There are too many rulings in this case to summarize all of them in a single Alert. So I will stick to what I consider the four major acts in a play that is likely to continue. On May 14, the 2nd Circuit ruled in the latest version (Act IV) of US & Vulcan Society v. City of New York, et.al. [2013 U.S. App. LEXIS 9671]. The most important issue in this case from our perspective is whether it is valid to charge pattern or practice for knowingly using written tests that produce adverse impact and, are arguably, not valid. For now at least, a divided panel of the 2nd Circuit says no. But we’re getting ahead of ourselves.
In Act I (US v. City of New York, 2009 [637 F. Supp. 2d 77], the DOJ sued New York City for its use of entry-level firefighter exams because they adversely impacted Black and Hispanic applicants, and were not proven to be job related and consistent with business necessity. The DOJ sought "appropriate action to correct the present effects of its discriminatory policies and practices." The Vulcans and several named individuals were then permitted to intervene. They joined the DOJ charge on adverse impact, added a pattern or practice charge for Black applicants, and added to the list of defendants the NYC Citywide Administrative Services (DCAS) and two individuals in the official and personal capacities (Mayor Michael Bloomberg & then Fire Commissioner Nicholas Scoppetta). The DOJ did not join these latter claims. District Court Judge Nicholas G. Garoufis granted summary judgment on the adverse impact claim, but permitted the City to continue to use one of the tests on an interim basis pending its validation.
The Act I ruling was on July 22, 2009. Act II followed shortly thereafter when, on September 29, 2009 (US & Vulcans v. City of New York [2010 U.S. Dist. LEXIS 111064] Judge Garoufis deemed the test to be invalid in accordance with the 2nd Circuit precedent for content validity in Guardians v. CSC (1980) [630 F.2d 79].
Act III occurred when, Judge Garoufis, on January 13, 2010 authored a ruling in which he granted summary judgment on the Vulcan’s charge of pattern or practice, but denied the charges relating to the added defendants [US & Vulcans v. City of New York, 683 F. Supp. 2d 225]. On the latter and more important issue (for our purposes), Judge Garoufis inferred from statistical evidence that the City’s examination policy denied appointments to 144 Black applicants and that 112 Black applicants were denied approximately 34 year’s worth of wages they would have received absent the policy. Judge Garoufis also credited “historical, anecdotal, and testimonial evidence showing that intentional discrimination was the city’s standard operating procedure.”
That brings us to Act IV, the 2nd Circuit’s divided ruling on May 14, 2013. The most important aspect of the Act III ruling by Judge Garoufis is that the defendants failed to successfully rebut statistical evidence presented by the Vulcans. It is on this issue, and this issue alone, on which the 2nd Circuit was divided.
The two majority judges (Newman & Winter) opined that pattern or practice lawsuits (most notably the landmark ruling in International Brotherhood of Teamsters v. United States [431 U.S. 324] follow the same rules as individual disparate treatment claims such that prima facie evidence of intentional discrimination requires the defendant to merely offer a nondiscriminatory reason for the challenged action, forcing the plaintiffs to prove that the explanation offered is a pretext for discrimination. The prima facie and defense burdens are considered lighter burdens of “production” leaving the pretext phase as the only one with a burden of “proof.” Or as stated by Judge Newman (writing for Judge Winter):
A central issue in the pending case is what showing an employer must make to satisfy its burden of production in a pattern-or-practice case. In Teamsters the Supreme Court stated that the employer's burden was "to defeat the prima facie showing of a pattern or practice by demonstrating that the Government's proof is either inaccurate or insignificant. The emphasized words raise a question as to whether the Supreme Court thought the employer's rebuttal evidence must be directed at the statistics that often constitute the prima facie case of discrimination or simply at the rebuttable presumption of discrimination that arises from those statistics.
In plain English, the question here is whether the defendant’s burden of production: (a) must directly rebut the plaintiff’s statistics or (b) simply offer an explanation independent of the statistics that is nondiscriminatory. Judge Newman ruled that the defendant is free to rebut the statistics (a much weightier task), but does not have to. Then Judge Newman proceeded to explain why the City met its burden of production. Accordingly:
The City produced evidence attempting to rebut the inference that it had acted with a discriminatory intent. It articulated a nondiscriminatory reason for using the challenged exams - the fact that they were facially neutral. The City also relied on its contention that the exams had been prepared in an attempt to comply with "acceptable test development methods."
There is more --- but that’s the main gist. It’s like saying we recognize that the tests produced adverse impact, but we didn’t go into it with that expectation.
The dissenting judge (Pooler) disagreed for several reasons, some of which are too detailed for a single Alert. The gist of Judge Pooler’s arguments are (1) pattern or practices and individuous disparate treatment scenarios are not the same; (2) the pattern or practice charge virtually demands direct statistical proof; and (3) the defendants were required to directly rebut the statistical evidence (and not simply offer a non-discriminatory explanation). Or in her own words:
Rather than responding to the statistical evidence, the City only "argu[ed] that the Intervenors ha[d] not proved that the City harbored a subjective intent to discriminate against black applicants." In essence, the City ignored the inevitable conclusion of the statistics and tried to focus on intent. But, "[a]t this stage, lack of direct proof regarding the employer's mental state is simply immaterial to the question of whether the City can rebut the presumption of unlawful discrimination created by the Intervenors' prima facie showing." Despite the City's correct assertion that what "actually motivate[s] the employer's decision" is relevant departure from the Teamsters framework is "fatal" where the motivation did not address the statistical evidence.
This does not end the case; it merely reverses Judge Garoufis’ summary judgment relating to pattern or practice. From here, one of two things may happen. Divided three-panel rulings can lead to an en banc ruling by all available 2nd Circuit judges. Absent that, the case would go to trial, and whatever ruling occurs there will undoubtedly lead to an appeal to the Supreme Court. By the way, Judge Newman noted that, in view of some of the acerbic statements (e.g., that the City’s rebuttal evidence was “either incredible or inapposite”), the City won on its appeal to have Judge Garoufis disqualified to try the next phase of the case.
I’d like to finish with a general thought on the issue of whether intentional discrimination by way of adverse impact makes sense. Whether it does or not in the present case, I can’t say. But on a more general level, of course it can make sense. For example, after the 15th Amendment guaranteed former slaves the right to vote, white landowners used facially neutral criteria to limit this right (e.g., own land, read and write, pay poll taxes). Hard to imagine lack of intent on that one. Even in Griggs v. Duke Power (1971) [401 U.S. 424], the case that started the adverse impact ball rolling, it is arguable that the defendant instituted certain requirements (e.g., high school diploma, passing scores on cognitive tests) because it knew those requirements would reduce black participation in the hiring and promotion processes. Stay tuned on this one; we don’t expect it to end here.
by Art Gutman, Ph.D., Professor, Florida Institute of Technology