JOBETH KISSINGER, Plaintiff,
v.
THE MENNONITE HOME, d/b/a MENNONITE HOME COMMUNITIES, et al., Defendants.
Civil Action No. 20-3000
United States District Court, E.D. Pennsylvania
February 28, 2022
MEMORANDUM
Schiller, J.
Presently before the Court is Plaintiff JoBeth Kissinger's Motion to Amend the Judgment for an Award to Offset Negative Tax Consequences (Pl.'s Mot. to Amend J.) and Motion for Attorney Fees, Costs, and Prejudgment Interest (Pl.'s Fee Pet.). For the reasons that follow, Kissinger's Motion to Amend the Judgment is granted and Kissinger's Fee Petition is granted in part and denied in part. Specifically, Kissinger will be awarded an additional sum in the amount of $80, 421.00 to offset the negative tax consequences of her front pay and back pay awards. Kissinger will also be awarded $250, 972.00 in attorneys' fees, $19, 596.32 in costs, and $6, 295.07 in prejudgment interest, a total of $276, 863.39 in fees, costs, and interest.
I. BACKGROUND
Kissinger's motions arise out of an employment dispute between Kissinger and Defendants Mennonite Home Communities (“Mennonite Home”), Kimberly Blessing, and Dan Mortensen. On June 22, 2020, Kissinger asserted ten causes of action against Defendants: a Family and Medical Leave Act (“FMLA”) interference claim against Mennonite Home; five FMLA retaliation claims against Mennonite Home, Blessing, and Mortensen; an Americans with Disabilities Act (“ADA”) discrimination claim against Mennonite Home; an ADA retaliation claim against
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Mennonite Home; a Pennsylvania Human Relations Act (“PHRA”) discrimination claim against Mennonite Home; and a PHRA retaliation claim against Mennonite Home.
On November 17, 2021, this Court decided in Kissinger's favor on her FMLA interference, ADA discrimination, and PHRA discrimination claims against Mennonite Home, including by finding that Mennonite Home willfully interfered with Kissinger's rights under the FMLA. The Court entered judgment in the amount of $812, 036.00 for Kissinger against Mennonite Home as follows: $296, 514.00 in back pay, $296, 514.00 in liquidated damages, and $219, 008.00 in front pay.[1]
II. DISCUSSION
A. Offsetting Negative Tax Consequences
On December 15, 2021, Kissinger moved the Court to amend its judgment pursuant to Fed.R.Civ.P. 59(e) to incorporate an additional sum to offset the negative tax consequences of her lump sum front pay and back pay awards. She requests an additional $80, 421.00 based on calculations performed by economic expert Andrew Verzilli. (Pl.'s Mot. to Amend J. Ex B.)
A district court may, in its discretion, “award a prevailing employee an additional sum of money to compensate for the increased tax burden” a lump sum award may generate. Eshelman v. Agere Sys., Inc., 554 F.3d 426, 441-42 (3d Cir. 2009). “Without this type of equitable relief in appropriate cases, it would not be possible to restore the employee to the economic status quo that would exist but for the employer's conduct.” Id. at 442 (citing In re Continental Airlines, 125 F.3d 120, 135 (3d Cir. 1997)). The burden is on the employee to “show the extent of the injury they
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have suffered, ” and the district court “should grant relief in light of the circumstances peculiar to the case.” Id. at 443.
The Court will award this additional sum in order to make Kissinger whole given the equities of this case. Notably, before being terminated by Mennonite Home, Kissinger owned a home and had accumulated a robust 401(k) account for retirement; after her termination, she was forced to drain her 401(k) account and she ultimately foreclosed on her home. Kissinger v. Mennonite Home, Civ. A. No. 20-3000, 2021 WL 5356801, at *8 (E.D. Pa. Nov. 17, 2021). Her termination launched a sequence of dominoes that ravaged her financial circumstances, and she should not be perversely penalized for tax purposes because this Court found in her favor.
Moreover, although the Third Circuit has not explicitly ruled on this issue, the Court finds it appropriate to incorporate Kissinger's front pay award in calculating this additional sum, as other courts in this Circuit have done. See Andujar v. Gen. Nutrition Corp., Civ. A. No. 14-7696, 2018 WL 3999569, at *10 (D.N.J. Aug. 20, 2018) (“It makes logical sense that if the purpose of a[n] . . . award is to compensate plaintiff for moving into a higher tax bracket, the amount of plaintiff's future pay award should be considered. After all, the award will be taken into account in computing plaintiff's tax bracket.”); O'Neill v. Sears, Roebuck & Co., 108 F.Supp.2d 443, 447 (E.D. Pa. 2000) (“Compliance with this goal requires reimbursement for the reduced amount of front pay money that the plaintiff has to invest as a result of higher taxes, as well as reimbursement for the higher taxes he must pay on his back wages caused by getting this money in a lump sum.”). Mennonite Home also misreads Perez. Despite a typo, it is clear that the court there-citing to Eshelman-awarded an additional sum to compensate for negative tax consequences in connection with a front pay award. Perez v. Lloyd Indus., Inc., Civ. A. No. 16-1079, 2019 WL 3765657, at *9
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(E.D. Pa. Aug. 9, 2019) (in section wholly devoted to discussing plaintiff's “front pay damages, ” awarding sum “inclusive of . . . tax gross up”).
Mennonite Home maintains that Verzilli's calculations are “speculative and unreliable, ” but disappointingly has failed to provide the Court with any counter calculations. For example, it asserts that Verzilli should not have “utiliz[ed] a single tax year to estimate the tax impact, ” but does not tell the Court why 2022 should not have been used, or which year should have been used instead. (Defendants' Opposition to Plaintiff's Motion to Alter or Amend Judgment [Defs.' Opp. to Pl.'s Mot. to Amend J.] at 5.) Mennonite Home avers that Verzilli should not have used the standard deduction in his calculations because “Kissinger had historically itemized her deductions, ” but-despite noting in the prior sentence that Kissinger's tax returns are “readily available” as exhibits-it does not cite to the record in support of this proposition. (Id.) And, indeed, Kissinger has used the standard deduction in recent years. (See Pl.'s Trial Ex. 14.) It urges the Court to “consider the presumed benefits obtained during the years after [Kissinger's] termination, ” but does not say how this should happen or expand upon this thought at all, copying and pasting this suggested “consideration” directly from a case in which the plaintiff's requested sum was declined after he apparently self-calculated his requested award. (Defs.' Opp. to Pl.'s Mot. to Amend J. at 6 (citing Moffitt v. Tunkhannock Area Sch. Dist., Civ. A. No. 13-1519, 2017 WL 319154, at *21 (M.D. Pa. Jan. 20, 2017).)
In cherry picking excerpts from the case law without meaningfully scrutinizing these surface-level statements or applying them to the case at hand, Mennonite Home has thus done away with its opportunity to concretely inform this Court what should be done in connection with the tax consequences of Kissinger's front pay and back pay awards (beyond, of course, urging the Court to not to grant any additional award, without at all contemplating the equities underpinning
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such potential award). Meanwhile, on the opposite side of the table sits Verzilli, who has served as an expert witness in numerous Third Circuit cases regarding offsetting negative tax consequences, including Eshelman. He remains exceedingly credible. In fact, the court in Moffitt- one of the cases Mennonite Home cites in support of its opposition of an award-specifically praised the detailed nature of Verzilli's Eshelman calculations. See Moffitt, 2017 WL 319154, at *22. And Verzilli's affidavit stated that he “[f]ollowed the guidelines set forth in . . . Eshelman” here. (Pl.'s Mot. to Amend J. Ex. B.)
At the end of the day, it is within the Court's “broad equitable powers” and “wide discretion” to fashion remedies to make victims of discrimination whole. Eshelman, 554 F.3d at 441-42. Kissinger's $515, 522.00 lump front pay and back pay awards will considerably elevate her tax bracket. Lest Mennonite Home forgets, Kissinger's new higher tax rate is directly related to its conduct: had Kissinger received her Mennonite Home pay in 2022-which would have been, as stipulated by the parties, a salary of $84, 422.00-she would have belonged to a lower tax bracket, but, instead, she faced discrimination on the part of Mennonite Home and was terminated. Awarding her the difference allows her to be made whole given all that she lost in the wake of her termination. Accordingly, the Court will award Kissinger an additional $80, 421.00 based on Verzilli's calculations.
B. Prejudgment Attorneys' Fees
The FMLA entitles a prevailing party to “a reasonable attorney's fee, reasonable expert witness fees, and other costs of the action to be paid by the defendant.” 29 U.S.C. § 2617(a)(3). The ADA also provides for an award of “reasonable attorney fees, including litigation expenses, and costs” to the prevailing party. 42 U.S.C. § 12205. The PHRA contains a similar provision. 43 P.S. 962(c.2). The parties do not dispute that Kissinger is the “prevailing party.”
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A court traditionally begins its calculation of reasonable fees by determining the “lodestar, ” “which requires multiplying the number of hours reasonably expended by a reasonable hourly rate.” Maldonado v. Houstoun, 256 F.3d 181, 184 (3d Cir. 2001). The party seeking fees bears the burden of proving that her request is reasonable by submitting evidence supporting the hours worked and the rates claimed by her attorneys...
