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Title Bhaya v. Westinghouse Electric Corporation

Date 1990

By Alito

Subject Misc

Contents

Page 1

235 of 238 DOCUMENTS

LAL R. BHAYA, and RICHARD CARNER, and WILLIAM J. HAESSLER, and HENRY A. PARZICK, and EARLE WILLIAMS, Appellants v. WESTINGHOUSE ELECTRIC CORPORATION, Appellee

No. 89-2063

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

922 F.2d 184; 1990 U.S. App. LEXIS 22315; 54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462; 31 Fed. R. Evid. Serv. (Callaghan) 1379

October 11, 1990, Argued

December 28, 1990, Filed

PRIOR HISTORY: **1 On Appeal from the United States District Court for the Eastern District of Pennsylvania; D.C. Civil No. 84-5381.

DISPOSITION:

Affirmed.

CASE SUMMARY:

PROCEDURAL POSTURE: Appellant employees sought review of a decision of the United States District Court for the Eastern District of Pennsylvania, which, on remand, granted a new trial on liability and damages and subsequently dismissed appellant's Age Discrimination in Employment Act, 29 U.S.C.S. § 621 et seq., claim against appellee employer.

OVERVIEW: Appellant employees brought an action against appellee employer alleging a violation of the Age Discrimination in Employment Act, 29 U.S.C.S. § 621 et seq. After a jury verdict in favor of appellant, the district court entered a judgment not withstanding the verdict in favor of appellee. On appeal, the court vacated the judg- ment and remanded. The district court granted a new trial on liability and damages on remand and found in favor of appellee. Appellant sought review. The court sustained the trial judge's decision to grant a new trial because the judge's conclusion that the erroneous admission of hearsay testimony should have been excluded under Fed. R. Evid. 403 was neither arbitrary nor irrational and the erroneous admission of this testimony necessitated a new trial because it was possible that appellee's substantial rights had been affected. The court found that the grant- ing of a new trial on damages was inconsequential, since the district court properly granted a new trial on liability. The court found that appellant did not assert any sound

basis for reversing the judgment in favor of appellee and affirmed the judgement of the district court.

OUTCOME: The court affirmed the district court's de- cision to grant a new trial on the issue of appellee em- ployer's liability and potential damages in appellant em- ployees' action for violation of the Age Discrimination in Employment Act because the prior erroneous admission of hearsay testimony which could have affected appellee's substantial rights warranted a new trial. The court affirmed the judgement of the second trial in favor of appellee.

LexisNexis(R) Headnotes

Civil Procedure > Appeals > Standards of Review

HN1 When the granting or denial of a new trial is con- tested on appeal, substantial deference must generally be given to the decision of the trial judge, who saw and heard the witnesses and has the feel of the case which no ap- pellate printed transcript can impart. Where a new trial was granted based in part on erroneous evidentiary rul- ings, the Supreme Court stated that the authority to grant a new trial is confided almost entirely to the exercise of discretion on the part of the trial court.

Civil Procedure > Appeals > Standards of Review

HN2 A trial judge's decision to admit or exclude evi- dence under Fed. R. Evid. 403 may not be reversed unless it is arbitrary and irrational.

Evidence > Relevance > Confusion, Prejudice & Waste of Time

HN3 Relevant evidence may be excluded under Fed. R. Evid. 403 if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jurors.

Evidence > Relevance > Confusion, Prejudice & Waste of Time

922 F.2d 184, *; 1990 U.S. App. LEXIS 22315, **1;

54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462

Page 2

HN4 "Unfair prejudice" as used in Fed. R. Evid. 403 has been defined as an undue tendency to suggest decision on an improper basis.

Evidence > Relevance > Confusion, Prejudice & Waste of Time

HN5 Evidence that a party committed wrongs other than those at issue in a case often creates a danger of unfair prejudice because such evidence may influence a jury to return a verdict based on a desire to punish for the other wrongs.

Civil Procedure > Appeals > Standards of Review > Abuse of Discretion

Evidence > Procedural Considerations > Inferences & Presumptions

HN6 Rebuttal evidence must generally tend to refute the defendant's proof, and a trial judge's decision regarding the scope of rebuttal may not be reversed unless there has been a clear abuse of discretion.

Civil Procedure > Appeals > Standards of Review

Civil Procedure > Jury Trials > Jury Instructions

HN7 A trial judge's instructions to a jury must be consid- ered as a whole, to determine whether they are misleading or inadequate.

Civil Procedure > Appeals > Standards of Review > Abuse of Discretion

HN8 Unless a trial judge misstates the law, the judge's rulings on points for charge may be reversed only if the judge committed an abuse of discretion.

COUNSEL:

Alan P. Epstein, Esq., Argued, Jablon, Epstein

& Wolff, Philadelphia, Pennsylvania, Attorneys for

Appellants.

Dona S. Kahn, Esq., Argued, Anderson, Kill, Olick

& Oshinsky, P.C., Philadelphia, Pennsylvania, Attorneys for Appellee.

JUDGES:

Mansmann, Cowen and Alito, Circuit Judges. Mansmann, Circuit Judge, dissenting.

OPINIONBY:

ALITO

OPINION:

*185 OPINION OF THE COURT ALITO, Circuit Judge

This is an appeal from a final judgment follow-

ing a jury verdict in favor of Westinghouse Electric Corporation ("Westinghouse") in a suit by five former Westinghouse engineers under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. The plaintiffs contend that the district court erred in granting Westinghouse's motion for a new trial, in excluding cer- tain evidence at the second trial, and in refusing to give a supplemental jury instruction at the second trial. We will affirm.

The background of this case is set out in some detail in this court's prior opinion, Bhaya v. Westinghouse Electric Corp., 832 F.2d 258 (3d Cir. 1987), which reversed the district court's entry of judgment notwithstanding the ver- dict following the first **2 trial, and in the opinion of the district court granting a new trial on remand. Bhaya v. Westinghouse Electric Corp., 709 F. Supp. 600 (E.D. Pa. 1989). n1 Accordingly, a brief summary will suffice for present purposes.

n1 See also Bhaya v. Westinghouse Corp., 624

F. Supp. 921 (E.D. Pa. 1985) (addressing damages and attorney's fees following the first trial).

The five plaintiffs held the position of "negotia- tion engineer" before Westinghouse eliminated that en- tire job progression in 1982. The plaintiffs claimed that Westinghouse eliminated their job progression, rather than making layoffs based on seniority from a pool con- sisting of the negotiation engineers and engineers in two other closely related job progressions (the "availability assurance engineers" and the "applications engineers"), because the negotiation *186 engineers were older. After the first trial in 1985, the jury returned a verdict for the plaintiffs. Westinghouse then moved for a judg- ment notwithstanding the verdict, because of the asserted insufficiency **3 of the evidence. In the alternative, Westinghouse sought a new trial because of alleged trial errors. The district court granted judgment notwithstand- ing the verdict and thus did not address the claimed trial errors that formed the basis for the new trial motion.

On appeal, this court reversed, holding that the ev- idence, when viewed in the light most favorable to the plaintiffs, was sufficient to support a judgment in their favor. 832 F.2d at 262. We therefore vacated the judg- ment notwithstanding the verdict but noted that the dis- trict court on remand could consider Westinghouse's as yet undecided motion for a new trial. Id. at 263.

On remand, the district court granted a new trial both on liability and damages. At the second trial, the jury found that Westinghouse was not liable, and the plaintiffs

922 F.2d 184, *186; 1990 U.S. App. LEXIS 22315, **3;

54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462

Page 3

have appealed. II.

A. We will first address the district court's decision to grant a new trial on liability. The district court's de- cision was based on the admission, over objection, of testimony by one of the plaintiffs, Henry Parzick, con- cerning out-of--court statements supposedly made at a Westinghouse management meeting. On direct examina- tion, Parzick stated that his immediate supervisor, **4 Thomas Kinlin, had related a discussion about the termi- nation of the negotiation engineers that had occurred at the meeting in Kinlin's presence. n2 Asked what Kinlin had told him, Parzick testified as follows:

Somebody in that meeting brought up the point that they might be violating . . . the labor laws of their contract.

When plaintiffs' counsel asked Parzick to state "exactly what Mr. Kinlin said, to the best of his recollection," Parzick testified:

A statement was made that maybe we shouldn't be eliminating this group. Maybe we're doing something illegal or against the contract, and Mr. Nick Kulokoski, who was the personnel manager of the division, said, let's give it a try. What do we have to lose?

Thus, Parzick related out-of--court statements made by three individuals: Kinlin, who allegedly recounted the discussion at the management meeting; an unidentified attendee at the meeting, who allegedly brought up the point that "they might be violating . . . the labor laws of their contract" and said that "maybe they were doing something illegal or against the contract"; and Kulokoski, the division personnel manager, who allegedly responded,

"Let's give it a try. What **5 do we have to lose?"

n2 Kinlin testified that he did not attend any management meeting at which the termination of the negotiation engineers was discussed, and he stated that he had no recollection of the conversa- tion with Parzick.

In granting a new trial on liability, the district court fo- cused on the statements of the unidentified attendee. The court concluded that the statements were not hearsay be- cause they were offered, not for the truth of the matter as- serted, but to show the meaning of Kulokowski's response

("Let's give it a try. What do we have to lose?"), which

would have otherwise been meaningless. 709 F. Supp. at

602-03. While holding that admission of these out-of-- court statements was not barred on hearsay grounds, the district court concluded that the unidentified declarant's statements were probably irrelevant (and thus inadmissi- ble under Fed. R. Evid. 402) and that, even if relevant, they should have been excluded under Fed. R. Evid. 403.

709 F. Supp. at 603-04. The court explained that while the unidentified **6 attendee reportedly said that the layoffs might be "illegal," he never stated that they might violate the ADEA. The court observed that the uniden- tified attendee's comments might just as well have con- cerned the possible violation of the collective bargaining agreement or labor laws but that these possible viola- tions were immaterial in an age discrimination case. Id. Thus the *187 court concluded that the unidentified declarant's statements should have been excluded or, in the alternative, accompanied by a cautionary instruction. Id. Applying the new trial standard set out in McQueeny v. Wilmington Trust Co., 779 F.2d 916, 928 (3d Cir. 1985), the district court held that the erroneous admission of this testimony necessitated a new trial because it was

"quite possible" that Westinghouse's "substantial rights"

had been affected. 709 F. Supp. at 604.

B. HN1 When the granting or denial of a new trial is contested on appeal, substantial deference must gen- erally be given to the decision of the trial judge, "who saw and heard the witnesses and has the feel of the case which no appellate printed transcript can impart" ( Cone v. West Virginia Pulp & Paper Co., 330 U.S. 212, 216,

91 L. Ed. 849, 67 S. Ct. 752 (1947)). **7 In Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 66 L. Ed. 2d 193, 101 S. Ct. 188 (1980), where a new trial was granted based in part on erroneous evidentiary rulings, the Supreme Court stated that "the authority to grant a new trial . . . is confided almost entirely to the exercise of discretion on the part of the trial court." See also Waldorf v. Shuta, 896 F.2d 723, 737 (3d Cir. 1990); Honeywell v. American Standards Testing Bureau, 851 F.2d 652, 655

(3d Cir. 1988), cert. denied, 488 U.S. 1010, 109 S. Ct.

795, 102 L. Ed. 2d 787 (1989); Link v. Mercedes-Benz of North America, Inc., 788 F.2d 918, 921-22 (3d Cir. 1986); Silverii v. Kramer, 314 F.2d 407, 413 (3d Cir. 1963) ("It is well settled that the granting or refusing of a new trial is a matter resting in the sound discretion of the trial judge and his action thereon is not reviewable upon appeal, save in the most exceptional cases").

Particular deference is appropriate in the present case because the decision to grant a new trial rested on an evi- dentiary ruling that was itself entrusted to the trial court's discretion. Indeed, HN2 a trial judge's decision to admit or exclude evidence under Fed. R. Evid. 403 may not be reversed unless it is "arbitrary and irrational." **8 n3

922 F.2d 184, *187; 1990 U.S. App. LEXIS 22315, **8;

54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462

Page 4

United States v. De Peri, 778 F.2d 963, 973-74 (3d Cir.

1985), cert. denied, 475 U.S. 1110, 89 L. Ed. 2d 916, 106

S. Ct. 1518 and cert. denied, 476 U.S. 1159, 106 S. Ct.

2277, 90 L. Ed. 2d 720 (1986); United States v. Friedland,

660 F.2d 919, 929 (3d Cir. 1981), cert. denied, 456 U.S.

989, 73 L. Ed. 2d 1283, 102 S. Ct. 2268 (1982); United States v. Long, 574 F.2d 761, 767 (3d Cir.) ("If judicial self-restraint is ever desirable, it is when a Rule 403 anal- ysis of a trial court is reviewed by an appellate tribunal"), cert. denied, 439 U.S. 985, 99 S. Ct. 577, 58 L. Ed. 2d 657

(1978).

n3 The district court did not rule that the out- of-court statement was irrelevant but only that it

"probably was irrelevant" (709 F. Supp. at 603). We note, however, that the trial court's ruling on relevancy would have been reviewable only for an abuse of discretion. Pfeiffer v. Marion Center Area School District, 917 F.2d 779, Slip. op. at 5 (3d Cir.

1990).

Applying these deferential standards of review, we sustain the trial judge's decision to grant a new trial in this case. The trial court's conclusion that the testimony at is- sue should have been **9 excluded under Fed. R. Evid.

403 was unquestionably neither arbitrary nor irrational but reflected an appropriate assessment and weighing of the prescribed considerations. HN3 Relevant evidence may be excluded under Rule 403 "if its probative value is substantially outweighed by the danger of unfair prej- udice, confusion of the issues, or misleading the jurors." Here, the trial judge had solid grounds for concluding that the out-of--court statements at issue had little if any relevance or probative value and that they created a sub- stantial danger of "unfair prejudice," "confusion of the issues," and "misleading the jurors."

The out-of--court statements had little if any relevance or probative value because they lacked any apprecia- ble link to age discrimination or the ADEA. According to Parzick's testimony, the unidentified attendee specif- ically mentioned that terminating the negotiation engi- neers might violate "the labor laws of their contract" or

"the contract." The most natural interpretation of this tes- timony is that it referred *188 to a possible breach of the collective bargaining agreement. But in an age discrimi- nation case, evidence that management was willing to risk a violation of its **10 collective bargaining agreement would be relevant only if that fact made it "more probable .

. . than it would be without the evidence" that management was also willing to risk a violation of the ADEA. Fed. R. Evid. 401. In our judgment, any connection between a willingness to risk a breach of the collective bargaining agreement and a willingness to risk a violation of age

discrimination laws is remote at best. n4

n4 The dissent contends (dissenting typescript

5) that evidence of Westinghouse's willingness to risk a break of its collective bargaining agree- ment was relevant to rebut Westinghouse's defense that the collective bargaining agreement prohib- ited the company from spreading the reduction-in-- force across the three engineering job progressions. Plaintiffs, however, never advanced this theory of relevancy. A trial judge's assessment of relevancy cannot be reversed on appeal based upon an en- tirely new theory not apparent on the face of the evidence. See Campbell v. Nordco Products, 629

F.2d 1258, 1264 (7th Cir. 1980); J. Weinstein & M. Berger, Weinstein's Evidence 401 08 at 401-

57 to 401-58 (1990) ("Except in a case where the evidence sought to be introduced is relevant on its face, the court may without error sustain an ob- jection to its introduction if the attorney fails to explain its significance.") (footnotes omitted); 1 J. Wigmore, Evidence § 17 at 782 (Tillers rev. 1983).

**11

Even if the phrase "labor laws of the contract" is inter- preted to embrace the entire body of employment law -- an arguable although less plausible interpretation -- the statement in question would still lack appreciable proba- tive value, as does the unidentified attendee's additional statement that the termination might be "illegal" in some unspecified way. Because these broad and vague state- ments might have referred to countless forms of illegal conduct, the statements in themselves carry little proba- tive weight in proving that management considered the age of the negotiation engineers in deciding to eliminate their jobs. Of course, the probative value of these state- ments would have been greatly enhanced if they had been uttered during a discussion relating in some way to the ages of the engineers affected by management's decision. But plaintiffs offered no such proof. Without some link to age, these broad and vague references had little probative weight in proving an ADEA case.

By contrast, the out-of court statements created a great danger of HN4 "unfair prejudice" (Fed. R. Evid. 403), which has been defined as an "undue tendency to sug- gest decision on an improper basis." Advisory Committee

**12 Note on Rule 403. HN5 Evidence that a party committed wrongs other than those at issue in a case of- ten creates a danger of "unfair prejudice" because such evidence may influence a jury to return a verdict based on a desire to punish for the other wrongs. n5 See 10

Moore's Federal Practice § 403.10 1 at IV-75 & n.9

(1990); E. Cleary (ed.), McCormick on Evidence § 185

922 F.2d 184, *188; 1990 U.S. App. LEXIS 22315, **12;

54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462

Page 5

at 545 (1984); C. Wright & A. Miller, Federal Practice and Procedure § 5215 at 281. Here, the testimony in- dicating that Westinghouse management was willing to engage in conduct that might violate the "labor laws of the contract" or might be "illegal" in some unspecified way created just such a danger. As the trial judge aptly put it, "the jury probably was left with the impression that Westinghouse's managers were a lawless bunch."

709 F. Supp. at 600. The jury might well have been in- fluenced to return a verdict against Westinghouse simply because the jury disapproved of management's generally lawless attitude as portrayed by Parzick's testimony. Thus the testimony at issue here presented a textbook example of unfair prejudice.

n5 Although evidence that Westinghouse man- agement was willing to risk a violation of the col- lective bargaining agreement or "labor laws" does not appear to fall directly within Fed. R. Evid.

404(b), this evidence is closely akin to evidence falling within this rule. Evidence falling within Rule 404(b) must be carefully analyzed under Rule

403. See Fed. R. Evid. 404(b) advisory committee's note.

**13

For similar reasons, this testimony also created a great danger of "confusion of the issues." While the jury should have considered only whether Westinghouse had commit- ted age discrimination, the testimony in question invited the jurors to ponder *189 whether Westinghouse had violated "the labor laws of the contract" or whether it had committed other unspecified illegalities. By tending to divert the focus of the jury's attention in this way, the testimony injected a confusing factor into the case.

Finally, the testimony at issue created a substantial danger of "misleading the jury." The statement that ter- mination of the negotiation engineers might violate the

"labor laws of the contract" or might be "illegal" did not necessarily relate in any way to age discrimination; in- deed, as previously observed, it seems more likely that these references pertained exclusively to the possibility of breaching the collective bargaining agreement. Yet the admission of these vague and suggestive statements in an age discrimination case had a natural tendency to mislead. This danger is well illustrated by the following passage from the closing argument of plaintiff's counsel. Plaintiffs' counsel told the **14 jury (709 F. Supp. at 603 n.2)

(emphasis added):

Henry Parzick said unequivocally that he was told that Westinghouse knew that what they

did was wrong, that Kulokoski said . . . might not this be discrimination, might not this be a violation of state and federal statutes? And Kulokoski, according to Hank Parzick, said .

. . yes, let's take our chances.

In fact, the out-of--court statements recounted by Parzick contained no mention of "discrimination" or the "viola- tion of state and federal statutes." But admission of those statements in an age discrimination case tended to mis- lead by suggesting-- without foundation-- precisely what plaintiffs' counsel inaccurately claimed in his summation. In sum, the district court had ample grounds for conclud- ing that the out-of--court statements in question should have been excluded under Rule 403.

Having identified this incorrect evidentiary ruling, the trial judge was required under McQueeny v. Wilmington Trust Co., 779 F.2d at 928, to grant a new trial unless it was

"highly probable" that the error did not affect any "sub- stantial rights". No such conclusion was possible in the present case. Indeed, plaintiffs implicitly concede **15 the importance of the out-of--court statements by arguing in this appeal that the exclusion of the same testimony at the second trial caused them "substantial prejudice"

(Appellants' Br. 37) and thus constituted reversible er- ror. See Fed. R. Civ. P. 61 (judgment may not be set aside based on exclusion of evidence unless necessary to ensure

"substantial justice"). Accordingly, it is apparent that the granting of a new trial on liability was justified.

III.

Plaintiffs' remaining arguments clearly lack merit. The district court correctly held that a new trial should be granted on the issue of damages; n6 and in any event, the granting of a new trial on damages was inconsequential, since the district court properly granted a new trial on lia- bility, the jury at the second trial found for Westinghouse on that issue, and plaintiffs have not asserted any sound basis for reversing the judgment entered following that verdict.

n6 As previously noted, plaintiffs claimed that Westinghouse, instead of terminating all the ne- gotiation engineers, should have spread out nec- essary layoffs among the members of a larger pool that included the availability assurance and applica- tions engineers. In part for the purpose of showing that any damages should be limited, Westinghouse sought to introduce evidence that some availability assurance engineers had been laid off shortly after plaintiffs, but the district court sustained plaintiffs' objections. In ruling on Westinghouse's new trial motion, however, the district court recognized that

922 F.2d 184, *189; 1990 U.S. App. LEXIS 22315, **15;

54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462

Page 6

this evidence was relevant on the issue of damages because it tended to show that plaintiffs might have been properly laid off a short time later even if plaintiffs' suggestion about spreading out the lay- offs had been followed (709 F. Supp. at 605).

On appeal, plaintiffs assert that some younger engineers were never laid off. The thrust of plain- tiffs' argument appears to be that evidence of the layoffs of some availability assurance engineers was not relevant because that evidence did not con- clusively show that plaintiffs would have been laid off at that time. This argument is fallacious, how- ever, because evidence need not be conclusive in order to be relevant. See Fed. R. Evid. 401.

**16

Plaintiffs contest the exclusion at the second trial of the out-of--court statements *190 just discussed in re- lation to the first trial. However, the trial judge's decision to exclude those statements at the second trial n7 must be upheld for the same reasons already explained. n8

n7 Contrary to plaintiffs' contention on appeal, it is apparent that the court at the second trial ad- hered to its earlier ruling that the out-of--court state- ments should be excluded under Rule 403. Counsel for Westinghouse argued this point at length, and the court sustained her objection.

During argument, the district court appeared to question whether Kinlin's out-of--court statement was inadmissible on another ground, i.e., lack of sufficient proof of the preliminary facts (see Fed. R. Evid. 104) necessary for introduction of that state- ment as an admission under Fed. R. Evid. 801(d)(2)

(D). Because we conclude that the district court's exclusion of this evidence under Rule 403 was proper, we need not address this alternative ground for exclusion.

n8 At the second trial, plaintiffs attempted to tie the out-of court statements to the subject of age. Parzick testified that after he was notified of his termination, he and Kinlin talked about "the differ- ences in ages." Specifically Parzick testified:

I told Mr. Kinlin, I said: "How can they do that to us old-timers? How can they really get rid of us old-timers?" And he said: "Hank, I really don't know . .

This additional testimony does not fundamen- tally alter the balance under Rule 403 or demon- strate that the district court's ruling was arbitrary or irrational. This new testimony indicates that Parzick raised the topic of age by referring to the negoti- ation engineers as "old timers." Arguably it indi- cates that Kinlin discussed the topic of age in his alleged conversation with Parzick. But this new tes- timony provides no evidence that age was discussed at the management meeting. Without such a link, the statements at that meeting still have little if any probative value.

**17

We also reject plaintiffs' contention that the district court erred by refusing to admit as part of their rebuttal case an excerpt from the testimony given at the first trial by one of Westinghouse's witnesses, Charles A. Turnbull.

1983); Martin v. Weaver, 666 F.2d 1013 (6th Cir. 1981);

cert. denied, 456 U.S. 962, 72 L. Ed. 2d 485, 102 S. Ct.

2038 (1982); Hickok v. G.D. Searle & Co., 496 F.2d 444

(10th Cir. 1974); 3 J. Weinstein & M. Berger, Weinstein's Evidence 611 1 at 611-30 8 n.45 (1990); 6 J. Wigmore, Evidence § 1873 (Chadboum Rev. 1976). The trial court properly exercised that discretion in the present case be- cause the excerpt from Turnbull's prior testimony merely stated in slightly different language what another defense witness said at the second trial.

As this court explained in its prior opinion, the plain- tiffs contended that Westinghouse, **18 instead of terminating all of the negotiations engineers, could have spread out seniority-based layoffs among the availability assurance and applications engineers as well. 832 F.2d at

261. To support this theory, the plaintiffs presented testi- mony that they were qualified to perform the work of the engineers in the other job progressions and that "the tasks could have been transferred without a change in plaintiffs' job description." Id.

As part of its effort to refute this theory at the first trial, Westinghouse called Turnbull, who "testified that the job tasks could not have been transferred without engaging in collective bargaining unless assumption of those tasks would have required no revision of the plain- tiffs' job description." 832 F.2d at 261. At the second trial, Westinghouse called Robert McBurney, who held the po- sition of Corporate Human Resource Director and who gave essentially the same testimony as Turnbull had at the

922 F.2d 184, *190; 1990 U.S. App. LEXIS 22315, **18;

54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462

Page 7

first trial regarding the transfer of job tasks from the avail- ability assurance engineers and the applications engineers to the negotiations engineers. Although McBurney's di- rect and cross-examination on this point were extensive, the similarity of **19 his testimony to Turnbull's is il- lustrated by the following question and answer on direct examination:

Q. Can you transfer some duties that don't change the job description without bargain- ing?

A. If the duties are already covered in the job description and they are exactly *191 the same kind of functions already performed.

Since McBurney's testimony was substantially the same as Turnbull's, the district court properly exercised its dis- cretion in excluding the transcript of Turnbull's testimony. n9

n9 Before excluding the Turnbull transcript ex- cerpt on the ground that it was essentially the same as McBurney's testimony, the district court stated that plaintiffs had not given notice of their intention to offer Turnbull's prior testimony, as required by Rule 21 of the Rules of the United States District Court for the Eastern District of Pennsylvania. Because we hold that Turnbull's prior testimony was properly excluded on another ground, we need not address the effect of Local Rule 21.

Finally, we hold that the district **20 court did not err in refusing to give a third supplemental jury in- struction on circumstantial evidence. When the trial judge initially instructed the jury, he included a full and accurate instruction on circumstantial evidence. After deliberating for some time, the jury reported that it could not agree and requested a clarification of the difference between types of evidence. In response, the judge again provided an accurate explanation of direct and circumstantial evi- dence. Plaintiffs' counsel did not object to this instruction but asked the court to make clear that the plaintiffs could sustain their burden of proof by circumstantial evidence, and the court did so. Following this clarification, one of the jurors asked whether age discrimination could be proven simply by showing that an employer had laid off older, qualified workers while retaining younger work- ers or whether there must be "an intention on the part of the company to discriminate." The court responded there must be proof that age was a determining factor in the employer's decision.

Plaintiffs' counsel objected that the court's answer

"made it sound as if the employer had to make an affirma- tive statement and/or take **21 affirmative action as demonstrated by 'direct evidence.'" The trial judge ruled, however, that he had already explained that an employer's intention could be inferred from circumstantial proof.

HN7 A trial judge's instructions to a jury must be

"considered as a whole, to determine whether they are misleading or inadequate." Savarese v. Agriss, 883 F.2d

1194, 1202 (3d Cir. 1989). HN8 Unless a trial judge misstates the law, the judge's rulings on points for charge may be reversed only if the judge committed an abuse of discretion. Id. In this case, the district court's instruc- tions on direct and circumstantial evidence and on age discrimination were correct, and the court soundly ex- ercised its discretion in refusing to give additional sup- plemental instructions covering the same matters that had already been explained fully and accurately. Having given correct and complete initial instructions, detailed supple- mental instructions, an additional clarification requested by plaintiffs' counsel, and an accurate response to a ju- ror's question, the district court was not required to do any more.

The judgment of the district court will therefore be affirmed.

DISSENTBY:

MANSMANN

DISSENT:

MANSMANN, Circuit Judge, **22 dissenting.

I respectfully dissent because I believe that the dis- trict court committed legal error in two respects: (1) in overturning the first jury's verdict in favor of the plain- tiffs and in granting a new trial on the erroneous basis that the testimony of Henry Parzick was irrelevant and prejudicial and in excluding Parzick's testimony at the second trial; and (2) in the second trial, by responding to the jury's questions by language that was incomplete, confusing and misleading with respect to the plaintiffs' burden of proof in circumstantial cases of employment discrimination. I would reinstate the first jury's liability verdict for the plaintiffs and remand for a new trial on damages.

We have repeatedly emphasized that direct evidence in the form of a "smoking gun" is not required to prove dis- crimination. See Lockhart v. Westinghouse Credit *192 Corp., 879 F.2d 43, 48 (3d Cir. 1989) ("there is usually no

'smoking gun' evidence of intentional discrimination");

Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 895 (3d

922 F.2d 184, *192; 1990 U.S. App. LEXIS 22315, **22;

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Cir.)(in banc), cert. dismissed, 483 U.S. 1052, 97 L. Ed.

2d 815, 108 S. Ct. 26 (1987) ("because the plaintiff may meet in alternate ways his burden to show that age was a determinative **23 factor in his discharge, the plaintiff is entitled to show that the employer's explanation was pretextual by proffering evidence which is circumstantial or indirect as well as that which shows directly discrimi- natory animus"); Maxfield v. Sinclair Int'l, 766 F.2d 788,

791 (3d Cir. 1985), cert. denied, 474 U.S. 1057, 88 L. Ed.

2d 773, 106 S. Ct. 796 (1986) (employer statements to the employee that s/he is being fired because of age will often be difficult to obtain); Dillon v. Coles, 746 F.2d 998, 1003

(3d Cir. 1984) (in employment discrimination cases direct evidence of the employer's motivation is unavailable or difficult to acquire).

The allocation of burdens of proof and persuasion provided in McDonnell Douglas Corp. v. Green, 411 U.S.

792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973), and Texas

Dep't of Community Affairs v. Burdine, 450 U.S. 248, 67

L. Ed. 2d 207, 101 S. Ct. 1089 (1981), make clear that not only is "smoking gun" evidence not required, but a spe- cially tailored burden-shifting mechanism is available to a plaintiff who cannot produce direct evidence. See Gavalik v. Continental Can Co., 812 F.2d 834, 853 (3d Cir.), cert. denied, 484 U.S. 979, 98 L. Ed. 2d 492, 108 S. Ct. 495

(1987) (proof of discrimination under ERISA employs

Burdine burden-shifting mechanism where direct **24

"smoking gun" evidence is unavailable).

I would hold the excluded testimony of Henry Parzick to be both highly relevant and admissible as an admission of a party opponent. The record as a whole provides the context in which the statement is relevant and lays a proper foundation for a party opponent admission under Federal Rule of Evidence 801 (d)(2)(D). A more complete review of the evidence produced at the first trial n1 makes this clear.

n1 Because I would hold that the district court erred in granting a new trial on this issue, I would not have the court reach the question of whether the district court properly excluded this testimony at the second trial. Obviously, I would hold it error for the district court to have subsequently excluded this testimony at the second trial.

II.

Although the panel majority accurately summarizes the parties' contentions, additional facts are necessary to explain the relevance of the excluded testimony. While admitting that declining sales had necessitated the re- duction-in--force, Westinghouse **25 contended that it was precluded from transferring the plaintiffs to different

job progressions by the collective bargaining agreement. Throughout the trial, Westinghouse asserted that it sought conscientiously to conform to the terms of the collective bargaining agreement in terminating the plaintiffs.

At the same time, Westinghouse manager James Borden testified that in deciding to eliminate the nego- tiation engineers' job progression, Westinghouse man- agers Borden and McIntyre had not considered plaintiffs' ages, pensions or salaries, however, Borden admitted he had recognized "years of service" as an "emotional is- sue". Borden testified that Westinghouse staff met weekly over a period of several months to consider reduction-in-- force options. According to Borden, executive meetings were also held where Nick Kulokoski, manager of per- sonnel relations, provided guidance on labor laws, the collective bargaining agreement, and compliance with discrimination laws. Despite these numerous meetings, Westinghouse failed to document its assertions that its de- cision to eliminate negotiation engineers was based solely on economic necessity and that factors such as age, pen- sion, or salary had not been assessed. **26

Plaintiff Henry Parzick testified that on November 3,

1982, he and other negotiation engineers were called to a meeting with James Borden and their supervisor Thomas Kinlin at which they were informed of their termination. Parzick testified, "one point of interest after the meet- ing, I did speak to *193 Mr. Kinlin. We just chatted, and he informed me that at an executive management meeting he attended . . . a discussion was held regard- ing our termination." Parzick then related, over objec- tion, the statements of the unnamed manager and Nick Kulokoski. Parzick also testified that only "management level or above" personnel attended executive meetings. Contrary to the majority's characterization of Kinlin's tes- timony, in answer to plaintiffs' counsel, Kinlin testified equivocally concerning this conversation, stating that he could have had a "confrontation with Kinlin, . . . but that he could not remember it", however, Kinlin believed

"Hank" (Henry Parzick) and did not believe he was lying when he testified. Given the verdict for the plaintiffs, it is highly probable that the jury believed Parzick rather than Kinlin.

III.

Keeping in mind that "smoking guns" are rarely avail- able to the plaintiffs **27 in employment discrimina- tion cases, the evidence proffered at the first trial was clearly sufficient to establish the relevance of Parzick's testimony. Borden established that staff and management held weekly meetings to discuss layoffs. While he asserted that the plaintiffs' ages were not considered, he conceded recognition of the emotional impact of the plaintiffs' long years of service when deciding to terminate the plaintiffs.

922 F.2d 184, *193; 1990 U.S. App. LEXIS 22315, **27;

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Borden also established that Nick Kulokoski, who al- legedly stated "Let's give it a try. What do we have to lose?", advised management regarding compliance with the collective bargaining agreement and discrimination laws. Further, a compartmentalized differentiation be- tween Westinghouse's alleged disregard of the collective bargaining agreement and age discrimination laws ignores the fact that age and seniority often are related and that pensions accrue according to both age and the collective bargaining agreement.

It was certainly for the jury to assess the credibility of Westinghouse's assertion that it never considered the financial implications of terminating groups of employ- ees, specifically, relative savings in salary and pensions, which are tightly **28 linked with age and seniority. Finally, even if one agrees with the majority that Parzick's testimony was not relevant to the plaintiffs' affirmative claim of age discrimination, it was undeniably relevant to challenge Westinghouse's defense that it could not have spread the reduction-in--force across the three engineer- ing job progressions because the terms of the collective bargaining agreement precluded it from doing so. Because the plaintiffs could have met their burden by proving that Westinghouse's alleged business reasons were pretextual, Parzick's testimony was improperly excluded as irrele- vant.

With respect to the district court's ruling that Parzick's testimony was unfairly prejudicial under Federal Rule of Evidence 403, I do not disagree with the panel major- ity's use of the abuse of discretion standard of review, but rather with the application of this standard to these facts. To be excluded under Rule 403, evidence must be unfairly prejudicial; mere prejudice cannot suffice because "virtu- ally all evidence is prejudicial or it isn't material." Carter v. Hewitt, 617 F.2d 961, 972 n.14 (3d Cir. 1980). Quoting Weinstein, we have stated that evidence is unfairly preju- dicial **29 if it

"appeals to the jury's sympathies, arouses its sense of horror, provokes its instinct to pun- ish," or otherwise "may cause a jury to base its decision on something other than the es- tablished propositions in the case."

Carter, 617 F.2d at 972.

The declarant's statement mentioned "violating . . . the labor laws of their contract" or "doing something ille- gal or against the contract." Even if the illegality referred to age discrimination and not the collective bargaining agreement, the district court found the statement sub- stantially prejudicial because the jury may have viewed

Westinghouse managers as a "lawless bunch."

But Westinghouse itself proffered the defense that it never considered plaintiffs' ages and at all times con- formed to the terms and restrictions of the collective bar- gaining agreement. So it was certainly *194 material to Westinghouse's defense that it at all times tried to con- form to the collective bargaining agreement. Given that Westinghouse repeatedly emphasized such efforts to con- form to the collective bargaining agreement, the plaintiffs' one bit of evidence that Westinghouse may not have so scrupulously concerned itself with the collective bargain- ing agreement cannot be said **30 to violate the Carter standard.

Logically relevant and not unfairly prejudicial, Parzick's testimony was admissible as a party opponent admission under Federal Rule of Evidence 801 (d)(2)(D). A statement qualifies as such an admission when

it is offered against a party and is . . . a state- ment by the party's agent or servant concern- ing a matter within the scope of the agency or employment, made during the existence of the relationship.

This rule requires that the declarant be both authorized and acting within the scope of employment, when making an admission on behalf of the defendant. See Carden v. Westinghouse Electric Corp., 850 F.2d 996, 1002 n.6 (3d Cir. 1988). Both statements, "maybe we're doing some- thing illegal or against the contract" and "let's give it a try .

. . what do we have to lose?", were made by high level ex- ecutives authorized to speak on behalf of Westinghouse. Both statements were made during a meeting limited to Westinghouse executives which concerned reduction-in-- force options. See Cline v. Roadway Exp., Inc., 689 F.2d

481, 488 (4th Cir. 1982) (admitting evidence by employ- ees of statements made by "managers, some specifically identified," at managers **31 meetings indicating some evidence of age discrimination). Cf. Carden, 850 F.2d at

1002 (supervisor's statement that "they wanted a younger person" failed to identify "they" as foundation for ad- mission); Cedeck v. Hamiltonian Federal Sav. and Loan Ass'n, 551 F.2d 1136, 1138 (8th Cir. 1977) (no admission because declarant unknown).

Moreover, one can infer from their presence at a meet- ing concerning the impending reduction-in--force that both the unnamed manager and Nick Kulokoski acted within the scope of their employment. For example, Nick Kulokoski, the personnel manager responsible for coun- sel on legal issues, acted within the scope of his employ- ment when he evidenced Westinghouse's attitude: "Let's give it a try. What do we have to lose?" Westinghouse

922 F.2d 184, *194; 1990 U.S. App. LEXIS 22315, **31;

54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462

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also cannot "compartmentalize this executive as if he had nothing more to do with company policy than the janitor or watchman". Lockhart, 879 F.2d at 54 (rejecting lim- ited view that a manager not associated with plaintiff's division could not make admission for company).

Where the employer is a corporate entity, we have rec- ognized that a manager's comments may not be avoided if later disadvantageous to its litigation posture. **32 Id. ("when a major company executive speaks, "every- body listens" in the corporate hierarchy . . ."). Contra Staheli v. University of Mississippi, 854 F.2d 121, 127

(5th Cir. 1988) (professor uninvolved in tenure decision could not make admission for school concerning denial of tenure); Hill v. Spiegel, Inc., 708 F.2d 233, 237 (6th Cir. 1983) (admission made by managers uninvolved in decision to discharge plaintiff made outside the scope of their agency). These facts suffice to lay the foundation that these managers acted within the scope of their em- ployment.

Both the unnamed declarant's and Nick Kulokoski's statements constituted party-opponent admissions. n2

The admissibility of a Rule 801(d)(2)(D) admission does not depend on the plaintiff's ability to name a corporate officer making a damaging admission on behalf of the corporation; rather, identification which establishes the requisite foundation suffices. See Dudding v. Thorpe, 47

F.R.D. 565, 571 (W.D. Pa. 1969). The name of the un- named declarant, given the fact that he commented upon the legality of the termination decision, is unnecessary because the characteristics attributable *195 to the declarant based on the context **33 of the statement satisfy the requirements for a party opponent admission. Id. (authorized statement of an unnamed nurse who ob- served the alleged tort in the recovery room admissible against the hospital).

n2 Kinlin's declaration to Parzick also satisfies Rule 801(d)(2)(D)'s foundation requirements be- cause Kinlin's statement to Parzick coincided with the meeting at which Parzick was terminated.

Corporations do not proclaim boldly their intent to dis- criminate and rarely embrace discriminatory statements made by their managers. Yet these people are the ones who act for the corporation and because corporate entities can speak only through employees, managers' articulations may be the only ones evidencing corporate discriminatory intent. If corporate parties are not immune from making Rule 801(d)(2)(D) admissions, then managers' statements made in the scope of their employment must be given the effect of an admission.

IV.

To reverse for a confusing or misleading jury instruc- tion, we "must **34 be left with a substantial and ineradicable doubt as to whether the jury was properly guided in its deliberations". United States v. Traitz, 871

F.2d 368, 383 (3d Cir.), cert. denied, 493 U.S. 821, 107

L. Ed. 2d 44, 110 S. Ct. 78 (1989). I am left with such a doubt given the circumstances of the supplemental in- struction received by the jury within ten minutes of its defense verdict.

The initial charge instructed the jury on the burden of proof as well as direct and circumstantial evidence. After retiring to deliberate at 12:40 p.m., the jury returned with questions at 4:20 p.m. n3 The court correctly reinstructed on the difference between direct and circumstantial evi- dence, whereupon the jury was dismissed briefly. After the jury reentered at 4:33 p.m., the court gave the follow- ing charge:

In answer to the first question: No. If it was pure happenstance, if there was no design at all, no reason why these men's names should come out and they were older, if it was pure happenstance as I say and not by any design, no, Westinghouse would not be liable.

But if you analyze it, from the very def- inition that I gave you, it means that that must have been a part of the intention of Westinghouse, because I said **35 to you that age must be a "determining factor." That means, of necessity, that the employer must have determined that, because you can't have a "determination" in a vacuum. It has to be somebody's determination to make it a "de- termining factor."

So, therefore, it must be one of the things that influenced Westinghouse. In fact, the thing, one of the things that determined Westinghouse to do the, to act in the way it did.

In answer to the second question: No. Because the plaintiff has the burden of proof as I mentioned to you, and if the plain- tiff hasn't proven why they did this, then the plaintiff has not sustained the burden of proof.

Plaintiffs' counsel then asked the court to reiterate that the plaintiffs could meet their burden of proof with circum- stantial evidence. The court complied. n4

n3 As read into the record by the district court, these questions were:

922 F.2d 184, *195; 1990 U.S. App. LEXIS 22315, **35;

54 Fair Empl. Prac. Cas. (BNA) 1078; 55 Empl. Prac. Dec. (CCH) P40,462

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**36

1. "We are split on our verdict. However, there may be a change of opinion if Westinghouse is still guilty if they sic. discriminated by chance rather than by design".

2. "If a juror says that he does not know why Westinghouse made the decision to layoff employees the way they sic. did, should he vote to convict sic. ?"

3. "What is evidence? Please define the word evidence."

n4 The district court charged: "Circumstantial

of age." The court: "The employer must consider age to be a determining factor in reaching it's sic. decision." Plaintiffs' counsel obtained an exception, articulating his concern that the jury "ha s left here with a feeling that they need to find direct evidence of the employer's in- tention, . . . and I would ask . . . that that question . . . be answered . . . to include that they can find "intention" and they can find "intentional action" both through direct and circumstantial evidence."

In my view, this last question evidences at least one ju- ror's continuing confusion over the relationship between types of evidence and the burden of proof. Because the jury returned a defense verdict within ten minutes of re- tiring after this last question, I am left with a "substantial and ineradicable doubt" as to whether the instructions al- layed the jury's evident confusion concerning the type of

evidence is just as good as direct evidence, provided it leads you to, to a conclusion 'by a preponderance of the evidence.' In other words, it leads you to bal- ance the scales; balances the scales or unbalances them. . . . You can't speculate; no, of course."

At this point, another juror asked an additional ques- tion "having to do with the actual definition of age dis- crimination": "If . . . Westinghouse laid off older workers and retained younger ones, and if they were all fully qual- ified, etc. , is that . . . in and of itself age discrimination?" In response, the court stated: "If the age . . . was "a de- termining factor" in making that decision, that would be age discrimination." The juror responded: "but . . . if it was not *196 known, it was decided by the individual making this consideration that it was not known why the decision or how the decision was made, why the decision was made to do "this versus this," the mere fact of laying off the older workers and retaining the younger workers, is that age discrimination? You are saying that that is not, **37 by itself. There has to be an intention on the part of the company . . . to discriminate on the basis

evidence required to meet the plaintiffs' burden of proof. Although the district court repeatedly defined circumstan- tial evidence, I believe that at least one juror was confused as to whether direct evidence **38 was needed to show Westinghouse's discriminatory intent and therefore that the jury may have rendered a defense verdict even though it concluded that Westinghouse's explanation was pretex- tual.

Based on the foregoing I would summarize my de- parture from the majority as follows. At the first trial, al- though I agree with the panel majority that Westinghouse should have had the opportunity to show mitigation of damages, I would reinstate the verdict reached as to liability because I believe the statements made by Westinghouse managers were admissions relevant to age discrimination.

With respect to the second trial, I would reverse be- cause the district court precluded the highly relevant ad- missible testimony of Henry Parzick and because I am convinced that the charge confused and misled the jury such that the jury believed that the plaintiffs had to prove discriminatory intent by direct evidence.

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