Appeal from the United States District Court for the Northern District of Indiana, Hammon Division. No. 71 H 215 -- Allen Sharp, Judge.
Before Sprecher and Wood, Circuit Judges, and Campbell, Senior District Judge.*fn*
This racial discrimination case challenging the employment practices of the East Chicago, Indiana Fire Department comes to this court after nearly seven years in the district court. The case proceeded on the basis of the plaintiffs' third amended complaint filed on May 23, 1973. The nineteen named plaintiffs brought the action on behalf of themselves and all other Black and Spanish surnamed persons similarly situated against East Chicago and others claiming that the past hiring practices of the fire department had discriminated against minorities and that the provisions of an Indiana Act, Ind.Code § 19-1-37.5, reinforced and continued the discrimination by "locking in" the effects of the department's past practices. The plaintiffs claimed that the conduct of the defendants violated the Thirteenth and Fourteenth Amendments and 42 U.S.C. § 1981, 1983, as well as Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e.*fn1 They sought a judgment declaring the department's employment practices discriminatory and invalidating either the entire Indiana Act or section 10 of the Act.*fn2 The plaintiffs further urged the court to impose hiring quotas on the fire department and to prohibit consideration of seniority as a factor in promotion decisions.
In December, 1974, a partial consent decree concerning the department's hiring practices was presented to the court.*fn3 Although originally the court signed the settlement agreement, it later withdrew its approval when it became aware of objections to the relief provided. In June, 1975, a consent decree on promotions was presented to the court.*fn4 Objections to this proposed settlement also arose, because it declared the Indiana Act in question unconstitutional. The court requested briefing by all the parties on the proposed consent decrees, particularly as they related to the constitutionality of the Indiana Statute. In May, 1976, the court ruled that the Act was constitutional and ordered the parties to fashion any future settlement agreements accordingly.*fn5
Approximately one year later, on May 31, 1977, a consent decree granting promotion relief was presented to the district court for approval. This new settlement proposed granting additional seniority points to minority firemen for promotion purposes. At the hearing held on the settlement, the court questioned all the parties. The attorney for the intervenor-union was unwilling to sign the agreement because "there may be some inverse discrimination," but added that "whatever the court orders, naturally (we will) be bound thereby." Nothing further was said by the intervenors, the defendants, or the plaintiffs on this subject. The court then indicated that "I am going to approve the partial judgment on the basis of the record that is before me as of this time."
On the same day, the issues that remained unresolved by agreement between the parties were tried before the court. The plaintiffs presented evidence, concluded, and rested; the defendants presented no evidence. Following receipt of additional memoranda, the court heard oral arguments of the parties on August 12, 1977. On November 15, the court entered its memorandum order. Dawson v. Pastrick, 441 F. Supp. 133 (N.D.Ind.1977).
The court held that the plaintiffs had stated a cause of action under the Thirteenth and Fourteenth Amendments and 42 U.S.C. § 1981, but not under 42 U.S.C. § 1983 or Title VII.*fn6 Reaching the merits of the constitutional claims, the court found that the plaintiffs failed to establish the intentional or purposeful discrimination required by Washington v. Davis, 426 U.S. 229, 96 S. Ct. 2040, 48 L. Ed. 2d 597 (1976), and thus were not entitled to relief on those grounds. The court did hold, however, that the plaintiffs had established a Prima facie case under section 1981 by presenting statistical evidence showing "a racial disparity between the racial composition of the fire department of East Chicago and the racial composition of the city itself." 441 F. Supp. at 141. Although the plaintiffs' Prima facie case stood unrebutted, the court declined to impose the mandatory hiring quotas requested by the plaintiffs. Instead, it ordered the city to conduct affirmative recruitment of minorities, to have all application and examination procedures validated in accordance with EEOC guidelines, and to file a report every six months with the court actions which the defendants had, for the most part, agreed to take prior to trial.*fn7 The court also declined to award attorneys' fees to the plaintiffs.
On appeal the intervenor objects to the seniority points awarded to the minority firemen in the consent decree of May 31, 1977. Both the plaintiffs and the city defendants urge this court to uphold the consent decree.
The plaintiffs appeal from the judgment entered by the court on November 15, 1977. They object to the trial court's refusal to impose mandatory hiring quotas on the fire department. They also argue that they were prevailing parties and therefore entitled to recover attorneys' fees. The city defendants have not appealed the trial court's judgment holding that their past conduct violated section 1981 and are willing to validate all future application forms and examinations as well as to engage in affirmative action to encourage minority applicants in accordance with the trial court's decree. The defendants resist, however, the plaintiffs' requests for a more stringent remedy and an award of attorneys' fee.*fn8
We hold that the district court did not abuse its discretion in approving the consent decree and in refusing to impose hiring quotas. We believe, however, that the court misapplied the test for awarding attorneys' fees in civil rights cases and, therefore reverse and remand the judgment for a determination of the proper amount of fees which should be awarded the plaintiffs.
The May 31, 1977, consent decree set forth a series of facts detailing the percentage of minorities hired in the past and the present positions of minorities in the fire department from which it concluded "that there has been a disproportionate discriminatory effect upon Black and Spanish surnamed individuals in the promotional process. . . ." The remedy granted was the award to all Black and Spanish surnamed individuals then employed by the fire department "an additional 15.25 seniority points, to be used for promotional purposes only." The order stated that, in accordance with the Indiana Act, no one would be considered for promotion who failed to achieve a passing score on the written examination for the position. Thus, the seniority points awarded were only considered after the written part of the exam was passed. Because the Indiana Act requires that all promotions be from the "next immediate lower rank," the order required that the tests be given first for the chauffeur position and that those who passed be appointed before the administration of the test for the next higher position. Consequently, conceivably one could move to the top of the promotional ladder upon passing each exam.
On appeal the intervenor-union argues that the Indiana Act, which was declared constitutional by the district court, protects the seniority of the majority firefighters and that since there was no showing of purposeful, intentional discrimination by the firemen themselves or by the department, the remedy granted by the court violated the seniority rights of the majority firemen. The union contends that the remedy creates "reverse discrimination" by according preferential treatment on the basis of race alone and thus is not an appropriate remedy under 42 U.S.C. § 1981 (which the intervenor assumes is the sole basis for the remedy).
The plaintiffs argue that the seniority points award is an appropriate remedy in a section 1981 action and equally appropriate under Title VII, which was one of the possible bases for the remedy.*fn9 The city defendants, who also seek to have the consent decree upheld, argue that the intervenor has not presented a justiciable controversy because the majority firemen have suffered no actual injury. The defendants argue that no promotion was denied any majority fireman as a result of the seniority points award since the promotion examinations that have been given ...