Second Circuit Makes Key Holdings Involving Proof Requirements In Individual Discrimination Cases And Litigation Hold Requirements

Recently, in Chin v. Port Authority of New York & New Jersey, 2012 U.S. App. LEXIS 14088 (2d Cir. July 10, 2012), the United States Court of Appeals for the Second Circuit made two key holdings involving proof requirements in individual discrimination cases and litigation hold requirements.

First, the Second Circuit held that private plaintiffs may not use the pattern or practice method of proving discrimination outside the class action context. Unlike most discrimination cases where the ultimate burden of proof is always with the plaintiff and the plaintiff must present a prima facie case of discrimination, under a pattern or practice method of proof the plaintiff is only required to prove the existence of an employer's discriminatory policy and then the burden of proof shifts to the employer to demonstrate that it did not discriminate against the plaintiff pursuant to that policy.

Second, the court addressed the consequences of an employer's failure to issue a litigation hold to preserve evidence once it was on notice of potential litigation. Rejecting a high-profile New York federal district court decision (which held that a party's failure to issue a written litigation hold constituted gross negligence per se), the Second Circuit held that a "case by case" approach to the failure to produce evidence must be applied and affirmed the trial court's refusal to issue an adverse inference instruction – despite an admitted loss of evidence.

Factual Background

In Chin, 11 Asian-American police officers who worked for the Port Authority of New York and New Jersey claimed that the Port Authority violated Title VII by failing to promote them due to their race. They did not bring their case as a class action. The plaintiffs asserted three theories of liability for discrimination: individual disparate treatment, pattern-or-practice disparate treatment, and disparate impact. After a nine-day trial, the jury unanimously found the Port Authority liable for discrimination against seven of the plaintiffs under all three theories.

At trial, 22 fact witnesses testified, including all 11 of the plaintiffs who testified about their personal backgrounds, education, experiences as police officers, attendance and disciplinary records, awards and commendations, and performance evaluations. Six chiefs, one former superintendent, the superintendent at the time of trial, and three other Port Authority managers testified regarding the Port Authority's promotional procedure. Each side also presented a statistical expert and a damages expert.

The plaintiffs presented a statistical expert who testified about two analyses that, in his view, demonstrated a high probability that Asian Americans had been discriminated against in the Port Authority's promotion process:

In his first study, plaintiffs' statistical expert compared the percentage of white police officers who held a supervisory position (out of all white police officers) with the percentage of Asian Americans who held a supervisory position (out of all Asian-American police officers), using an industry-standard test known as the "Fisher Exact Test" to opine whether disparities were due to chance; and In his second study, plaintiffs' statistical expert compared the promotion rate for whites who were on the eligible lists to the promotion rate for Asian Americans who were on the eligible lists, again using the Fisher Exact Test to opine whether disparities were due to chance. On appeal, the Port Authority argued, among other things,1 that the pattern-or-practice disparate treatment theory should not have been submitted to the jury in this private, non-class action.

One of the plaintiffs who did not prevail at trial, Howard Chin, alleged on appeal, among other things,2 that he was entitled to a new trial because the trial court denied plaintiffs' request for an adverse inference instruction even though the Port Authority destroyed certain promotional records and failed to institute a litigation hold upon receiving notice of the plaintiffs' EEOC charge.

The Second Circuit held that the district court should not have permitted non-class action, private plaintiffs to use a pattern or practice method of proof to establish their claims...