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A federal judge has upheld a jury’s award of $295,000 in a race discrimination case — including $175,000 in punitive damages — but reduced the plaintiff’s attorneys’ fee requests in part because the lawyers charged too high an hourly rate. In his 43-page opinion in Skaggs v. Hartford Financial Group Inc., U.S. District Judge Berle M. Schiller found that plaintiff Jacqueline J. Skaggs had sufficient evidence that her race was a factor in the company’s decision to pass her over for a promotion and to demote her. Schiller reduced attorneys’ fees and costs from a requested $141,172 to $105,038. Schiller also found that Hartford’s lawyers waived their right to challenge Skaggs’ claim for punitive damages by pointing out too late the company’s good faith efforts to detect and deter discrimination. Under the U.S. Supreme Court’s 1999 decision in Kolstad v. American Dental Association, Hartford’s lawyers argued that the company was shielded from punitive damages as a result of the evidence of its good faith efforts. But Schiller refused even to consider the argument, saying Hartford had waived any Kolstad defense because it raised it for the first time in its post-trial motions. “Hartford did not raise Kolstad as a defense in its answer, in its pretrial memorandum, or in its proposed points for charge to the jury. The plaintiff had no opportunity or notice to present contrary evidence, and the court was never given the opportunity to instruct the jury on Kolstad, if, indeed, it was applicable,” Schiller wrote. During the trial, Schiller said, Hartford’s arguments against the punitive damages award was limited to challenging the evidence as lacking proof of malice or recklessness. “The jury was instructed on maliciousness and recklessness, and the jury was entitled to ground its punitive damage award on the character of Hartford’s discrimination. Kolstad, on the other hand, represents a separate defense with a separate set of issues,” Schiller wrote. Evidence at trial showed that Skaggs began working for Hartford in 1978 and rose to become the supervisor in Hartford’s administrative support unit in Marlton, N.J., overseeing mailing, copying and other clerical functions. She also helped oversee “raters” who analyze insurance policy applications of potential Hartford clients and set an appropriate premium. When Hartford closed its Marlton office, it retained Skaggs as a supervisor for its new King of Prussia, Pa. office. But soon after she arrived in King of Prussia, Skaggs said her new bosses restructured the office and set out to choose a new supervisor, pitting her against two white candidates for the job. In March 1998, Skaggs said she was told that she was passed over for the newly created post because she lacked knowledge of insurance rating and thus she was not qualified for the position. Instead, she said, she was offered a word processing position that would have reduced her salary from $44,500 to $37,598. At trial, Skaggs said she was never given credit for her work supervising raters or her leadership ability — as recognized in past evaluations by Hartford — and that the decisionmaker had downgraded her past performance score. The jury found that Hartford had intentionally discriminated against Skaggs on the basis of race, but rejected her claim of retaliation. Skaggs was awarded $100,000 in lost wages and benefits, $20,000 for her pain and suffering, and $175,000 in punitive damages. In Monday’s opinion, Schiller found that since Hartford’s lawyers did not challenge the sufficiency of Skaggs’ evidence before the case was submitted to the jury, they had waived the right to make such arguments in post-trial motions. But even if the arguments hadn’t been procedurally waived, Schiller said that he would have rejected them on the merits. While Hartford claims that Skaggs was not qualified for the new post, Schiller found that the jury could properly conclude that she was qualified. Schiller also found that the jury could have concluded that Hartford’s stated reasons for passing over Skaggs was a pretext for discrimination on the basis of the company’s “internal inconsistencies and contradictions.” Hartford’s lawyers also argued that they were entitled to a new trial because Schiller erred when he sustained a Batson objection by the plaintiff and seated a black juror who was struck by the defense. But Schiller affirmed his ruling, saying “because she was the only black juror on the panel likely to be seated, I found sufficient evidence of discrimination.” The defense, he said, attempted to produce a “race-neutral and facially valid reason” for the use of its peremptory challenge by stating that the juror was a clerical employee, a union member and a city employee. But the plaintiff succeeded in her Batson challenge, Schiller said, by pointing to other, non-black clerical workers and union members whom the defendants chose not to strike — a fact that Schiller said indicated that “counsel’s stated motive for its strike were not its true ones.” ATTORNEYS’ FEES CUT Skaggs’ lawyers — Olugbenga Abiona and Albert Michell — asked for $136,771 in attorneys’ fees and $4,401 in costs. But Schiller found that both lawyers had asked for too much per hour and that most of Michell’s time on the case was unnecessary. Abiona, who has been in practice 12 years, asked for $250 per hour on pretrial matters and $500 per hour for his work during the trial. Michell, who has six years’ experience, asked for $200 for pretrial work and $400 for trial work. But Hartford’s lawyers submitted an affidavit from attorney Alan B. Epstein of Spector Gadon — a leading plaintiffs’ attorney in employment discrimination cases — who said he charges between $290 and $340 per hour, and that plaintiffs’ lawyers don’t usually charge a higher rate for trial work. Schiller found that Epstein’s rates “represent the higher end of the billing scale for the Philadelphia market.” As a result, Schiller concluded that “the $500 rate for trial work quoted by Mr. Abiona is unreasonable. While Mr. Abiona has ability and experience, they do not approach the level implied by Mr. Epstein’s resume and peer commendations.” Instead, Schiller found that Abiona deserves $250 an hour, without a higher rate for trial work. Since Michell played a “smaller role” in the case that merely supported Abiona, he deserves $175 per hour, Schiller said. But Schiller found that most of Michell’s hours should be cut because he “played only a minuscule role in the trial, and much of his involvement in trial preparation was unnecessary and redundant.” Abiona delivered both the opening statement and closing argument, Schiller noted, and Michell did very little during the trial, conducting the examination of only one witness. As a result, Schiller allowed Michell to bill for just one half hour of his time during the trial. Schiller also cut many of the hours Michell had billed for pre-trial work, saying it was unnecessary for him to review the same documents that Abiona reviewed. But Schiller rejected a defense argument that he slash the plaintiff’s bill due to her “limited success” since she dropped an age discrimination claim and lost her retaliation claim. “Where the successful and unsuccessful claims share a common core of facts and related legal theories, or where counsel’s time is dedicated to litigation as a whole, the lodestar value should not be modified downward,” Schiller wrote. “Although plaintiff withdrew her age discrimination claims and lost on her retaliation claims, those claims shared a common nucleus of fact with the race discrimination claims on which she prevailed.” In the end, Schiller awarded the plaintiff’s team $105,038 in attorneys’ fees and costs. Hartford was represented by attorneys Larry Besnoff, Daniel F. Schranghamer and Joseph J. Centeno of Obermayer Rebmann.

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