relevant evidence does not justify drawing adverse inferences. See id. The reason for this disagreement is that credibility determinations are for the trier of fact; they are not properly made at the summary judgment stage. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255(1986) ("Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. . . ."); Wolf v. Buss (America) Inc., 77 F.3d 914, 922 (7th Cir.) (stating in an age discrimination case that "[o]n summary judgment, a court can neither make a credibility determination nor choose between competing inferences. Rather, these are functions for a jury."), cert. denied, 519 U.S. 866 (1996)
DTP also cite to Favors v. Fisher, 13 F.3d 1235 (8th Cir. 1994), and Webb v. District of Col., 146 F.3d 964 (D.C. Cir. 1998), in support of its claim that Plaintiffs have a sufficient opportunity through discovery to prove their age discrimination claims in spite of the destruction of documents. Neither case holds that no sanction is warranted under such circumstances. Rather, in Favors the court said the destruction of the evidence entitled the plaintiff to a presumption of pretext. Id. at 1239. The trier of fact, (which was the district court because it was a bench trial), credited the defendant's explanation for the destruction and, therefore, concluded the defendant had rebutted the presumption. Id. at 1239-40. In Webb, the appellate court vacated the default judgment entered by the district court upon concluding that the state of the record did not appear to warrant sanctions as severe as default. 146 F.3d at 975-76. The court did not hold that no sanction was warranted, but said the district court had not adequately explained why no lesser sanction would suffice. Id. at 975. The case was remanded to the district court for further consideration of lesser sanctions. Id. at 976.
DTP also relies on Webb to support its argument that an adverse inference is proper only when it is consistent with the record evidence. Though language in footnote 20 in Webb suggests that the inference to be drawn from the destruction of relevant evidence should be consistent with the other evidence in the case, ( see id. at 974 n. 20 ("The most reasonable inference to be drawn that would not be inconsistent with other evidence would seem to be that no applicant who was not selected was more qualified than Webb.")), this language does not represent the holding of the case. And, again, the drawing of reasonable inferences from the evidence is for the trier of fact, not the court. See, e.g., Wolf, 77 F.3d at 922. Stepak v. Aetna Life and Cas. Co., No. H:90CV00886(AVC), 1994 WL 858045, at *20 (D.Conn. Aug. 29, 1994), aff'd, 52 F.3d 311 (2d Cir. 1995), also relied upon by DTP in arguing that an adverse inference should be consistent with the record evidence, is inapposite as there was no showing of bad faith in that case. See id. at *21. As there was no evidence that the destruction in documents was intentional in INA Aviation Corp. v. United States, 468 F. Supp. 695, 700-02 (E.D.N.Y. 1979), aff'd, 610 F.2d 806 (2d Cir. 1979), that case, too, is inapposite.
The Plaintiffs have come forward with sufficient evidence regarding the circumstances of the destruction of the RIF documents in this case to raise a reasonable inference of bad faith by DTP. First, there is no dispute over the fact that the destruction was intentional rather than inadvertent: Kohler ordered that the RIF documents be destroyed. Furthermore, Kohler's testimony reveals his awareness of the potentiality for litigation and the relevance of RIF documents should litigation arise. Moreover, the record reflects that on December 4, 1997, the Notice of Charge of Discrimination of Mr. Smith was issued to DTP-and addressed to Mr. Pete Kohler, Personnel Manager. A reasonable trier of fact could infer that DTP and Kohler had notice of Mr. Smith's Charge of Discrimination shortly after that December 4 date. Though the record does not reflect the date on which Mr. Whaley's Charge was issued to DTP, DTP certainly had notice of his Charge sometime before February 4, 1998, when it submitted its position statement in response to the Charge. This evidence, coupled with the evidence that the RIF ended in the first quarter of 1998 and the evidence that certain documents were destroyed "towards the end of the process" or when the RIF "was finished," support a finding that DTP through Kohler had notice that the RIF documents were relevant to the charges and that the charges were likely to give rise to future litigation and destroyed them for the purpose of hiding adverse information. In addition, by failing to retain the RIF documents for a period of one year, DTP appears to have violated the records retention regulation, which would create a strong presumption that the RIF documents contain evidence adverse to DTP. See Latimore, 151 F.3d at 716.
DTP has produced evidence that could overcome this presumption, namely Kohler's testimony about why he had the RIF documents destroyed. A trier of fact could believe Kohler's explanation that he ordered the destruction of the documents for humanistic reasons and because the documents were no longer needed, but this explanation borders the incredulous. A trier of fact could reject Kohler's explanation, and if it does, then it could reasonably find that DTP destroyed the RIF documents in bad faith. Suffice to say that there is evidence which if believed would support a reasonable inference that DTP was aware of the Plaintiffs charges of discrimination against it before many if not most of the RIF documents were destroyed.
Local Rule 56.1's requirement that a nonmoving party cite to admissible evidence when disputing the movant's Statement of Material Facts does not contemplate the situation where, as here, the movant has destroyed the documents that could substantiate disputes of material facts. Given the court's conclusion that the Plaintiffs are entitled to an adverse inference in their favor, the court finds that their denials of DTP's Statement of Material Fact as supported by their DTP's destruction of evidence, are sufficiently supported.
DTP's claims regarding Kohler's reasons for ordering the destruction and absence of thought about litigation as well as the timing of the destruction are all issues to be resolved by the trier of fact. Because there are genuine issues of fact as to DTP's motivation for destroying the RIF documents it would be inappropriate to sanction DTP with either dismissal or default. Similarly, the exclusion of all evidence as to the evaluation process, ratings, and ratings comparison is not warranted on the basis of the record. The state of the record does, however, support the giving of an adverse inference instruction to the jury. It is for the jury to decide whether DTP has "satisfactorily explained" the destruction of the documents and sufficiently rebutted the presumption that the evidence was destroyed because it was adverse to it. Accordingly, the Plaintiffs' motion for sanctions is GRANTED in the alternative: The Plaintiffs are entitled to have an adverse inference instruction given to the jury. In addition, the court will give a limiting instruction in an effort to alleviate any danger that the jury would find for the Plaintiffs simply as punishment for DTP's destruction of documents. Examples of the type of instructions to be given follow below:
FINAL JURY INSTRUCTION A
FINAL JURY INSTRUCTION B
Federal law requires certain employers, including DTP, to maintain any personnel or employment record made or kept by the employer, including but not necessarily limited to records having to do with demotion, transfer, lay-off or termination, for one (1) year.
The destruction of personnel or employment records may give rise to an inference that such records contained information unfavorable to DTP's case only if you find by a preponderance of the evidence that the records were willfully destroyed in bad faith. "Bad faith" means destruction for the purpose of hiding adverse information.
Keep in mind though, the question you are to decide is whether DTP discriminated against the Plaintiffs because of their ages, not whether it should be punished for the destruction, or the alteration, of personnel or employment records.
Therefore, even if you find that personnel or employment records were willfully destroyed in bad faith, and from that you infer that the records contained information unfavorable to DTP's case, that alone is not enough to render a verdict against DTP. You would still have to find, based on all the evidence and inferences from evidence that you draw, that each Plaintiff proved by a preponderance of the evidence that DTP transferred/demoted him because of his age, as explained in previous instructions.
If the jury draws the inference that the destroyed RIF documents contain evidence unfavorable to DTP, then it could find that DTP's proffered reason for transferring the Plaintiffs from the supervisory positions was unworthy of belief and, therefore, a pretext for age discrimination. Thus, the Plaintiffs' age discrimination claims have survived summary judgment.
It is also noted that DTP makes a whole host of arguments about real and/or perceived weaknesses in the Plaintiffs' case, ( see, e.g., Def.'s Br. Supp. Mot. Summ. J. at 11 (arguing Plaintiffs have no evidence that Hill or Parker discriminated against them); id. at 12-14 (addressing Parker's alleged age-based comment to Smith), id. at 18-19 (arguing a lack of evidence that DTP's decisions were motivated by Plaintiffs' ages), id. at 20 (claiming Plaintiffs cannot identify the particular decision maker who allegedly discriminated against them), id. at 27-29 (arguing that other evidence "negates" any inference of age discrimination-supervisors in the Plaintiffs' divisions and the same age or older than Plaintiffs received higher ratings and kept their supervisory positions, the RIF did not disproportionately affect older employees and the Plaintiffs received pay raises in the past from the same persons responsible for their transfer), but all of these pertain to the Plaintiffs' ability to ultimately persuade the trier of fact that DTP unlawfully discriminated against them because of their ages. Once the Plaintiffs come forward with sufficient evidence to cast doubt on DTP's proffered reason for their demotion-and they have through the adverse inference created by DTP's destruction of RIF documents-they survive summary judgment and are entitled to have the jury decide whether DTP discriminated against them because of their ages.
It is noted that the Plaintiffs have objected to any testimony about the RIF evaluation and rating process and RIF documents, contending such evidence is inadmissible under Rule 1002 of the Federal Rules of Evidence and/or inadmissible hearsay. Rule 1002 generally requires that the original writing itself is required to prove the contents of the writing. Fed.R.Evid. 1002; see United States v. Shriver, 842 F.2d 968, 976 n. 10 (7th Cir. 1988). The Advisory Committee Notes to the rule indicate that:
[A]n event may be proved by nondocumentary evidence, even though a written record of it was made. If, however, the event is sought to be proved by the written record, the rule applies. For example, payment may be provided without producing the written receipt which was given. Earnings may be proved without producing books of account in which they are entered.
Fed.R.Evid. 1002 advisory committee's note (1972). Thus, "the relevant question is whether [the] testimony proves an event from [the witness's] firsthand knowledge of the event. If so, Rule 1002 does not apply." Simmons v. Allsteel, Inc., No. 95 C 3049, 1999 WL 1045214, at *2 n. 6 (N.D.Ill. Nov. 12, 1999). If, however, the witness's testimony goes to the contents of a destroyed RIF documents or attempts to prove something based on his or her familiarity with a destroyed RIF document, then the rule applies. See id.; R R Assocs. v. Visual Scene, Inc., 726 F.2d 36, 38 (1st Cir. 1984) (stating Rule 1002 does not "prohibit a witness from testifying to a fact simply because the fact can be supported by written documentation."); Middleby Corp. v. Hussmann Corp., No. 90 C 2744, 1993 WL 151290, at *14 (N.D.Ill. May 7, 1993).
The Plaintiffs have not established that any and all DTP witnesses' testimony about the RIF evaluation process goes merely to the contents of the RIF documents or attempts to prove something based on the witnesses' familiarity with the documents rather than attempting to prove an event from the witness's firsthand knowledge. To the extent the testimony concerns the rating and evaluation process rather than particular written evaluations or documents, the rule would not require the testimony's exclusion. As for the contention that any testimony as to the documents and rating process are inadmissible hearsay, the Plaintiffs have not persuaded the court that all such testimony is necessarily hearsay. Of course, at trial the court will entertain specific objections to hearsay evidence. Thus, the Plaintiffs' request for the exclusion of all evidence related to the RIF evaluation is DENIED.
C. Whether DTP's Alleged Violation Was Willful
The ADEA provides for liquidated damages for "willful" violations. See Hazen Paper Co. v. Biggins, 507 U.S. 604, 616 (1993). "Willful" means that the employer "either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute". Id. at 617; Trans World Airlines v. Thurston, 469 U.S. 111, 128 (1985); Chiaramonte, 129 F.3d at 402. The Plaintiffs claim DTP's alleged discrimination was willful and seek liquidated damages.
DTP argues that the Plaintiffs have admitted they have no facts to support their claim that DTP knew or recklessly disregarded whether its actions were against the law. This admission does not dispose of that claim, however. Significantly, the Plaintiffs did not admit that no facts exist which would support their claim that DTP's alleged violation was willful. The destruction of substantially all the RIF documents as well as Kohler's testimony would permit a trier of fact to draw the reasonable inference that DTP knew or showed reckless disregard for the matter of whether its conduct in demoting the Plaintiffs was prohibited by the ADEA. Therefore, DTP is not entitled to summary judgment on the Plaintiffs' allegation that the violation of the ADEA was willful.
DTP's Statement of Material Facts includes the following:
Smith has no facts to support his claim that DTP knew and recklessly disregarded the fact that its actions were against the law.
Smith has no facts to support his claim that DTP's alleged discriminatory acts were willful and intentional, other than the fact that some employees retained after the RIF had less seniority than him (sic).
. . . .
Whaley has no facts to support his claim that DTP knew or recklessly disregarded the fact that its actions were prohibited by law.
Whaley has no facts to support his claim that DTP's actions were willful, intentional, other than the fact that those employees in departments which finished their work first were reduced first, regardless of their seniority or age.
The cited portions of the Plaintiffs' depositions do support these statements, and the Plaintiffs did not controvert these statements in their Rule 56.1 Response to Statement of Material Facts. Instead, they asserted objections based on "mis-characterization of the available evidence" and referred to the "additional facts." These statements are therefore deemed admitted. See, e.g., Waldridge v. American Hoechst Corp., TH90-79-C, 1992 WL 612252, at *8 (S.D.Ind. Oct. 6, 1992), aff'd, 24 F.3d 918, 922-23 (7th Cir. 1994).
Motions to Strike
A. Plaintiffs' Motion to Strike
Plaintiffs move to strike DTP's Statements of Material Facts Numbers 26-57, 73 and 85, contending that these statements attempt to describe aspects of the alleged evaluation process associated with the RIF and for which substantially all documentation was destroyed by DTP. The Plaintiffs argue that the exclusion of all evidence regarding the alleged evaluation process is needed to avoid the prejudice to them. Because there are genuine issues of fact as to whether the documents were destroyed in bad faith, to preclude presentation of this evidence would be inappropriate. In addition, such a wholesale exclusion of evidence would deny the trier of fact the opportunity to consider DTP's explanation for the document destruction and make the necessary credibility determinations regarding the issues of bad faith and whether DTP's explanation for the Plaintiffs' transfer was a pretext for discrimination. Accordingly, the Plaintiffs' motion to strike is DENIED.
B. Motion to Strike Affidavit of Neal Lewis and Attached Summary
DTP moves to strike the affidavit of Neal Lewis and attached summary submitted in support of the Plaintiffs' response to DTP's summary judgment motion. It argues the affidavit is inadmissible on several grounds. Because DTP admits that certain supervisors in the Plaintiffs' division were ten or more years younger than the Plaintiffs, the court need not rely on the Lewis affidavit in determining whether the Plaintiffs can demonstrate a prima facie case, which is the purpose for which it is offered. Therefore, the motion to strike the Lewis affidavit and attached summary is DENIED AS MOOT.
C. Report of Michael Murphy
DTP moves to strike the report of Michael Murphy, whom the Plaintiffs' have designated as a human resources expert. The Plaintiffs offer Mr. Murphy's report on the issue of the failure to exercise reasonable care or follow customary practice concerning the retention of employment documents in the RIF context.
Expert testimony is admissible only when "scientific, technical, or other specialized knowledge" "will assist the trier of fact to understand or determine a fact in issue." Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 592-93 (1993); Fed.R.Evid. 702. DTP raises various objections to Murphy's report, the court need not address them all as it agrees that Murphy's report and opinion would not be of assistance to the jury. A lay jury is quite capable of understanding the facts and issues relative to the destruction of RIF documents, particularly in light of the record retention regulation and the Notice of Charge of Discrimination sent to DTP. Therefore, the motion to strike the report of Michael Murphy and its attachments is GRANTED and the same are STRICKEN. See United States v. Castillo, 924 F.2d 1227, 1232 (2d Cir. 1991) (testimony directed to "lay matters which a jury is capable of understanding and deciding without the expert's help" properly excludable) (quotation omitted).
Conclusion
The Plaintiffs can demonstrate a prima facie case of age discrimination and have pointed to sufficient evidence to allow the trier of fact to draw adverse inferences from DTP's destruction of RIF documents. The adverse inferences would permit a reasonable jury to infer that DTP's stated reason for their demotion/transfer was false and that the real reason was unlawful discrimination. Therefore, the Plaintiffs' motion for sanctions is GRANTED and DTP's motion for summary judgment is DENIED. The motion to strike the Report of Michael Murphy and its attachments is GRANTED. The motion to strike the Lewis affidavit is DENIED. The Plaintiffs' motion to strike is DENIED.
The jury will be instructed that it may find, but is not required to, that the destroyed RIF documents would have been unfavorable to DTP's case. DTP will be allowed to introduce evidence of its explanation for the destruction of the documents, as well as evidence regarding the RIF evaluation and rating process. In addition, the court will give a limiting instruction in an effort to alleviate any fear that the jury would find in favor of the Plaintiffs solely to punish DTP for destroying the documents.
ALL OF WHICH IS ORDERED.