Opinion
71 Civ. 2877 (RLC)
August 4, 2003
ELIOT SPITZER, ATTORNEY GENERAL OF THE STATE OF NEW YORK, CARRIE COHEN, Of Counsel, New York, New York, Attorney for Plaintiff, the New York State Division of Human Rights.
MICHAEL A. CARDOZO, CORPORATION COUNSEL OF THE CITY OF NEW YORK, PHOEBE ROOSEVELT, Of Counsel, New York, New York, Attorney for Plaintiff, the City of New York.
LOUIS GRAZIANO, Of Counsel, UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, NEW YORK DISTRICT OFFICE, New York, New York, Attorney for Plaintiff, Equal Employment Opportunity Commission.
EDWIN G. SCHALLERT, PATRICIA G. CORLEY, JYOTIN HAMID, Of Counsel, DEBEVOISE PLIMPTON, New York, NY, Attorneys for Plaintiff-Intervenors.
KRISTIN M. DADEY, Of Counsel, LAWYER's COMMITTEE FOR CIVIL RIGHTS UNDER LAW, Washington, DC, Attorneys for Plaintiff-Intervenors.
ALAN LEVINE, JACKSON CHIN, Of Counsel, PUERTO RICAN LEGAL DEFENSE AND EDUCATION FUND, New York, NY, Attorneys for Plaintiff-Intervenors.
EDMUND P. D'ELIA, P.C., EDMUND P. D'ELIA, Of Counsel, New York, New York, Attorney for Defendant.
JOHN O'B. CLARKE, Of Counsel, HIGHSAW, MAHONEY CLARKE, Washington, DC, Attorneys for Defendants.
OPINION
Plaintiffs and defendants in this Title VII action move for approval of a Consent Order, entered into by them and preliminarily approved by the court pending the results of a fairness hearing. The motion is opposed by non-white current and former members of Local 28, who have secured representation and intervened in this action upon receiving notice of the Proposed Consent Order.
BACKGROUND
This thirty year old race discrimination suit was brought against Local 28 on behalf of black and Hispanic members of the Union. After decades of contentious litigation, government plaintiffs and defendants entered into settlement negotiations. These negotiations culminated in a Proposed Consent Order preliminarily approved by the court on December 19, 2002. The court reserved its final approval of the Order pending the results of a fairness hearing, which took place on April 15, 2003. At the hearing, intervenors voiced their objections to the settlement. Plaintiffs and defendants now seek final approval of the Proposed Consent Order.
At that time they were putative intervenors. Their motion to intervene was granted on July 22, 2003.
DISCUSSION
It is well settled that voluntary compliance is the preferred means of achieving the goals of Title VII. See, e.g., Johnson v. Transp. Agency, Santa Clara County, CA, 480 U.S. 616, 630 n. 8 (1987); Kirkland v. New York State Dep`t of Correctional Servs., 711 F.2d 1117, 1128 (2d Cir. 1983). Yet the court is bound to withhold approval of a consent decree until it has independently scrutinized the proposal to make sure that it is fair, adequate, and reasonable. County of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1323 (2d Cir. 1990); Plummer v. Chemical Bank, 668 F.2d 654, 658 (2d Cir. 1982). Toward this end, the Second Circuit, in City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974), delineated several factors to consider:
Although Grinnell involved approval of a settlement of a class action lawsuit and this case is not a class action, these factors remain instructive. See Sheppard v. Consolidated Edison Co., 94 CV 403, 2000 WL 33313540, at *4 (E.D.N.Y. Dec. 21, 2000) (applying Grinnell factors in denying approval of proposed consent decree in Title VII action not certified as a class action).
(1) the reaction of the class to the settlement;
(2) the risks of establishing liability;
(3) the risks of establishing damages;
(4) the range of reasonableness of the settlement fund in light of all the attendant risks of litigation;
(5) the range of reasonableness of the settlement fund in light of the best possible recovery;
(6) the ability of the defendants to withstand a greater judgment;
(7) the stage of the proceedings and the amount of discovery completed;
(8) the complexity, expense and likely duration of the litigation; and
(9) the risks of maintaining the class action through the trial.Id. at 463.
The ninth factor is not relevant in this case because it is not a class action.
At the fairness hearing, the courtroom was literally brimming with nonwhite objectors, whose objections were voiced through intervenors' counsel. In addition, over 100 current and former Local 28 members submitted written objections to the court, most of which contained specific, relevant concerns about the Proposed Order. This significant level of public objection is particularly telling in light of evidence that some nonwhite Union members would not voice their opposition due to fear of retaliation. (Obj.'s Mem. at 23-24; Saunders Decl.; Vasquez Decl.; James Decl.)
In a series of recent letters, Local 28 accuses the Special Master and his staff of allowing their own pecuniary interests to influence their actions in opposing the Proposed consent Order and in providing information ex parte to intervenors. The court has already rejected this baseless contention orally, and reemphasizes its complete confidence in, and satisfaction with, their performance. The Special Master's job is to enforce the decisions of the court aimed to protect the rights of nonwhite Local 28 members, and this includes educating them about those rights. This role has proven especially critical over the years as government plaintiffs have not always been zealous representatives of these victims of discrimination. Of course, now that the intervenors have entered this suit on behalf of black and Hispanic members of Local 28, the Special Master may be able to play a less active role in this regard, but his actions have been entirely proper throughout this litigation.
Defendant submits evidence of support for the Proposed Consent Order in the form of petitions signed by 300 nonwhite Local 28 members. The petition reads, in pertinent part:
As of April 15, 2003, ninety-one (91) individuals have signed a declaration in opposition to the proposed Consent Order. Such individuals include members of Sheet Metal Workers' Local Union No. 25 and others who are NOT presently members of Sheet Metal Workers' Local Union No. 28.
IF YOU BELIEVE IN LOCAL UNION NO. 28 AND ITS CONTINUED SURVIVAL ALLOW YOUR VOICE TO BE HEARD.
To allow an insignificant (ie., [sic] small) number of individuals with personal interests to control the fate of Sheet Metal Workers' Local Union No. 28 is unfair and should not be permitted.
If you want your voice to be heard and you believe the proposed Consent Order is an adequate resolution of this case your signature below is requested.
(Def.'s App.)
The content of this petition is misleading; it implies that the Union's very survival depends upon approval of the Proposed Consent Order. It also implies that the objectors are acting out of self-interest and do not care about Local 28, as some are "NOT" presently members. Faced with such a petition, some nonwhite members may have thought that their signature was merely indicative of their support for the Union. A so-called "Fact Sheet" that accompanied the petition was similarly misleading, as it appeared to indicate that if the current Consent Order were not approved, a majority of nonwhite Local 28 members would be left without any chance for relief whatsoever, whereas if it were approved, all would receive relief. (Intervenors' Ex. 18.)
In addition to the misleading contents of the written materials, allegations about the conditions under which some of the petitions were signed raises serious questions about their probative value in any event. There is evidence that at least some of the petitions were presented to members for signatures in front of business agents (who are responsible for job placements) and employers. (Intervenors' Reply Mem. at 21-23.) Apprentices were subjected to solicitation in the classroom by their Head Instructor and Administrator of their School. (Id. at 22.) As a result, some nonwhite members may have felt pressured to sign the petitions or face retaliation.
Taken as a whole, the record indicates that there is strong and substantial opposition to the Proposed Consent Order, which weighs against its approval.
An analysis of risks versus benefits (Grinnell factors 2 through 6) also weighs against approval of the Proposed Consent Order. Local 28's liability has already been determined by the court for the 1984-1991 period, and there is similar evidence of discrimination from 1991-present. Court experts have already determined the level of claimants' damages to be nearly $150 million. In addition, this court found, and the Second Circuit affirmed, that Local 28 has the ability to pay more than the $4.4 million proposed under the settlement. EEOC v. Local 638 . . . Local 28 of Sheet Metal Workers' Int'l Ass'n, 117 F. Supp.2d 386, 392, aff'd, 247 F.3d 333 (2d Cir. 2001) (ordering the Union to pay $2.6 million into an escrow account, and $900,000 per year thereafter in satisfaction of all backpay awards). The court's expert, Stanley Moskowitz, has audited Local 28's financial statements and, contrary to Local 28's protestations of financial hardship, found no reason why Local 28 would not be able to continue these payments. (Intervenors' Ex. 13.) In terms of the proposed affirmative action goal of 40 percent, given the fact that a court-appointed expert, Dr. Mark Killingsworth, determined that the appropriate goal should be 52.5 percent, the risk of litigating this issue seems low compared to the potential benefits.
With respect to Grinnell factors 7 and 8, it is clear that the parties have conducted substantial discovery over the years, that this litigation is complex, and that withholding approval of the Proposed Consent Order will lengthen its duration. Normally these circumstances would weigh in favor of approval. Here they do not tip the overall balance in that direction. To quote the Fifth Circuit:
it remains this court's task to ensure that the Title VII rights of . . . minority employees, who have been subjected to the scourge of racial discrimination, are vindicated. While we deplore contributing further to the seemingly Methuselean duration of this case, `we would not substitute one hour of efficiency for one moment of justice.'Pettway v. Am. Cast Iron Pipe Co., 576 F.2d 1157, 1223 (5th Cir. 1978) (citation omitted). Much of the litigation to date has resulted from Local 28's non-compliance with this courts' orders after liability was established in 1975. The Union should not be rewarded for dragging its feet until government plaintiffs reached a point of exhaustion.
CONCLUSION
For the foregoing reasons, approval of the Proposed Consent Order is DENIED.