UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
September 24, 1981
THELMA DAVIS, APPELLEE
UNITED STATES STEEL SUPPLY, DIVISION OF UNITED STATES STEEL CORPORATION, APPELLANT
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (Civil Action No. 75-1020)
Before: GIBBONS, HUNTER and GARTH, Circuit Judges
GARTH, Circuit Judge .
This racial discrimination action has previously proceeded before the Pittsburgh Commission on Human Relations and thence through the Pennsylvania courts. In this appeal of the plaintiff Davis's § 1981 action brought in the District Court of the Western District of Pennsylvania, we are required to review the basis for her discharge. We are satisfied that had any other employee, white or black, acted as Ms. Davis had, that employee would also have been dismissed. Accordingly, while we do not hold that res judicata bars Ms. Davis's action, we reverse the order of the district court in her favor, holding that under even the most stringent standard of review, a standard which we need not employ, the district court's judgment may not be sustained.
Thelma Davis, a black woman, commenced her employment with the Steel Supply Division of the United States Steel Corporation (USS) on May 5, 1966. She was employed as a Flexograph operator and was the first black office employee at the Supply Division's Reedsdale Street location. She had been employed by USS for almost four years when her employment terminated on February 3, 1970.
During her tenure with USS, Davis experienced difficulties with her fellow employees.Tension developed between Davis and two other women employees who also worked in the Flexograph Room, where invoices were prepared. At least one of these women complained to Pishko, their immediate supervisor, that Davis was uncooperative.Davis, in turn, submitted a letter to Beecher Taylor, Pishko's supervisor, complaining of numerous incidents involving co-workers. Some of these complaints were racial in nature. As a result of these and other actions, as Taylor's direction, Pishko talked to Davis and several other employees in an effort to restore office harmony.
These efforts were to no avail, at least as far as the Flexograph Room was concerned. In early 1969, therefore, Pishko moved Davis to the File Room. The record is equivocal as to whether Davis's problems continued in that department. However, on the morning of February 3, 1970, Pishko, as a result of complaints made by co-workers, requested Davis to use less perfume on her person. Davis was offended by this request and complained to Sykes, the acting district manager and Pishko's then supervisor. Later that day, Davis discovered that one of her boots was torn and attributed that action to her fellow employees.She complained to Pishko that the torn boot was another example of the type of harassment she was suffering. During a tempestuous discussion, Davis left Pishko's office and refused his requests that she return. Pishko then went to Sykes, and, after informing Sykes of the events that had transpired, asked Sykes to discharge Davis. Davis was thereupon called to Sykes's office and discharged by him. She alleges, and Sykes denies, that Sykes had told her, among other things, that her discharge was for "her safety's sake."
Davis first complained to the City of Pittsburgh Commission on Human Relations (PCHR) on February 4, 1970, the day after her discharge. She alleged that an atmosphere of racial intolerance was maintained at USS and that she had been subjected to harassment by fellow employees during the last three years of her employment. She alleged that her complaints to supervisors had been largely ignored and that her discharge occurred after Taylor, a district manager who had been sensitive to her complaints, was transferred to another city.
The Commission conducted a full adversary hearing on Davis's complaint on June 4, 1971. The Commission issued its decision on March 6, 1972 and found that U.S. Steel had violated § 8(a) of the Pittsburgh Human Relations Ordinance because it had treated Davis differently than it treated other employees.The Commission wrote that the ordinance "prohibits discrimination or difference in treatment on the basis of race" (Appendix at 278a).*fn1 The Commission based its ruling on three observations First, it noted that Davis was the first black employee in the office section of the Supply Division and that, after her departure, the Division had no black office workers. The Commission wrote that while this fact "did not of itself establish past discriminatory practices, it certainly raises a strong presumption that the company has not followed an affirmative action program and possibly has engaged in discrimination on past occasions." (Appendix at 279a). Second the Commission found that Davis was treated differently than other employees by virtue of the fact that "[h]er files and records appeared to contain material that was being compiled by her supervisor to support a dismissal charge." Id .Third, the manner in which Davis was dismissed was found to be "arbitrary, unreasonable, and not conducive to instilling good inter-group relations in the City of Pittsburgh." Id .
In its opinion the Commission recited recited "that [the] management of [a] large corporation [has] a positive duty to actively establish conditions of work that enable all races and all ethnic and religious groups to work together in harmony." Id . The Commission ordered Davis reinstated with payment for her lost wages.
USS appearled this decision under 53 P.S. § 11308 (repealed in 1978) to the Pennsylvania Court of Common Pleas.*fn2 Pursuant to that statute, the court reviewed the Commission's decision on the basis of the 269 page transcript of the Pittsburgh Human Relations Commission hearing. The Common Pleas Court affirmed the Commission's decision and on November 20, 1975, then ordered the appeal of the United States Steel Supply Division dismissed. The court found that "[t]he problem relating to Mrs. Davis' relations with other employees thus had become to subject of company action. It was not an abuse of discretion on the part of the Commission to find the company had improperly resolved the complaints in taking action against Mrs. Davis" (Appendix at 286a).
USS then successfully appealed the Court of Common Pleas judgment to he Commonwealth Court of Pennsylvania. United States Steel Supply Division v. City of Pittsburgh Commission on Human Relations , 332 A.2d 871 (Pa. Commw. Ct. 1975). That court found that all of the Commission's factual findings, with the exception of its finding that Davis's records were kept in a different manner than those of other employees, were irrelevant to Davis's charge that her discharge was discriminatory.*fn3
The Commonwealth Court also decided that the record revealed that even the one relevant finding, dealing with the manner in which records were kept, did not, without more, constitute racial discrimination on the part of the Supply Division. Rather, it held that uncontroverted evidence established that the record keeping practice was put into effect only after Davis's suit was filed and that the notations and additions to Davis's file "would appear to be the normal procedure for any employer facing such a lawsuit." Id . at 875. The Commonwealth Court then vacated the orders of the Pittsburgh Commission on Human Relations.
Davis did not appeal this decision to the Pennsylvania Supreme Court. Rather, on August 13, 1975, she filed the instant civil action for damages pursuant to 42 U.S.C.§ 1981 on August 13, 1975. In her complaint, Davis alleged that she was sugjected to a pattern of racial discrimination consisting of racial slurs and racially motivated harassment. She claimed that she was then unlawfully dismissed from her employment and sought damages to compensate her for lost wages, fringe benefits and pension rights as well as costs and attorneys' fees.
The district court found in Davis's favor after the case, pursuant to the stipulation of the parties, was submitted to the court for a determination of liability on the basis of the transcript of the PHRC hearing of June 4, 1971, and the deposition of Davis dated April 24, 1979. (Appendix at 382a). No live testimony was heard. In an opinion dated October 19, 1979, the district court found that USS practiced racial discrimination in discharging Ms. Davis.*fn4
The plaintiff could have been terminated on suggestion of the office manager out of a retaliatory motive on his part. But, the motivation for retaliation is bound up with racial issues, since it was just such complaints that were the substance of the 1969 letter to the district manager. For all of the above reasons, I find that the discharge was racially discriminatory.
The foregoing shall constitute findings of fact and conclusions of law as required by Federal Rule of Civil Procedure 42(a). [sic] An appropriate Order will issue.
In a subsequent opinion based on the same submissions and three additional exhibits, the court determined the amount of Davis's damages ($44,236.11 and $6,500 in attorney's fees and costs) and the issue of mitigation. On appeal, USS asserts that Ms. Davis's claim was barred by res judicata ; that no evidence establishing a racially motivated discharge appears in the record; and that Davis failed to mitigate damages.*fn5 We reverse.
USS claims that Davis's suit is barred by res judicata . In an earlier appeal, Davis v. U.S. Steel Supply Division , 581 F.2d 335 (3d Cir. 1978), this court resolved in Davis's favor the question of the appropriate state statute of limitations that would be applied in an action under 42 U.S.C. § 1981 "where the gist of a § 1981 complaint concerns the racially discriminatory discharge of an employee...." Id . at 341 n.8. On that appeal, this court left the res judicata issue open when it concluded, contrary to the district court, that Davis's claim was not barred by the statute of limitations. Although USS had also moved for summary judgment asserting res judicata , the court did not reach the merits of that argument, noting that:
There is an open question under state and federal law whether the Commonwealth Court's reversal of the Commission's order would be accorded res judicata effect in a subsequent private suit brought under either the Human Relations Act or under federal civil rights laws. The res judicata force of state judicial review of local administrative adjudications depends on a variety of factors which have not been developed in the record in his case.See New Jersey Educ. Ass'n v. Burke , 579 F.2d 764 (3d Cir. 1978); Mitchell v. NBC , 553 F.2d 265 (2d Cir. 1977). The district court, in fact, did not reach the res judicata issue in dismissing plaintiff's § 1981 complaint. We intimate no view as to the proper res judicata effect, if any, that should be accorded the Commonwealth Court's reversal of a finding of discrimination in a subsequent action under the Pennsylvania Human Relations Act or § 1981.
Id . at 340 n.5. In this appeal, however, we must decide the res judicata question which was raised below and decided against USS by the district court.
Here, USS relies upon the reasoning of the Second Circuit in Mitchell v. National Broadcasting Corp ., 553 F.2d 265 (2d Cir. 1977). In that case, the court held that Mitchell, who had filed a complaint charging that she had been dismissed from her job as a result of racially discriminatory employment practices, was barred by res judicata from bringing a § 1981 claim in federal court. Her federal action had been brought after her claim had been rejected by the New York State Division of Human Rights, and her appeals rejected by the New York State Human Rights Appeal Board and the Appellate Division of the New York State Supreme Court.*fn6
Both the majority and the dissenting opinions in Mitchell were concerned with the policy which underlies the doctrine of res judicata and the adequacy of the state proceedings. Both opinions were concerned with the potential for multiple and endless proceedings that could be mounted by a plaintiff if res judicata was held not to apply. Indeed, the majority in Mitchell , while recognizing that strong federal policies can override the mandate of 28 U.S.C. § 1738,*fn7 providing for full recognition of a state court judgment in the federal courts, nevertheless held that Mitchell was not entitled to still another trial on her employment claim.
The question is admittedly a close one, but we are persuaded, as was Judge Feinberg (now Chief Judge) writing in dissent in Mitchell , that "[w]ith respect to employment discrimination, Congress has shown a clear intent to provide injured plaintiffs with a federal fact-finding forum, and... this intent supersedes the requirement of § 1738." 553 F.2d at 277 (Feinberg, J. dissenting). That intent, and the importance of a federal fact finding forum in the employment discrimination context, in our opinion, sets off this category of cases from those that might otherwise respond to the concerns for comity and judicial efficiency that are ordinarily served by applying a res judicata bar. (See Lehman v. Lycoming County Children's Services , 648 F.2d 135, 138-39 (3d Cir. 1981) (en banc ) for a discussion of the res judicata effect of state court judgments in federal court.)
While arguably there are differences between the earlier state proceedings initiated by Mitchell and those which the Commonwealth court reviewed as a result of Davis's complaint, those differences are not significant in terms of res judicata principles once we have determined that Congress intended that a federal fact finding forum be available to an injured plaintiff. Thus, the concluding portion of Judge Feinberg's dissenting opinion is as pertinent and relevant here, in the context of Davis's action, as it was in Mitchell :
It may be that there is no basis for Mitchell's [Davis's] claim, and viewed from that perspective, allowing her to present it in the federal court duplicates effort and squanders scarce judicial resources. Yet, the duplication complained of is part and parcel of the congressional determination that racial discrimination claims in employment are important enough to warrant independent and overlapping federal remedies. And they are also important enough to warrant de novo review of administrative rulings on employment discrimination. Some of this effort may be unnecessary, but the courts should not use the doctrine of res judicata to prune away what they view as redundancies in this scheme without close attention to the congressional intention.
553 F.2d at 280 (Feinberg, J., dissenting).
This conclusion -- that res judicata does not bar Davis's present action -- is buttressed by this court's decision in Smouse v. General Electric Co ., 626 F.2d 333 (3d Cir. 1980). There, a plaintiff brought a Title VII action against General Electric claiming that a phase-out of General Electric's operations at its West Mifflin plant, which took place in 1971, discriminated against women who, as a result, were transferred from full to part-time positions. Prior to the institution of the plaintiff's action in federal court, a class action*fn8 had been successfully prosecuted in the Pennsylvania courts. Although the class plaintiffs had ultimately prevailed before the Supreme Court of Pennsylvania, no relief had been received by any of the affected employees. We assume that plaintiff Smouse's impatience with the delay in implementing relief caused her to initiate her separate action in federal court even though she was a member of the class that had prevailed in the state proceedings.
The district court granted summary judgment to General Electric on the ground that Smouse's action was barred by res judicata as a result of the state proceedings. On appeal, this court reversed. We held that under the reasoning of Alexander v. Gardner-Denver Co ., 415 U.S. 36(1974) state administrative proceedings such as those conducted by the Pennsylvania Human Relations Commission, even though reviewed through and by the highest court of Pennsylvania, can not bar federal relitigation of discrimination claims under Title VII.
The Smouse court reasoned, in a Title VII context, as we now reason in a § 1981 setting, that "the legislative intent to permit independent assertion of claims under both Title VII and other applicable state and federal statutes, means that state administrative proceedings do not act as res judicata as to Title VII claims." Smouse, supra , at 335 (citation omitted). It is true that certain differences in administrative procedures were noted, but the court concluded that "given our analysis of Title VII and its objective, we cannot agree that a state determination at any stage is an absolute bar to a Title VII action." Smouse, supra , at 336.*fn9
For the purposes of res judicata , we, too, see no reason to distinguish between an action commenced under § 1981, (Davis's) or an action commenced under Title VII (Smouse's). The reasoning found in the dissenting opinion in Mitchell and in our own court's Smouse opinion is compelling. We hold that the predominant federal policy involved in these types of actions does not permit res judicata to operate as a bar to the maintenance of a federal suit.
Having concluded that Davis's § 1981 action was not barred by the prior proceedings which culminated in the Commonwealth Court of Pennsylvania's decision in favor of USS, we turn to a consideration of the merits of her claim.
In reviewing the district court's proceedings we start from the premise that the normal "clearly erroneous" standard of review is not the standard governing this case.*fn10 As this court said in In re Holi-Penn , 535 F.2d 841, 845 (3d Cir. 1978):
In the instant case, all of the evidence before the district court was documentary. Since we are thus 'in as good a position to determine the question as is the district court,' we many review the finding... without being constricted by the clearly erroneous rule. Government of the Virgin Islands v. Gereau , 523 F.2d 140, 145-46 (3d Cir. 1975); Universal Athletic Sales Co. v. Salkeld , 511 F.2d 904, 907 (3d Cir. 1975), cert. denied , 423 U.S. 863, 96 S. Ct. 122, 47 L. Ed. 2d 94, 44 U.S.L.W. 3204 (1975).
While we recognize that other circuits have divided with respect to the appropriate standard by which to review a case which is wholly documentary,*fn11 this court is firmly committed to the principle that a documentary non-jury case is reviewed differently than a case in which the district court has had the opportunity to see the witnesses, hear live testimony, and make credibility determinations. Thus in Scott Paper Co. v. Scott's Liquid Gold, Inc ., 589 F.2d 1225, 1229 n.3 (3d Cir. 1978), we wrote "in cases decided primarily on documentary evidence... we are in an equally good position to evaluate the evidence and need not be as constrained in cases where credibility of a witness may be in issue." In Re Multidistrict Litigation involving Frost Patent , 540 F.2d 601, 603 (3d Cir. 1976); Gov't of Virgin Islands v. Gereau , 523 F.2d 140, 144-46 (3d Cir. 1975), cert. denied , 424 U.S. 917 (1976); Universal Athletic Sales v. Salkeld , 511 F.2d 904, 907 (3d Cir.), cert. denied , 423 U.S. 863 (1975); Consolidated Sun Ray, Inc. v. Lea , 401 F.2d 650, 658 n.34 (3d Cir. 1968), cert. denied , 393 U.S. 1050 (1969); Borden Co. v. Clearfield Cheese Co ., 369 F.2d 96, 101 (3d Cir. 1966). See generally 5A Moore's Federal Practice, 2d Ed., P52.04. In situations where live testimony is heard, of course, it is understandable that deference be given to the district court's evaluations and findings of fact. In those cases, such findings of fact may only be set aside when they are clearly erroneous, that is "when although there is evidence to support [the finding], the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co ., 333 U.S. 364 (1948).
The dissent, however, in arguing for a rule contrary to the established law of this Circuit, claims that the cases of this court which establish the "documentary" rule of review are substantially different from the case sub judice . Yet a reading of those cases, see Scott Paper Co. v. Scott's Liquid Gold, Inc., supra; In re Holi-Penn, Inc., supra; Universal Athletic Sales Co. v. Salkeld, supra; Borden Co. v. Clearfield Cheese Co., Inc., Supra; Surgical Supply Service, Inc. v. Adler , 321 F.2d 536 (3d Cir. 1963), does not support the dissent's attempted distinction. In each of those cases, as in the instant case, the record consisted wholly of documentary evidence, which the parties claimed supported their version of the facts in dispute. In each instance, the facts on which the trial court's disposition was based were redetermined de novo by this court.
Moreover, the dissent's claim that our standard of review is proscribed by United States v. United States Gypsum Co ., 333 U.S. 364 (1948), and Commissioner v. Duberstein , 363 U.S. 278 (1960), is as unsupportable as its purported distinction of this court's decisional law.The dissent states that in both Gypsum and Duberstein the Supreme "Court applied the clearly erroneous standard of Rule 52(a) to inferences drawn from documentary evidence and from disputed facts." Typescript at 7. Nothing could be further from the fact. In Gypsum , the Court applied the "clearly erroneous standard" because the Government, in addition to presenting documentary exhibits, also examined twenty-eight live witnesses, 333 U.S. at 372, whose testimony was conflicting, id . at 395. In Commissioner v. Duberstein , in which the identical issue was presented by two different cases heard together by the Supreme Court, there was oral witness testimony in addition to the documentary evidence. In the Duberstein case, Duberstein testified, see 363 U.S. at 280-81; in Stanton v. United States , the companion case to Duberstein , a company director testified, id . at 281-82.
Thus, both Gypsum and Duberstein reflect exactly the same doctrinal approach to Rule 52(a)'s standard of review as our precedents and this case reflect. That standard was recently summarized in Altman v. Altman , No. 80-2106 (3d Cir. June 29, 1981) slip op. at 7 n.3: where the record consists of purely documentary evidence, we are in as good a position as the district court to find the facts. However, if there is oral testimony before the district court, then even though the record may be largely documentary, the standard of review is whether the district court's finding of facts are clearly erroneous.
We confess that United States v. United Steelworkers of America , 271 F.2d 676 (3d Cir.), aff'd , 361 U.S. 39 (1959), is puzzling in this respect because while it does not discuss either Gypsum or Duberstein , as the dissent may be read to imply, the decision contradicts its own earlier legal premise. In Steelworkers , the court noted that the case was submitted on affidavits and without oral testimony. It went on to state, as all other Third Circuit cases have stated since that time, that
[t]he result of this method of proof is that the rule which calls upon us to support the findings of the district judge unless clearly erroneous is inapplicable so far as it has to do with the trial court's opportunity to observe the demeanor of the witnesses and like matters.
Id . at 685. However, it then concluded by stating without discussion that
[o]n a review of the entire record we conclude that we cannot say that the findings made by the court below are clearly erroneous.
Id . at 688.We can only surmise that the court's conclusion was a harmless inadvertency, and one which, had it been called to the attention of the opinion writer, would undoubtedly have resulted in a phrasing of its conclusion consistent with its earlier correct statement of the "documentary" standard of review. Indeed, were it otherwise, this court since that time would have been consistently in disregard of its own precedents, see, e.g., Scott Paper Co., supra , and its own procedures. See United States Court of Appeals for the Third Circuit, Internal Operating Procedures, Ch. VIII, § C (1978); O. Hommel Co. v. Ferro Corp ., Nos. 80-2062, 80-2723 (3d Cir. Sept. 2, 1981), slip op. at 28; Hamilton v. Roth , 624 F.2d 1204, 1209 (3d Cir. 1980).
We have thus consistently held for at least the past quarter century, as we do now, that the Rule 52(a) "clearly erroneous" standard does not apply to wholly documentary cases where the record discloses no oral testimony.The dissent, however, theorizes that adherence to the "documentary" standard of review will greatly increase the burden on this court by requiring "far greater expenditure of judge time than will review under the clearly erroneous standard." Typescript at 10. This court, however, has not complained of, nor suffered, any undue burden during its long history of experience with the "documentary" standard of review. Nor is it surprising that this should be so: we must always review the entire record, even in cases involving live testimony which are governed by the "clearly erroneous" standard, in order to ensure that the record contains sufficient support to affirm the district court's findings. See e.g., Krasnov v. Dinan , 465 F.2d 1298 (3d Cir. 1972); Case v. Morrisette , 475 F.2d 1300, 1308 (D.C. Cir. 1973) (under "clearly erroneous" standard, reviewing court "must look to all of the evidence of record to determine whether the findings can pass muster") (footnote omitted).
In the present case, we do not have live witnesses who have testified and who were thus open to the district court's scrutiny, examination, and assessment. The entire record in this case, by stipulation of the parties, consists of four discrete components: (1) the record developed before the PCHR; (2) the stipulations of the parties; (3) the April 24, 1979 deposition of the plaintiff, Davis; and (4) three written exhibits.*fn12 Thus, on this appeal, where the record is wholly documentary, we are in as good a position as the district court to determine the facts and we are not constrained to apply the "clearly erroneous" standard.
Davis's entire claim rises or falls on her proof that she was discharged because she was black and for no other reason. 42 U.S.C. § 1981 provides:
All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.
Although there have been somewhat varying views*fn13 as to whether or not purposeful discrimination is necessary to make out a prima facie claim under § 1981, that issue need not concern us here. Even if we were to reach that issue, i.e ., is purposeful discrimination required under § 1981, and were to hold that it is not, on this record Davis would still fall far short of establishing her claim. Here the record is clear that Davis's race played no part in her termination, and that she was discharged for race-neutral considerations. Thus her § 1981 claim must fail.
The record discloses that Davis was discharged on February 3, 1970, by Sykes, the acting district manager, at the request of Pishko, Davis's immediate supervisor. Pishko had been Davis's supervisor since 1966. Therefore, for Davis to prevail, it must be shown that either Sykes or Pishko acted on the basis of racial considerations.
In reviewing the record, however, we are struck by the complete absence of evidentiary support for such a claim. The evidence respecting the events immediately attendant upon Davis's discharge, as well as the evidence concerning Davis's employment and treatment throughout her tenure, is barren of any racial bias attributable to USS. We have carefully examined the record as it reflects the events of February 3, 1970, the date on which Davis was fired. In our opinion, the record demonstrates that Davis's behavior on that date, and not her race, was the only reason that she was terminated.
Pishko, Davis's immediate supervisor, testified that he had been embarrassed in front of other employees by Davis's behavior when she stormed out of his office and refused to return after he had requested her to do so a number of times. It was at that point that Pishko testified that he felt he had no alternative but to recommend that she be terminated. Pishko described the incident in his testimony as follows:
So, She came walking into my office in a huff and a puff. And she said, "See." And she was at the door. Then, she opens her boot and she says, "Here," she says, "Someone cut my boot. And someone is going to pay for this." Or, something of that sort.And I said to Miss Zuklich, "Would you excuse us, please. I would like to talk to Thelma about this." So, my secretary, my payroll clerk walked out of the office.
Now, as Thelma came in and sat down, I said to Thelma, I said, "Thelma, is the boot really cut or is it torn? Could it be worn that way? Because it is in the corner of the heel." I didn't have the boot in my hand. She had it in her hands. I was viewing it from across the table, also. I said, "Could it be worn, rather than torn?" She said, "No. It's cut."
So then, I, in a low tone, said "Have you any idea who is doing this to you?If you do, point him out to me. Tell me who is doing it." And she said, "No. I can't tell you. You won't do anything about it, anyway."
So, I said, "Why don't you hang your clothes up in the main office. Then, when you come in, you can take your coat off and put it in my office. If you want to put it in one of the smaller offices around here, any one of them, you can." But, she didn't want to listen to me. And started to walk -- stormed out of my office. As I walked out of the office --
Q Wait a minute, now.
By that -- what do you mean by that? Do you mean that she just got up and walked out?
A I don't even think that she was sitting down. Or, maybe she was sitting down. I can't recall. She said, "Oh, yo won't do anything about it." And she huffed right out of my office.
So, there I am, trying to do something about it and she walked out on me.
I walked out, called her out of the office.
Q Now, were you in the outer area of the office?
A Not where the others were; back in the area where she works, I said, "Thelma, would you please come to my office. And let's discuss this thing." And she didn't want to come in. So, I said, "Thelma, please come into my office. I insist that you come into my office and discuss it."
So, again she came into my office. And we discussed was it cut, or was it really worn, and did she know who was doing it. I said, "Why don't you bring your clothes up here"? Again, she was in a huff. And, again, she walked out of my office, saying nothing; just standing up -- I couldn't even hear what she was talking about or what she was saying to me.
So, again, I walked back there and I asked her --
Q Again, this is in the main office?
A Yes; in the back portion of the office.
Again, I asked her to come into my office and discuss it. And, again, she refused. So, I walked over to Mr. Sykes. [illegible] embarrassed.She had completely disregarded [illegible]; and paid no attention to me whatsoever.
Q And this was in the presence of the other employees?
A In the presence of all the other employees. I walked over to Mr. Sykes' office. I said, "Mr. Sykes, I would like to terminate her. I get no respect, as a supervisor, whatsoever. We have got to do something about it." So, he said, "All right. Let's call her in and we will terminate her."
(Appendix at 186a-189a).
Davis's own testimony confirms that Pishko called her back to his office to discuss her co-worker complaints, but that she refused to return. (Appendix at 353a). We acknowledge that the testimony given by Davis at her deposition taken on April 24, 1979, and her testimony before the Commission on Human Relations on June 4, 1971, are conflicting in many particulars -- a circumstances which undermines her credibility. For example, at the PCHR hearing, Davis testified that on the day she was fired, she had discovered that one of her boots was torn, and that she "walked into Mr. Pishko's office, with one boot on and one boot in my hand, stating to him that this is what I was talking about." (Appendix at 55a). At the deposition, however, Davis testified that:
After I was terminated for my safety's sake, I proceeded to go and get my clothing and go home. That is when I discovered the boot was torn, like the others were.
(Appendix at 354a).
Davis's credibility is further undermined by the difference in her testimony at the PCHR hearing and at her deposition regarding her need to catch a bus home on the day she was fired. At the hearing, she simply stated that after being told by Sykes of her discharge,
I got a pair of shoes and a book that I had, that I had been reading on my breaks. Then, I proceeded to go out of the office and to get a bus....
(Appendix at 56a). Her testimony in her deposition of April 24, 1979, some eight years later, stands in sharp contrast on this point. She stated for the first time that she had refused Pishko's requests to return to his office and discuss the problem with her boot because she had to catch a bus home:
Q Did Mr. [P]ishko say anything to you?
A Well, his secretary was in the room at the time, and I tried to get an audience, and they were still talking, so I had to try to catch that five till bus, and I just showed it to him.
Q Did Mr. [P]ishko say anything to you at that time?
A. I don't recall, at the moment, everything he said, but he says, "Come in and sit down." I said, "Boris, I don't know what to do." I says, "I have to try to get the bus, and it is time for me to go, and I will see if I can have anything done about it."
MR. MEDONIS: Do you recall what he said to you if anything?
THE WITNESS: He said, "Come in and sit down, and we will talk about it." I said, "We talked before."
(Appendix at 353a).
Apart from the testimony, however, of substantial significance to us is the stipulation of facts to which the parties agreed required no proof. An examination of the relevant stipulations leaves room for no other conclusion but that Davis was discharged because she refused to comply with her superior's request to return to his office and discuss her complaints. The stipulated facts read:
9. Davis complained to her immediate supervisor, Boris Pishko, of difficulties she was having with fellow employees.
10. Davis complained of damage to her personal apparel.
11. Davis complained to B. K. Taylor about racial slurs.
12. When Davis complained to B. K. Taylor, a supervisor at USS, concerning problems she was having, conditions improved as a result of his efforts.
13. Davis was transferred in January 1969 from the Flexograph area to the filing area.
14. Davis complained on February 3, 1970 to her immediate supervisor, Boris Pishko, that someone had damaged the inside lining of her boot.
15. Davis refused to comply with the request of Boris Pishko to discuss her complaint concerning her boot.
16. Davis was terminated from her employment on February 3, 1970.
(Appendix at 379a).
Because it was Pishko's recommendation that Davis be discharged, it is his motivation at the time of her discharge that is important to us.*fn14 The record establishes that Pishko did not seek Davis's termination because she was black, in fact it is abundantly clear from the record that throughout her tenure at USS, Pishko made significant efforts to accommodate Davis's concerns, particularly when they were based on race. He testified that:
From my memos, if it would have been a white person, they would have been fired along time ago.
Really, with the actions that I had to contend with for the years that it went on, I really took a lot.
And, may I say this; that I didn't want to disturb anything. I tried to help Thelma. I wanted her to be a part of us and each time I talked, there was a little while, maybe, for just a short time, it would go on. Then it would fall off once more, really.
(Appendix at 224a).
The record amply supports this contention. Thus, when Davis was hired, Pishko had explicitly requested the personnel department to provide him with a qualified minority applicant. Indeed, it was Pishko who conducted the employment interview, and who hired Davis in May of 1966. It was also Pishko who investigated complaints made by Davis during her term of employment, and who took affirmative steps to alleviate and prevent any racial tensions. Davis herself acknowledged that Pishko "did all he culd to try to straighten the other girls out." (Appendix at 78a).
When Edna Coward, a co-employee who had exhibited racial hostility towards Davis, resigned, Coward announced that she would not attend a dinner to be held in her honor if Davis were to be invited.Pishko, although acknowledging that he had no authority to prevent the dinner from being held, nevertheless demanded that no such dinner take place unless all the employees, including Davis, were invited. (Appendix at 193a-194a).
Pishko also recalled two incidents when a racial slur of Davis was brought to his attention. After the first, he called the offending employee, Harriet, to his office and reprimanded her for her behavior.*fn15 In the second instance, the person involved, "Ginny," was someone who had appeared to Pishko to be generally supportive of Davis. Pishko explained that:
I took no action because she was not specific on her statements.So, I didn't want to. Ginny was one of the girls that would drive Thelma to these functions. Ginny had a car. And if I would have brought this up to her, I don't know what would have happened. I probably would have found that I would have stirred things up worse than they were.
(Appendix at 219a). Pishko's actions were consistent with his testimony, which was not contradicted, that he felt it to be his responsibility to protect all employees, white and black, as part of his duties as a supervisor. (Appendix at 220a).
Taylor, the district manager, supported Pishko's view that Davis would have been fired earlier if she were white; it was only the fact that Davis was black that caused her supervisors to refrain from discharging her. Taylor testified:
It seemed as though Thelma had been engaging in -- oh, hostility, perhaps -- or, bordering on insubordination. Mr. Pishko was not happy with the way she was doing the work. And he was most unhappy with the attitude that she had and the attitude that seemed to be spreading throughout that area that was [a]ffected.
So, at that particular point, I said "Boris, if this is your problem -- if this is our problem -- then, we are going to have to discharge Mrs. Davis." That was because we had had several conversations about Mrs. Davis, in between the first one that I told you about. And it was then, that Boris told me -- his exact words I cannot tell you. But I can tell you the context -- Boris said two things that stand out in my mind. "Well, if I do, it is going to start trouble." Because he had been threatened with that.
And he also had a sense that it was going to start trouble because she was a Negro.
Then, two; he said, "Give me another chance. I think I can do it. I think I can get Thelma straightened out; and get everybody straightened out."
(Appendix at 125a).
Thus, based on the testimony which we credit and the stipulations of fact, we conclude, just as did the Commonwealth Court, see note 4, supra , that Davis was not discharged because of her race.
Before we conclude this discussion, however, one other issue merits our attention, particularly since it was the focus of much of the Commonwealth Court's opinion which reversed the PCHR. We refer to the question of whether, and with what justification, Davis's file contained material that was not kept in the files of the other employees. It is uncontroverted that at various times, instances of Davis's conduct were noted by Pishko on sheets in his calendar pad, which were collected and placed in Davis's file.
On the record before us, we credit Pishko's explanation that Davis's records were not kept in a different manner than other employees because of her race. Pishko made many notations on his calendar pad, including those concerning office problems and matters. He retained these pads for several years. After Davis filed her charge against USS, on his own initiative Pishko reviewed the entries made on these pads and extracted those notations which concerned Davis, placing them in her file. In similar fashion, Coward's resignation letter, a letter which criticized Davis in racial terms, was placed in Davis's file after Davis filed her complaint.Moreover, Pishko testified that he never saw the letter until that time and in his own words he was "flabbergasted" when he did. (Appendix at 202a-206a). Thus, the record establishes that these additions to Davis's file were made in response to, rather than in anticipation of, or prior to, the time that Davis filed her charge of racial discrimination against USS.
While we have not commented in this opinion on all the complaints made by Davis and on every response which USS made to those complaints, we have examined in detail every incident which could be asserted as demonstrating the presence of racial animus on the part of USS in its dealings with Davis. We have found none. We are satisfied that our review of the record as a whole discloses that USS tolerated action by Davis during the term of her employment, that it would not have tolerated had Davis been white. The record also reveals that Davis's discharge was not based on any racial ground but was based on her refusal to comply with her supervisor's repeated requests to return to his office for a discussion of her personal problems.
We recognize that the workplace in terms of personal relationships, is rarely free from expressions that ofttimes may affront the feelings of fellow employees. Although § 1981 protects against racially discriminatory acts of the employer at the workplace, it does not make the employer an absolute guarantor of a perfect work environment free from all frictions, even including those with racial overtones. Thus, sporadic disagreements, altercations, conflicts, and irritations caused by co-workers, even when they concern racial matters and cause an employee offense, cannot, without more, provide the essential predicate of a § 1981 action against an employer.
A fair reading of the instant record as a whole indicates that Davis in many cases perceived in racial terms what were no more than interpersonal incidents of the sort that arise generally in routine employee relationships at the workplace. Even granting that some of Davis's difficulties with her co-employees had racial connotations, Davis's understandable sensitivity on that score, standing alone, cannot suffice as a substitute for the proof needed to satisfy a § 1981 claim against her employer. The evidence here is abundant that during Davis's employment all steps were taken by management to discourage offending conduct and to resolve employee difficulties that had arisen when management because aware of the particular incident. The record is also clear that the critical event of which Davis complains -- Davis's discharge on february 3, 1970 -- was neither motivated nor caused by racial animus on the part of USS.
The stipulations of fact and the testimony are clear: had Ms. Davis responded to her superior's request on February 3, 1970, and returned to his office to discuss the incident which was troubling her, it is manifest from this record that she would not have been discharged. Having refused to comply with his requests, however, and having done so in the presence of other employees, she cannot now be heard to complain that her discharge resulted from other than her own acts. Thus we are compelled to reverse the district court, which concluded otherwise.
Our conclusion that Davis was not discharged because of her race reduces the significance of the "mitigation of damages" issue argued to strenuously by the parties. However, that argument can be disposed of in short order. Even if Davis had been able to demonstrate that her dismissal was the result of racial factors (which we hold that it was not), she would not be entitled to the damages determined by the district court,*fn16 because the record reveals no evidence of mitigation. The parties stipulated that the record for the determination of damages would consist of the materials previously submitted (the transcript of her PCHR hearing, Davis's deposition of April 24, 1979, and the pre-trial stipulations), and three additional exhibits.
The only evidence of record which could remotely support mitigation is a letter to Davis's lawyer from a case worker for the Allegheny County Board of Assistance. The letter reads, in relevant part:
Ms. Thelma A. Davis... has been known to or agency since she lost her employment with U.S. Steel in 1970. The case record is clear in regards to the conditions and continued eligibility for her receiving Public Assistance. This is particularly regarding our periodic decisions about her ability to seek work as a condition of eligibility to receive assistance....
The case record, however, substantiates that Ms. Davis was properly registered for employment services through the Pennsylvania State Employment Service and also was taking individual actions to maintain her job skills. These included courses in her secretarial training and applications for employment without PSES referral. As early as October, 1975, we became aware of increasing demands on Ms. Davis for the care of her aged father. Since about that time until his recent death, we have exempted Ms. Davis from work registration due to this need to care for her incapacitated relative.
This brief letter is meant to state that employment efforts and employability have been a periodic and critical point of eligibility for the assistance received by our clients....
(Appendix at 392a).
These equivocal statements about Davis's "ability to seek work", maintaining her job skills, and her registration for employment*fn17 stand in stark contrast to Davis's explicit pre-trial stipulation that "[s]ince February 3, 1970, Davis has not sought or applied for employment of any kind." (Appendix at 379a). Moreover, this stipulation is buttressed by Davis's testimony at her deposition on April 24, 1979 in which the following three exchanges took place:
Q. Mrs. Davis, after you were terminated, did you seek employment with any other employer?
A. No, because I thought I was unfairly treated by U.S. Steel, and I needed -- if I was to get a job, I would have to have a good reference.
Q. You didn't seek any other employment?
A. No, I didn't.
Q.Have you ever applied for employment?
A. No, I haven't.
(Appendix at 358a).
Q. You have indicated that you made no applications for any employment after the time that you were terminated from the United States Steel Corporation; is that right?
A. That's right.
(Appendix at 361a).
The only other record evidence that we have found on this issue was Davis's testimony at her PCHR hearing. There she testified:
Q Do you remember the date you were discharged?
A February 3, 1970.
Q Have you been able to find a job since then?
A I have looked; but no.
(Appendix at 58a).
Nevertheless, even this statement could not support the damages awarded by the district court as it can only refer to the period from Davis's termination in February, 1970 until the hearing in June, 1971. Moreover, as we have pointed out, the stipulation to which Davis agreed completely undermines any reliance on this testimony.
We have recited all the relevant material in the record bearing on the issue of mitigation, and have necessarily concluded that no evidence satisfying Davis's "affirmative duty to mitigate damages," and thus the damages award, is to be found. Thus, even were we to affirm U.S. Steel's liability to Davis, we would be obliged to reverse the district court's judgment because Davis failed to establish that she sought to mitigate damages by actively seeking employment.
The judgment of the district court, dated October 19, 1979, and February 19, 1980, will be reversed, and the case will be remanded to the district court with the direction that judgment be entered in favor of the defendant United States Steel Supply, Division of United States Steel Corporation. Each party will bear its own costs.
GIBBONS, Circuit Judge , dissenting
United States Steel Corporation (USS) appeals from a judgment awarding Thelma Davis lost wages and benefits, attorney's fees and costs. Davis' complaint alleges that the termination of her employment by USS was racially motivated, and thus violated 42 U.S.C. § 1981. In a bench trial, Judge Hubert I. Teitelbaum found as a fact that the termination of Davis' employment was racially motivated, and that by being available for employment from the date of termination to September 30, 1975, she had mitigated damages for that period, but not thereafter. USS contends that Davis' Section 1981 action is barred by res judicata , and that the district court's findings of fact on racial motivation and on mitigation of damages are clearly erroneous.*fn1
The majority, in Part I, rejects USS's res judicata contention. It nevertheless reverses the judgment, not on the ground advanced by USS -- that it is clearly erroneous -- but because the scope of review set forth in Fed. R. Civ. P. 52(a) does not apply in this case. We can, according to the majority, find the facts anew. USS never made such a contention and Davis never had an opportunity to respond to it. The majority acts sua sponte . It thrusts upon USS and other litigants in this court an interpretation of Rule 52(a) without even the benefit of a briefing on that interpretation.
I agree that Davis' action is not barred by res judicata .*fn2 I disagree, however, that our scope of review is plenary, and not subject to the clearly erroneous standard of Rule 52(a). I am mystified by the justification for such a holding in light of the statement in footnote 10 on page 14, that the district court's findings do not even satisfy the clearly erroneous standard. The throwaway line in that footnote, read in light of the accompanying discussion in Part III A, lacks the ring of conviction. It suggests the contrary to what it states: that "the ultimate factual determination of the factfinder... (1) is [not] devoid of minimum evidentiary support displaying some hue of credibility" and (2) "bears [some] rational relationship to the supporting evidentiary data."*fn3
The district court's findings include these:
Plaintiff, a black woman, was hired by defendant, United States Steel (U.S.S.) in 1966. Thereafter, friction developed between plaintiff and her fellow employees creating problems in the work area. The plaintiff claimed to have been struck by an employee while another employee claimed to have been struck by the plaintiff. Plaintiff's coworkers said she would not work together, or in a manner consistent with their methods. Plaintiff's personal property was damaged while left unattended. All of the above was reported to the office manager by plaintiff and her co-workers in detail. Though these incidents centered around Mrs. Davis, the problems were not, in the opinion of the management personnel,*fn2 caused solely by her.
In 1969, plaintiff detailed in a letter to the district manager, numerous complaints about harassment. Action was taken by U.S.S.'s managerial employees to remedy these complaints. This action, by plaintiff's own admission, did improve working conditions.
During the morning of February 3, 1970 plaintiff was requested by the office manager to use less perfume.Feeling this complaint was unfounded, Mrs. Davis complained to the acting district manager. The scope of that discussion expanded to include other complaints of Mrs. Davis. At a lunch-time meeting between the acting district manager and the office manager, it was decided to call the personnel office in Chicago to discover the range of disciplinary action that could be taken against Mrs. Davis. Having been unable to contact Chicago, it was decided no action would be taken.
Later that day, Mrs. Davis in an agitated state approached the office manager with a torn boot and informed him that this was an example of the harassment she was suffering. Mrs. Davis left the manager's office and refused to return at his request. The office manager than requested the acting district manager to terminate Mrs. Davis immediately. Though her work performance was not at issue,*fn3 Mrs. Davis eas terminated. She was told it was for "her safety's sake ."*fn4 (emphasis in original)
It is this Court's view that U.S.S. practiced racial discrimination in discharging Mrs. Davis. The plaintiff was an employee-at-will and could be discharged at anytime. The defendant alleges the discharge was for insubordination. On February 3, 1970, Mrs. Davis was agitated, having suffered the indignity of a complaint about her personal hygiene and having suffered damage to her personal property. Considering the lateness of the working day, Mrs. Davis' need to meet a bus for her ride home and the length and number of prior discussions, Mrs. Davis' actions do not amount to insubordination. Ergo , she must have been dismissed for a different reason.
Other possible reasons for Mrs. Davis' termination were inadequate work performance, that plaintiff was a troublemaker, punishment by the office manager for going "over his head " and racial discrimination. Work performance was not a factor. Testimony indicates management did not feel the problems in the office were caused solely by the plaintiff. Therefore, it would be unlikely that she was dismissed for these reasons.
The plaintiff could have been terminated on suggestion of the office manager out of a retaliatory motive on his part.But, the motivation for retaliation is bound up with racial issues, since it was just such complaints that were the substance of the 1969 letter to the district manager. For all of the above reasons, I find that the discharge was racially discriminatory.
2. PHRC at 131.
3. Stipulation of the parties #7.
4. PHRC at 203-04.
Plainly the district court performed the classic function of the factfinder: drawing inferences respecting the ultimate fact -- the motive for Davis' termination -- from conflicting evidence.
USS contends that it terminated Davis for insubordination, while Davis contends the termination was racially motivated. The district court refused to credit the insubordination explanation, relying upon evidence of the surrounding circumstances. The court inferred from evidence of prior events that the February 3, 1970 discharge was in retaliation for Davis' complaints about racial harassment by fellow employees. There is evidence: of harassment; that Davis complained to the superiors of her immediate supervisor; that her employment records were kept in a different manner from those of other employees; that on February 3, 1970 she was subjected to a racial slur and her personal property was damaged; that the supervisor's response to Davis' February 3 complaint was to terminate her although her work performance was not in issue. The inference of racial motivation drawn by the trial court "bears a rational relationship to the supporting evidentiary data" above. There is admittedly other evidence which would support a different inference. Indeed, there are conflicts in the testimony. The district court's conclusion as to the ultimate fact in issue amounts to a resolution of those conflicts in favor of the plaintiff. The majority opinion acknowledges that credibility issues are presented by the conflicting testimony. Pointing to conflicts between Davis' deposition testimony and her testimony before the Pittsburgh Commission on Human Relations, the majority refuses to believe her version of the February 3, 1970 incidents while crediting that of her supervisor, Pishko. The district court, reading the same evidence, credited Davis and discredited Pishko. If both had testified live, there would be no question but that the factfinder's credibility determination would not be "devoid of minimum evidentiary support displaying some hue of credibility." The requirements of Rule 52(a) are thus fulfilled, and, despite the throwaway line in footnote 10, a reversal is proper only if Rule 52(a) is inapplicable. In turn, therefore, to the majority's announcement in Part III A, that, in a case tried on depositions rather than on live witness testimony, appellate review of facts is plenary.
We are not dealing with a determination of the consequences of documents intended to have legal effects. Thus cases such as Borden Co. v. Clearfield Cheese Co., Inc ., 369 F.2d 96 (3d Cir. 1966), involving issues of validity or infringement, are not controlling. Moreover, a district court cannot, by couching a legal conclusion as a finding of fact, prevent appellate review of legal errors. A close analysis of many of the cases which speak of a different standard of review where documentary evidence is used actually involve that question. See, e.g., Scott Paper Co. v. Scott's Liquid Gold, Inc ., 589 F.2d 1225 (3d Cir. 1978) (whether trade-mark acquired secondary meaning outside the paper goods product line); In re Multidistrict Litigation Involving Frost Patent , 540 F.2d 601 (3d Cir. 1976) (sufficiency of documentary evidence in establishing fraud on patent office as a matter of law); In re Holi-Penn, Inc ., 535 F.2d 841 (3d Cir. 1976) (written appraisal and written management proposal insufficient to establish good faith within meaning of 11 U.S.C. § 544); Universal Athletic Sales Co. v. Salkeld , 511 F.2d 904 (3d Cir.) cert. denied 423 U.S. 863 (1975) (whether defendant's chart infringes copyrighted chart as a matter of law); Surgical Supply Service, Inc. v. Adler , 321 F.2d 536 (3d Cir. 1963) (likelihood of confusion must be shown to establish unfair competition); Sears, Roebuck and Co. v. Johnson , 219 F.2d 590 (3d Cir. 1955) (trade-name infringement established as a matter of law). In none of these cases was the court presented with a record containing conflicting evidence in the form of transcripts of depositions or testimony in a prior case. In none of them was the court presented with the task of drawing factual inferences from conflicting testimony as to motive or state of mind. In Government of Virgin Islands v. Gereau , 523 F.2d 140, 144 (3d Cir. 1975), cert. denied , 424 U.S. 917 (1976) this court pronounced dicta that it can substitute its own factual conclusions and inferences for those of the trial court. In that case, however, this court reached the same conclusion on the ultimate facts as did the trial court. The dicta about independent review was included as justification for affirming rather than remanding when the trial court had disregarded competent evidence. Gereau did not involve the substitution of credibility determinations or the substitution of inferences from conflicting testimony.Where the facts are disputed, "the court has scrutinized facts not dependent on demeanor evidence by the clearly erroneous standard." Government of Virgin Islands v. Gereau , 523 F.2d at 144. Thus none of the Third Circuit cases on which the majority relies can fairly be considered dispositive.
The majority opinion breaks new ground in this circuit. The novelty of the rule is not, however, a reason for rejecting it. But it must be consistent with the text of Rule 52(a) and defensible on policy grounds. It is neither. Moreover it is inconsistent with governing precedents both in the Supreme Court and in this court.
Rule 52(a) makes no distinction among the types of evidence subject to the clearly erroneous rule. It provides, simply and unequivocally: "findings of fact shall not be set aside unless clearly erroneous." The Advisory Committee Note to the original rule states that the clearly erroneous test "is applicable to all classes of findings in cases tried without a jury whether the finding is of a fact concerning which there was a conflict of testimony, or of a fact deduced or inferred from uncontradicted testimony." Fed. R. Civ. P. 52 (Advisory Committee Notes). The rule also contains the additional cause "and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses." This disjunctive clause means that in applying the clearly erroneous standard of review, if witness credibility is an issue and the trial court had such an opportunity, that opportunity shall be given due regard. Plainly it does not mean that if witness credibility is not an issue the appellate court can substitute its own inferences. There are often sharp disputes over the inferences to be drawn from evidence, written or oral, about which there is no credibility dispute. Equally plainly, the disjunctive clause is simply inoperative when neither the trial court nor the appellate courts had an opportunity to observe the witnesses. The operative clause in such a case is the first: "findings of fact shall not be set aside unless clearly erroneous." This should be "apparent to anyone who understands the difference between a hypothetical and a conjunctive proposition." Wright, The Doubtful Omniscience of Appellate Courts , 41 Minn. L. Rev. 751, 770 (1957). It is apparent to the Supreme Court. In United States v. U.S. Gypsum Co ., 333 U.S. 364, 394-95 (1948), and again in Commissioner v. Duberstein , 363 U.S. 278, 291 (1960), the Court applied the clearly erroneous standard of Rule 52(a) to inferences drawn from documentary evidence and from undisputed facts. No Supreme Court case has ever suggested that an appellate court can substitute its inferences for those drawn by the trial court merely because the latter did not observe witnesses face to face. The Gypsum and Duberstein cases seem dispositive on the proper interpretation of the rule. This court interpreted Rule 52(a) consistently with Gypsum and Duberstein in United States v. United Steelworkers of America , 271 F.2d 676, 685 & 688 (3d Cir.) aff'd , 361 U.S. 39 (1959).
Despite the plain language of the rule and the clear position of the Supreme Court as to its meaning, there is extant a mutant line of authority, eminating from an opinion by Judge Jerome Frank for a divided court in Orvis v. Higgins , 180 F.2d 537, 539-40 (2d Cir.), cert. denied , 340 U.S. 810 (1950), which misreads the opportunity to observe clause not as what it is -- a limitation or refinement of the clearly erroneous standard -- but as an exception to it. Judge Frank stated:
Where a trial judge sits without a jury, the rule varies with the character of the evidence -- if he decides a fact issue on written evidence alone, we are as able as he to determine credibility, and so we may disregard his finding.
Several things are missing in Judge Frank's opinion. First, we are not told the source of the authority for the Court of Appeals to rewrite Rule 52(a). Moreover, assuming that we are as able as the trial court to determine credibility, Judge Frank gives us no answer to the obvious question why we should. As Judge Chase noted in dissent,
The [trial court's] findings support the judgment and those findings, as this record unmistakably shows, are the result of a careful study of the evidence which he might reasonably believe, and believing, might reasonably use as the basis for drawing the inference he did.
180 F. Supp. at 541-42. What more is a litigant entitled to? In the cosmic sense, appellate Judge Frank's factual inferences may have been closer to ultimate truth than those of District Judge Conger, but we have no real assurance of that. As Judge Chase cogently observed, "[t]hough trial judges may at times be mistaken as to facts, appellate judges are not always omniscient." 180 F.2d at 542.
The concurrence of several judges in a factual inference possibly increases the likelihood of achieving truth in the cosmic sense. To that extent, circuit courts may have a numerical advantage. But even that statistical edge disappears in a case such as Orvis v. Higgins , or a case such as this, in which among four judges looking at the record the lineup is 2-2. Perhaps Judge Frank thought that for purposes of statistical probability a trial judge's factual inferences should receive a lesser weight than those of an appellate judge. Again, there is no basis for that view.
Assume that I would be willing, by use of selective portions of the record, to draw a different factual inferences about the motivation for Davis' termination than did Judge Teitelbaum. The score then would be 3-1 against the district judge's view. This would make us marginally more at ease with rejecting Judge Teitelbaum's inferences than the 2-2 score. Surely the truth, in the cosmic sense, cannot depend on such a realignment of percentages -- a probability game. Yet, the majority's adoption of plenary review over the clearly erroneous standard relegates us to this score-keeping game with minimal if any improvement in our ability to draw "true" factual inferences. The primary function of appellate courts is the correction of errors of law. The primary function of the trial court is to make a record and from it to determine the relevant facts.
Even in instances where an appellate court is in as good a position to decide as the trial court, it should not disregard the trial court's finding, for to do so impairs confidence in the trial courts and multiplies appeals with attendant expense and delay.
9 Wright & Miller Federal Practice and Procedure, § 2587 at 748. See also 5A Moore's Federal Practice P52.04; Note, Rule 52(a) Appellate Review of Findings of Fact Based on Documentary or Undisputed Evidence , 49 U. Va. L. Rev. 506 (1963). In addition to encouraging the filing of appeals, the majority's rule has the disadvantage of increasing the already considerable burden on this court with respect to those that are filed. Examination of a record as to which our review is plenary, if it is done conscientiously, will require far greater expenditure of judge time than will review under the clearly erroneous standard. Under the majority's rule all three panel members will be obliged to scrutinize every page of the entire record and to make inferences independently of those made by the trial court. Moreover, the majority's "we are in as good a position as the trial court" rationale cannot be confined to cases involving the absence of live testimony. It is predicated upon the absence of an opportunity to observe live witnesses when making credibility determinations. Thus it is equally applicable to cases involving live witness testimony where the witnesses are unimpeached and the only question is what factual inferences should be drawn from their testimony. The increasing number of cases in which evidence is presented in the form of videotape will not only require that in every instance the appellate court look at the video materials and make its own credibility determinations but also will encourage such expensive litigation tools. If the rule is not applied evenhandedly in these situations its supposed rationale will be exposed as a pretext for result orientation in selected instances.
The "we are in as good a position as the trial court" rationale is, of course, a possible model for an appellate court system. But it is a model which imposes enormous costs without commensurate social benefits.The judicial process is at best a less than scientific method of determining the facts. The process is at its least scientific in determining such facts as subjective motivation. All that can be expected is the opportunity to present to a neutral factfinder the parties' respective versions, under rules designed to assure a measure of fairness, and to let that factfinder draw inferences. Since certainty is impossible no matter how often the process is repeated, society's interest emphasizes finality at that point. The clearly erroneous standard accepts the strong interest in finality, while the majority's "we are in as good a position as the trial court" rule ignores it. The late Judge Charles E. Clark, who drafted Rule 52(a), recognized that society's interest in finality outweighed any competing interest in allowing even those philosopher kings with whom he sat on the Second Circuit to perform anew the task of drawing inferences. Judge Frank disagreed with his colleague, in this and other respects. In the marketplace of ideas the Clark view as to the proper interpretation has gained more widespread acceptance both among federal appellate courts and among commentators.*fn4 It should not be rejected by this court.
Under the clearly erroneous standard the trial court's findings of fact on liability, quoted above, cannot be set aside. That is equally true as to his findings of fact on damages. The liability and damage phases of the case were tried separately. A stipulation was made as to what Davis' benefits and earnings would have been from February 18, 1970 through November 1979, and the damage case was submitted on the transcripts in evidence and two letters. One of these, from the Allegheny County Board of Assistance, was offered to corroborate Davis' testimony that she was seeking employment at least up to the time her father became ill and she undertook his care. The trial court found:
On February 3, 1970, the plaintiff was discharged by the defendant. For sometime thereafter, the plaintiff applied for and received unemployment compensation. When plaintiff's eligibility for unemployment compensation expired, the plaintiff became the beneficiary of public assistance. The plaintiff has until this time remained on public assistance.
As a necessary incident to qualifying for unemployment compensation, the plaintiff was required to actively seek employment. This requirement was also a precondition to the plaintiff's eligibility for public assistance through October of 1975. The evidence indicates that the plaintiff fulfilled these preconditions.
In October of 1975, the plaintiff's father became seriously ill and required constant supervision. Since the plaintiff provided that care, the requirement that she remain registered with the Pennsylvania State Employment Service and that she actively seek work was dropped by the Allegheny County Board of Assistance as a precondition to her receipt of public assistance.
As a result, this Court finds that the plaintiff did seek work from the date of her discharge until October of 1975. Though she did not succeed in finding employment, she did attempt to find other employment. As a result, I find that the plaintiff did mitigate damages until October of 1975. After that date the evidence indicates that the plaintiff cared, quite commendably, for her ill father. However, while that conduct is admirable, it suggests that the plaintiff was not in the job market, and could not therefore be mitigating damages.
These findings are not clearly erroneous. Looking at the same record materials I would draw the same inferences, although, as indicated above, I should not have to do so. Thus, as with liability, among the four judges drawing factual inferences on damages the score is 2-2.
The judgment appealed from should be affirmed.