Opinion
No. C0-01-1826.
Filed June 25, 2002.
Appeal from the District Court, Hennepin County, File No. EM 99-11171.
Judith K. Schermer, Judith K. Schermer PLC,; and Carolyn Guy, Carolyn Guy LLC, (for appellants)
John W. Polley, Daniel C. Gerhan, Holly M. Robbins, (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellants, all former employees, sued respondent country club for age discrimination and related claims based on the failure to rehire appellants after a layoff during a remodeling project. After a bench trial, the court ruled in favor of respondent, dismissing appellants' complaint, denied appellants' post-trial motions, and awarded costs to respondent. Appellants contend they were deprived of a fair trial and were deprived of their right to a jury trial. They challenge the conclusion that they failed to establish their disparate impact, disparate treatment, and promissory estoppel claims. Finally, they challenge the award of costs. We affirm in part, reverse in part, and remand.
FACTS
In May of 1997, respondent Interlachen Country Club began laying off its employees in preparation for a structural remodel of the club house. During the meetings that preceded the layoffs, Interlachen managers assured employees that no one was being terminated. Those receiving health benefits would continue to receive them until the remodeling project was completed and the employees were recalled to work.
Appellants were all employees of Interlachen prior to May 1997. Most of the nine appellants were laid off in May and the last one was laid off in November. Vivian Strand, currently age 64, had worked for Interlachen almost 40 years, having lived in the girls' dormitory in the early days. Doris Wasti, age 69, had worked for Interlachen for 30 years. Leo Boschee, age 64, had worked for Interlachen for 31 years. Arla Kroger, age 67, Jim Osmonson, age 47, and Kathleen Weiss, age 50, had each worked there for about 20 years. Brenda Swanson-Eisinger, age 51, Martha Moroz, age 51, and Nikolai Nikolov, age 44, had each worked there for approximately 10 years. None of the appellants was rehired after the reopening of Interlachen.
When Interlachen commenced the rehiring process, it did not contact appellants, but placed general advertisements for the new positions. Interlachen adopted the requirement that all prospective employees, including laid-off employees, must contact Interlachen and submit an application before they could be considered for hiring. But appellants contend that Interlachen did not inform them of this requirement (except appellants Wasti and Swenson-Eisinger and then only after these two had filed discrimination charges, as discussed below). Interlachen did contact some younger laid-off employees, but claimed it did so only for laid-off employees who stayed in continuous contact during the lay-off period.
Appellants filed discrimination charges against Interlachen with the Minnesota Department of Human Rights (MDHR) and received notice from the MDHR of their right to sue. Appellants then brought this suit, for age discrimination and retaliation under the Minnesota Human Rights Act, Minn. Stat. § 363.03 (2000) and the Minnesota Age Discrimination Act, Minn. Stat. § 181.81 (2000), and for promissory estoppel. Appellants initially waived their right to a jury trial, but later attempted to withdraw their waiver. The district court denied appellant's request to withdraw their waiver and the matter was tried to the court. The court found that appellants failed to establish disparate impact or disparate treatment, and that they failed to show that promissory estoppel applied. The district court dismissed all claims.
Appellants' complaint also alleges a claim for breach of contract. Because appellants do not challenge the district court's dismissal of that claim, it is waived. Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982) (stating that issues not briefed on appeal are waived).
Appellants filed a motion for a new trial, arguing they were deprived of a fair trial due to trial irregularities and they were deprived of their right to a jury trial. The district court denied appellants' motion for a new trial and awarded respondents $14,202.80 for costs and disbursements. Appellants filed this appeal challenging the district court's judgment of dismissal, its order denying a new trial, and $4,053.46 of its award of costs for transcripts and copying.
DECISION I
Appellants claim that the district court erred by denying their motion for a new trial because trial irregularities, including erroneous evidentiary rulings, were so pervasive that they violated appellants' right to a fair trial.
We will not disturb the district court's decision to deny a new trial except for a clear abuse of discretion. Halla Nursery, Inc. v. Baumann-Furrie Co., 454 N.W.2d 905, 910 (Minn. 1990). Absent erroneous interpretation of the law, the question of whether to admit or exclude evidence is also within the district court's discretion. Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (Minn. 1997). "Entitlement to a new trial on the grounds of improper evidentiary rulings rests upon the complaining party's ability to demonstrate prejudicial error." Id. at 46 (quotation omitted).
Erroneous Evidentiary Rulings
Appellants complain that the district court committed prejudicial error by (1) sustaining numerous "vague" and "lack of foundation" objections to clear, preliminary questions that were necessary to open critical lines of inquiry; (2) refusing to explain the basis for its exclusionary rulings and often asking opposing counsel to do so; (3) not allowing appellants to make offers of proof; (4) restricting appellants' cross-examination of several adverse witnesses; (5) allowing Interlachen to impeach one appellant with prior inconsistent statements contained in a document while precluding appellant from referring to other consistent statements contained in the same document; and (6) sustaining hearsay objections to conversations between an appellant and a member of Interlachen management. In sum, appellants suggest that the district court effectively prevented them from developing a record of their claims, and then, based on the undeveloped record, ruled that appellants had not met their burden of proof.
The record supports the appellants' claim that the district court's rulings effectively prevented appellants from presenting evidence necessary to prove their claims. The district court established a pattern of sustaining overly technical objections that generally had no legal basis, particularly in a bench trial, where the rules of evidence are more liberally applied. Cf. Minn.R.Evid. 102, comm. cmt. (stating that the rules of evidence should be read "with a view for accomplishing essential fairness, with a minimum of formality and procedural obstacles in the search for the truth"); Willmark Serv. Sys., Inc. v. Wirtz, 317 F.2d 486, 489 (8th Cir. 1963) (noting that it is virtually impossible for the judge in a bench trial to commit reversible error by receiving incompetent evidence); Chris/Rob Realty v. Chrysler Realty Corp., 260 N.W.2d 456, 459 (Minn. 1977) (expressing confidence "in the ability of a court in a trial without a jury to be objective and to disregard evidence improperly admitted"). It is true that appellants' questions were sometimes awkward, with a tendency toward leading, even on direct examination. But the pattern of exclusion was greater than would be justified by even a highly technical application of the rules of evidence.
The district court regularly sustained Interlachen's repetitive objections of "vague" and/or "lack of foundation" to general or preliminary questions that were asked to lay a foundation. For example, appellants asked Tim Ivory, one of two key decision-makers at Interlachen, more than 20 questions in an attempt to elicit the preliminary fact that Ivory had a meeting with appellant Kathleen Weiss in March 1998. The first in that line of questions was straightforward: "Did you have a meeting with Kathy Weiss in March of 1998, Mr. Ivory?" Interlachen's counsel objected to each question on grounds of "vague" and/or "lack of foundation," and the court sustained each objection. On some occasions, after a series of objections as "vague" or "lacking foundation" were sustained, the court sustained the objection that the question had been "asked and answered." Appellants were never able to elicit the fact that Ivory met with Weiss in 1998 and, therefore, could not develop testimony about what Ivory told Weiss at that meeting.
In ruling against appellants' claim of discriminatory treatment, the district court relied on the defense that appellants had been told they must contact Interlachen during the layoff period and reapply for their positions, but failed to do so. The court, however, sustained objections to appellants' questions to individual appellants asking whether they had ever been told to contact Interlachen during the layoff period. The district court also sustained objections to appellants' questions to Ivory, asking why he did not offer employment to seven of the nine appellants. And, when appellants' counsel asked the district court to explain its ruling on such objections, the court often declined, answered incompletely, or directed counsel for Interlachen to make the explanation.
The district court prevented appellants from introducing evidence about statements made by one of the appellants in a document she had submitted to the MDHR even though she had been impeached on cross-examination by references to other statements in the same document. Then, because there was no evidence in the record to support that appellant's assertion that the document as a whole was consistent with her testimony, the court found that she was not a credible witness. Under the law, a party who is impeached by a document containing a prior inconsistent statement should be allowed to testify to a prior consistent statement, particularly where it is contained in the same document. Minn.R.Evid. 801(d)(1)(B).
The district court also erred by failing to explain the reasons for its preclusive rulings. While the court is not required to help counsel frame their questions, when counsel cannot understand a ruling sustaining an objection, and in good faith requests an explanation, the district court must indicate the specific grounds for its ruling. Adelmann v. Elk River Lumber Co., 242 Minn. 388, 394-95, 65 N.W.2d 661, 665-66 (1954). This is particularly true where, as here, there is an extensive pattern of such rulings. Attorneys should not be required to attempt to reframe a question by intuiting the basis for an unexplained ruling. And, except where the court is asking the objecting party to provide more detail to inform the court before ruling on an objection, it is the duty of the court, and not that of opposing counsel, to explain the ruling. Id.
Prejudice
Before determining that appellant is entitled to a new trial based on these erroneous rulings, we must consider whether the rulings prejudiced appellants. Kroning, 567 N.W.2d at 45-46. Such prejudice is apparent with respect to appellants' claims for discriminatory treatment, retaliation, and promissory estoppel. The district court concluded that appellants had failed to prove a prima facie case of discriminatory failure to hire, but the district court's rulings effectively prevented appellants from developing critical evidence relevant to that claim. Likewise, the district court concluded that appellants failed to prove the elements of promissory estoppel, but the district court's rulings effectively prevented appellants from developing critical evidence on that claim.
Accordingly, we reverse the district court's order denying appellants' motion for a new trial on the claims of discriminatory treatment, retaliation, and promissory estoppel and remand those claims to the district court for a new trial.
Our decision to order a new trial on these claims does not preclude Interlachen from seeking summary judgment before trial on the claims of certain appellants whose individual actions might preclude them from proving a prima facie case. For example, there is evidence that appellants Nikolow and Osmonson did not intend to return to work for Interlachen after the layoff. Because of the incompleteness of the record we are unable to review Interlachen's argument that these facts should defeat the claims of these appellants as a matter of law.
This conclusion does not apply to appellants' claims of discriminatory impact. Appellants have not called our attention to any facts concerning their discriminatory-impact claims that were precluded by the district court's evidentiary rulings. Thus, we can review the district court's dismissal of those claims based on the present record.
II
Appellants claim that the district court erred in dismissing their disparate impact claims, arguing (1) that their second amended complaint contained sufficient allegations to satisfy notice-pleading requirements on claims of disparate impact; (2) that the charges they filed with the MDHR were likewise sufficient to raise their claims of disparate impact within the period required by the statute of limitations; and (3) that the evidence was sufficient to establish a prima facie case of disparate impact.
Pleading
Under the Minnesota Human Rights Act, an employee may establish employment discrimination under either a disparate-impact or a disparate-treatment theory. Minn. Stat. § 363.03 (2000); Goins v. West Group, 635 N.W.2d 717, 722 (Minn. 2001).
The district court dismissed appellants' disparate impact claims on the grounds that appellants had failed to adequately plead them. There are no Minnesota decisions specifically addressing the pleading requirements for a disparate-impact claim under the Minnesota Human Rights Act. We do find some guidance, however, from the decisions of federal courts under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e to 2000e-1f (1994). See Sigurdson v. Isanti County, 386 N.W.2d 715, 719 (Minn. 1986) (noting that Minnesota courts have "often applied principles developed in the adjudication of claims arising under Title VII" to cases brought under the Minnesota Human Rights Act).
While the United States Supreme Court has not specifically addressed the requirements for pleading a disparate-impact claim, it recently discussed the standard of pleading applicable in a disparate-treatment case. In Swierkiewicz v. Sorema N.A. , 122 S.Ct. 992 (2002), the supreme court reviewed the Second Circuit's requirement that a plaintiff plead a prima facie case of national origin and age discrimination. Id. at 996. The Second Circuit's requirement meant that a plaintiff must allege circumstances that support an inference of discrimination under the McDonnell-Douglas framework. Id. The Supreme Court reversed, holding that the "prima facie case under McDonnell-Douglas * * * is an evidentiary standard, not a pleading requirement." Id. at 997. The Court concluded that Title VII did not require a heightened standard of pleading and that the plaintiff's complaint satisfied the simplified notice-pleading standard of Rule 8 of the Federal Rules of Civil Procedure. Id. at 998-99.
Minnesota employs a similar notice-pleading system. Minn.R.Civ.P. 8; see also Barton v. Moore, 558 N.W.2d 746, 749 (Minn. 1997). Appellants' second amended complaint alleges "[Interlachen] discriminated against [appellants] on the basis of their age." The complaint describes the layoff of each appellant and alleges that appellants were never told that they would be required to reapply; that appellants were not offered reemployment and return bonuses; and that younger employees were offered reemployment and return bonuses. Under the guidance of Swierkiewicz, and considering that Minnesota employs a similar notice-pleading system, we conclude that appellants' complaint gives Interlachen fair notice of their disparate-impact claims and satisfies rule 8 of the Minnesota Rules of Civil Procedure.
Statute of Limitations
The district court concluded that appellants' disparate-impact claims were "time-barred because they did not raise [them] until August 1999, more than one year after the Club had reopened," citing Minn. Stat. § 363.03, subd. 3. The reference to August 1999 is the date of the service of appellants' civil complaint. The correct citation to the statute of limitations is Minn. Stat. § 363.06, subd. 3 (2000), which provides that, within one year after the occurrence of an unfair discriminatory practice, a party must either bring a civil action, file a charge with a local commission, or file a charge with the commissioner of MDHR. Id.
The district court apparently focused on the date of the filing of the civil action on the assumption that the discrimination charge that appellants filed with the MDHR did not adequately allege disparate impact to satisfy the statute of limitations. Applying the reasoning of Swierkiewicz, we conclude that the MDHR claims alleged facts sufficient to provide notice of a claim for disparate impact and thus satisfied the one-year limitation under Minn. Stat. § 363.06, subd. 3. We find nothing in the Human Rights Act that would require that discrimination charges be pleaded with greater specificity than a complaint in a civil action. To the contrary, the act specifies only that the charge "set out a summary of the details of the practice complained of." Minn. Stat. § 363.06, subd. 1 (2000). Moreover, the act specifies that its provisions "shall be construed liberally for the accomplishment of the purposes thereof." Minn. Stat. § 363.11 (2000).
Prima Facie Case
The district court found that appellants had not presented sufficient evidence of disparate impact to establish a prima facie case. To establish a prima facie case for disparate impact, appellants must show: (1) an identifiable, facially neutral employment practice; and (2) that the employment practice disparately affects members of a protected class. Schlemmer v. Farmers Union Cent. Exch., Inc., 397 N.W.2d 903, 908 (Minn.App. 1986).
[A] claim of disparate impact differs from disparate treatment in that the employee need not show that the employer was motivated by a discriminatory intent; it is only necessary to demonstrate that a facially neutral employment practice actually operates to exclude from a job a disproportionate number of members of the protected class.
Id. "Statistical evidence is the most frequently used tool in establishing a prima facie case of disparate impact." Id.
The district court found that appellants did not identify what policy they were challenging. Appellants claim that the discriminatory practice was Interlachen's policy of only hiring former employees who stayed in contact with Interlachen during its closure and who reapplied for their jobs. We conclude that appellants sufficiently identified the challenged policy.
The district court found that appellants had not shown that this policy was responsible for a significant adverse impact on a protected class. Minn. Stat. § 363.03, subd. 11, places the burden on the appellants to show that the challenged procedure "is responsible for a statistically significant adverse impact" on a protected class. Minn. Stat. § 363.03. subd. 11 (2000). Appellants rely, first, on the so-called "four-fifths" rule. This is a rule applied administratively by the MDHR to determine that there is sufficient evidence of adverse impact. Kohn v. City of Minneapolis Fire Dept.,583 N.W.2d 7, 13 (Minn.App. 1998), review denied (Minn. Oct. 20, 1998). Under the four-fifths rule, if members of a protected class are selected at a rate of less than four-fifths (or eighty percent) of the most selected group, the selection rate is evidence of a disparate impact. Mems v. City of St. Paul, Dept. of Fire and Safety Services, 224 F.3d 735, 740 (8 Cir. 2000). Appellants rely, second, on the change in the average age of Interlachen's workforce. Strattan v. Dept. for the Aging for City of New York, 132 F.3d 869, 880 (2nd Cir. 1997) (finding that a drop of five years in employees' average age contributed to a finding of adverse impact).
Appellants assert that a simple calculation of the change in the average age of Interlachen employees before and after the layoff provides evidence, under the four-fifths rule, that the policy had disparate impact. Appellants showed that 38.6% of the laid-off workers under 40 were rehired, while only 15% of the laid-off workers over 40 were rehired, or less than two-fifths of the rate of rehire for workers under 40. More generally, appellants showed that 34.7% of the workforce before the layoff was over 40, but only 17.1% of the staff after the layoff was over 40 and that the average age of all employees dropped from 36 to 28.
The problem with appellants' analysis is the imprecision and lack of comparability of the data for the before and after groups. When using such statistical evidence, the employee must show the protected-status composition of the applicant pool. See Wards Cove Packing Co., Inc. v. Atonio, 490 U.S. 642, 651, 109 S.Ct. 2115, 2122 (1989) (declining to find disparate impact where the statistics regarding the work force did not reflect "the pool of qualified job applicants or the qualified labor force population"); Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 95 S.Ct. 2362, 2375 (1975) (stating that a prima facie case requires showing that "the tests in question select applicants for hire or promotion in a racial pattern significantly different from that of the pool of applicants"); Kohn, 583 N.W.2d at 13-14 (stating the evidence was sufficient where the plaintiff set forth the number of employee applicants who took the test and the applicant pool's minority composition, and the number of employees who were promoted and their minority composition); Sigurdson v. Carl Bolander Sons, Inc., 532 N.W.2d 225, 229 (Minn. 1995) (rejecting Sigurdson's disparate-impact age-discrimination claim because he failed to support it with evidence regarding the applicant pool or to prove that older people were systematically excluded).
Although appellants' statistical evidence compares the number of older persons employed prior to the layoffs with the number of older persons who were hired or rehired when Interlachen reopened, it does not exclude persons over 40 years of age who voluntarily took themselves out of the applicant pool and, therefore, whose absence from the post-lay-off workforce could not be attributed to discriminatory impacts. Appellants assume, but did not prove, that all laid-off employees over 40 were seeking to be rehired and could properly be considered in the applicant pool. To the contrary, the district court specifically found:
Plaintiffs produced no statistical evidence on the applicant pool or on a systematic exclusion of older people. The evidence shows that Interlachen employed several employees over the age of 40 after the renovation. To the extent that plaintiffs produced numbers, they have not explained their significance.
Plaintiffs' statistics lump job applicants with non-applicants and employees who had not worked for defendant before the layoffs with employees who had. Groups being compared must be similarly situated with respect to their characteristics for a disparate impact claim to be successful. Wards Cove Packing Company, Inc. v Atonio, 490 U.S. 642 (1989).
Without evidence that older workers who were not rehired actually sought to return to work at the Club, the fact that a smaller proportion of older workers worked at Interlachen after the renovation before the layoffs does not demonstrate a disproportionate impact. Peters v. Lieuallen, 568 F. Supp. 261, 265 (D.Or. 1983).
Because appellants failed to produce evidence that a causal link exists between the challenged practice and the statistics appellants presented, we affirm the district court's dismissal of the disparate-impact claims.
III
Appellants argue that the district court erred by denying their request to withdraw their waiver of a jury trial. A party may waive a jury trial by written consent. Minn.R.Civ.P. 38.02. The district court, in its discretion, may allow a party to withdraw its waiver of a jury trial "where the withdrawal will not prejudice the opposite party." Wittenberg v. Onsgard, 78 Minn. 342, 348, 81 N.W. 14, 16 (Minn. 1899); see also,Blenda Life Corp. v. Blenda Life Inc., 293 Minn. 448, 451, 196 N.W.2d 925, 927 (1972) (stating that the district court did not abuse its discretion by denying party's motion for a new trial where the party previously waived its right to a jury trial).
The record indicates that when appellants first waived a jury trial, Interlachen agreed, and the case was scheduled for a bench trial. However, on the first day of trial, when the district court informed the parties that it preferred a jury trial, appellants reconsidered and then asked to withdraw their waiver of a jury trial. Interlachen objected, stating that it would be prejudiced by allowing the withdrawal of the waiver of a jury trial at that late date. The district court ultimately denied appellants' request to withdraw their waiver and proceeded with a bench trial.
We conclude that the district court acted within its discretion when it denied appellants' request to withdraw their waiver of a jury trial on the first day of trial. Although Interlachen did not elaborate on its claim of prejudice, we recognize that a party's preparation for a bench trial could differ significantly from the preparation it would undertake for a jury trial, and thus no further elaboration seems necessary.
IV
Appellants have asked that any new trial be conducted before a different judge. Appellants have not, however, made any motion to remove the trial judge.
Minnesota law requires an affirmative showing of prejudice to remove a judge. Minn.R.Civ.P. 63.03. Generally, such prejudice must stem from an extrajudicial source that caused the judge to base his or her decision on knowledge acquired outside the judge's participation in the case. In re Estate of Lange, 398 N.W.2d 569, 573 (Minn.App. 1986).
There are exceptions to the "extrajudicial source" rule, such as the "pervasive bias" exception. See Liteky v. U.S., 510 U.S. 540, 551, 114 S.Ct. 1147, 1155 (1994) (citing Davis v. Bd. of Sch. Comm'rs of Mobile Cty., 517 F.2d 1044, 1051 (CA5 1975). The "pervasive bias" exception occurs when the bias or prejudice that arises from events occurring at trial, "is so extreme as to display clear inability to render fair judgment." Id. The Liteky Court held that the petitioners' grounds for recusal were inadequate where they consist of judicial rulings, routine trial administration efforts, and ordinary admonishments (whether or not legally supportable) to counsel and to witnesses[.] * * * [and where all] occurred in the course of judicial proceedings, and neither (1) relied upon knowledge acquired outside such proceedings nor (2) displayed deep-seated and unequivocal antagonism that would render fair judgment impossible.
Id. at 556, 114 S.Ct. at 1158.
Appellants do not claim the district court judge relied on knowledge acquired outside the proceedings and their complaints about the court's rulings do not reach the threshold of pervasive bias required to remove a judge. We have no doubt that the trial judge can conduct the new trial in a fair and unbiased manner.
V
Because we reverse and remand for a new trial on appellants' claims of discriminatory treatment and promissory estoppel, we likewise reverse the award to Interlachen of its costs.