
USCA1 Opinion

	




                            United States Court of Appeals                                For the First Circuit                                 ____________________        No. 96-1117                                MARY JANE KERR SELGAS,                                 Plaintiff, Appellee,                                          v.                             AMERICAN AIRLINES, INC., AND                                WHADZEN CARRASQUILLO,                               Defendants, Appellants.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                    [Hon. Jose Antonio Fuste, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                               Torruella, Chief Judge,                                          ___________                      Coffin and Campbell, Senior Circuit Judges.                                           _____________________                                 ____________________            Howard  B. Comet  with whom  Andrew  B.  Steinberg and  Vicente J.            ________________             _____________________      __________        Antonetti were on brief for appellants.        _________            Judith  Berkan with whom  Rosalinda Pesquera  and Mary  Jo Mendez-            ______________            __________________      ________________        Vilella were on brief for appellee.        _______                                 ____________________                                   January 13, 1997                                 ____________________               COFFIN, Senior Circuit Judge.  At issue in this case are the                       ____________________          equitable  remedies  awarded to  the  plaintiff,  Mary Jane  Kerr          Selgas ("Kerr Selgas"), in a sex discrimination suit  against her          employer, American  Airlines ("American").   A jury  awarded Kerr          Selgas a lump sum award in that suit that included an unspecified          amount for front pay.  In an earlier appeal,  this court affirmed          the judgment.   See Kerr  Selgas v. American  Airlines, Inc.,  69                          ___ ____________    ________________________          F.3d  1205  (1st  Cir. 1995)  ("Kerr  I").    The district  court                                          _______          subsequently   ordered  Kerr   Selgas  reinstated   by  American.          American   maintains  in   this   appeal  that   front  pay   and          reinstatement are mutually exclusive equitable remedies, and that          the court therefore erred  in allowing both  to Kerr Selgas.   It          further  claims  that  the   district  court  erred  in  ordering          reinstatement  without conducting  a hearing,  without permitting          American  to conduct  additional  discovery,  and in  considering          extra-record evidence submitted  by Kerr Selgas.   We affirm  the          court's  legal judgment that both front pay and reinstatement are          permissible, but we vacate the  district court's order and remand          for a  hearing on whether reinstatement is  an appropriate remedy          here.                                        BACKGROUND                                      __________               The  facts of the underlying suit are discussed in detail in          our opinion in  Kerr I;  accordingly, we relate  here only  those                          ______          facts relevant to the instant appeal.               Mary Jane Kerr Selgas was fired by American Airlines in 1992          after 18 years with  the company; she brought suit  under federal                                         -2-          and Puerto Rico law, alleging sex discrimination, harassment, and          violation  of her local law right to  privacy.  At the conclusion          of a  three week  trial, a  jury awarded her  over $1  million in          damages; under Puerto Rico law, this was doubled automatically to          over  $2 million.   A  remittitur and  the rejection  of punitive          damages by this court in Kerr I resulted in a final damages award                                   ______          of $1.2 million.                While Kerr Selgas had requested reinstatement in her initial          complaint, and also in subsequent motions, the district court set          this issue aside  during the course of  the trial and  during the          pendency of the  Kerr I  appeal.   One month  after this  court's                           ______          decision  in  Kerr I  on November  13,  1995, the  district court                        ______          ordered  American to  reinstate Kerr  Selgas.   The court  did so          without holding a full hearing  on this issue, and its order  was          based  on the  evidence  received  at  trial  and  on  additional          materials submitted with motions by Kerr Selgas.  American claims          that  this  reinstatement  order  is improper  for  two  reasons.          First, it argues that reinstatement and front pay are alternative          remedies and that Kerr  Selgas was fully compensated by  the jury          award  including   front  pay.    Second,   if  reinstatement  is          permissible,  it argues that it should not have been ordered here          without  first  giving  American   additional  discovery  and  an          opportunity  to be heard  on the issue,  particularly if evidence          obtained after the trial was to be considered.                                      DISCUSSION                                      __________               Our  review of the district court's decision that both front                                         -3-          pay  and reinstatement could be  awarded together as  part of the          remedies available to  a Title  VII plaintiff is  de novo, as  we                                                            __ ____          review for legal error.  Compagnie de Reassurance d'Ile de France                                   ________________________________________          et  al. v. New England Reinsurance Corp.,  et al., 57 F.3d 56, 71          _______    ______________________________________          (1st Cir. 1995)  (review of legal rulings is de  novo).  However,                                                       __  ____          in  reviewing  a  district  court's decision  to  actually  award          equitable relief,  we utilize  the abuse of  discretion standard.          Lussier  v. Runyon,  50 F.3d  1103, 1111  (1st Cir.  1995).   Our          _______     ______          review is deferential, and we will not normally find an  abuse of          discretion absent strong evidence of a lapse in judgment.  Texaco                                                                     ______          Puerto Rico v. Department  of Consumer Affairs, 60 F.3d  867, 875          ___________    _______________________________          (1st Cir. 1995).  In Title VII  cases, we must be mindful of  the          statute's  dual purposes of eliminating discrimination and making          its victims whole.  Id.                                __          A.   Equitable Remedies Under Title VII:  Front Pay and               Reinstatement.               The  remedial  scheme in  Title VII  is  designed to  make a          plaintiff who has been the victim of discrimination whole through          the use of equitable remedies.  Albemarle Paper Co. v. Moody, 422                                          ___________________    _____          U.S.   405,  418   (1975).     These   remedies  (which   include          reinstatement, back pay, and  front pay) are accordingly intended          to  compensate a plaintiff for the effects of the discrimination,          both past and future, and to bring the plaintiff  to the position          which s/he would have occupied  but for the illegal act(s).   See                                                                        ___          Shore v. Federal  Express Corp.,  777 F.2d 1155,  1159 (6th  Cir.          _____    ______________________          1985).  Under  Title VII, the  first choice is  to reinstate  the          plaintiff at  the original  employer; this accomplishes  the dual                                         -4-          goals  of  providing  full  coverage  for  the  plaintiff  and of          deterring such conduct by employers in the future.  See Scarfo v.                                                              ___ ______          Cabletron Systems, Inc., 54 F.3d 931, 954 (1st Cir. 1995).            _______________________               Where  reinstatement  is  not  immediately  available  as  a          remedy,  either  due  to  the plaintiff's  condition,  or  due to          conditions at  the employer that preclude  the plaintiff's return          (such  as  hostility  of other  employees,  or  the  need for  an          innocent  employee  to be  "bumped"  in  order  to reinstate  the          plaintiff),  front   pay  is  available  as   an  alternative  to          compensate the plaintiff from the conclusion of trial through the          point at which the plaintiff can either return to the employer or          obtain comparable employment elsewhere.  See id.; see also Powers                                                   ___ ___  ___ ____ ______          v. Grinnell Corp., 915  F.2d 34, 42 (1st  Cir. 1990); Wildman  v.             ______________                                     _______          Lerner Stores Corp., 771 F.2d 605, 616 (1st Cir. 1985) (front pay          ___________________          may be awarded in ADEA suits where reinstatement is impracticable          or  impossible; circumstances  of  each case  to be  considered);          Dillon v. Coles, 746 F.2d 998, 1006 (3rd  Cir. 1984).  It is this          ______    _____          context,  where the overarching  preference is  for reinstatement          and front pay is  an alternative for finite periods  during which          reinstatement is unavailable,1 which  is the key to understanding          the construction of remedial  packages.  In this context,  it can          be  seen  that front  pay  and  reinstatement  are  not  mutually                                        ____________________               1    See, e.g.,  Scarfo v. Cabletron Systems,  Inc., 54 F.3d                    ___  ____   ______    ________________________          931, 953 (1st Cir.  1995)("Front pay refers to damages  for wages          from  the  date  of  judgment  to  some  specified  date  in  the          future.");  Thompson v.  Sawyer,  678 F.2d  257,  293 (D.C.  Cir.                      ________     ______          1982)("[F]ront pay should persist, however, only until the wrongs          for which plaintiffs are owed backpay have been righted.")                                             -5-          exclusive.    Front  pay  takes  a  plaintiff  to  the  point  of          employability.   Reinstatement  at that  point would,  in effect,          "perfect" the remedy because  the plaintiff would be back  in the          very job she lost unlawfully.               Trial courts have discretion to fashion the  awards in Title          VII cases so as to fully  compensate a plaintiff in a manner that          suits the specific  facts of the  case; this discretion  includes          the  selection  of  the  elements  which  comprise  the  remedial          recovery.2   Albemarle, 422 U.S.  at 415-16.   Traditionally, the                       _________          court determines the  whole remedial package  in one fell  swoop.          Hybrid awards combining front  pay with other equitable elements,          while rare, are not novel.  The Court of Appeals for the District          of  Columbia in Thompson v. Sawyer, 678  F.2d 257, 268 (D.C. Cir.                          ________    ______          1982),   commended  a   district  court's   award   (although  it          reformulated certain of the elements) which included back pay and          front pay to be paid to  female bindery workers at the Government          Printing  Office through such time as women comprised half of the          litigated positions.  Reinstatement and front pay were explicitly                                        ____________________               2    American claims that by  presenting her claim for front          pay to the  jury in the  form of jury  instructions, Kerr  Selgas          "elected" front pay as  a remedy, rather than reinstatement.   It          is  clear that in  a Title  VII case, it  is the court  which has          discretion to fashion relief  comprised of the equitable remedies          it sees as appropriate,  and not the parties which  may determine          which  equitable remedies  are available.   See  James v.  Sears,                                                      ___  _____     ______          Roebuck  & Co., 21  F.3d 989, 997  (10th Cir. 1994)  (decision to          ______________          award  reinstatement  or  front  pay is  at  court's  discretion;          plaintiffs who refused  reinstatement where not impracticable  or          impossible  may not elect front pay simply because they prefer it          as  remedy).   Additionally, Kerr  Selgas' repeated  requests for          reinstatement in her original complaint and in subsequent motions          bely a  claim that  she elected  one  form of  recovery over  the          other.                                         -6-          cobbled  together as part of the relief afforded the plaintiff in          Valdez  v. Church's Fried Chicken,  Inc., 683 F.  Supp. 596 (W.D.          ______     _____________________________          Tx.  1988),  where reinstatement  to  a  managerial position  was          ordered  as soon as a position became available and front pay was          ordered  to  continue until  the  reinstatement  occurred.   This          court,  while it  has  not previously  addressed this  particular          issue,  has indicated a preference for a flexible approach in the          construction  of remedial awards.   See Lussier, 50  F.3d at 1112                                              ___ _______          (remedial tapestry  is made up  of multiple strands  of relief).3          The  district court therefore had the option here of combining an          award of front pay  with reinstatement.  Its only  limitation was          to avoid duplication.  See Scarfo, 54 F.3d at 955 (citing Dopp v.                                 ___ ______                         ____          HTP Corp., 947 F.2d 506, 516 (1st Cir. 1991)(duplicative remedies          _________          are to  be  avoided)).   Because  courts typically  consider  all          remedies  at the  same time,  duplication most commonly  would be          avoided by denying front  pay when an immediate  reinstatement is          ordered.                 Although the district  court was not explicit  about what it          was  doing  in this  instance  (allowing American  to  argue that          reinstatement  had been  excluded  as a  prospective remedy),  it          appears to  have bifurcated the traditional  remedies analysis on          the  assumption that, since Kerr  Selgas was unable  to return to          work at  the time of  trial, pay  for some future  time --  i.e.,                                        ____________________               3    We  note that  the cases  American has  cited from  our          circuit merely support the  proposition that reinstatement is the          preferred first remedy, and that where this is unavailable, front          pay may  be awarded,  rather than precluding  a remedial  package          which contains both elements.                                          -7-          front  pay -- was necessary to compensate Kerr Selgas, whether or          not reinstatement would be an appropriate additional remedy.4  It          therefore reserved the reinstatement issue  for later resolution,          and  sent the  compensatory elements  (back pay,  front  pay, and          damages) to the jury for determination.5   By including front pay          in its lump sum award, the jury fully compensated Kerr Selgas for          the discrimination she had suffered from the point of the initial          illegal  act to  the  point  at which  she  would  once again  be          employable at her prior level.  The court then took up post-trial          whether American was required to take her back.                 Due to the  amorphous nature  of the  jury award  -- it  was          simply a lump sum  with no distinctions made between  the amounts          allocated  to  back  pay, front  pay,  or  damages,  and with  no          statement as to the time  period which the front pay portion  was          intended to cover -- it cannot be stated with any certainty which          dates or figures  the jurors  determined were  applicable to  the          front pay  issue.6  In  other words,  it is not  clear when  they                                        ____________________               4    In  its  June  23,   1994  Order,  the  district  court          explicitly  stated  that  the  issue  of  reinstatement  remained          pending resolution by the court.                 5     We would counsel district  courts in the future  to be          explicit about  the procedures  they are following,  whether they          choose to  reserve an equitable remedy  for future determination,          or conclude that it is inapplicable in a particular instance.                 6    Additionally, an award of front pay, constituting as it          does, an  estimate of what a plaintiff might have earned had s/he          been  reinstated  at  the  conclusion of  trial,  is  necessarily          speculative.  See Loeb v. Textron, Inc., 600 F.2d 1003, 1023 (1st                        ___ ____    _____________          Cir. 1979).   However, this speculative  aspect should not  deter          courts from  fashioning awards that accomplish  Title VII's goals          of making a wronged plaintiff whole.  See Barbour v. Mitchell, 48                                                ___ _______    ________          F.3d 1270,  1280  (D.C.  Cir. 1995)  (noting  courts  and  juries                                         -8-          thought  she would  be ready  to  return to  work.   Testimony at          trial, however, put the longest date at 18 months after trial, or          October  1995.7    Furthermore, in  its charge  to the  jury, the          court specifically  limited any  damages to  those caused by  the          defendants'  wrongful conduct.8    Reinstatement was  ordered  in          December 1995.  The  front pay and reinstatement awards thus seem          most reasonably to cover separate and  distinct periods of time.9          Because  there is no  duplication, the two  equitable remedies of          front pay and reinstatement  could be used in concert  to achieve                                        ____________________          routinely engage in some  speculation based on factual record  in          other situations such as personal  injury cases when valuing lost          earning capacity).                 7    American's expert testified that Kerr Selgas was fit to          return to work  immediately after the  conclusion of trial;  Kerr          Selgas' expert, on  the other  hand, testified that  it would  be          eight to  18 months before she  would be able to  return to work.          The  testimony  concerning  her  income  loss included  estimates          presented by her expert  as to the losses she  would sustain were          she  to return to work  immediately, six months  after trial, and          one year after trial.                 8    In  its instructions to the jury, the court stated that          the jury could award damages only for injuries that the plaintiff          proved were  caused by the defendants'  alleged wrongful conduct.          The court then instructed the jury to consider as elements of any          damages  award  back pay,  compensatory  damages  for any  future          pecuniary  losses, and  damages  for  emotional pain,  suffering,          inconvenience and  mental anguish.  It  specifically required the          jury  to consider  two factors  relating to  damages for  loss of          future earnings:  reduction of the  award by any amount that  the          plaintiff  would  have expended  in  making  those earnings;  and          secondly, reduction of the award by considering the interest that          the plaintiff could earn on the amount of the award if she made a          relatively risk-free investment.                 9    Taken  at its  outside  possible limit,  the award  for          front pay would  seem to have extended from the  date of judgment          (4/13/94) through October  1995.    Reinstatement was ordered  by          the district court on  December 13, 1995.  Accordingly,  there is          no overlap between the time period covered by the front pay award          and that covered by the reinstatement order.                                         -9-          Title  VII's  goal of  fully  compensating the  plaintiff.   This          brings  us to  American's  second point  on  appeal: whether  the          process used to reach the reinstatement decision was proper.            B.   Admission of Evidence and Lack of Hearing on Restitution.               American  contends that  the trial  court erred  in ordering          reinstatement  because it  impermissibly considered  evidence not          adduced  at  trial,  and   because  American  was  not  permitted          additional discovery or a hearing on the reinstatement issue.                 In  considering   the  plaintiff's  post-trial   motion  for          reinstatement, the court had before it both the evidence received          at  trial, and  additional  evidence submitted  by the  plaintiff          purporting to  demonstrate that some  of the  issues which  might          have  earlier precluded  reinstatement  (including  hostility  of          other employees and the plaintiff's  own inability to work)  were          no  longer bars to her  return.10  The  district court explicitly          relied  upon some  of  this evidence  in  its order,  citing  the          information in a  newspaper article relating to the  departure of          certain   individuals    from   American,   and    her   treating          psychologist's statement that  Kerr Selgas was  fit to return  to          work.    However,  the  court  also  noted  that  defendants  had                                        ____________________               10   Specifically, the plaintiff produced news  reports that          one of the chief offenders in her experience at American, Whadzen          Carrasquillo,  had  left  the  company.    She  also  produced  a          statement by her treating psychologist, Carlos Velasquez, stating          he   believed  she  was  fit  to  return  to  work  at  American.          Velasquez' affidavit,  however, speaks  only in the  most general          terms: it states that on the basis of unspecified tests conducted          at unspecified dates,  Kerr Selgas "is  currently[...]functioning          adequately"  and that he therefore  believes she is  "now able to          return  and to carry out her duties as Account Sales Executive at          American Airlines."                                          -10-          presented testimony at trial  that Kerr Selgas was fit  to return                              ________          to work in March 1994.11                 The adversarial system's search for truth and the assessment          of  remedies are  predicated upon  an open  and fair  exchange of          ideas  and  information.   Lussier, 50  F.3d at  1113.   It  is a                                     _______          fundamental principle of this  system that a fact finder  may not          consider extra-record evidence  concerning disputed  adjudicative          facts.   Id. at  1114.  While  we have suggested in  at least one                   ___          case  that parties  might  possibly waive  a  deprivation of  the          evidentiary  and  procedural guarantees  embodied in  the managed          adversarial  system  with  regard  to  extra-record evidence,  or          consent to a court's  consideration of it,  see id. at 1115,  the                                                      ___ ___          evidence  supporting such  a voluntary  and knowing  waiver would          need to be significant and unequivocal.               Such is not the  case here.  American repeatedly  stated its          opposition to  Kerr Selgas'  reinstatement, and  more importantly          repeatedly requested a hearing and discovery on the reinstatement          issue.12    Kerr Selgas  herself requested  a  jury trial  on the                                                         ____                                        ____________________               11   Kerr  Selgas  suggested  at   oral  argument  that  the          district court  could  have  reached  its  determination  without          relying  on  the new  evidence; however,  this  is belied  by the          language of the district court's order.               12   American  opposed Kerr Selgas' motion for reinstatement          in  a 12-page opposition filed on December 23, 1994, citing among          other reasons, the need for an evidentiary hearing and additional          discovery  due to  the lack of  sufficient information  in either          the  evidence submitted  at trial  or the later  submissions with          which to determine whether Kerr Selgas  was in fact fit to return          to work.  In its July 27, 1995  Opposition to Plaintiff's Renewed          Request  for Reinstatement  and Related  Benefits, American  also          opposed  Kerr Selgas' reinstatement.   Again, in  its December 8,          1995  Opposition to  Plaintiff's  Request  for Reinstatement  and                                         -11-          reinstatement  issue  in  her  July 10,  1995  motion  requesting          reinstatement.    Therefore,  there   is  no  indication  of  any          intention  on either  party's  part to  waive  a hearing  on  the          reinstatement issue.                 Where the  district court  based its determination  at least          partially  on information not properly  before it in  the form of          evidence admitted at trial,  and where the remedy to  be accorded          the plaintiff is as significant as reinstatement, we are hesitant          to  applaud   anything  less  than  strict   adherence  to  those          procedures which  accord each party the opportunity  to be fairly          heard  on   key  issues.     Accordingly,  while  we   hold  that          reinstatement  may  properly  be  awarded  in  a  Title VII  case          together  with front  pay  as long  as  there is  no  duplication          between the two awards, in this case we  believe a hearing should          have   been  held   to   determine   whether  reinstatement   was          appropriate.     Therefore,  we   vacate  the   district  court's          reinstatement order and  remand for  proceedings consistent  with          this  opinion   to  determine  whether  Kerr   Selgas  should  be          reinstated by American.13                                         ____________________          Related Benefits,  American raised its objection to reinstatement          being ordered without an  evidentiary hearing and the opportunity          for further discovery.                 13   We anticipate  a limited  hearing on  the reinstatement          issue.  See Uno  v. City of Holyoke,  72 F.3d 973, 992  (1st Cir.                  ___ ___     _______________          1995) (on  remand, lower court may conduct hearing without having          new trial  and permit parties  to supplement the  existing record          with  additional facts).  As Kerr Selgas has been compensated for          the time from the initial act to the point of  her employability,          further  monetary  damages are  not  available  to  her, and  the          damages question is no longer open.                                         -12-                                      CONCLUSION                                      __________               Courts may properly combine  the equitable remedies of front          pay  and reinstatement  in  order to  meet  Title VII's  goal  of          providing  full   compensation   to  the   victims   of   illegal          discrimination, as long as there is no  economic or chronological          duplication   between  the  awards.    However,  the  protections          inherent in the adversarial system demand  that full and complete          hearings  be   provided  on  contested  issues   affecting  these          equitable remedies.                      Vacated and remanded.  No costs to either party.          ________________________________________________                                         -13-
