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The 3rd U.S. Circuit Court of Appeals has upheld most of a jury’s $6 million verdict in an age discrimination suit brought by the former president and CEO of Spring House, Pa.-based Advanta Mortgage Co. but ordered the trial judge to cut more than $1.1 million awarded under a state wage law. In a 15-page unpublished decision in Riseman v. Advanta Corp., the unanimous three-judge panel rejected most of the defense arguments but agreed that the jury was simply too generous when it awarded more than $2.5 million under the Pennsylvania Wage Payment and Collection Law. The court found that since the WPCL claim was premised entirely on plaintiff Milton Riseman’s allegation that he was cheated out of several hefty bonuses, the award should be limited to the maximum damages that could be inferred from Riseman’s own testimony. As a result, the panel — 3rd Circuit Judges Samuel A. Alito, Thomas L. Ambro and Leonard I. Garth — reduced the award from $2,562,001 to $1,435,000. Garth authored the opinion. On remand, the panel ordered U.S. District Judge Anita B. Brody of the Eastern District of Pennsylvania to recalculate the statutory penalties added to the WPCL award commensurate with the reduction. Overall, however, the court’s ruling was a major victory for the plaintiff and his lawyers — John M. Elliott, Mark J. Schwemler and Adam B. Krafczek Jr. of Blue Bell, Pa.-based Elliott Reihner Siedzikowski & Egan — because it rejected Advanta’s bids to throw out the entire verdict or order a new trial. It also sets the stage for an award of attorney fees to the plaintiffs’ team that could top $1 million. In the suit, Riseman claimed he was forced out of his job at age 62 because the company wanted a younger image. Ironically, the nine-member jury found that Advanta Corp. did not discriminate against Riseman on the basis of his age — either by passing him over for the post of president of the parent corporation and hiring a 35-year-old man instead, or by hiring a man in his early 40s to replace Riseman as president of Advanta Mortgage. But the jury found that the company did violate the Age Discrimination in Employment Act when it retaliated against Riseman and fired him immediately after he complained of age discrimination. Riseman, now 66, of Radnor, Pa., is a former top executive at Citibank in New York who started working for Advanta in 1992 at the age of 55. At the time that he claimed he was forced out, he was earning $385,000 plus bonuses that sometimes doubled or even tripled his pay. The suit alleged that when the post of president for the parent company opened up, Riseman was passed over in favor of Olaf Olafsson, a 35-year-old “wunderkind” who had no experience in the financial industry. Elliott told the jury that Olafsson quickly set out to oust Riseman and replace him with a man 20 years his junior. At first, Elliott said, Olafsson assured Riseman that the company just was looking for an executive vice president who would report to Riseman. But when Carl Forsythe was hired, he immediately took over as president of Advanta Mortgage, and Riseman was stripped of his title and ordered to vacate his office, Elliott said. Elliott stressed that Advanta had strong words of praise for Riseman over the years, crediting him with a “dramatic turnaround” at Advanta Mortgage that “literally saved the company.” As for proof of age bias, Elliott argued that when Forsythe was recruited, Olafsson referred to Riseman as “Uncle Milty” and “Grumpy.” But Advanta’s lawyers, Robert M. Goldich, Melissa E. Lea and Michael S. Fitzsimmons of Philadelphia-based Wolf, Block, Schorr and Solis-Cohen, argued that Advanta had a strong record of hiring older executives and that there was no real proof of any age bias. The nickname “Uncle Milty” was nothing more than a term of endearment used by workers who liked Riseman, they said. Advanta executives who took the stand during the three-week trial insisted that in his final months, Riseman refused to be a “team player” after the company sold its lucrative credit-card business. Chairman Dennis Alter claimed that in corporate meetings, Riseman would make faces and shake his head whenever Alter spoke. He also said Riseman refused to implement plans made by top executives and even took efforts to thwart plans they made. As a result, Alter said, the company decided not to give Riseman a vice president to assist him, but instead chose to replace him as president. Even then, Alter said, Advanta didn’t fire Riseman, but instead offered him the post of chairman of Advanta Mortgage. At first, he said, Riseman accepted, but turned the post down a few days later. But the jury apparently believed Riseman, who said that he had never resigned and that Advanta had fired him just one day after his lawyer sent the company a letter saying Riseman believed he was the victim of age discrimination. In its verdict, the jury found that Advanta had retaliated against Riseman for complaining of discrimination and awarded more than $1.3 million in backpay on that claim. And since the jury also found that the ADEA violation was “willful,” the backpay award was automatically doubled by Brody. Now the 3rd Circuit has upheld the entire ADEA award. On remand, when Brody recalculates the WPCL award, it will swell from about $1.4 million to nearly $1.8 million with a statutory 25 percent multiplier. And since Brody has also awarded Riseman prejudgment interest, the final judgment for Riseman is likely to be about $5 million before attorney fees.

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