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Browett v. City of Reno

United States District Court, D. Nevada

May 8, 2018

MICHAEL S. BROWETT, Plaintiff,
v.
CITY OF RENO, Defendant.

          ORDER

          ROBERT OTONES UNITED STATES DISTRICT JUDGE.

         This case arises out the denial of a police Sergeant's rights under the Family and Medical Leave Act of 1993 (“FMLA”) and the police department's refusal to promote him to Lieutenant after he complained. Pending before the Court are motions for judgment and attorney's fees.

         I.PROCEDURAL HISTORY

         Plaintiff Michael Browett sued the City of Reno (“the City”) in this Court under the FMLA. The Court interpreted the Complaint as including two claims: (1) interference (exercise of rights) under 29 U.S.C. § 2615(a)(1); and (2) interference (discrimination) under 29 U.S.C. § 2615(a)(2).[1] The Court denied summary judgment to the City, and a jury found for Plaintiff on both claims.

         II. DISCUSSION

         A. Damages

         1. Back Pay and Benefits

         The FMLA provides for past lost pay and benefits (“back pay”) as compensatory damages to be awarded by a jury. 29 U.S.C. § 2617(a)(1)(A)(i)(I).[2] The jury awarded Plaintiff $110, 406 in back pay. Defendant argues that the award of back pay was based on speculation unsupported by the evidence, but that is not true. The award was supported by an expert witness's unrebutted testimony. Anyway, such an argument is misplaced at this juncture. Defendant may challenge the sufficiency of the evidence via a motion for new trial and/or a renewed motion for directed verdict after judgment is entered. But there is no basis to challenge the amount of back pay awarded by the jury with respect to the form of judgment.

         2. Pre-Judgment Interest

         The FMLA provides for pre-judgment interest, to be applied to back pay “at the prevailing rate.” Id. § 2617(a)(1)(A)(ii) (citing id. § 2617(a)(1)(A)(i)). In federal question cases, a trial court should apply the rate for post-judgment interest under 28 U.S.C. § 1961(a), “unless the trial judge finds, on substantial evidence, that the equities of the particular case require a different rate.” W. Pac. Fisheries, Inc. v. SS President Grant, 730 F.2d 1280, 1289 (9th Cir. 1984) (Kennedy, J., joining). The current § 1961 rate was about 2.24% at the time of the hearing, see Selected Interest Rates (Daily) - H.15, https://www.federalreserve.gov/releases/h15/, and although it may change slightly by the time the Court enters judgment, the Court will not recalculate the de minimis difference. Interest under § 1961 is compounded annually. 28 U.S.C. § 1961(b).

         The § 1961 rate is unfortunately often ill-suited to calculate pre-judgment interest in a way sufficient to fully compensate a plaintiff for the lost time value of a damages award. Where pre-judgment interest is fixed by statute, that ends the matter, but where a Court must use its discretion to determine what rate of interest will make a plaintiff whole, the Court must use its discretion to determine whether the § 1961 rate or some other rate is appropriate to the equities of the case. As a practical matter, “the weekly average 1-year constant maturity Treasury yield, ” 28 U.S.C. § 1961(a), does not necessarily represent an accurate calculation of the time value of money to a plaintiff. The consumer price index (“CPI”), for example, will often be a better benchmark, because it is specifically designed to account for the changing value of U.S. currency with respect to typical consumer expenses such as food, shelter, energy, etc. The Bureau of Labor Statistics indicates the following “12-month percentage change[s], Consumer Price Index, selected categories, not seasonally adjusted”: July 2016 (0.8%), July 2017 (1.7%), February 2018 (2.2%). See https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm. Because of the low rate of inflation under the CPI in this case, the § 1961 rate is sufficient for pre-judgment interest, and the Court will compound interest annually for each year of wages lost, as § 1961 requires. See, e.g., Murphy v. City of Elko, 976 F.Supp.2d 1359, 1364 (D. Nev. 1997) (Reed, J.) (using the § 1961 rate for pre-judgment interest in a § 1983 case and compounding annually).[3]

         Plaintiff suggests[4] using rates “obtained from the Internal Revenue Service website and identified as the schedule for Calculation of Back Wages, ” i.e., 3.00% through March 31, 2016 and 4.00% thereafter. Plaintiff does not identify the precise source of these figures. They appear to be based on rates used by the Social Security Administration (“SSA”) to calculate old age benefits based on awards of back pay, but the Court will not guess. In any case, the rates are not reasonable given the much lower CPI during the relevant time. Also, Plaintiff's interest calculations are unclear as to the method used. (See Interest Rate Calculations, ECF No. 69-2). Plaintiff used $110, 000 as the principal and listed “Simple Interest” (presumably meaning uncompounded) for each quarter dated July 1, 2015 through April 1, 2018. But there is no indication how Plaintiff obtained the results given. He has not “shown his work.” For example, one entry is “7/1/16 4.00% $1, 106.01.” Using a basis of $110, 000, the amount of back pay for the quarter beginning (or ending-the exhibit does not explain which) July 1, 2016, assuming a steady rate of back pay throughout the two years and seven months of back pay awarded (the exhibit nowhere states or implies this is not so) is 3/31 x $110, 000 = $10, 645.16. Four percent of that is $425.81, not $1, 106.01. Four percent of the fifteen months of lost back pay through July 1, 2016 is $2, 129.03, so that can't be the formula used, either. If 1% quarterly interest (corresponding to constant 4% annual interest) is applied to $10, 645.16 and compounded quarterly for nine more quarters, the result is $1, 113.72. That's close to Plaintiff's result of $1, 106.01. But even counting July 1, 2016 itself, there are only seven-and-a-half quarters between that date and February 2018 (the date used to calculate back pay at trial), so this cannot be the basis of Plaintiff's calculation. Furthermore, there is no indication that the IRS or the SSA compound interest rates quarterly, and Plaintiff has listed the interest as “Simple.” There may be a valid basis for the calculation, but Plaintiff has not provided it, the Court is unable to divine it, and the rates used are significantly higher than the § 1961 rate, which is itself higher than the CPI.

         Plaintiff is owed back pay from July 21, 2015 to February 21, 2018 (exactly 31 months), according to the expert report relied upon by the jury. The annual rate is 2.24%. The accrual for the last seven months from July 21, 2017 to February 21, 2018 at the annual rate is 2.24% x 7/12 = 1.31%. For the first year of back pay (July 21, 2015 to July 21, 2016), the interest accruing from July 21, 2016 through February 21, 2018 is $110, 406 (12/31) x 1.0224 x 1.0131 - $110, 406 (12/31) = $1, 529.73. For the second year of back pay (July 21, 2016 to July 21, 2017), the interest accruing from July 21, 2017 through February 21, 2018 is $110, 406 (12/31) x 0.0131 = $559.87. The last seven months of back pay accrued interest for an average of 3.5 months. The accrual over 3.5 months at the annual rate of 2.24% is 0.65%.[5] Therefore, these final seven months of back pay accrued interest through February 21, 2018 equal to $110, 406 (7/31) x 0.0065 = $162.05. The total pre-judgment interest is $2, 251.65.

         3. Liquidated Damages

         Finally, “an additional amount as liquidated damages equal to the sum of the amount described in clause (i) [back pay] and the interest described in clause (ii)” must also be awarded. Id. § 2617(a)(1)(A)(iii). Liquidated damages are awarded by default, but the Court has discretion not to award them if the City “proves to the satisfaction of the court that the act or omission which violated section 2615 of this title was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of section 2615 of this title.” Id. § 2617(a)(1)(A)(iii). The City has not made a showing of good faith, at least not as to the § 2615(a)(2) claim. The evidence adduced at trial made clear that Plaintiff's complaint to the City about his FMLA right to substitute sick leave was not only a reason, but the primary reason, for the decision not to promote him. Plaintiff's complaint about the City's FMLA practice was aggressively brought up directly in the promotion interviews and later explained to Plaintiff as the reason for his denial of promotion.

         The Court rejects the argument that the City's actions were reasonable because of the manner in which Plaintiff complained about the FMLA issue. The May 11, 2015 email Plaintiff sent to the City's human resources representative complaining about the City's denial of permission for him to use sick leave and the City's requests for medical details (that may have been in violation of the Collective Bargaining Agreement) included no profanity, misrepresentations, or improper threats. It was only “threatening” in the sense that Plaintiff threatened to file a grievance if the City persisted in denying him the right to use his sick leave and insisting he take unpaid or vacation leave.[6] At trial, counsel and witnesses for the defense focused on the word “threat, ” as if there had been some threat of violence or other improper action in the email, but no reasonable person could have found the evidence to show that. A threat to file a grievance about an unlawful practice is categorically protected behavior, and the “threat” in this case did not go beyond that. Most of the other evidence used to support the City's alleged good faith in denying Plaintiff a promotion occurred after the first denial of promotion and was in fact precipitated by it, i.e., Plaintiff's “outbursts” in frustration with certain command staff members having retaliated against him in the promotion process because of his earlier complaints about sick leave. Nearly all of the evidence relating to any “anger management and communication problems” cited by the City relates to Plaintiff's conflict with the City over his sick leave. (See Resp. 2-3, ECF No. 72).

         As in Liu, where the reason given for the adverse action was problems with “soft skills” such as “being upbeat, ” the reasons given for passing over Plaintiff that were unrelated to Plaintiff's frustration with the sick leave issue were similarly vague and intangible, such as “lack of command presence, ” “lack of global view of the Department and City, ” “very limited strategic perspective, ” and “did not adequately answer some questions.” See Liu v. Amway Corp., 347 F.3d 1125, 1136-37 (9th Cir. 2003) (“Where termination decisions rely on subjective evaluations, careful analysis of possible impermissible motivations is warranted because such evaluations are particularly susceptible of abuse and more likely to mask pretext.” (citation and internal quotation marks omitted)). Of the potentially concrete reasons given, such as “lack of understanding as to how a lieutenant fits into the strategic structure of the department, ” no witness gave concrete examples or explanations but only unsupported conclusions. Defendants' witnesses' testimony mirrored the June 11, 2015 pass over letter, which was similarly vague and conclusory, (see Letter, ECF No. 18-11), as noted in the Court's order ...


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