                                                                                                                           Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-4-2003

Le v. Univ PA
Precedential or Non-Precedential: Precedential

Docket 01-3638




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PRECEDENTIAL

       Filed March 4, 2003

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

Nos. 01-3638, 01-3759

TAI VAN LE, MR.

v.

UNIVERSITY OF PENNSYLVANIA,
A Not-for-profit corporation and;
STANLEY OPELLA, an individual

(E. D. Civil No. 00-cv-00481)

TAI VAN LE, MR.

v.

UNIVERSITY OF PENNSYLVANIA,
A Not-for-profit corporation

(E. D. Civil No. 99-cv-1708)

       Tai Van Le, Appellant No. 01-3638

TAI VAN LE, MR.

v.

UNIVERSITY OF PENNSYLVANIA,
A Not-for-profit corporation and;
STANLEY OPELLA, an individual

(E. D. Civil No. 00-cv-00481)




TAI VAN LE, MR.

v.

UNIVERSITY OF PENNSYLVANIA,
A Not-for-profit corporation

(E. D. Civil No. 99-cv-1708)

       The Trustees of the University of
       Pennsylvania, the proper
       corporate name of the University
       of Pennsylvania,
       Appellant No. 01-3759

ON APPEAL FROM THE
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

(D.C. Civil Nos. 99-cv-01708 and 00-cv-00481)
District Judge: The Honorable Bruce W. Kauffman

Argued October 29, 2002

BEFORE: NYGAARD, COWEN, and
MICHEL,* Circuit Judges.

(Filed March 4, 2003)

       Robert F. O’Brien, Esq. (Argued)
       Nancy S. Sokol, Esq. (Argued)
       Tomar, O’Brien, Kaplan, Jacoby,
        & Graziano
       20 South Brace Road
       Cherry Hill, NJ 08034
        Counsel for Appellant/
       Cross Appellee
_________________________________________________________________

* The Honorable Paul R. Michel, Circuit Judge for the United States
Court of Appeals for the Federal Circuit, sitting by designation.

                                2


       Neil J. Hamburg, Esq. (Argued)
       JuHwon Lee, Esq.
       Hamburg & Golden
       1601 Market Street
       Suite 565
       Philadelphia, PA 19103
        Counsel for Appellee/
       Cross Appellant

OPINION OF THE COURT

NYGAARD, Circuit Judge:

In this appeal, Appellant and Cross-Appellee Tai Van Le
alleges that the District Court erred on two points by
denying his Motion for Reconsideration: (1) denying the
Motion to Amend Judgment to Increase Back Pay and
Include Front Pay, and (2) upholding the validity of the Rule
68 Offer of Judgement. On cross-appeal, Appellees and
Cross-Appellants, The Trustees of the University of
Pennsylvania, allege that the District Court erred by
denying in part its Petition for Attorneys’ Fees and Costs
and denying its Motion for Judgment Notwithstanding the
Verdict on Punitive Damages. For the reasons discussed
below, we will affirm the decision of the District Court.

I. Jurisdiction and Standard of Review

We have jurisdiction over a final order of the District
Court pursuant to 28 U.S.C. S 1291. The decision to deny
a Motion for Reconsideration is within the discretion of the
District Court, but "if the court’s denial was based upon the
interpretation and application of a legal precept, review is
plenary." Koshatka v. Philadelphia Newspapers, Inc., 762
F.2d 329, 333 (3d Cir. 1985). On cross-appeal, we also
have plenary review over the decision to deny the Motion for
Judgment as a Matter of Law. Ambrose v. Township of
Robinson, 303 F.3d 488, 492 (3d Cir. 2002). However,
because the jury determined the issue on both of these
motions, "our scope of review is limited to examining
whether there is sufficient evidence to support the verdict,

                                3


drawing all reasonable inferences in favor of the verdict
winner." Kelly v. Matlock, Inc., 903 F.2d 978, 981 (3d Cir.
1990). We have plenary review over both legal questions
regarding the interpretation of Rule 68 and the
construction of the offer of judgment. Public Interest
Research Group v. Windall, 51 F.3d 1179, 1184 (3d Cir.
1994).

II. Discussion

The University of Pennsylvania hired Tai Van Le, a
Vietnamese-born U.S. citizen, as an Electronics Technician
in 1986. Le worked primarily on projects generated by the
research group led by Dr. Stanley Opella and related to the
design of sophisticated electronic devices for nuclear
magnetic resonance spectroscopy. This working
arrangement continued harmoniously until late 1997, when
Dr. Opella began expressing concern with the accuracy of
Le’s designs and Le began to feel that certain statements
made in the laboratory were directed towards his national
origin in a discriminatory manner. After reporting these
comments to the University, Le was assigned a new
supervisor and the University conducted an internal
investigation that did not discover discrimination.

The situation did not improve from the perspective of
either party and from September to early December 1998,
Le took an extended sick leave. Upon his return, the
University placed Le on probation for poor performance
prior to his leave. Le was given several specific tasks to
complete during the one month probationary period. He did
not complete the assigned tasks and was terminated for
poor performance in January 1999.

In April 1999, Le filed a pro se complaint alleging
national origin discrimination against his employer, the
University of Pennsylvania, and his supervisor, Dr. Stanley
Opella. Le filed a second complaint in January 2000
against the same parties, this time alleging retaliation. On
February 29, 2000, the defendants made an offer of
judgment for $50,000 pursuant to FED. R. CIV. P. 68.1 This
_________________________________________________________________

1. Federal Rule of Civil Procedure 68 provides, in part:

                                4
offer was made jointly by the defendants on both of the
then pending cases. Le rejected the offer and, after
consolidation, the cases went to trial.

At the close of Le’s evidence, the claims against Dr.
Opella were dismissed pursuant to FED. R. CIV. P. 50. The
remaining defendant, the University of Pennsylvania,
presented its case and after deliberations, the jury returned
a mixed verdict. The jury found for the University on Le’s
discrimination claim, but awarded Le $25,000 in
compensatory damages and $10,000 in punitive damages
as to the retaliation claim. In post-trial motions, the District
Court denied Le’s post-offer attorneys’ fees under Rule 68
and granted the University’s motion to shift its post-offer
costs. However, the District Court denied the University’s
request for post-offer attorneys’ fees, finding that such fees
could only be awarded under Title VII when the plaintiff
brought a frivolous claim. The District Court also denied
motions from both parties attacking the sufficiency of the
evidence for the jury’s verdict.

A. Le’s Appeal

Le alleges that the District Court erred by denying his
Motion for Reconsideration. Specifically, Le argues that the
University did not demonstrate that he failed to mitigate his
damages and thus the jury award was incorrect. Le also
claims that the Offer of Judgment made by the University
is invalid. Both arguments fail.

1. Mitigation of Damages by Le

Damages in a Title VII case may be reduced by the jury,
provided that the defendant-employer makes certain
showings.2 In Booker v. Taylor Milk Co., 64 F.3d 860, 864
_________________________________________________________________

       At any time more than 10 days before the trial begins, a party
       defending against a claim may serve upon the adverse party an offer
       to allow judgment to be taken against the defending party for the
       money or property or to the effect specified in the offer, with costs
       then accrued. . . . If the judgment finally obtained by the offeree is
       not more favorable than the offer, the offeree must pay the costs
       incurred after the making of the offer.

2. Title VII has been interpreted to require mitigation by the employee
and allows reduction of damages otherwise. 42 U.S.C.S 2000e-5(g)(1)

                                 5


(3d Cir. 1995), we explained that "[t]o meet its burden, an
employer must demonstrate that 1) substantially equivalent
work was available, and 2) the Title VII claimant did not
exercise reasonable diligence to obtain the employment."
From the evidence presented at trial, it is clear that this
burden was met.

The University introduced testimony that University
employees who are laid off regularly obtain comparable jobs
at the University. This was exemplified by the testimony of
Dr. Kathy Vallentine, Le’s co-worker in the same laboratory.
Dr. Vallentine testified that with a diligent search she was
able to find comparable employment within the University
after the laboratory closed. Additionally, Dr. Hai Lung Dai,
the Chair of the Chemistry Department, testified that the
University offered Le an opportunity to have a paid leave of
absence. During this leave, Le would receive support from
the University’s Human Resources Division and a job
consultant to aid him in his job search for a position within
the University for three months and outside the University
for six months. Le declined this offer.

As to Le’s duty to seek other employment, he testified
that he attended a job fair at some point and posted his
resume online, but could only produce two rejection letters
from a time period some fifteen months after his dismissal
as proof that he sought other employment. Le did not
attempt to find other work for a significant period of time
following his dismissal, and only half-heartedly began after
the amended lawsuit was filed in 2000. The jury could
infer, from the ability to transfer positions within the
University, the job fairs related to engineering, the two
possible jobs from which Le was rejected, coupled with Le’s
refusal to seek job-hunting assistance and general
insouciance about his job search, that other jobs existed
but that Le did not exercise reasonable diligence.

2. The Rule 68 Offer of Judgment

Le argues that the Offer of Judgment made by the
University should be declared invalid because it was not
_________________________________________________________________

("Interim earnings or amounts earnable with reasonable diligence by the
person or persons discriminated against shall operate to reduce the back
pay otherwise allowable.").

                                6


originally apportioned between Dr. Opella and the
University, nor between the discrimination and retaliation
claims. Le also argues that the offer contains ambiguous
language and thus cannot be compared to the final
judgment.

Le points to several cases outside our circuit where the
failure to apportion the offer was deemed fatal. In Gavoni v.
Dobbs House, Inc., 164 F.3d 1071 (7th Cir. 1999), the
Seventh Circuit affirmed the denial of the defendant’s
motion for costs under Rule 68. The defendant had made
an unapportioned offer of $10,000 to three plaintiffs and
the jury ultimately awarded the plaintiffs a total of $6,500.
Although the total amount of the offer was greater than the
total sum received by the three plaintiffs, the court was
concerned that the plaintiffs lacked "a clear baseline from
which [they] may evaluate the merits of their case relative
to the value of the offer." Id. at 1076. The court noted that
there was no easily comparable sum involved from the face
of the offer and pointed to the variety of arguments made
by both sides, ranging from comparing the total offer with
the total award, splitting the offer in thirds and then
comparing, or comparing the individual awards with the
total offer. According to the court "[t]hese varied
constructions of the single offer only underscore its fatal
problem: imprecision. The plaintiffs simply could not have
evaluated the individualized values of the offer." Id.

Le also cites to the Fifth Circuit’s decision in Johnston v.
Penrod Drilling Co., 803 F.2d 867 (5th Cir. 1986). In
Johnston, the court reversed the lower court’s decision to
grant costs pursuant to Rule 68. Id. at 869. The court
acknowledged the unique factual position of the case, in
that a single plaintiff had received an unapportioned offer
from two defendants, rejected the offer, but then later
settled with one of the defendants. At the close of trial, the
jury decided against the remaining defendant, but awarded
the plaintiff an amount less than the original Rule 68 offer.
The court found that the proper comparison was to look at
the individual settlement amount plus the jury award as
compared to the Rule 68 offer. Id. at 870. As this amount
was greater than the offer, the court reversed.

                                7


The cases Le cites are inapplicable because they differ
significantly from the factual position of this case. Here, the
University and Dr. Opella did not make an offer to multiple
plaintiffs, nor were there other amounts besides the jury
verdict to compare. Le knew from the outset what amount
would be compared with his future judgment. In
considering and distinguishing the cases cited by Le, the
District Court also noted the unique relationship between
Dr. Opella and the University. The University’s indemnity
contract provides that they had accepted any financial
responsibility resulting from any actions by Dr. Opella and
thus "the University’s pocketbook and Dr. Opella’s
pocketbook were one and the same." Le v. University of
Pennsylvania, 2001 WL 849707, at * 5 (E.D. Pa. July 13,
2001). The District Court found that dismissing Le’s claims
against Dr. Opella was not fatal to the offer of judgment
because Le could expect that all costs would be borne by
the University. Id.

Given the single identity of the defendants, failure to
apportion between the University and Dr. Opella was not
fatal to the offer. A decision to the contrary could promote
the addition of improper defendants so that their eventual
dismissal would negate any legitimate Rule 68 offer made
by the proper defendants.3 Likewise, the need to apportion
between the retaliation and discrimination claims is
unnecessary where, as here, only one plaintiff receives an
offer pertaining to both claims. The jury returned a verdict
for Le on the retaliation claim, but not on the
discrimination claim. The offer applied to both claims in
toto and the total judgment of $35,000 awarded can easily
be compared to the Rule 68 Offer of $50,000 plus costs.
_________________________________________________________________

3. We note that the District Court found that Dr. Opella was Le’s
supervisor and not his employer. Under this relationship, liability cannot
exist pursuant to Title VII. Sheridan v. EI DuPont de Nemours & Co., 100
F.3d 1061, 1078 (3d Cir. 1996) (en banc). In Sheridan, we sat en banc
to "clarify the quantum and nature of evidence that will permit a jury to
find that an employer engaged in impermissible employment
discrimination." Id. at 1063. As part of the appeal, we affirmed the
dismissal of Sheridan’s supervisor at DuPont because"Congress did not
intend to hold individual employees liable under Title VII." Id. at 1078.

                                8


Le’s second argument for invalidating the offer of
judgment is that the language of the offer was ambiguous
as to whether or not costs were included--such that the
offer was for either $50,000 including costs or $50,000 plus
costs. The plain language of the offer dictates the result.
The offer provides "for the total amount of $50,000.00, plus
costs then accrued." App. at p. 84a. In Marek v. Chesny,
473 U.S. 1 (1985), the Supreme Court held that an offer in
a Title VII matter includes attorneys’ fees in the definition
of costs. The Court further found that "[a]s long as the offer
does not implicitly or explicitly provide that the judgment
not include costs" an offer is valid and presumes the
defendant will pay costs. Id. at 6. Le counters by quoting
later language in the offer that "the offer [of $50,000 plus
costs] shall represent and fix the total liability of the
[defendants] for any and all of plaintiff ’s loss, claims,
damages, costs, attorneys’ fees, or any other amounts or
expenses recoverable, or potentially recoverable, in this
action." App. at p. 85a. Le claims that this language
deviates from the clear language of "plus costs accrued"
and creates an assumption that something else is meant.
This argument has no merit. The plain language of the offer
states that it is "plus costs" and in another portion of the
offer, the University specifically cites to the Marek decision
to state that such costs would include attorneys’ fees. The
District Court properly compared the final judgment of
$35,000 plus costs to the offer of $50,000 plus costs in
determining that the offer exceeded the judgment.

B. The University’s Cross-Appeal

On cross-appeal, the University argues that the District
Court erred by denying its Motion for Judgment as Matter
of Law on the issue of punitive damages, and by denying its
request for post-offer attorneys’ fees under FED . R. CIV. P.
68.

1. Motion for Judgment as a Matter of Law

Initially, the University argues that they are entitled to
judgment as a matter of law on punitive damages because
the record is devoid of evidence that the University acted
maliciously or with reckless indifference towards Le’s
federally protected rights.4 The record indicates that there
_________________________________________________________________
4. As provided in 42 U.S.C. S 1981a(b)(1),"[a] complaining party may
recover punitive damages . . . if the complaining party demonstrates that

                                9


was sufficient evidence to support the jury’s verdict on
punitive damages. For example, Dr. George Palladino, the
Vice Chair of the Chemistry department, reassigned Dr.
Ronald McNamara as Le’s new supervisor following Le’s
complaints regarding discrimination and Dr. Opella. When
questioned as to why Dr. McNamara was assigned, Dr.
Palladino testified that he based this decision on his
interactions with Dr. McNamara on the basketball court.
Specifically, he testified that:

       We had departmental basketball, started playing that
       when I was, first came to Penn and McNamara was a
       regular and we had African-Americans. We had Asian-
       Americans that were out there every day and I’ve been
       around people a lot in my life and you can tell if
       somebody is a racist I think. You’d see it pretty easily
       on a basketball court. And Ron is a real, he’s an
       excellent athlete and he played very well and he, it
       didn’t make any difference what your color or creed
       was, it never--I mean, you make a judgment I think in
       those situations.

Since the team was made up of a racially diverse group, Dr.
Palladino concluded that Dr. McNamara would not have
any problems supervising Le. The decisionmaking process
used by Dr. Palladino could easily have been viewed by the
jury as demonstrating ‘reckless indifference’ towards Le’s
federally protected rights. Also, there was additional
evidence that Le presented a lengthy rebuttal in response to
a bad performance review, which was then cursorily
handled by the University’s administration. Further, the
District Court noted that upon receiving Le’s complaint,
and before concluding its investigation, the administration
failed to counsel and advise Le’s supervisors and colleagues
about the evils of discrimination. In all, sufficient evidence
exists to support the jury’s verdict.

2. The Rule 68 Offer of Judgment

The final issue on the University’s cross-appeal is
whether the District Court erred by holding that the
_________________________________________________________________

the respondent engaged in a discriminatory practice or discriminatory
practices with malice or with reckless indifference to the federally
protected rights of an aggrieved individual."

                                10


definition of costs, as it pertains to defendants under Rule
68, does not include attorneys’ fees.
The seminal case in this area is Marek v. Chesny , 473
U.S. 1 (1985). Although it does not squarely answer the
question before us, it does guide our analysis. In Marek, the
Supreme Court addressed "whether attorneys’ fees incurred
by a plaintiff subsequent to an offer of settlement under
Federal Rule of Civil Procedure 68 must be paid by the
defendant under 42 U.S.C. S 1988, when the plaintiff
recovers a judgment less than the offer." Id . at 3. Generally,
prevailing plaintiffs in a civil rights suit are entitled to
recover their attorneys’ fees, but Rule 68 operates to block
such a shift if the judgment returned is less than the offer.
In discussing the policies of both S 1988 and Rule 68, the
Court found that the two were not in conflict and that "the
most reasonable inference is that the term ‘costs’ in Rule
68 was intended to refer to all costs properly awardable
under the relevant substantive statute or other authority.
In other words, all costs properly awardable in an action
are to be considered within the scope of Rule 68‘costs.’ " Id.
at 9. The Court went on to hold that "absent congressional
expression to the contrary, where the underlying statute
defines ‘costs’ to include attorneys’ fees, we are satisfied
such fees are to be included as costs for purposes of Rule
68." Id. The Court found that this interpretation of Rule 68
did not undercut the goals of civil rights plaintiffs, and that
the plaintiff in Marek was not entitled to attorneys’ fees due
to the operation of Rule 68.

According to Marek, we must look to the underlying
statute and its interpretations to determine what
constitutes a ‘properly awardable’ cost to a defendant in a
Title VII action. The University urges that becauseS 1988
grants a prevailing party reasonable attorneys’ fees, and
they prevailed on the discrimination claim and the issue of
post-offer costs, they should receive their post-offer
attorneys’ fees. This argument fails to account for how we
have defined ‘costs’ under S 1988. In EEOC v. L.B. Foster
Co., 123 F.3d 746 (3d Cir. 1997), we addressed the issue of
when a Title VII defendant may be properly awarded its
attorneys’ fees as the prevailing party. Tracking the
Supreme Court’s holding in Christiansburg Garment Co. v.

                                11


EEOC, 434 U.S. 412 (1978), we concluded that the
standard for awarding attorneys’ fees to a prevailing
defendant was not the same as the standard for a
prevailing plaintiff. L.B. Foster Co., 123 F.3d at 750. We
held that "a district court may in its discretion award
attorney’s fees to a prevailing defendant in a Title VII case
upon a finding that the plaintiff ’s action was frivolous,
unreasonable, or without foundation, even though not
brought in subjective bad faith." Id. at 751 (quoting
Christiansburg, 434 U.S. at 421).

In the context of Rule 68, however, this creates a tension
because Rule 68 does not apply if the defendant wins the
underlying lawsuit. Delta Air Lines, Inc. v. August, 450 U.S.
346, 352 (1981). Thus, for the cost-shifting provision of
Rule 68 to apply, the plaintiff must obtain some judgment
against the defendant. Such a recovery by the plaintiff
would negate any argument that the plaintiff ’s suit was
frivolous. Therefore, we hold that a defendant in a Title VII
civil rights suit can never recover its attorneys’ fees under
Rule 68, because the triggering event of that rule alters the
potential costs that are ‘properly awardable’ to a defendant
under S 1988.5 Here, Le was awarded $35,000 in damages
and thus his suit cannot be described as frivolous. We
conclude that the University’s attorneys’ fees are not
properly awardable costs under Rule 68.
_________________________________________________________________

5. Although this is an issue of first impression for our court, this
conclusion comports with those of our sister courts of appeal who have
previously addressed this issue. See, e.g., Crossman v. Marcoccio, 806
F.2d 329, 334 (1st Cir. 1986) ("because courts may not properly award
attorney’s fees to unsuccessful civil rights defendants under section
1988, we hold that Rule 68 can never require prevailing civil rights
plaintiffs to pay defendants’ post-offer attorney’s fees."); O’Brien v. City of
Greers Ferry, 873 F.2d 1115, 1120 (8th Cir. 1989) (accepting the holding
of Crossman and finding that the City was not entitled to attorneys’ fees
because the plaintiff had recovered against two municipal officers);
EEOC. v. Bailey Ford, Inc., 26 F.3d 570, 571 (5th Cir. 1994) ("[E]ven if
appellee were entitled to recover "costs" under Rule 68, its attorneys’ fees
are not among the properly recoverable costs without a determination
that the action was frivolous, unreasonable, or without foundation.").

                                12


III. Conclusion

For the forgoing reasons, the August 29, 2001 Order of
the District Court will be affirmed.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                                13
