King v. CVS Health Corp.

198 F.Supp.3d 1277

James R. KING, Plaintiff,

v.CVS HEALTH CORPORATION, Defendant.

CASE NO.: 1:12-cv-01715-KOB

United States District Court, N.D. Alabama, Eastern Division.

Signed August 2, 2016

Leirin Michael Ragan, Alicia Kay Haynes, Charles E. Guerrier, Kenneth D. Haynes, Haynes & Haynes PC, Birmingham, AL, for Plaintiff.

Amy K. Jordan, Jennifer M. Busby, S. Greg Burge, Burr & Forman LLP, Sharonda Donje' Childs, Baker Donelson Bearman Caldwell & Berkowitz PC, Birmingham, AL, for Defendant.

Memorandum Opinion on Post-trial Motions

KARON OWEN BOWDRE, CHIEF UNITED STATES DISTRICT JUDGE

On February 19, 2015, after a two-week trial before Judge Hopkins, the jury returned a verdict in favor of Plaintiff James R. King on his claim that CVS Caremark Corporation¹ willfully and illegally terminated his employment as a pharmacist because of his age. The jury awarded $1,065,383.15 in compensatory damages, and also found that CVS willfully violated the ADEA. (Doc. 153). The finding of willful violation entitled Mr. King to liquidated damages in an equal amount to his compensatory damages, so on June 3, 2015, the court entered a final judgment in favor of Mr. King for $2,130,766.30. (Doc. 179). That amount was later remitted to $1,230,766.30. (Doc. 213).

This case was transferred to this judge on June 13, 2016, when Judge Hopkins granted CVS's request that she recuse for the reasons explained below. With the reassignment of the case came five post-trial motions, including CVS's request that "all orders or rulings made after [August 24, 2015] should be vacated." (Doc. 236 at 10).

The court held a hearing on those motions on July 29, 2016, and made the following rulings for the reasons more fully stated on the record and summarized below:

1. Defendant's request to vacate all of Judge Hopkins' orders or rulings after August 24, 2015 (Doc. 236) is DENIED IN ITS ENTIRETY .

2. Plaintiff's Re-Filed Motion for Equitable Relief: Reinstatement and Related Relief (Doc. 229) is GRANTED IN PART/DENIED IN PART . The court orders that CVS reinstate Mr. King to his former position with the same terms and conditions of his employment as soon as possible; IF new pharmacists are required to take an assessment test, Mr. King's reinstatement is subject to passage of such assessment; the Defendant shall expunge from Mr. King's employment records all references to the adverse employment actions that the jury found were pretextual, including any reference that he is "not eligible for rehire"; and Cody Berguson is NOT to supervise the pharmacy where Mr. King works. The court further orders that the award of back pay to the date of the final judgment shall continue at the daily rate of $516.10 for Mr. King's normal schedule that he worked before September 20, 2011, until the date he is reinstated, fails the assessment, or chooses not to work. But the court denies Plaintiff's requests for additional conditions and oversight.

3. Plaintiff's Re-filed Rule 59(e) Motion for Equitable Relief: Prejudgment Interest (Doc. 230) is GRANTED. The Plaintiff shall recover pre-judgment interest on the full amount of the damages awarded to him from the date of his termination on September 20, 2011 until the date of the final judgment entered this date at the IRS Prime Rate for underpayment by corporations, which is 5% until April 1, 2016, then 6% to the date of judgment, compounded quarterly.

4. Plaintiff's Re-Filed Motion for Supplemental Back Pay and Liquidated Damages from the Date of the Verdict to the Entry of Final Judgment (doc. 215) is GRANTED. The court awards Mr. King back pay in the amount of $266,307.16 and liquidated damages in the same amount for a total additional damage award of $532,614.32.

5. Plaintiff's Re-Filed Motion for Equitable Relief: Tax Consequences of Judgment (doc. 183) is DENIED.

Having ruled on all post-trial motions, except Plaintiff's Motion for Attorney Fees, which is not under submission, the court will enter a separate Third Amended Final Judgment in favor of the Plaintiff James R. King and against CVS Health Corp. in the total amount of $1,880,296.87, which includes $881,690.76 as back pay from September 20, 2011 to the date of this judgment, an equal amount for liquidated damages ($881,690.76) , plus interest at 5% until April 1, 2016, then interest at 6% compounded quarterly; and will order the immediate reinstatement of Mr. King to the same position and pay as he held when terminated, subject to the additional terms contained in this Memorandum Opinion.

DISCUSSION

I. Defendant's Motion to Vacate(Doc. 236)

In response to Judge Hopkins' Conflict Disclosure Notice (Doc. 224) entered on March 14, 2016, CVS filed Defendant's Response to Conflict Disclosure and Motion to Disqualify (Doc. 236), which also included the request that "all orders or rulings made after [August 24, 2015] be vacated." (Doc. 236 at 10, 11). Judge Hopkins gave the Plaintiff an opportunity to respond. (Doc. 237). Mr. King filed his Response to the Court's Conflict Disclosure and Opposition to Defendant's Motion to Disqualify (Doc. 241); he distinguished the cases cited by CVS and argued that this situation comes within the safety valve provided by 28 U.S.C § 455(f) and did not require Judge Hopkins' disqualification. Nevertheless, on June 13, 2016, Judge Hopkins granted CVS's motion for disqualification but did not address its request to vacate all orders entered from August 24, 2015 until April 14, 2016. (Doc. 248). When the case was transferred to this judge, the motion to vacate came along with the other pending post-trial motions.

CVS argues that "the appropriate remedy is retroactive disqualification and vacatur" and seeks "to vacate all of Judge Hopkins' orders entered after August 24, 2015." (Doc. 236 at 10, 11). Before addressing the substance of the orders CVS seeks to vacate, the court first examines whether vacating any of Judge Hopkins' entered orders during the eight months she held CVS stock is required.

The question of judicial disqualification is addressed by 28 U.S.C. § 455, which reads in part as follows:

(a) Any justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.

(b) He shall also disqualify himself in the following circumstances:

...

(4) He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding;

(emphasis added).

Subsection (d)(4) defines "financial interest" as "ownership of a legal or equitable interest, however small." Thus, under § 455(b)(4), Judge Hopkins should have disqualified herself when she purchased stock in "CVS Health Corp." if she knew of the conflict.

Indeed, prior to the addition of subsection (f) to § 455 in November of 1988, any judge who inadvertently was or became disqualified would be removed from a case, regardless of the circumstances or the effect on the litigation. See In re Cement & Concrete Antitrust Litigation , 515 F.Supp. 1076 (D.Ariz.1981). But as the Supreme Court recognized, "A conclusion that a statutory violation occurred does not, however, end our inquiry. As in other areas of the law, there is surely room for harmless error committed by busy judges who inadvertently overlook a disqualifying circumstance. There need not be a draconian remedy for every violation of § 455(a)." Liljeberg v. Health Servs. Acquisition Corp. , 486 U.S. 847, 861, 108 S.Ct. 2194, 100 L.Ed.2d 855 (1988).

Congress itself recognized the disruption caused in cases and to litigants when a "draconian remedy" is imposed, and added section (f) "specifically as a safety valve to avoid costly and inefficient disruption of cases when the financial interests at stake are de minimis. " Key Pharmaceuticals, Inc. v. Mylan Laboratories, Inc. , 24 F.Supp.2d 480, 483 (W.D.Pa.1998) (citing 1988 U.S. Code Cong. & Admin. News at 6029-30).

After the Liljeberg decision, Congress amended 28 U.S.C. § 455 to add section (f), which reads:

(f) Notwithstanding the preceding provisions of this section, if any justice, judge, magistrate judge, or bankruptcy judge to whom a matter has been assigned would be disqualified, after substantial judicial time has been devoted to the matter, because of the appearance or discovery, after the matter was assigned to him or her, that he or she individually or as a fiduciary, or his or her spouse or minor child residing in his or her household, has a financial interest in a party (other than an interest that could be substantially affected by the outcome ), disqualification is not required if the justice, judge, magistrate judge, bankruptcy judge, spouse or minor child, as the case may be, divests himself or herself of the interest that provides the grounds for the disqualification.

(emphasis added).

CVS acknowledged that "Judge Hopkins, having divested herself of the stock, has cured the need to disqualify herself under 28 U.S. C. § 455(b)(4)." (Doc. 236 at 2). However, it argued that she was required to disqualify herself under § 455(a) because her "impartiality might reasonably be questioned." Id. The facts that CVS cites for such impartiality are that the "relationship of CVS Health to CVS Caremark is obvious" and that Judge Hopkins "made significant decisions on the merits." (Doc. 236 at 9).

If such allegations were sufficient to mandate disqualification, § 455(f) would have very little opportunity to serve its purpose as a safety valve and avoid inefficient disruption of cases in which "substantial judicial time has been devoted to the matter." It could only apply in cases where the judge devoted "substantial judicial time" to babysitting a case without any significant decisions on the merits. This judge does not question Judge Hopkins' sincere decision to recuse when CVS challenged her appearance of...