{\rtf1\ansi\deff0\deftab720{\fonttbl{\f0\fswiss MS Sans Serif;}{\f1\fdecor\fcharset2 Symbol;}{\f2\fswiss MS Sans Serif;}} {\colortbl\red0\green0\blue0;} \deflang1033\pard\plain\f2\fs17 No. 94-1979 \par \par In The Supreme Court of The United States \par \par OCTOBER TERM, 1995 \par \par THOMAS R. LUSSIER, PETITIONER \par \par v. \par \par MARVIN RUNYON, \par UNITED STATES POSTMASTER GENERAL \par \par ON PETITION FOR A WRIT OF CERTIORARI \par TO THE UNITED STATES COURT OF APPEALS \par FOR THE FIRST CIRCUIT \par \par BRIEF FOR THE RESPONDENT IN OPPOSITION \par \par DREW S. DAYS, III \par Solicitor General \par \par FRANK W. HUNGER \par Assistant Attorney General \par \par ROBERT S. GREENSPAN \par SANDRA WIEN SIMON \par Attorneys \par \par Department of Justice \par Washington, D.C. 20530 \par (202)514-2217 \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par QUESTION PRESENTED \par \par Whether the district court had discretion to adjust \par petitioner's front pay award under the Rehabilitation \par Act of 1973,29 U.S.C. 701 et seq., to take into account \par his receipt of Veterans Administration and Civil Ser- \par vice Retirement System benefits. \par \par (I) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par TABLE OF CONTENTS \par \par Page \par \par Opinions below . . . . 1 \par Jurisdiction . . . . 1 \par Statement . . . . 2 \par Argument . . . . 6 \par Conclusion . . . . 10 \par \par TABLE OF AUTHORITIES \par \par Cases: \par \par Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) . . . . 9 \par Doyne v. Union Elec. Co., 953 F.2d 447 (8th Cir. 1992) . . . . 8 \par EEOC v. Ford Motor Co., 645 F.2d 183 (4th Cir. 1981), \par rev'd in part, 458 U.S. 219, on remand, 688 F.2d 951 \par (451 Cir. 1982) . . . . 8 \par Gaworski v. ITT Commercial Fin. Corp., 17 F.3d 1104 \par (8th Cir.), cert. denied, 115 S. Ct. 355 (1994) . . . . 9 \par Glover v. McDonnell Douglas Corp., 981 F.2d 388 (1992), \par vacated, 114 S. Ct. 42 (1993), on remand, 12 F.3d 845 \par (8th Cir.), cert. denied, 114 S. Ct. 1647 (1994) . . . . 9 \par Graefenhain v. pabst brewing Co., 870 F.2d 1198 (7th \par Cir. 1989) . . . . 7 \par Hukkanen v. International Union of Operating Eng'rd, \par 3 F.3d 281 (8th Cir. 1993) . . . . 7 \par Jackson v. City of Cookeville, 31 F.3d 1354 (6th Cir. \par 1994) . . . . 7 \par Maxfield v. Sinclair Int'l, 766 F.2d 788 (3d Cir. 1985), \par cert. denied, 474 U.S. 1057 (1986) . . . . 9 \par Mckennon v. Nashville Banner Publishing Co., 115 \par S. Ct. 879 (1995) . . . . 9 \par Pension Benefit Guaranty Corp. v. LTV Corp., 496 \par U.S. 633 (1990) . . . . 10 \par Powers v. Grinnell Corp., 915 F.2d 34 91st Cir. 1990) . . . . 6 \par Rasimas v. Michigan Dep't of Health, 714 F.2d 614 \par (6th Cir. 1983), cert. denied, 466 U.S. 950 (1984) . . . . 8 \par \par (III) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par IV \par \par Cases-Continued \par \par Saulpaugh v. Monroe Community Hosp., 4 F.3d 143 \par (2d Cir. 1993), cert. denied, 114 S. Ct. 1189 (1994) . . . . 6 \par Shore v. Federal Express Corp., 42 F.3d 373 (6th Cir. \par 1994) . . . . 6 \par Thompson v. Sawyer, 678 F.2d 257 (D.C. Cir. 1982) . . . . 2 \par Wildman v. Lerner Stores Corp., 771 F.2d 605 (lst \par Cir. 1985) . . . . 6 \par Wisniewski v. United States, 353 U.S. 901 (1957) . . . . 9 \par \par Statutes, regulation, and rule: \par \par Civil Rights Act of 1964, Tit. VII, 42 U.S.C. \par 2000e et seq . . . . 2 \par 42 U.S.C. 2000e-5(g) . . . . 2 \par Rehabilitation Act of 1973, 29 U.S.C. 701 et Seq . . . . 2 \par 29 U.S.C. 791 . . . . 2 \par 29 U.S.C. 794a(a)(1) . . . . 2 \par 29 C.F.R. 1613.701-1613.806 . . . . 2 \par Fed. R. Civ. P. 59(e) . . . . 2 \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par In the Supreme Court of the United States \par \par OCTOBER TERM. 1995 \par \par No. 94-1979 \par \par THOMAS R. LUSSIER, PETITIONER \par \par v. \par \par MARVIN RUNYON, \par UNITED STATES POSTMASTER GENERAL \par \par ON PETITION FOR A WRIT OF CERTIORARI \par TO THE UNITED STATES COURT OF APPEALS \par FOR THE FIRST CIRCUIT \par \par BRIEF FOR THE RESPONDENT IN OPPOSITION \par \par OPINIONS BELOW \par \par The opinion of the court of appeals (Pet. App. Al- \par A22) is reported at 50 F.3d 1103. The district court's \par findings of fact and conclusions of law (Pet. App. A23- \par A44) are unreported. \par \par JURISDICTION \par \par The judgment of the court of appeals was entered on \par March 29, 1995. The petition for a writ, of certiorari \par was filed on June 5, 1995. The jurisdiction of this \par Court is invoked under 28 U.S.C. 1254(1). \par \par (1) \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 2 \par \par STATEMENT \par \par 1. The Rehabilitation Act of 1973,29 U.S.C. 701 et \par seq., prohibits the federal government from discrim- \par inating against employees on the basis of handicap. \par See 29 U.S.C. 791; see also 29 C.F.R. 1613.701- \par 1613.806. The Act provides that victims of handicap \par discrimination may seek the same remedies that are \par available to plaintiffs under Title VII of the Civil \par Rights Act of 1964, 42 U. S. Cl. 2000e et seq. See 29 \par U.S.C. 794a(a)(1). Title VII provides that courts \par may order relief in the form of "affirmative action \par *** which may include, but is not limited to, \par reinstatement or hiring of employees, with or without \par back pay * * *, or any other equitable relief as the \par court deems appropriate." 42 U.S.C. 2000e-5(g). \par Relying on that provision, courts have concluded that \par they may award plaintiffs "front pay" to provide \par compensation for future earnings that are lost on \par account of employment discrimination. See, e.g. \par Thompson v. Sawyer, 678 F.2d 257, 292 (D.C. Cir. \par 1982) (collecting cases). \par 2. The United States Postal Service employed peti- \par tioner between 1981 and 1992. In 1985, petitioner filed \par an Equal Employment Opportunity (EEO) Complaint \par alleging that the Postal Service was discriminating \par against him on the basis of a handicap, post-traumatic \par stress disorder, that had resulted from his military \par service in Vietnam. As a result of the EEO \par proceedings, the Postal Service agreed to promote \par petitioner to a supervisory position. He received the \par promotion in 1990. Pet. App. A24. \par In October, 1991, an altercation occurred between \par petitioner and another Postal Service employee. That \par employee was disciplined through placement on invol- \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 3 \par \par untary leave. During an investigation of the alter., \par cation, petitioner informed investigators that he had \par been convicted of disorderly conduct in the 1970s. \par That admission contradicted petitioner's 1980 appli- \par cation for employment, in which he had stated that he \par had not been convicted of any criminal offenses. Pet. \par App. A24-A28. \par On November 7, 1991, a Postal Service supervisor \par met with petitioner to discuss the return of the dis- \par ciplined employee. During that meeting, petitioner \par lost his temper, orally abused the supervisor, and \par later took sick leave on account of stress. While peti- \par tioner was on leave, a former postal service worker in \par Royal Oak, Michigan shot and killed four people, \par wounded four others, and took his own life. That \par event prompted the Postmaster General to announce \par that personnel files would be reviewed to uncover \par workers with dangerous propensities. At about. the \par same time, the Postmaster General's Office received \par an anonymous letter, dated November 1, 1991, stating \par that petitioner posed a risk of violence. Pet. App. A28- \par A29. \par The Postal Service conducted a further inves- \par tigation into the October, 1991, altercation and ulti- \par mately decided to terminate petitioner's employment. \par The Postal Service informed petitioner that he was \par being discharged because he had falsely stated in his \par employment application that he had not been convict- \par ed of any criminal offenses. Pet. App. A31-A33. \par 3. Petitioner sued the Postal Service, claiming \par that his discharge violated the Rehabilitation Act. \par After a bench trial, the district court ruled that \par petitioner had suffered employment discrimination on \par account of his post-traumatic stress disorder. The \par court concluded that petitioner's false application was \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 4 \par \par a pretext for the discharge and that the Postal \par Service terminated petitioner because it "feared that \par his mental condition made him likely to cause a Royal \par Oak-type incident." Pet. App. A36. \par The court determined that the Postal Service's dis- \par criminatory discharge had caused petitioner severe \par psychological injury and that he would never be re- \par employed at the level of productivity he had achieved \par prior to his dismissal, but that petitioner would be \par capable of returning to work at a lower-paying job \par with decreased productivity. Pet. App. A38. As part \par of its remedy, the court awarded petitioner front pay \par for twenty-three years to compensate him for future \par earnings lost on account of the discriminatory dis- \par charge. Id. at A42-A43. \par In calculating the front pay award, the court first \par determined that the present value of petitioner's lost \par earnings and benefits was $790,805. The court ex- \par pressly agreed with the Postal Service, however, that \par front pay under the Rehabilitation Act is an equitable \par remedy that is "intended to make the plaintiff whole, \par not to provide a windfall" Pet. App. A42. The court \par accordingly concluded "that any additional economic \par benefits [petitioner] is entitled to receive by virtue of \par his termination should offset the recovery he other- \par wise obtains as front pay." Id. at A43. \par The district court found that petitioner was \par entitled to collateral benefits related to his discharge \par in the form of increased Veterans Administration \par (VA) benefits and Civil Service Retirement System \par (CSRS) benefits. Before his discharge, petitioner had \par received partial VA benefit payments on account of \par his disability. After his discharge, the VA deter- \par mined that he was totally disabled and increased his \par benefit payments. In addition, petitioner applied for \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 5 \par \par CSRS disability benefits. See Pet. App. A38-A39, \par A43-A44. \par The district court calculated petitioner's front pay \par award on the basis of the present value of petitioner's \par calculated lost earnings ($790,805), reduced by the \par present value of his increase in VA benefits ($358,401) \par and the present value of his interim CSRS benefits \par ($112,723). Pet. App. A47-A48. As a result, petitioner \par received an award of $320,000 in front pay. He also \par received $75,000 in compensatory damages, plus inter- \par est, costs, and reasonable attorney fees. Id. at A49.1 \par 4. The court of appeals affirmed in part, vacated in \par part, and remanded the case for further proceedings. \par Pet. App. A1-A22. The court of appeals held that a \par district court may award front pay as an exercise of \par equitable discretion, and it rejected petitioner's objec- \par tions to the district court's adjustment of the front \par pay award. The court of appeals ruled "that it is \par within the trial court's discretion to tailor a front pay \par award to take account of collateral benefits in a \par discrimination case, and that the [district] court \par acted within the realm of this discretion in the case at \par bar." Id. at A3. \par The court of appeals recognized that an award of \par front pay differs from an award of back pay, because it \par is an inherently more speculative remedy. The court \par concluded that a district court must have substantial \par discretion to consider the effect of collateral benefits \par \par ___________________(footnotes) \par \par 1 The Postal Service filed a motion to amend the judgement \par pursuant to Fed. R,. Civ. P. 59(e) on the ground that the \par government had made a final CSRS benefit calculation that had \par increased petitioner's monthly benefits payment from $390 to \par 1,111. The district court, however, refused to make further \par adjustments to its award. Pet. App. A50-A52. \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 6 \par \par in light of the specific facts and equities presented in \par a particular case. Pet. App. A5-A13. It ruled that the \par district court's use of adjustments in this case pro- \par vided a fair method for compensating petitioner and \par "struck an entirely reasonable balance between the \par goals of fair compensation and adequate deterrence." \par Id. at A16 2 \par \par ARGUMENT \par \par 1. Petitioner contends that the district court erred \par in reducing the amount of his front pay award under \par the Rehabilitation Act to take into account his re- \par \par ceipt of increased VA benefits and CSRS disability \par benefits. The court of appeals correctly rejected that \par argument, holding that a district court may tailor a \par front pay award to take into account collateral bene- \par fits. As the court of appeals observed, federal employ- \par ment discrimination statutes, including the Age Dis- \par crimination in Employment Act (ADEA), Title VII, \par and the Rehabilitation Act, allow courts to award \par front pay as a farm of equitable relief. See Pet. App. \par A7; Shore v. Federal Express Corp., 42 F.3d 373,377- \par 378 (6th Cir, 1994); Saulpaugh v. Monroe Commu- \par nity Hosp., 4 F.3d 134, 145 (2d Cir. 1993), cert. denied, \par 114 S. Ct. 1189 (1994); Powers v. Grinnell Corp., 915 \par F.2d 34, 42-43 (lst Cir. 1990); Wildman v. Lerner \par Stores Corp., 771 F.2d 605,616-617 (lst Cir. 1985). \par The courts of appeals have accordingly recognized \par that a district court's determination of both the need \par \par ___________________(footnotes) \par \par 2 The court concluded, however, that the district. court had \par inappropriately relied on extra-record evidence in calculating \par the CSRS offset. It remanded the case for recalculation of that \par offset based on record evidence. Pet. App. A17-A22. \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 7 \par \par for and the measure of front pay entails a fact-specific \par exercise of equitable discretion. See Hukkanen v. \par International Union of Operating Eng'rs, 3 F.3d .281, \par 286 (8th Cir. 1993). As the Seventh Circuit has \par stated, \par \par In making a front pay determination, the district \par court must make numerous predictions, deter- \par mining the plaintiff's life expectancy, the likeli- \par hood that the plaintiff will be promoted or given \par salary increases, the employer's financial stabil- \par ity, the prospect that the plaintiffs position may \par be eliminated and general economic conditions, \par such as the inflation and unemployment rates \par \par Graefenhain v. Pabst Brewing Co., 870 F.2d 1198, 1208 \par (1989). \par A district court charged with responsibility for \par fashioning a remedy for employment discrimination is \par likewise entitled to apply its informed judgment in \par determining whether to adjust a front pay award in \par light of the receipt of other employment benefits. The \par court of appeals followed what it described as a "vir- \par tually seamless array of precedents" in applying that \par principle here. Pet. App. A8. See, e.q., Jackson v. City \par of Cookeville, 31 F.3d 1354, 1359-1360 (6th Cir. 1994) \par (applying abuse-of-discretion standard to determine \par validity of district court's deduction of pension bene- \par fits from an ADEA front pay award); Graefenhain, 870 \par F.2d at 1210 (holding that district court had discretion \par to determine whether to deduct pension payments from \par front pay award under ADEA). \par 2. Petitioner contends that the question whether a \par trial court may exercise equitable discretion in \par awarding relief has generated a conflict among the \par courts of appeals. Pet. 6-8. Petitioner relies, how- \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 8 \par \par ever, primarily on cases involving back pay. See ibid. \par (citing Rasimas v. Michigan Dep't of Health, 714 \par F.2d 614, 627 (6th Cir. 1983), cert. denied, 466 U.S. 950 \par (1984); EEOC V. Ford Motor Co., 645 F.2d 183,195-196 \par (4th Cir. 1981), rev'd in part, 458 U.S. 219, on remand, \par 688 F.2d 951,952 (4th Cir. 1982]). The court of appeals \par expressly limited its ruling to front pay cases, \par stating "whether or not courts possess authority to \par tailor back pay awards to take collateral benefits into \par account-a question that we leave open for the time \par being-we are confident that they possess the author- \par ity to tailor awards of front pay in that manner." Pet. \par App. All. The court explained: \par \par Even if we assume, arguendo, that granting \par discretion to district courts to deduct collateral \par benefits from back pay awards is problematic, \par front pay presents an easier call. After all, the \par dispensation of front pay-if only because of its \par relatively speculative nature * * *-is neces- \par sarily less mechanical than back pay, and the \par amount of front pay-if only because of its predic- \par tive aspect-is necessarily less certain than back \par pay * * *. For these reasons, front pay is much \par more heavily dependent than back pay upon the \par district court's exercise of its informed discre-. \par tion. \par \par ld. at A1O-A11. \par Petitioner relies principally on Doyne v. Union \par Elec. Co., 953 F.2d 447 (8th Cir. 1992), to suggest that \par the decisions of the courts of appeals respecting front \par pay are in conflict. See Pet. 6. The Eighth Circuit \par stated in Doyne that courts calculating back and \par front pay awards under the ADEA should not deduct \par plaintiffs pension benefits. 953 F.2d at 451-452. Since \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 9 \par \par that decision, however, the Eighth Circuit has ruled \par that a defendant was entitled to credit pension pay- \par ments against an ADEA back pay award to ensure \par that the award did not provide the plaintiff with a \par windfall. See Glover v. McDonnell Douglas Corp., \par 981 F.2d 388,396-397 (1992), vacated on other grounds, \par 114 S. Ct. 42 (1993), prior holding reinstated on \par remand, 12 F.3d 845, 848 (8th Cir.), cert. denied, 114 \par S. Ct. 1647 (1994). Consequently, it is doubtful that \par Doyne represents settled law in the Eighth Circuit. \par See Pet. App. A1O-A11 & n.5; Gaworski v. ITT \par Commercial Fin. Corp., 17 F.3d 1104, 1112 n.7 (8th \par Cir.) (noting possible intra-circuit conflict), cert. \par denied, 115 S. Ct. 355 (1994). See generally \par Wisniewski v. United States, 353 U.S. 901,902 (1957) \par ("It is primarily the task of a Court of Appeals to \par reconcile its internal difficulties.'').3 \par 3. Petitioner also argues that this Court should \par review this case for several reasons of policy and \par suggests that- the case has "broad implications" for \par the deterrent effect of employment discrimination \par laws. Pet. 7-10. This Court has recognized the \par important deterrent value of those laws. See \par McKennon v. Nashville Banner Publishing Co., 115 \par \par ___________________(footnotes) \par \par 3 Petitioner cites (Pet. 8) one other case involving both back \par pay and front pay, Maxfield v. Sinclair Int`1, 766 F.2d 788 (3d \par Cir. 1985), cert. denied, 474 U.S. 1057 (1986). That decision, \par however, does not squarely address the use of equitable dis- \par cretion in awarding front pay. The Third Circuit affirmed a \par district court's judgment that the plaintiff was entitled to back \par pay and front pay. See 766 F.2d at 790. It held that the plain- \par tiff's back pay award should not be reduced to take account of \par the plaintiff's social security benefits, id. at 793-795, but it did \par not specifically address whether the plaintiff's front pay award \par was subject to a collateral source reduction, see id. at 795-797. \par \par ---------------------------------------- Page Break ---------------------------------------- \par \par 10 \par \par S. Ct. 879,884 (1995); Albemarle Paper Co. v. Moody, \par 422 U.S. 405, 417 (1975). The need for deterrence, \par however, does not require that district courts be \par deprived of all discretion to determine an equitable \par measure of front pay. "Deterrence is a function of \par degree, and nothing in the Rehabilitation Act or in \par the case law commands that it be maximized at all \par costs." Pet. App, A15. Cf. Pension Benefit Guaranty \par Corp. V. LTV Corp., 496 U.S. 633,646-647 (1990). \par \par CONCLUSION \par \par The petition for a writ of certiorari should be \par denied. \par \par Respectfully submitted. \par \par DREW S. DAYS, III \par Solicitor General \par \par FRANK W. HUNGER \par Assistant Attorney General \par \par ROBERT S. GREENSPAN \par SANDRA WIEN SIMON \par Attorneys \par \par \par AUGUST 1995 \par \par \par }