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


10-23-2003

Veneziano v. Long Island Pipe
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-3083




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"Veneziano v. Long Island Pipe" (2003). 2003 Decisions. Paper 191.
http://digitalcommons.law.villanova.edu/thirdcircuit_2003/191


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                                                     NOT PRECEDENTIAL

      THE UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT

                       ___________

                 Nos. 02-3083 and 03-2931
                       ___________

                STEVEN M. VENEZIANO,

                                     Appellant

                              v.

     LONG ISLAND PIPE FABRICATION & SUPPLY;
      ROBERT MOSS; AETNA, U.S. HEALTHCARE

     LONG ISLAND PIPE FABRICATION & SUPPLY,

                   Defendant/Third-Party Plaintiff

                              v.

    UNITED STATES FIRE INSURANCE COMPANY,

                                   Third-Party Defendant.

                       ___________


ON APPEAL FROM THE UNITED STATES DISTRICT COURT
        FOR THE DISTRICT OF NEW JERSEY

                 (D.C. Civil No. 99-cv-02753)
     District Judge: The Honorable Stephen M. Orlofsky




                       ___________
                       Submitted Under Third Circuit LAR 34.1(a)
                                  September 3, 2003


            BEFORE: SLOVITER, NYGAARD, and ROTH, Circuit Judges.


                                (Filed: October 23, 2003)

                                      ___________

                              OPINION OF THE COURT
                                   ___________


NYGAARD, Circuit Judge.

             Appellant Steven M. Veneziano brought a suit against Appellees Long

Island Pipe Fabrication & Supply (“LIP”), LIP owner Robert Moss, and Aetna U.S.

Healthcare (“Aetna”) asserting claims under the Americans with Disabilities Act

(“ADA”), New Jersey’s Law Against Discrimination (“NJLAD”), Employment

Retirement Income Security Act (“ERISA”), and common law tort. The District Court

granted summary judgment for LIP and M oss on all claims but ERISA. The Court also

granted summary judgment to Aetna on all counts. After a bench trial on the ERISA

claim, the District Court ruled for Veneziano and required LIP and Moss to pay modest

penalties and attorney fees. In a subsequent suit by Aetna, the District Court awarded

sanctions against Veneziano’s counsel for asserting frivolous claims. We have

consolidated these two cases—the underlying case and the sanctions award—for

consideration in the instant appeal. We will affirm the District Court’s orders of summary

                                            2
judgment, affirm the findings on penalties and attorney fees, and dismiss Veneziano’s

appeal of the sanctions award for lack of standing.

                     I. FACTS AND PROCEDURAL HISTORY

              Because the facts are known to the parties, we review them only briefly.

Veneziano was employed as a warehouse manager by LIP for approximately one year,

from January 1997 to January 1998. As a benefit of his employment, Veneziano had

health insurance coverage as a member of LIP’s group plan with Aetna.

              Veneziano’s employment with LIP ended after he was hospitalized and

diagnosed with symptomatic HIV and PCP. Because Veneziano was no longer an

employee of LIP, his insurance coverage was eventually terminated by Aetna. The

insurance coverage was reinstated under Title X of the Consolidated Omnibus

Reconciliation Act of 1985 (“COBRA”), but Veneziano lacked coverage from June 15,

1998 to August 1, 1998.

              Veneziano brought claims against LIP, Moss, and Aetna. His claims

against LIP and M oss were under the ADA, NJLAD, ERISA, and common law tort. His

claims against Aetna were under the ADA and NJLAD. In response to Veneziano’s

claims, the defendants moved for summary judgment. The District Court granted

summary judgment in favor of LIP and M oss on the ADA, NJLAD, and common law tort

claims, leaving the ERISA claim to be considered at trial. The District Court also granted

summary judgment for Aetna as to all of Veneziano’s claims. At a bench trial, the Court



                                             3
    held that LIP had violated the ERISA statute, but since it had not done so in bad faith, the

    court imposed only modest penalties. Veneziano’s appeal of the summary judgment

    orders and holding at trial was filed at No. 02-3083 and is the crux of the instant case.1

                  When it granted summary judgment for Aetna, the District Court found that

    the claims against Aetna were “frivolous, meritless, . . . vexatious” and in bad faith under

    N.J. Stat. Ann. § 10:5-27.1, and therefore awarded Aetna attorney fees. Rather than

    charge the costs to Veneziano, the Court stipulated that the sanction was against

    Veneziano’s counsel. 28 U.S.C. § 1927. Veneziano immediately filed an appeal of the

    sanctions award, but this Court denied the appeal, without prejudice, because the amount

    had not yet been quantified. No. 03-1394. Once the amount was quantified, Veneziano

    renewed his appeal of the sanctions award in No. 03-2931.

                  On August 12, 2003, we granted the uncontested motion to consolidate the

    sanctions award appeal with the appeal of the case on the merits. We have jurisdiction

    over the appeals under 28 U.S.C. § 1291.

                                         II. DISCUSSION

    A.            Standard of Review

                  This Court has plenary review of the District Court’s decisions to grant

    summary judgment. See Blair v. Scott Specialty Gases, 283 F.3d 595, 602-03 (3d Cir.



1   1.      W e note that V eneziano has m ade previous appeals of the D istrict Court’s
2   grant of summary judgment for LIP and Moss, but the appeals were dismissed as
3   premature. N os. 01-1977; 02-2318.

                                                  4
2002). The Court takes the facts in the light most favorable to the appellant and must

grant summary judgment if there is no issue of material fact and the moving party is

entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).

              This Court reviews a District Court’s award of attorney fees under plenary

review as to the standard applied, and for abuse of discretion as to amount. See Brytus v.

Spang, 203 F.3d 238, 244 (3d Cir. 2000) (citations omitted). Similarly, this Court

reviews a District Court’s determination of penalty amount for abuse of discretion. See

Hennessey v. Fed. Deposit Ins. Corp., 58 F.3d 908, 916 (3d Cir. 1995).

B.            ADA and NJLAD’s Qualified Person Requirement

              Veneziano claims that the District Court erred when it found that Veneziano

had not shown a genuine issue of material fact about whether he was a qualified person

under the ADA and NJLAD.

              To make out a prima facie case under the ADA, a plaintiff must show that

he (1) is disabled, (2) is qualified to perform the essential functions of his job, and (3)

suffered an adverse employment decision as a result of discrimination. Deane v. Pocono

Med. Ctr., 142 F.3d 138, 142 (3d Cir. 1998). If a plaintiff fails to make out a prima facie

case under the ADA, he has likewise failed to meet his burden under the NJLAD.

              The issue under the qualified person prong of the ADA and NJLAD is

whether heavy lifting was an essential function of Veneziano’s job as a warehouse

manager. The District Court applied judicial estoppel and refused to consider any



                                               5
evidence, since on a Disability Report submitted to the Social Security Administration

Veneziano indicated that for one-third to two-thirds of the work day he lifted more than

50 pounds.

              “[J]udicial estoppel may be invoked by a court at its discretion to preserve

the integrity of the judicial system by preventing parties from playing fast and loose with

the courts in assuming inconsistent positions, and . . . with a recognition that each case

must be decided upon its own particular facts and circumstances.” Motley v. New Jersey

State Police, 196 F.3d 160, 163 (3d Cir. 1999) (emphasis and ellipsis in original)

(citations and quotations omitted). Before applying judicial estoppel, a court should

assess whether the present position is inconsistent with a prior position, and if so, whether

the inconsistent positions were offered in bad faith. Id. at 163-64. We find, as did the

District Court, that Veneziano’s statement on the Social Security form is inconsistent with

his current argument that heavy lifting was not an essential function in his job, and that

Veneziano has failed to proffer a reasonable explanation for the inconsistency. We are

not persuaded by Veneziano’s assertion that because he did not fill out the Social Security

application himself, judicial estoppel cannot apply. Veneziano signed the application and

does not contest that the information provided thereon was true.

              We are further convinced the result we reach on this issue—that Veneziano

did not show an issue of material fact about being qualified to perform the essential




                                              6
functions of his job—is correct, since Veneziano has conceded he was “physically

incapable of working between January 1998 and M arch of 1999.”

               Because we hold that the District Court was correct in applying the doctrine

of judicial estoppel, it follows that the grant of summary judgment for failure to make out

a prima facie case under the ADA and NJLAD was appropriate.

C.             Intentional Infliction of Emotional Distress

               The District Court granted summary judgment on Veneziano’s intentional

infliction of emotional distress claim because he had not shown that LIP’s or M oss’s

conduct was extreme and outrageous. We too reject Veneziano’s contention that the

totality of the circumstances constitutes extreme and outrageous conduct. Veneziano

cites no New Jersey case law to demonstrate that the appropriate test is the totality of the

circumstances or that an employer-employee relationship reduces the necessary showing

of outrageousness. In fact, Veneziano conveniently overlooks the cases applying New

Jersey law that say “it is particularly difficult to establish intentional infliction of

emotional distress in the employment context.” See, e.g., Witherspoon v. Rent-A-Center,

173 F.Supp.2d 239, 242 (D. N.J. 2001).

               Because Veneziano has failed to show extreme and outrageous conduct, an

element of the intentional infliction of emotional distress tort, the District Court properly

granted summary judgment on that claim.

D.             ERISA Penalties



                                                7
              At trial, the District Court held that although LIP violated the ERISA statute

by failing to provide Veneziano sufficient or timely notice of his rights under COBRA

and ERISA, only modest penalties were appropriate because Veneziano was not

prejudiced and LIP had not acted in bad faith. Veneziano challenges the penalties and

asserts that LIP acted in bad faith and caused him prejudice.

              The District Court fulfilled its obligations by asking whether LIP acted in

bad faith or caused Veneziano prejudice, answering both questions in the negative. Based

on these findings, the Court awarded statutory penalties. We will not disturb the District

Court’s exercise of discretion in assigning the penalty amount.

E.            Attorney Fees

              The District Court awarded attorney fees to Veneziano under 29 U.S.C. §

1132(g)(1), but not in the entire amount he sought. The District Court excluded the

amount of fees attributable to claims on which Veneziano did not prevail. Veneziano

argues that this reduction in fees was inappropriate.

              Hensley v. Eckerhart, 461 U.S. 424 (1983), requires that a District Court

calculate a lodestar amount before it awards attorney fees. The lodestar is reached by

multiplying the reasonable number of hours worked by a reasonable hourly rate. Id. at

433. The first question on appeal is whether the District Court properly reduced the

number of hours that it plugged into the lodestar formula. “In calculating the hours

reasonably expended, a court should review the time charged, decide whether the hours



                                             8
    set out were reasonably expended for each of the particular purposes described and then

    exclude those that are excessive, redundant, or otherwise unnecessary.” Maldonado v.

    Houstoun, 256 F.3d 181, 184 (3d Cir. 2001) (citations and quotations omitted).

    Veneziano has failed to show that the number of hours was reasonable. The document

    that Veneziano submitted supporting his fee request was not redacted or prorated to

    account for unsuccessful claims.2 The District Court found that only one-sixth of general

    administrative activities were reimbursable. It was entirely appropriate for the District

    Court to prorate these general fees, as it was something that Veneziano’s counsel should

    have done before applying for attorney fees under § 1132(g)(1).

                  Then the District Court proceeded to further reduce the reimbursable hours

    because of Veneziano’s limited success. See Hensley, 461 U.S. at 434-36. The Court

    applied a negative 50% multiplier. The issue is whether this additional reduction was

    appropriate, or whether it constituted an inappropriate double reduction. In Hensley, the

    Supreme Court stated that once the District Court has calculated the lodestar it may, in its

    discretion, adjust the amount based on the “results obtained” by the plaintiff. Id. at 434-

    35. Here, the District Court properly exercised its discretion by further reducing the

    lodestar. See Institutionalized Juveniles v. Sec’y of Pub. Welfare, 758 F.2d 897, 925 (3d

    Cir. 1985).




1   2.      The fee request included hours expended on an EEOC claim that was w holly
2   separate from the ERISA claim before the District C ourt.

                                                 9
              We find that the District Court applied the proper standard and did not

abuse its discretion in setting the amount of attorney fees.

F.            ADA’s Covered Entity Requirement

              The District Court properly granted summary judgment for Aetna on the

ADA claim, because Aetna is not a “covered entity” subject to the ADA. Veneziano

misreads the ADA’s prohibition against retaliation and coercion, 42 U.S.C. § 12203, to

apply to all “persons” when it clearly applies only to employers. See, e.g., Hiler v.

Brown, 177 F.3d 542, 545-47 (6th Cir. 1999). Since Aetna is not Veneziano’s employer,

nor can it be seen as an agent of his employer, it is not subject to ADA liability.

G.            NJLAD’s Bona Fide Insurance Plan Exception

              The District Court did not err by granting summary judgment for Aetna on

the NJLAD claim. Aetna is excluded from the NJLAD as a “bona fide insurance plan.”

See N.J. Stat. Ann. § 10:5-2.1. Veneziano argues that because Aetna failed to comply

with state regulations by terminating Veneziano’s coverage without prior notice it cannot

be considered “bona fide.” However, there is no legal precedent that supports this

position. Aetna falls squarely within the definition of “bona fide” set forth by the

Supreme Court for an analogous provision in the Age Discrimination in Employment

Act—the plan must only “exist and pay benefits.” Pub. Employees Ret. Sys. v. Betts, 492

U.S. 158, 166 (1989) (citations omitted).

H.            Sanctions Award



                                             10
              Veneziano appeals the sanctions award against his counsel. We will not

reach the merits of his argument because he lacks standing to so appeal. See Bartels v.

Sports Arena Employees Local 137, 838 F.2d 101, 104 (3d Cir. 1988) (stating that

plaintiffs lack standing to appeal sanctions imposed only against their counsel).

                                   III. CONCLUSION

              For the reasons set forth, we will affirm the District Court’s orders of

summary judgment, imposition of penalties, and award of attorney fees. We dismiss the

appeal of the sanctions award against Veneziano’s counsel for lack of standing.




                              _________________________

                                    TO THE CLERK:

                             Please file the foregoing opinion.


                                  /s/ Richard L. Nygaard
                                        Circuit Judge
