APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 74-2980)
Before Seitz, Chief Judge, and Garth and Sloviter, Circuit Judges.
Appellant, Judith Gurmankin, a blind school teacher previously found to have been the subject of unconstitutional employment discrimination, appeals from the trial court's denial of the requested remedies of backpay and tenure.*fn1 Appellees are the Board of Education of the School District of Philadelphia, Michael Marcase, Superintendent of the School District of Philadelphia, (who replaced Matthew Costanzo, the original defendant), Murray Bookbinder, Executive Director of Personnel and Labor Relations, and Martin K. Ferrier, Director of Professional Personnel (hereinafter jointly referred to as School District).
The facts in this case are the subject of two prior reported decisions and will be summarized only briefly here. Ms. Gurmankin, who holds a Professional Certificate from the Pennsylvania Department of Education as a teacher of Comprehensive English in Pennsylvania Public Schools, first attempted to obtain employment in the Philadelphia School District in 1969 but was unsuccessful because of the District's medical and personnel policy which excluded blind teachers from teaching sighted students in the public schools. She was classified as having a "chronic or acute physical defect" and was therefore prevented from taking the Philadelphia Teachers Examination until the spring of 1974. Thereafter, she passed the examination but rejected the positions offered to her by the School District because they did not include retroactive seniority to which she claimed she was entitled because of the previous exclusion.
Ms. Gurmankin filed suit in November 1974 pursuant to 42 U.S.C. § 1983 alleging that the School District's policy of preventing blind teachers from teaching sighted students was unconstitutional. In its opinion filed March 31, 1976, the trial court agreed with appellant's claim that denial of the opportunity to demonstrate her competency represented an irrebuttable presumption in violation of the requirements of due process, and ordered that she be offered employment with seniority retroactive to September 1970. Gurmankin v. Costanzo, 411 F. Supp. 982 (E.D.Pa.1976). In a supplemental proceeding, the trial court found that more than ten months after its original order the School District had still failed to offer appellant suitable employment at an "attractive" high school in compliance with the injunction's seniority provision. The court entered a supplemental order on February 8, 1977, amending the injunction to require the School District to provide appellant with a position as an English teacher at one of six designated schools. The original injunction and the supplemental order were both affirmed on appeal to this court. 556 F.2d 184 (3d Cir. 1977).
The relief requested by appellant as part of her original complaint included a demand for backpay which was considered by the trial court in a proceeding subsequent to that in which liability and seniority were determined. The trial court denied backpay for the period sought by appellant, beginning from September 1970, the date the court previously found she would have been offered employment absent discrimination. It granted backpay for the period from March 31, 1976, when the court originally directed the School District to offer appellant employment, through the time when appellant was offered employment in accordance with the court's order of February 8, 1977. The School District has not appealed from the order granting backpay from March 31, 1976. This appeal concerns the denial of backpay for the period from September 1970 until March 31, 1976.
Appellant contends that the failure to award her backpay for the full period in which her constitutional rights were violated constituted an abuse of discretion. Relying primarily on the Title VII cases in which the Supreme Court has held that courts, after a finding of unlawful discrimination, must use their equitable discretion to fashion the most complete relief available, see, e. g., Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S. Ct. 2362, 45 L. Ed. 2d 280 (1975); Franks v. Bowman Transportation Co., 424 U.S. 747, 96 S. Ct. 1251, 47 L. Ed. 2d 444 (1976), appellant argues that she has been deprived of a fundamental component of a make whole remedy to which she is entitled.
The School District replies that this case is distinguishable from those cases which require award of backpay as a general rule. The School District argues that the trial court appropriately analyzed the "peculiar facts and circumstances of this case" in exercising its equitable discretion to deny the backpay remedy and that its exercise of that discretion was not "clearly erroneous" and should not be disturbed on appeal.
In its analysis of the appropriate remedy to award in this case, the trial court concluded that equity required the denial of backpay for the period September 1970 through March 31, 1976 for three reasons. First, the court distinguished the Title VII cases as precedent, holding that different policy considerations rendered "impossible mechanical application of Title VII law to this case." The trial court viewed the presumptive use of the backpay remedy in Title VII cases as arising from the national need for an effective deterrent against persistent discrimination Congress has declared impermissible; the use of backpay in those cases "appears justified because employers have been made aware of the illegality of discrimination based upon certain characteristics."
Second, the trial court stated it was not clear whether the "potent remedy" of backpay was required here because only recently had employers become aware of the treatment which the law requires must be accorded persons such as appellant:
Nor can the Court confidently state that defendants had "notice" that the action they took against Ms. Gurmankin might implicate her constitutional rights; without making "notice" a requirement for imposition of the backpay award, this fact does reflect on the fairness of imposing the backpay award.
Third, the court read the recent Supreme Court decision in City of Los Angeles v. Manhart, 435 U.S. 702, 98 S. Ct. 1370, 55 L. Ed. 2d 657 (1978), as supporting the denial of retroactive relief to Ms. Gurmankin. In the Manhart case present and former female employees of the Los Angeles Department of Water and Power successfully challenged the Department's requirement that female employees must make larger contributions to its pension fund than male employees on the ground that such a requirement violated Title VII's prohibition of classifications based on sex. After holding that the contribution differential was unlawful, the district court ordered a refund of all excess contributions. The Supreme Court affirmed the holding on liability but vacated the retroactive relief awarded, expressing concern that a decree that would have required retroactive readjustment of sex-differentiated employee contributions to pension funds would have implicated the financial stability of insurance and pension plans throughout the country entailing assets of more than $400 billion.
In the present case the trial court relied heavily on the Manhart decision in denying appellant's requested relief. Although the court recognized that appellant, in common with plaintiffs in Title VII cases, could be made whole only by a backpay award for the entire period in which she was unconstitutionally deprived of a position as a school teacher of sighted children in the Philadelphia School District, the court concluded that "equity requires her to bear this loss."
An appellate court reviewing the exercise of discretion of the trial court in granting or denying equitable relief must tread a path between the substitution of its own judgment for that of the trial court, which would eviscerate the authority of the trial court, and the automatic stamp of approval on the decision of the trial court, which would have the converse harm of precluding review of the scope of relief. Meaningful appellate review of the exercise of discretion requires consideration of the basis on which the trial court acted. If the factors considered do not accord with those required by the policy underlying the substantive right or if the weight given to those factors is not consistent with that necessary to effectuate that policy, then the reviewing tribunal has an obligation to require the exercise of discretion in accordance with "what is right and equitable under the circumstances and the law." See Langnes v. Green, 282 U.S. 531, 541, 51 S. Ct. 243, 247, 75 L. Ed. 520 (1931).
In order to effectuate important social policies aimed at eliminating employment discrimination, the Supreme Court has resolutely and unhesitantly entered the arena of the appropriate scope of relief which should be awarded. It has charged the district courts and courts of appeals to give potent relief, such as retroactive seniority and backpay, in effect exhorting against timidity in this area. As the Court noted in Franks v. Bowman Transportation Co., 424 U.S. at 770-71, 96 S. Ct. at 1267:
Albemarle Paper, (422 U.S.) at 416, 95 S. Ct. at 2371, made clear that discretion imports not the court's "inclination, but . . . its judgment; and its judgment is to be guided by sound legal principles." Discretion is vested not for purposes of "limit(ing) appellate review of trial courts, or . . . (inviting) inconsistency and caprice," but rather to allow the most complete achievement of the objectives of Title VII that is attainable under the facts and circumstances of the specific case. 422 U.S., at 421, 95 S. Ct., at 2373.
See also Evans v. Buchanan, 555 F.2d 373, 378 (3d Cir.), cert. denied, 434 U.S. 880, 98 S. Ct. 235, 54 L. Ed. 2d 160 (1977).
Examination of the legal precepts applied by the trial court in this case is facilitated by the explicit exposition in the court's opinion of July 12, 1978 of the factors considered in reaching its decision. Central to the decision to deny backpay was the court's belief that "the policy considerations underlying relief awarded in Title VII cases are very different from the ones involved here." In so stating, the trial court overlooked the fact that this precise argument was considered and rejected by this court on the first appeal in this matter, when the School District attempted to overturn the injunctive relief awarded on the ground that Title VII cases were inapplicable precedent. Judge Gibbons wrote:
The District urges that even if we agree that there was a due process violation, the trial court lacked the power to cure it by the award of rightful place seniority. It distinguishes cases such as Franks v. Bowman Transp. Co., 424 U.S. 747, 96 S. Ct. 1251, 47 L. Ed. 2d 444 (1976) and United States v. Int'l Union of Elevator Constructors, 538 F.2d 1012 (3d Cir. 1976) as confined solely to remedies for violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. But the language of Title VII in § 706(g), 42 U.S.C. § 2000e-5(g), on which the courts have relied in affording seniority relief is merely ". . . any other equitable relief as the court deems appropriate." There is no distinction in the law of equitable remedies between suits brought under Title VII and suits brought in reliance on 42 U.S.C. § 1983, or directly on the fourteenth amendment.
(W)here federally protected rights have been invaded, it has been the rule from the beginning that courts will be alert to adjust their remedies so as to grant the necessary relief.
Bell v. Hood, 327 U.S. 678, 684, 66 S. Ct. 773, 777, 90 L. Ed. 939 (1946); Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 392, 91 S. Ct. 1999, 2002, 29 L. Ed. 2d 619 (1971). The equitable relief of an award of a retroactive seniority date was, on the record before us, entirely appropriate. 556 F.2d at 188 (emphasis added).
The Title VII precedent instructs us that the normative principle of relief in an employment discrimination situation is the award of backpay. The award of such relief is made not solely to deter would be discriminators, as the trial court emphasized, but also to provide meaningful relief to the victims of illegal employment discrimination. In Albemarle Paper Co. v. Moody, supra, the Court established the presumptive right to a backpay order as a remedy for unlawful discrimination:
(T)he (district) court has not merely the power but the duty to render a decree which will so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future. Louisiana v. United States, 380 U.S. 145, 154, 85 S. Ct. 817, 822, 13 L. Ed. 2d 709 (1965). And where a legal injury is of an economic character,
"(t)he general rule is that when a wrong has been done, and the law gives a remedy, the compensation shall be equal to the injury . . .'
422 U.S. at 418-19, 95 S. Ct. at 2372 (1975) (emphasis added). Similarly, it was the need for fully effective relief which impelled the Court two years later in Franks v. Bowman Transportation Co., supra, to direct the entry of even more far-reaching equitable relief, that of retroactive seniority, notwithstanding the effect of such relief on the expectations of other employees who were innocent third parties. The significant factor was that in no other way could the victims of discrimination be compensated effectively.
The necessity of adopting a standard of relief which would restore the victim as fully as possible to the economic position in which s/he would have been in the absence of the employment discrimination has been recognized by this court which has, in numerous cases, adopted the "make whole" standard. In Rodriguez v. Taylor, 569 F.2d 1231 (3d Cir. 1977), cert. denied, 436 U.S. 913, 98 S. Ct. 2254, 56 L. Ed. 2d ...