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Finding that a jury’s verdict in a race discrimination suit was “fatally inconsistent” because it cleared all of the individual defendants but nonetheless found the employer liable, the 3rd U.S. Circuit Court of Appeals has overturned a verdict of more than $300,000 in a reverse discrimination suit against the Philadelphia Housing Authority. “A finding of intentional discrimination requires a finding that at least one person acting as the PHA’s agent had a discriminatory animus towards [the plaintiffs],” U.S. Circuit Judge Maryanne Trump Barry wrote in an unpublished decision in Paladino v. PHA. “If the jury concluded, as it did, that none of the three individual defendants had a wrongful intent, and no other PHA agent could plausibly be at fault, then the PHA cannot be liable,” Barry wrote in an opinion joined by U.S. Circuit Judges Jane R. Roth and Julio M. Fuentes. The ruling is a complete victory for PHA’s defense team — attorneys Patrick J. Harvey, John P. McLaughlin and William K. Kennedy of Ballard Spahr Andrews & Ingersoll. In their appellate brief, the Ballard Spahr lawyers argued that such an inconsistent verdict should always result in at least a new trial. But since the plaintiffs never appealed the verdicts in favor of the individuals, the defense team argued that the appellate court should simply overturn the verdict and order judgment in favor of PHA. Plaintiffs’ attorneys argued on appeal that the verdict should be upheld because the jury could have found that a fourth PHA employee, who was not named as an individual defendant, had engaged in discrimination. The 3rd Circuit disagreed, saying that since “the bulk” of the evidence presented at trial pointed to two PHA employees, the jury did not have enough evidence to find that the unnamed employee had discriminated. Testimony in the trial showed that the two plaintiffs, Gerald Paladino and James Wright, were both working as PHA housing rehabilitation specialists in February 1997 when the agency announced three openings for supervisor positions. At the end of the interviewing process, Paladino was ranked first among the candidates, and Wright was ranked second. Both men said they were told they had received the promotions in letters from then-PHA Executive Director John White Jr. Soon after, PHA rescinded the promotions, saying that a charge of race discrimination by a black worker meant that the agency would go through the selection process a second time. In a jointly filed brief, the plaintiffs’ lawyers — Nancy D. Wasser, Leigh A. Jerner and Jack L. Gruenstein — described what they claim happened next. “Believing that the promotions process would be fair, plaintiffs continued their quest to become supervisors. What they did not know was that the process was rigged, that they would be the victims of discrimination and that they would never get the promotions,” they wrote. The brief said the white men “later learned the first complaint of race discrimination was phony, PHA’s investigation was a sham, the panelists who were judging the applicants had been warned to avoid a discrimination suit by a minority and to change the original results.” The final decision, they said, was made “not on merit, but on racial preference.” Much of the testimony at trial focused on the black man who ultimately got one of the promotions and whose charge of discrimination had led to the second round of interviews. The plaintiffs set out to prove that George Fields was “handpicked” and that he had “bragged he was promised the job.” They also attempted to show that PHA officials fabricated a story about Fields being denied a fair shot at the job in the first round since he was out of work during the period the job was posted. In fact, the plaintiffs said, Fields had missed just one day of work during that time and had simply failed to apply for the job. One of the key disputes at the trial centered on “missing” documents that the plaintiffs insisted they could have used to prove their claims, including the scores from the first round of interviews in which they said they were ranked first and second. U.S. District Judge Eduardo C. Robreno agreed to instruct the jury that it was free to draw an “adverse inference” and assume that the documents would have supported the plaintiffs’ claims had they been produced. On appeal, the plaintiffs’ lawyers argued that PHA’s withholding of documents was enough to support a verdict against the PHA. Barry disagreed, saying, “Even if the jury drew the inference that the PHA willfully withheld incriminating documents … it would have had to infer that a particular agent of PHA was responsible for the discrimination.”

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