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March 26, 1992

ROBERT EARL MISTER, on behalf of himself and all others similarly situated, Plaintiffs,

The opinion of the court was delivered by: JAMES L. FOREMAN

 FOREMAN, Chief Judge:

 A number of issues remain to be resolved in this case. Pending before the Court are a Motion to Disqualify the Special Master and a Motion to Lift Stay. Prior to ruling on these motions, a number of issues relating to the proper measure of damages need to be resolved. The resolution of these issues at this juncture should ensure a smoother disposition of the case. *fn1"

 I. Review of Litigation

 The plaintiff, Robert Earl Mister, a black male, filed this action on January 9, 1981, against the Illinois Central Gulf Railroad Company, pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000c et seq.; 42 U.S.C. § 1981; and 42 U.S.C. § 1985. Mister alleged that the defendant refused to hire him because of his race. In addition to the individual claim, the Court allowed the plaintiff to represent a class of all black persons who had applied for jobs and been wrongfully rejected due to the defendant's racially discriminatory practices with regard to hiring within the defendant's St. Louis, Missouri, Operating Division.

 District Court Proceedings

 On October 11, 1985, the Court granted the defendant summary judgment on the plaintiffs claims under 42 U.S.C. § 1985. A bench trial was held on the remaining claims in November 1985, through January 1986. On August 7, 1986, the Court issued a memorandum and order finding the judgment should be entered in favor of the defendant on both the individual and the class claims. Mister v. Illinois Central Gulf Railroad Co., 639 F. Supp. 1560 (S.D. Ill. 1986), rev'd. 832 F.2d 1427 (7th Cir. 1987), cert. denied 485 U.S. 1035, 108 S. Ct. 1597, 99 L. Ed. 2d 911 (1988).

 In its August 7, 1986, memorandum, the Court recognized two possible theories of recovery for the class claims. The first was a disparate treatment claim alleging a pattern and practice of discrimination by the defendant. The second theory was a disparate impact claim, alleging that the defendant's hiring practices had a disparate and adverse impact on blacks.

 The plaintiffs evidence at the bench trial consisted of a combination of statistical evidence and anecdotal evidence. The statistical evidence consisted of testimony by Dr. Leroy Grossman, a labor economist. Dr. Grossman utilized an applicant flow analysis to reach his conclusions. In other words, Dr. Grossman compared the percentage of black applicants for jobs in the defendant's St. Louis Operating Division with the percentage of black hires for that division. Dr. Grossman then calculated the standard deviation *fn2" for these two groups. Dr. Grossman concluded that the discrepancy in hiring rates between black applicants and white applicants could not have been due to chance. However, in comparing the percentages hired by ICG in the two groups, Dr. Grossman treated the St. Louis Operating Division as a single unit, and therefore did not take into account the distance from the work site to the applicant's residence.

 The plaintiff also presented evidence that, between 1974 and 1983, blacks were excluded entirely from some job categories and that the highest percentage of black employees was found in the lowest paying job categories.

 The anecdotal evidence presented by the plaintiff consisted of testimony relating to an incident which occurred on March 27, 1979, at the defendant's hiring office in Carbondale, Illinois. Capitol Employment Agency referred a large group of predominately black jobseekers (between 120 and 179) to the Carbondale hiring office. On March 27, 1979, these jobseekers were bused to the Carbondale hiring office to apply for jobs. Many of these individuals testified that they had filled out an application to work for the defendant; that they were ready, willing, and able to work; that they were willing to relocate; and that the defendant never contacted them about a job.

 The defendant's evidence consisted of a three-fold attack on the plaintiff's statistical evidence. First, the defendant presented evidence to demonstrate that the data used by Dr. Grossman was incorrect. Second, defendant presented the testimony of its expert, a statistician by the name of Dr. David Peterson that there was no statistically significant difference between the number of white hires and the number of black hires. Third, the defendant presented evidence that distance between work site and residence was an important factor in hiring decisions, and this race-neutral factor accounted for any statistical discrepancy between white and black hiring.

 Dr. Peterson testified that the applicant flow analysis used by Dr. Grossman was an inappropriate method since the applications used by Dr. Grossman for data were incomplete. Instead, Dr. Peterson compared the actual number of blacks hired by the defendant with the expected number of black hires based on data from the 1980 census. Dr. Peterson performed three analyses: one compared actual black hires with expected black hires on a county-by-county basis; the second compared actual black hires with expected black hires on the basis of EEO job categories and county-by-county; the third analysis compared hires by job locations. All these analyses resulted in a finding that either the variations between expected black hires and actual black hires were statistically insignificant or that the defendant had actually hired more blacks than expected if a random pattern of hiring had occurred.

 The defendant also presented anecdotal evidence that distance between residence and job site was an important factor in hiring. Defendant presented testimony that absenteeism and tardiness were higher among workers who lived far from a job site than among those who lived close to a job site. Furthermore, workers who lived close to a job site were easier to call to work in the case of an emergency.

 The Court found that Dr. Grossman's testimony established a prima facie case of discrimination under the test set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668 (1973). Specifically, the Court found that the applicant flow analysis prepared by Dr. Grossman showed significant statistical differences between the number of blacks who applied for jobs with the defendant and the number of blacks hired by the defendant during the relevant time period. This difference was sufficient to show a prima facie case under both plaintiff's theory of disparate impact and disparate treatment.

 Having found that the plaintiff had established prima facie case of discrimination, the burden shifted to the defendant to articulate a legitimate, non-discriminatory reason for its actions. The defendant presented testimony regarding the relationship between distance from work to an applicant's residence and defendant's hiring patterns. The defendant showed that most hires for a particular job site lived within fifty miles of the site. The defendant further showed valid, non-discriminatory reasons for hiring workers who lived close to a job site. Last, the defendant presented statistical evidence which, although flawed, tended to show that if distance were taken into account, the defendant did not discriminate. Based on this evidence, the Court found that the defendant did not violate Title I or § 1981 in its hiring practices.

 The Court also entered judgment in favor of the defendant on the individual claim of Robert Earl Mister. The Court found that the misstatements made by Mister on his employment application, coupled with his poor work history, disqualified him from consideration for employment with the defendant.

 Circuit Court Opinion

 Disappointed in the Court's ruling, the plaintiff appealed to the Seventh Circuit. At the circuit court, the plaintiff argued that this Court's finding that distance provided a rational, non-discriminatory reason for the statistical discrepancies between white hires and black hires was in error. The defendant, in turn, argued that this Court erred in finding that the plaintiff had presented a prima facie case of discrimination.

 In an opinion written by Judge Frank H. Easterbrook, *fn3" the circuit court reversed judgment on the class claims but affirmed judgment on Mister's individual claims. The circuit court agreed with the finding that the plaintiff established a prima facie case of discrimination; indeed, the circuit court found it "hard to imagine a stronger case, short of an announcement of discrimination." *fn4" 832 F.2d at 1430.

 The circuit court disagreed, however, that the defendant had articulated a rational, non-discriminatory reason for the hiring discrepancy. Specifically, the circuit court held that the defendant failed to establish that distance between residence and work site accounted for the discrepancy. Although the circuit court accepted that distance from worksite would be a sufficient answer to the disparate treatment claim, 832 F.2d at 1431-32, it found that the defendant presented no evidence that black applicants did in fact live farther from the work sites than white applicants. Without this sort of proof, the defendant did not articulate a legitimate, non-discriminatory reason for its acts. "When the defendant pronounces a reason unrelated to the plaintiff ('a midget can't do the job', followed by silence on the plaintiff's height), it has not adequately articulated a neutral reason within the meaning of [Texas Department of Community Affairs v.] Burdine [, 450 U.S. 248, 101 S. Ct. 1089, 67 L. Ed. 2d 207 (1981)]." 832 F.2d at 1434.

 The circuit court added that, even if the defendant articulated a legitimate, non-discriminatory reason for the discrepancy, that reason was pretextual. The circuit court indicated that it was highly unlikely that distance between residence and work site explained the discrepancy. "The only explanations that have been offered for the disparity (and the only ones we can imagine in the absence of evidence that the black applicants had some systematic difference in qualifications from the white applicants) are discrimination and distance. To debunk the explanation based on distance is to compel the acceptance of the explanation from discrimination." 832 F.2d at 1435 [emphasis in original].

 The circuit affirmed the judgment against Mister on his individual claim. The circuit court noted that Mister had lied on his application. This led to the conclusion by the circuit court that this Court's findings with regard to the individual claim were not clearly in error.

 The defendants Petitioned for rehearing, rehearing en banc, and for a writ of certiorari from the Supreme Court. All these petitions were denied. This Court received the mandate ...

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