Federal Circuits, 7th Cir. (March 27, 1996)
Docket number: 94-3496
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Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 90 C 5020--Brian Barnett Duff, Judge.
John H. Hager, Elaine K.B. Siegel (argued), Hager & Siegel, Chicago, IL, for plaintiff-appellee.Charles C. Jackson (argued), Brenda H. Feis, Ellen E. McLaughlin, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, Hubert O. Thompson, Deborah A. Richards, Carney & Brothers, Chicago, IL, for defendant-appellant.Before WOOD, Jr., FLAUM, and MANION, Circuit Judges.FLAUM, Circuit Judge.Carmelo Melendez filed a complaint in district court, alleging the defendant, Illinois Bell Telephone Company ("Illinois Bell"), violated 42 U.S.C. 1981, Title VII and the Age Discrimination in Employment Act ("ADEA") by engaging in discriminatory hiring practices. The district court entered summary judgment against the plaintiff on his ADEA claim, but the § 1981 and Title VII claims, based on race discrimination, proceeded to trial. As a sanction for discovery abuses, the district court barred defendant's sole expert witness from testifying. The § 1981 disparate treatment claim was tried before a jury, which returned a general verdict for the defendant. After the § 1981 jury trial, the district court conducted a hearing on plaintiff's Title VII claims, which alleged both disparate treatment of and disparate impact upon Hispanics. In particular, Melendez challenged the discriminatory nature of a standardized management test, the BSAT. The district court held that the § 1981 jury verdict controlled the Title VII disparate treatment claim, but ruled for the plaintiff on his disparate impact claim. The defendant appeals the judgment in favor of the plaintiff on the Title VII disparate impact claim. We affirm.I.In September 1988, Melendez, a Hispanic male, applied for the position of Manager of Urban Affairs at Illinois Bell. This job was a first-level management position that entailed analysis and investigation of issues in the urban environment that might have impacted Illinois Bell's service to its Chicago-area Hispanic customers. The vacancy for which Melendez applied was created when the incumbent in that job, an Hispanic woman, was promoted to a higher level position.At the time, Illinois Bell screened management candidates through a three-part process administered by its personnel department. The personnel department required candidates to complete a formal application for employment and to pass both a structured interview, the Management Selection Interview ("MSI") and a standardized test, the Basic Skills Abilities Test ("BSAT"). Normally, candidates could interview with the particular department at Illinois Bell that was hiring only after successfully completing all three requirements. To accommodate schedules, however, Illinois Bell would occasionally have the hiring department interview candidates before they completed the tripartite screening process.On September 21, 1988, before being screened by the personnel department, Melendez interviewed with two managers from the urban affairs department, John McDermott and Suzette Broom. Although Melendez did not particularly impress McDermott and Broom during his interview, McDermott directed Melendez to the personnel department for further processing. In the personnel department Melendez completed an employment application and passed the MSI. Melendez also had graduated in the top half of his class from college, which was another one of Illinois Bell's objective qualifications for management positions. Melendez, however, failed the BSAT. Illinois Bell required applicants taking the BSAT to receive a score of at least 196 to be eligible for employment.1 Melendez's score was 157. On September 25, 1988, Illinois Bell's personnel department advised Melendez that he had failed the BSAT and therefore was not qualified for the manager of urban affairs position. He was informed that he could retake the BSAT in six months. McDermott thereafter selected Henry Lara, an internal candidate who was also Hispanic, to become manager of urban affairs.The BSAT is a standardized cognitive ability test, which Illinois Bell used to measure the learning potential of candidates for management positions. AT & T psychologists developed the BSAT in 1979 for telephone companies nationally. Local telephone companies, including Illinois Bell, implemented the BSAT in the early 1980's. The examination is "speeded," consisting of 100 multiple choice questions during a one hour time period. The BSAT tests four different skills: mathematics, grammar, reading comprehension, and following directions. The parties stipulated that the BSAT has a disparate impact against Hispanics.2To support the fairness and validity of the BSAT, AT & T psychologists conducted a validation study, which reported various statistical analyses of how the BSAT related to job performance. The validation study correlated test scores with actual job performance ratings and directly examined the BSAT by race for its ability to predict job performance. To review this validity evidence, Melendez introduced the expert testimony of Dr. Fred Bryant, Professor of Psychology at Loyola University of Chicago. Dr. Bryant received a Ph.D. in Social Psychology from Northwestern University and has numerous publications involving the statistical analysis of data. Dr. Bryant testified that, in the context of employment examinations, an examination is "valid" if it can predict how people will perform on the job. Dr. Bryant opined that the BSAT is very poor at predicting job performance and therefore lacks validity. In Dr. Bryant's opinion, the statistical evidence from the validation study convincingly showed that BSAT scores and job performance are unrelated for Hispanics. Moreover, Dr. Bryant concluded that the great weight of statistical evidence from the validation study demonstrated that there is no relationship between BSAT scores and job performance for whites. Dr. Bryant likewise found little evidence that the BSAT predicted job performance for African-Americans. Dr. Bryant also attacked the methodology of the validation study, asserting that the study improperly pooled data from different racial subgroups, which caused inflated validity data for the overall group. Even if one uses the inflated overall data, the BSAT predicts job performance only 3 percent better than chance alone. Indeed, prior to this litigation, psychologists hired by Illinois Bell to review its management hiring process concluded that "there is little or no support for the validity of BSAT scores in predicting the core areas of management performance...." Importantly, the data from the validation study illustrates that, despite a statistically significant difference in test scores between whites and Hispanics, there is no significant difference in job performance between the two groups.In December 1988, Melendez filed a charge with the EEOC, alleging that the BSAT had an unlawful disparate impact on Hispanics. On August 28, 1990, Melendez filed the current action in district court. While his charge was pending before the EEOC, Illinois Bell formed a consortium with other local telephone companies to revise or replace the BSAT. Illinois Bell's representative to the consortium was Dr. Gary Morris.3 On July 11, 1990, Psychological Services, Inc. ("PSI"), a consulting firm, sent a proposal to Dr. Morris and other consortium representatives, which indicated the necessity of establishing a new test with "face validity." The consortium retained PSI to develop a replacement test, which was labelled the BSAT-Replacement ("BSAT-R").Dr. Morris was personally involved with the development of the BSAT-R. On January 11, 1991 he wrote the following to various Illinois Bell department heads:I am writing this letter to inform you that the [ ] Consortium to revise the BSAT is finally getting near the point of completing a contract and starting work. A primary goal of this project is to develop a test with item content that is much more job related than was the case with BSAT....I will be sure to keep you posted on the status of the project as it progresses and on more details related to your involvement as soon as possible.The contract for PSI's consulting services was executed on March 11, 1991 and identified Dr. Morris as a recipient of contract notices. In an April 4, 1991 letter, Dr. Morris again wrote to various department heads: "As you are all aware, we are involved in a consortium effort to build a replacement for the BSAT. The time frame for its introduction is mid-year 1992." The BSAT-R project included examining the validity evidence for the BSAT as well as collecting additional data relevant to the validity of the BSAT.While the replacement test for the BSAT was being formulated, Melendez attempted to obtain information relevant to the BSAT's validity through discovery. On November 6, 1990, Melendez requested the production of documents "that constitute, refer or relate to the decision to use the BSAT, or to discussions or analyses concerning its use." Although the trial court ordered Illinois Bell to respond to this request by December 21, 1990, Illinois Bell produced no documents until January 14, 1991. The BSAT-R project was not disclosed, and Illinois Bell failed to produce many BSAT-related documents. When Melendez moved to compel production of these documents, Illinois Bell represented to the district court that production of the BSAT would cause irreparable harm because there was only one form.4 On March 15, 1991, upon discovering that there were at least two different versions of the BSAT, the district court imposed Rule 11 sanctions on Illinois Bell and ordered Illinois Bell to produce various BSAT-related documents. Illinois Bell produced additional BSAT-related materials on May 17, 1991, but did not reveal the BSAT-R project.Illinois Bell intended to call Dr. Morris at trial as an expert witness to testify that the BSAT is a valid employment examination. Testifying for Illinois Bell as an expert witness was one of Dr. Morris's duties in his position at Ameritech Services. Melendez deposed Dr. Morris numerous times prior to trial. Despite specific deposition questions directed at any investigations of the BSAT, Dr. Morris failed to disclose the existence of the BSAT-R project. On November 7, 1991, Melendez subpoenaed Ameritech Services, requesting, among other records, "[a]ll documents, including drafts, that constitute, refer to or relate to validation studies in which the [BSAT] was reviewed and considered in any way." After Illinois Bell's motion to quash this subpoena was denied, Ameritech Services produced voluminous documents unrelated to the BSAT-R.The § 1981 claim was originally scheduled for a jury trial beginning on September 13, 1993. The BSAT-R was implemented by Illinois Bell during the first week of September 1993. On September 9, two working days before trial, plaintiff sought a stipulation on the continued use of the BSAT. In response, counsel for Illinois Bell finally revealed the BSAT-R's existence and then produced the BSAT-R materials, after Melendez moved to compel their production. Melendez thereafter filed a motion for sanctions, alleging that Illinois Bell, along with its trial counsel and expert witness, intentionally concealed the BSAT-R and failed to disclose the test in response to repeated discovery requests. The district court postponed the trial and conducted a three-day hearing to determine the extent to which Illinois Bell, its trial counsel, and Dr. Morris were aware of the BSAT-R. At this hearing, Dr. Morris testified that he informed Illinois Bell's trial counsel about the development of a replacement test for the BSAT soon after the current litigation began. Dr. Morris also testified that he periodically advised Illinois Bell's trial counsel regarding the progress of the BSAT-R and the time frame for its implementation. After eliciting a great deal of testimony at this hearing, the district court concluded that Illinois Bell, its counsel, and Dr. Morris "knew or should have known" that the BSAT-R was relevant and responsive to Melendez's discovery requests. As a sanction under Fed.R.Civ.P. 37, the district court barred Illinois Bell's sole expert witness, Dr. Morris, from testifying at trial.The § 1981 jury trial commenced immediately after the sanctions hearing. Plaintiff based his theory of intentional discrimination on Illinois Bell's continued use of the BSAT despite Illinois Bell's knowledge that the test was invalid. At the close of evidence, the district court instructed the jury that for Melendez to prevail, he must prove that the defendant intentionally discriminated against him. Tailoring the instructions to plaintiff's theory of the case, the district court informed the jury that it could "infer from Illinois Bell's knowing use of a seemingly neutral employment test that has a disparate impact against a minority group that Illinois Bell's discrimination was intentional...." Following deliberation, the jury returned a general verdict in favor of Illinois Bell on the § 1981 claim.After the jury trial, the district court considered the merits of plaintiff's Title VII claims, which alleged both disparate treatment and disparate impact against Hispanics.5 Holding that it was bound by any factual issues decided by the jury, and that both § 1981 claims and Title VII disparate treatment claims require proof of intentional discrimination, the district court ruled that the jury verdict controlled plaintiff's Title VII disparate treatment claim. The court also ruled, however, that the jury verdict had no preclusive effect with respect to plaintiff's disparate impact claim. After determining that it had already garnered all of the relevant evidence during the jury trial, the court heard oral argument on the disparate impact claim. Following this hearing, the district court entered findings of fact and conclusions of law, holding that Illinois Bell violated Title VII through its use of the BSAT.II.On appeal, defendant presents four main grounds for reversing the district court's judgment for plaintiff on the Title VII disparate impact claim. With respect to the merits of the disparate impact claim, defendant contends first that plaintiff failed to establish a prima facie case of disparate impact because he was unqualified for a management position. Second, defendant argues that the district court's finding that defendant had no legitimate business reason to use the BSAT is clearly erroneous. Next, defendant asserts that the jury verdict on the § 1981 claim estopped the district court from ruling for the plaintiff on the Title VII claim. Finally, defendant maintains that the district court abused its discretion by inappropriately sanctioning Illinois Bell for its alleged discovery abuses. We address each of these arguments in turn.A.Illinois Bell argues that a single plaintiff, such as Melendez, must prove as part of his prima facie case of disparate impact that he was qualified for the position he sought. Technically, after trial, the issue of prima facie case in the specialized Title VII burden-shifting sense becomes moot. Allen v. Seidman, 881 F.2d 375, 379 (7th Cir.1989). Once the lawsuit has been tried, the relevant inquiry simplifies to whether the evidence presented at trial supports a finding of a Title VII violation. Id. In a disparate impact case, the plaintiff must prove that the challenged practice is discriminatory because it has a disparate impact unjustified by the defendant's legitimate business needs. Id. Yet we cannot dismiss the defendant's challenge so quickly, for this challenge raises concerns broader then the establishment of a prima facie case. In order for an individual plaintiff to have constitutional standing to bring a Title VII action, he must show that he was personally injured by the defendant's alleged discrimination and that his injury will likely be redressed by the requested relief. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 2136-37, 119 L.Ed.2d 351 (1992); Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 3324-25, 82 L.Ed.2d 556 (1984); see also Carpenter v. Board of Regents of Univ. of Wis. Sys., 728 F.2d 911, 915 (7th Cir.1984) (holding that plaintiff in disparate impact case must show injury resulted from policy alleged to have disparate impact). We have relied on these standing principles to require an individual Title VII plaintiff alleging disparate impact to establish that he was qualified for the position sought. See Gilty v. Village of Oak Park, 919 F.2d 1247, 1255 (7th Cir.1990) (reasoning that plaintiff "must establish that his individual circumstances entitle him to ... relief.").6 The basis for this qualification requirement is apparent. Absent direct evidence showing that a plaintiff was not hired or promoted because of a discriminatory employment practice, we assume that an unqualified plaintiff was not hired or promoted for the obvious reason-that he was unqualified. Such a plaintiff would have no standing to sue under Title VII, for he could not claim that he was injured, much less affected, by the defendant's use of an employment practice with an allegedly disparate impact. See Carpenter, 728 F.2d at 915 (holding that plaintiff's Title VII claim must fail if promotion was denied for reason unrelated to defendant's allegedly discriminatory test). In contrast, where a plaintiff demonstrates that he was not hired or promoted as the direct result of a discriminatory hiring practice, he has suffered a personal injury within the meaning of Title VII. To hold otherwise would unfairly narrow the language of Title VII, which makes it unlawful for an employer "to limit ... applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities ... because of such individual's race...." 42 U.S.C. § 2000e-2(a)(2) (emphasis added); see Connecticut v. Teal, 457 U.S. 440, 448, 102 S.Ct. 2525, 2531, 73 L.Ed.2d 130 (1982) (interpreting "opportunities" language to hold that Title VII prohibits employment practices having disparate impact despite employer's racially balanced "bottom line").In the present case, Melendez presented extensive direct evidence that he was not hired because he failed the BSAT. Illinois Bell's personnel department informed Melendez that his failing score on the BSAT disqualified him from further consideration. Illinois Bell also suggested to Melendez that he could retake the BSAT in six months. Suzette Broom testified that once she and John McDermott discovered plaintiff had failed the BSAT, there was no need to pursue employment possibilities with Melendez. Although McDermott testified that he would not have hired Melendez even if he had passed the BSAT, the district court found McDermott's version of events to be an ex post facto justification for Illinois Bell's decision.7 After reviewing the entire record, we must agree with the district court's assessment. Because plaintiff has sufficiently demonstrated that he was not hired due to his failure of the BSAT, we need not examine whether plaintiff was qualified for a management position.8Illinois Bell next contends that the district court erred in finding that the BSAT's discriminatory impact was unjustified by Illinois Bell's legitimate business needs, a finding which we review for clear error only. Daniels v. Pipefitters' Ass'n Local Union No. 597, 945 F.2d 906, 924 (7th Cir.1991), cert. denied,Try vLex for FREE for 3 days
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