Court of Appeals affirms racial discrimination verdict against Port Authority

The Second Circuit has upheld a verdict finding that the Port Authority racially discriminated against eleven Asian-Americans in denying them promotional opportunities. But it remands the case for a new trial on damages because the jury improperly awarded them compensatory damages on the basis of time-barred acts.

The case is Chin v. Port Authority, decided on July 10. The case raises a number of important issues relevant to Title VII law, including the relevance of certain statistical analysis as well as time-barred discriminatory acts in proving damages.

First, agreeing with all other Circuits that have taken up this issue, the Court of Appeals holds that the "pattern or practice" theory of liability is inapplicable when the plaintiffs are not bringing a class action. "Pattern or practice" entails showing that the employer's hiring pattern or policy discriminated against minority employees. We distinguish this from the more particular prima facie case under the McDonnell-Douglas burden of proof, i.e., adverse employment action under circumstances creating an inference of discrimination. The Second Circuit (Livingston, McLaughlin and Cabranes) holds that "permitting private plaintiffs to use the pattern-or-practice method of proof outside the class action context would require us to extend this method beyond its current application. This we decline to do. Such an extension would allow nonclass private plaintiffs who have shown a pattern or practice of discrimination (but have not made out a disparate impact claim) to shift the burden to employers to prove that they did not discriminate against a particular individual. But this would conflict with the Supreme Court's oft-repeated holding in the context of disparate-treatment, private nonclass litigation that 'the ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.'"

The district court therefore should not have instructed the jury that it may find Port Authority liable on the "pattern or practice" theory. The judgment on this claim is reversed. (The Court does say that proof that the employer had a "pattern or practice" of discrimination may help individual plaintiffs prove their disparate treatment claim under the traditional McDonnell-Douglas theory).

But all is not lost for plaintiffs on this appeal, even if they lose on the first issue. The jury also found that the plaintiffs were the victims of disparate treatment because of their race, and the Second Circuit says there was enough evidence to support that verdict. None of the 12 Asian-Americans on the eligible list were promoted during the relevant time period, in contrast to 36 out of 259 whites. The plaintiff's statistical expert testified that this disparity would happen by chance 13 percent of the time. Normally, this would be a statistically insignificant percentage, suggesting that discrimination was not the reason. But the Court of Appeals says that two facts nonetheless support the verdict. First, no Asian-Americans were promoted, and second, the evidence established that the plaintiffs were more qualified than some of the white officers who were promoted. "In the context of this case, it would not be unreasonable for a juror to find Dr. Cavanagh's statistics significant despite only being significant at the 13-percent level."

The plaintiffs also prevailed on their disparate impact claims. That theory of liability allows the plaintiff to win if a facially neutral employment practice that is not job-related has a disparate impact against racial minorities, sort of like a promotional exam that does not ask potential employees job-related questions. Here, a Board made recommendations for promotion. That recommendation "was neither necessary nor sufficient for promotion, and the weight it carried in the process was both unclear and variable." That questionable process suggests that the process did not allow for promotions on the basis of job-related input from the Board.

The plaintiffs have to undergo another trial, however. The jury awarded them damages on the basis of discriminatory acts that predated the statute of limitations. The plaintiffs argued that a series of promotion denials constituted the kind of continuing violation that brings otherwise time-barred events before the jury for the purposes of awarding damages. (Normally, time-barred events are only relevant to prove intent to discriminate on the more recent, timely employment decisions). The Court of Appeals rejects the plaintiff's creative argument, noting that the Supreme Court said in 2002 that promotion denials are discrete events for which plaintiff may file a charge of discrimination with the EEOC (as opposed to sexual harassment which may comprise a continuing violation and entitle the plaintiff to damages for all the harassment, even if some of it predated the statute of limitations). What the Court of Appeals is saying, then, is that promotion denials may not constitute a continuing violation under Title VII. Taking the lead of the other Circuits that have ruled on this issue, the Second Circuit says that "[d]iscrete acts of this sort, which fall outside the limitations period, cannot be brought within it, even when undertaken pursuant to a general policy that results in other discrete acts occurring within the limitations period." Since the jury may have included time-barred claims with respect to each of the plaintiffs, there will be a new trial on damages for pain and suffering and lost wages. As some of the plaintiffs got equitable relief on time-barred claims, the new trial on damages will cover those damages also.