Eugene Margerum, et al., Appellants-Respondents,v.City of Buffalo, et al., Respondents-Appellants.BriefN.Y.January 6, 20150 To be Argued by: JASON E. MARKEL, ESQ. Time Requested for Argument: (20 Minutes) STATE OF NEW YORK Court of Appeals APL-2013-00290 EUGENE MARGERUM, ANTHONY HYNES, JOSEPH FAHEY, TIMOTHY HAZELET, PETER KERTZIE, PETER LOTOCKI, SCOTT SKINNER, THOMAS REDDINGTON, TIMOTHY CASSEL, MATTHEW S. OSINSKI, MARK ABAD, BRAD ARNONE and DAVID DENZ, Appellants-Respondents, vs. CITY OF BUFFALO, CITY OF BUFFALO DEPARTMENT OF FIRE and LEONARD MATARESE, Individually and as Commissioner of Human Resources for the City of Buffalo, Respondents-Appellants. Appellate Division Docket Number: CA 12-01540. Erie County Index No.: 2007-1462. BRIEF FOR RESPONDENTS-APPELLANTS HODGSON RUSS LLP Attorneys for Respondents-Appellants The Guaranty Building 140 Pearl Street, Suite 100 Buffalo, New York 14202 Telephone: (716) 856-4000 Facsimile: (716) 849-0349 ADAM W. PERRY, ESQ. JASON E. MARKEL, ESQ. STEPHEN W. KELKENBERG, ESQ. JOSHUA FEINSTEIN, ESQ. Of Counsel Date of Completion: May 8, 2014. BATAVIA LEGAL PRINTING, INC.- Telephone (866) 768-2100 i STATUS OF RELATED LITIGATION A related matter arising from a grievance brought separately by the plaintiffs’ union remains pending under the auspices of the Public Employment Relations Board. The grievance charged that the same conduct by the defendants at issue in this action violated the anti-discrimination clause of the parties’ collective bargaining agreement (the “CBA”). The arbitration proceeding has previously been the subject of extensive appeals, including a leave application to this Court. Initially, the arbitrator agreed with the respondent-cross-appellant here, the City of Buffalo, that the City’s conduct did not fall within the scope of the CBA’s anti-discrimination provisions. On September 25, 2009, Supreme Court, Erie County, vacated that decision and remanded to a different arbitrator on the ground that the arbitrator’s finding was against public policy. Buffalo Prof’l Firefighters Ass’n, Inc., IAFF Local 282 v. City of Buffalo, Index No. 2009/005156. On December 30, 2010, the Fourth Department affirmed without explanation. The City then sought leave to appeal to this Court, but its application was denied on jurisdictional grounds. Buffalo Prof’l Firefighters Ass’n, Inc., IAFF Local 282 v. City of Buffalo, 79 A.D.3d 1737 (4th Dep’t 2010), lv. dismissed,17 N.Y.3d 854 (2011), rearg. ii denied, 18 N.Y.3d 836 (2011). As a result, the proceeding returned to the new arbitrator for hearing. That hearing has not been conducted. The arbitration is currently stayed pending the outcome of this appeal. DISCLOSURE PURSUANT TO RULE 500.1(f) The Respondent-Appellant City of Buffalo is a municipal corporation that was incorporated in 1832. The City of Buffalo is within the County of Erie. Both the City and the County are political subdivisions of the State of New York. TABLE OF CONTENTS PAGE iii STATUS OF RELATED LITIGATION ................................................................... I DSICLOSURE PURSUANT TO RULE 500.1(F) ................................................... Ii TABLE OF CONTENTS ......................................................................................... iiI TABLE OF AUTHORITIES ..................................................................................... x PRELIMINARY STATEMENT ............................................................................... 1 JURISDICTION AND FINALITY ........................................................................... 4 QUESTIONS PRESENTED ON CITY’S CROSS-APPEAL ................................... 7 COUNTER-STATEMENT OF QUESTIONS PRESENTED ON PLAINTIFFS’ APPEAL ............................................................................................ 9 BACKGROUND AND PROCEDURAL HISTORY ............................................. 10 A. The Parties ........................................................................................... 10 B. The Remedial Decree .......................................................................... 11 C. The MOCHA Actions .......................................................................... 12 D. Evaluation and Defense of the MOCHA Claims ................................. 14 E. The City’s Own Expert - Dr. Abrams - Advised the City That the Plaintiffs Will Likely Prevail in MOCHA I and That It Would Not Be in the City’s Interest to Call Her as a Witness ........ 18 F. Decision to Permit the Eligible Lists to Expire and Develop New Examinations .............................................................................. 20 G. The Margerum Action is Commenced ................................................ 23 H. The City Obtains a Federal Court Injunction to Stay Margerum Pending the Outcome in MOCHA ....................................................... 24 TABLE OF CONTENTS PAGE iv I. The MOCHA Plaintiffs Fail to Prove their Claims at Trial................. 26 J. The Notice-of-Claim Appeal in Margerum ........................................ 28 K. The U.S. Supreme Court Decides Ricci v. DeStefano ........................ 29 L. Supreme Court Grants Summary Judgment on Liability to the Margerum Plaintiffs ............................................................................ 31 M. The Fourth Department Affirms the Grant of Partial Summary Judgment to the Margerum Plaintiffs ................................................. 34 N. The Trial on Damages in Margerum ................................................... 35 1. The Plaintiffs ............................................................................. 36 2. Testimony on Economic Damages Issues ................................ 38 a. Overtime .............................................................................. 40 b. Likelihood of Future Promotions ......................................... 42 c. Assumptions Concerning IOD Plaintiffs ............................. 45 3. The Experts’ Supplemental Calculations .................................. 48 4. Non-economic Damages ........................................................... 49 O. The Margerum Plaintiffs are Awarded Damages in Excess of $2.7 Million ......................................................................................... 50 P. The Fourth Department’s Final Order In Margerum .......................... 51 Q. The U.S. Court of Appeals Affirms Dismissal of the MOCHA Actions ................................................................................................. 55 ARGUMENT ........................................................................................................... 56 TABLE OF CONTENTS PAGE v I. THE PLAINTIFFS’ HUMAN RIGHTS LAW CLAIMS SHOULD HAVE BEEN DISMISSED AS A MATTER OF LAW DUE TO THEIR FAILURE TO FILE NOTICES OF CLAIM IN ACCORDANCE WITH GENERAL MUNICIPAL LAW § 50-i ........... 56 A. The Plain Language of General Municipal Law § 50-i Encompasses Human Rights Law Claims ........................................... 57 1. Personal Injury .......................................................................... 58 2. Damage to Personal Property.................................................... 63 B. The Fourth Department is in Direct Conflict with the Second Department .......................................................................................... 66 C. The In Pari Materia Doctrine Likewise Dictates that Human Rights Law Claims Should Be Subject to Notice of Claim under the General Municipal Law ................................................................. 69 D. Multiple Courts have held that Statutory and Non-Tort Claims Trigger General Municipal Law § 50-i Notice of Claim Requirements as to Cities .................................................................... 72 E. Public Policy Supports Notice of Claim Requirements ...................... 76 II. NEW YORK SHOULD ADOPT AND APPLY RICCI’S “STRONG BASIS IN EVIDENCE” STANDARD IN NEW YORK HUMAN RIGHTS LAW CASES ............................................................................ 79 A. New York’s Standard for Recovery under the Human Rights Law Tracks Federal Case Law under Title VII ........................................... 79 B. The Ricci Standard .............................................................................. 81 1. Disparate Impact and Disparate Treatment Distinguished ....... 81 TABLE OF CONTENTS PAGE vi 2. The Ricci Court’s Careful Fashioning of the Strong Basis in Evidence Standard Resolved Any Conflict Between the Disparate-Treatment and Disparate-Treatment Provisions of Title VII ................................................................................ 83 C. The Fourth Department Applied Its Own Standard, not the Ricci Standard ............................................................................................... 89 D. The Second Circuit’s Affirmance in MOCHA Emphasizes the Distinct Inquiry that Exists under Ricci .............................................. 96 III. THE CITY IS ENTITLED TO PROTECTION UNDER THE SAFE HARBOR CREATED BY RICCI ................................................. 97 A. The City’s Strong Basis in Evidence .................................................. 98 1. The 1979 Remedial Decree ....................................................... 98 2. The MOCHA I Disparate Impact Litigation Is Commenced .............................................................................. 99 3. Dr. Abrams’ Early Evaluation ................................................ 100 4. The Deposition Testimony of the Exam Developer, Wendy Steinberg, Ph.D., and Her Supervisor, Paul Kaiser .... 101 5. The MOCHA Plaintiffs Deliver the Expert Report of Kevin R. Murphy, Ph.D. ......................................................... 103 6. The City’s Expert, Nancy Abrams, Ph.D., Expresses Significant Concerns about the Examinations and Cautions the City to Avoid Calling Her at Trial ..................... 108 7. The City’s Decision to Permit the Lists to Expire .................. 110 TABLE OF CONTENTS PAGE vii B. The District Court Recognizes the Substantial Nature of the MOCHA Plaintiffs’ Claims by Enjoining the Margerum Plaintiffs ............................................................................................ 115 C. If the Ricci Strong-Basis-in-Evidence Standard is Not Met Here, How Could It Ever Be Met? .................................................... 117 1. The City’s Conduct is the Opposite of the Actions of New Haven that Resulted in Liability in Ricci ....................... 119 2. This Case Closely Parallels United States v. New Jersey, in which the Employer Received Safe Harbor Protection Under Ricci ............................................................................. 120 3. The Trial Outcome in MOCHA does not Deprive the City of Safe Harbor Protection ............................................... 122 IV. PLAINTIFFS FAILED TO CARRY THEIR BURDEN OF ESTABLISHING THEIR ALLEGED ECONOMIC DAMAGES WITH “REASONABLE CERTAINTY,” AND THUS THE APPELLATE DIVISION SHOULD HAVE REDUCED THE PLAINTIFFS’ DAMAGES AWARD TO ZERO .................................. 125 V. THE APPELLATE DIVISION PROPERLY CONCLUDED THAT PLAINTIFFS’ EXPERT OFFERED INCOMPETENT PROOF GROUNDED IN UNSUPPORTABLE AND SPECULATIVE ASSUMPTIONS THAT FAILED TO ESTABLISH DAMAGES TO A REASONABLE DEGREE OF CERTAINTY ............................. 129 A. This Court’s Scope of Review of the Factual Findings Is Narrowly Circumscribed ................................................................... 131 B. The Standard for Damages in a Discrimination Case ....................... 131 TABLE OF CONTENTS PAGE viii VI. THE EVIDENCE AT TRIAL MOST CLOSELY COMPORTS WITH THE FACTUAL FINDINGS OF THE APPELLATE DIVISION .............................................................................................. 135 A. The Weight of the Evidence Supports the Appellate Division’s Findings Regarding the Overtime Assumptions for the Active Duty Plaintiffs ................................................................................... 135 1. The Trial Evidence .................................................................. 136 2. Expert Testimony .................................................................... 141 3. The Trial Court Adopted Its Own Assumption ...................... 144 4. The Weight of the Evidence Supports The Appellate Division’s Determination on Overtime ................................... 145 B. The Weight of the Evidence Supports the Appellate Division’s Findings on the Probability of Promotion ......................................... 149 1. The Factual Evidence .............................................................. 151 2. Shick’s Baseline Assumption was Speculative and Unsupported by the Factual Evidence .................................... 153 3. Besaw’s Baseline Assumption was Well-Grounded in the Plaintiffs Testimony and Other Record Evidence .................. 154 4. The Plaintiffs’ Contentions on Appeal are Meritless ............. 156 C. The Weight of the Evidence Supports the Appellate Division’s Factual Findings Regarding the “IOD” Plaintiffs Likelihood of Becoming Disabled ........................................................................... 162 1. The Factual Evidence .............................................................. 164 TABLE OF CONTENTS PAGE ix 2. Both Experts Initially Reached the Same Conclusion on the Same Assumption - the IOD Plaintiffs had no Damages .................................................................................. 165 3. Shick Altered his Assumption and Testimony to Manufacture Damages Once he Realized the IOD Plaintiffs had None After Accounting for Taxes .................... 167 4. Besaw Performed and Offered a Weighted-Loss Analysis as an Alternative Method to Calculate Damages .................... 168 5. Shick’s Rebuttal And Disability Study ................................... 170 6. Shick Offers this Flawed Weighted Analysis in a Post-Trial Supplemental Submission ...................................... 172 7. The Trial Court Awarded Damages to the Plaintiffs Based on Shick’s Post-Trial Weighted Analysis, but the Appellate Division Rightly Reversed ..................................... 173 8. The Plaintiffs Factual Contentions on this Appeal are Meritless, as the Weight of the Evidence Supports the Appellate Division’s Modification ......................................... 175 CONCLUSION ...................................................................................................... 178 TABLE OF AUTHORITIES PAGE x FEDERAL CASES Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) ............................................................................ 14, 100, 111 Alexander v. City of Milwaukee, 474 F.3d 437 (7th Cir. 2007) ............................................................................ 159 Biondo v. City of Chicago, 382 F.3d 680 (7th Cir. 2004) ............................................................................ 159 Bridgeport Guardians, Inc. v. Bridgeport, 933 F.2d 1140 (2d Cir. 1991) ........................................................................... 111 Felder v. Casey, 487 U.S. 131 (1988), superseded on other grounds by statute .......................... 68 Griggs v. Duke Power Co., 401 U.S. 424 (1971) ...................................................................................... 82, 90 Guardians Ass’n of NYC Police Dep’t, Inc. v. Civil Serv. Comm’n, 633 F.2d 232 (2d Cir. 1980) ............................................................................... 88 Gulino v. NYS Educ. Dep’t, 460 F.3d 361 (2d Cir. 2006) ....................................................................... 87, 106 Hayden v. Cnty. of Nassau, 180 F.3d 42 (2d. Cir. 1982) .............................................................................. 114 Hybert v. Hearst Corp., 900 F.2d 1050 (7th Cir. 1990) .................................................................. 134, 158 Kerner v. City & Cnty. of Denver, 11-cv-00256, 2013 U.S. Dist. LEXIS 41280 (D. Colo. Mar. 25, 2013) ............ 88 M.O.C.H.A. I, Soc’y, Inc. v. City of Buffalo, 2007 U.S. Dist. LEXIS 83544 (W.D.N.Y. Nov. 9, 2007) ........................ 117, 116 TABLE OF AUTHORITIES PAGE xi M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 2007 U.S. Dist. LEXIS 93066 (W.D.N.Y. Dec. 13, 2007) ................ 25, 115, 116 M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 03 cv 580, 2010 U.S. Dist. LEXIS 46628 (W.D.N.Y. May 12, 2010) ............... 28 M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 2009 U.S. Dist. LEXIS 20070 (W.D.N.Y. Mar. 9, 2009) ............................ 26, 91 M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 689 F.3d 263 (2d Cir. 2012) ........................................................... 55, 56, 97, 122 Oakley v. City of Memphis, 2010 U.S. Dist. LEXIS 143451 (W.D. Tenn. June 17, 2010) .......................... 120 Price v. Marshall Erdman & Assocs., Inc., 966 F.2d 320 (7th Cir. 1992) ............................................................................ 134 Rasic v. City of Northlake, 2010 U.S. Dist. LEXIS 134552 (N.D. Ill. Aug. 24, 2010) ............................... 159 Ricci v. DeStefano, 530 F.3d 87 (2d Cir. 2008) ................................................................................. 29 Ricci v. DeStefano, 557 U.S. 557 (2009) .....................................................................................passim Solo Cup Co. v. Fed. Ins. Co., 619 F.2d 1178 (7th Cir. 1980) ............................................................................ 88 Thomas v. iStar Fin., Inc., 508 F. Supp. 2d 252 (S.D.N.Y. 2007) ...................................................... 158, 159 United States v. Brennan, 650 F.3d 65 (2d Cir. 2011) .......................................................87, 88, 93, 94, 117 United States v. City of Buffalo, 457 F. Supp. 612 (W.D.N.Y. 1978) .............................................................. 11, 98 TABLE OF AUTHORITIES PAGE xii United States v. City of Buffalo, 633 F.2d 643 (2d Cir. 1980) ............................................................................... 12 United States v. New Jersey, 2012 U.S. Dist. LEXIS 113175 (D.N.J. June 12, 2012), aff’d, 522 Fed. Appx. 167 (3d Cir. 2013), cert. denied, ___ U.S. ___, 134 S. Ct. 527 (2013)................................................. 119, 120, 121 Weissman v. Dawn Joy Fashions, Inc., 214 F.3d 224 (2d Cir. 2000) ............................................................................... 80 STATE CASES 1455 Washington Ave. Assocs. v. Rose & Kiernan, Inc., 260 A.D.2d 770 (3d Dep’t 1999) ........................................................................ 64 Adair v. Tully-Kuzman, 91 A.D.3d 1228 (3d Dep’t 2012) ...................................................................... 134 Amatulli v. Delhi Constr. Corp., 77 N.Y.2d 525 (1991) ....................................................................................... 133 Aurecchione v. NYS Div. of Human Rights, 98 N.Y.2d 21 (2002) ........................................................................................... 80 Bailey v. Jamaica Buses Co., 210 A.D.2d 192 (2d Dep’t 1994) ...................................................... 132, 133, 178 Briggins v. McGuire, 67 N.Y.2d 965 (1986) ......................................................................................... 63 Burdick v. Bratt, 203 A.D.2d 950 (4th Dep’t 1994) ..................................................................... 132 Cassano v. Hagstrom, 5 N.Y.2d 643 (1959) ......................................................................................... 134 TABLE OF AUTHORITIES PAGE xiii Caton v. Doug Urban Constr. Co., 65 N.Y.2d 909 (1985) ....................................................................................... 133 Charles Hyman, Inc. v. Olsen Indus, Inc., 227 A.D.2d 270 (2d Dep’t 1996) ...................................................................... 128 Ciraolo v. Miller, 138 A.D.2d 443 (2d Dep’t 1988) ...................................................................... 133 City of New York v. State, 27 A.D.3d 1 (1st Dep’t 2005), lv. denied 6 N.Y.3d 711 (2006) ....................... 128 Clanton v. Agoglitta, 206 A.D.2d 497 (2d Dep’t 1994) .............................................................. 132, 178 Consol. Edison Co. of New York, Inc. v. NYS Div. of Human Rights, 77 N.Y.2d 411 (1991) ......................................................................................... 67 Cross v. Bd. of Educ. of Delaware Acad. & Cent. Sch. Dist. No. 1, 49 A.D.2d 67 (3d Dep’t 1975) .................................................................. 133, 134 Dennis v. Dachs, 85 A.D.2d 223 (1st Dep’t 1982) ....................................................................... 134 Economico v. Village of Pelham, 50 N.Y.2d 120 (1980) ......................................................................................... 63 Estate of Kalis v. City of Buffalo, 306 A.D.2d 932 (4th Dep’t 2003) ........................................................... 72, 75, 79 Ferrante v. Am. Lung Ass’n, 90 N.Y.2d 623 (1997) ......................................................................................... 79 Fiederlein v. NYC Health & Hosps. Corp., 56 N.Y.2d 573 (1982) ....................................................................................... 133 Forrest v. Jewish Guild for the Blind, 3 N.Y.3d 295 (2004), superseded on other grounds, as stated in Bennett v. Health Mgmt. Sys., Inc., 92 A.D.3d 29 (1st Dep’t 2011) ................. 79, 81, 159 TABLE OF AUTHORITIES PAGE xiv Friedman v. State, 67 N.Y.2d 271 (1986) ....................................................................................... 131 Gilleo v. Elizabeth A. Horton Mem. Hosp., 196 A.D.2d 569 (2d Dep’t 1993) ...................................................................... 134 Gould v. Bd. of Educ., 81 N.Y.2d 446 (1993) ......................................................................................... 63 Griffin v. William M. Mercer, Inc., 1998 WL 1050968 (Sup. Ct. N.Y. Cnty. Mar. 25, 1998) ................................. 158 Haughey v. Belmont Quadrangle Drilling Corp., 284 N.Y.136 (1940) .......................................................................................... 125 Henderson v. Holley, 112 A.D.2d 190 (2d Dep’t 1985) ...................................................................... 126 Henderson v. Town of Van Buren, 15 A.D.3d 980 (4th Dep’t 2005) ......................................................................... 70 Henrickson v. City of New York, 285 A.D.2d 529 (2d Dep’t 2001) ........................................................................ 64 In re Nathaniel T., 67 N.Y.2d 838 (1986) ....................................................................................... 131 Kaswacki v. Astoria Med. Anesthesia Assoc., P.C., 23 A.D.3d 438 (2d Dep’t 2005) ........................................................................ 126 Laverack & Haines v. NYS Div. of Human Rights, 88 N.Y.2d 734 (1996) ......................................................................................... 79 Levin v. Yeshiva Univ., 96 N.Y.2d 484 (2001) ......................................................................................... 82 Lodato v. Greyhawk N. Am., LLC, 39 A.D.3d 494 (2d Dep’t 2007) ........................................................................ 125 TABLE OF AUTHORITIES PAGE xv Margerum, et al. v. City of Buffalo, et al., Index No. 1462/2007 ...................................................................................passim Margerum v. City of Buffalo, 108 A.D.3d 1021 (4th Dep’t 2013) ........................................................... 126, 127 Margerum v. City of Buffalo, 63 A.D.3d 1574 (4th Dep’t 2009) ........................................................... 28, 29, 56 Margerum v. City of Buffalo, 66 A.D.3d 1502 (4th Dep’t 2009) ....................................................................... 31 Margerum v. City of Buffalo, 83 A.D.3d 1575 (4th Dep’t 2011) ................................................................. 34, 90 Marine Midland Props. Corp. v. Srogi, 60 N.Y.2d 885 (1983) ....................................................................................... 131 Matter of Smuckler v. City of New York, Index No. 112267/08, 2009 N.Y. Misc. LEXIS 5322 (Sup. Ct., N.Y. Cnty. Apr. 7, 2009) ............................................................................................. 64 Melia v. City of Buffalo, 306 A.D.2d 935 (4th Dep’t 2003), lv. denied, 100 N.Y.2d 516 (2003) ....... 73, 75 Mendell v. Salamanca Hous. Auth., 12 A.D.3d 1023 (4th Dep’t 2004) ........................................................... 69, 71, 79 Mete v. NYS Office of Mental Retardation and Developmental Disabilities, 21 A.D.3d 288 (1st Dep’t 2005) ......................................................................... 82 Miller Brewing Co., v. NYS Div. of Human Rights, 66 N.Y.2d 937 (1985) ......................................................................................... 79 Mills v. Cnty. of Monroe, 59 N.Y.2d 307 (1983) ......................................................................................... 68 TABLE OF AUTHORITIES PAGE xvi Mittl v. NYS Div. of Human Rights, 100 N.Y.2d 326 (2003) ....................................................................................... 79 Mittl v. NYS Div. of Human Rights, 307 A.D.2d 881 (1st Dep’t 2003) ............................................................. 132, 177 Mompoint v. City of New York, 299 A.D.2d 527 (2d Dep’t 2002) .................................................................. 66, 67 Munro v. Ossining Union Free Sch. Dist., 55 A.D.3d 697 (2d Dep’t 2008) .................................................................... 69, 70 Mutuel Ticket Agents, Local 23293 v. Roosevelt Raceway Assocs., 172 A.D.2d 595 (2d Dep’t 1991) ........................................................................ 73 People v. NYC Trans. Auth., 59 N.Y.2d 343 (1983) ................................................................................... 15, 82 Petix v. Connelie, 47 N.Y.2d 457 (1979) ......................................................................................... 64 Phelps Steel, Inc. v. City of Glens Falls, 89 A.D.2d 652 (3d Dep’t 1982) .................................................................... 73, 74 Picciano v. Nassau Cnty. Civ. Serv. Comm’n, 290 A.D.2d 164 (2d Dep’t 2001) .................................................................. 56, 69 Plainview Water Dist. v. Exxon Mobil Corp., 18 Misc. 3d 1121(A), (Sup. Ct. Nassau Cnty. Jan. 9, 2008), aff’d in part, 66 A.D.3d 734 (2d Dep’t 2009) ........................................................................ 133 Plato’s Cave Corp. v. State Liquor Auth., 68 N.Y.2d 791 (1986) ......................................................................................... 69 Rios v. Smith, 95 N.Y.2d 647 (2001) ....................................................................................... 177 TABLE OF AUTHORITIES PAGE xvii Rosenbaum v. City of New York, 8 N.Y.3d 1 (2006) ............................................................................................... 76 Sanders v. Winship, 57 N.Y.2d 391 (1982) ......................................................................................... 95 Scantlebury v. N.Y.C. Health & Hosps. Corp., 4 N.Y.3d 606 (2005) ........................................................................................... 79 Schneider v. New York, 38 A.D.2d 628 (3d Dep’t 1971) ........................................................................ 133 Scopelliti v. Town of New Castle, 210 A.D.2d 308 (2d Dep’t 1994) ........................................................................ 70 Sebastian v. N.Y.C. Health & Hosps. Corp., 221 A.D.2d 294 (1st Dep’t 1995) ....................................................................... 56 Snyder v. Wetzler, 84 N.Y.2d 941 (1994) ....................................................................................... 177 State Div. of Human Rights v. Kilian Mfg. Corp., 35 N.Y.2d 201 (1974) ................................................................................... 62, 82 State Div. of Human Rights v. NYS Dep’t of Corr. Servs., 90 A.D.2d 51 (2d Dep’t 1982) ............................................................................ 67 Thoreson v. Penthouse Int’l, 80 N.Y.2d 490 (1992) ......................................................................................... 67 Town of Brookhaven v. NYS Div. of Human Rights, 282 A.D.2d 685 (2d Dep’t 2001) .................................................................. 69, 70 Walsh v. Goldman Sachs & Co., 185 A.D.2d 748 (1st Dep’t 1992) ....................................................................... 67 Wantagh Union Free Sch. Dist. v. NYS Div. of Human Rights, 122 A.D.2d 846 (2nd Dep’t 1986) .................................................................... 132 TABLE OF AUTHORITIES PAGE xviii Weiss v. Karch, 62 N.Y.2d 849 (1984) ....................................................................................... 131 FEDERAL STATUTES 42 U.S.C. § 2000e-2(a)(1) ........................................................................................ 81 42 U.S.C. § 2000e-2(k)(1)(A)(i) ........................................... 14, 15, 82, 90, 100, 106 42 U.S.C. § 2000e-2(k)(1)(A)(ii) ..................................................................... 83, 111 42 U.S.C. § 2000e-2(k)(1)(C). ......................................................................... 83, 111 STATE STATUTES CPLR 214(5) ............................................................................................................ 67 C.P.L.R. § 4401 ...................................................................................................... 129 C.P.L.R. § 3211 ...................................................................................... 5, 23, 64, 179 C.P.L.R. § 3211(a) ............................................................................................... 2, 78 C.P.L.R. § 3212 ................................................................................................ 24, 179 C.P.L.R. § 5501(a) ..................................................................................................... 5 C.P.L.R. § 5501(b) ................................................................................................. 131 C.P.L.R. § 5602(a)(1)(i) ............................................................................................. 4 C.P.L.R. § 5611 .......................................................................................................... 4 County Law § 52 ...................................................................................................... 69 Executive Law § 290(3) ..................................................................................... 62, 95 TABLE OF AUTHORITIES PAGE xix Executive Law § 291(1) ........................................................................................... 62 Executive Law § 297(9) ........................................................................................... 67 General Municipal Law § 50-i ..........................................................................passim General Municipal Law § 50-e .................................................................... 66, 73, 78 General Municipal Law § 50-h ................................................................................ 77 General Municipal Law § 856(2) ............................................................................. 73 General Municipal Law § 858(16) ........................................................................... 73 General Municipal Law § 874(1) ............................................................................. 73 Town Law § 67 ............................................................................................ 69, 70, 71 Public Housing Law § 157 ........................................................................... 69, 70, 71 CONSTITUTIONAL PROVISIONS New York State Constitution .................................................... 23, 58, 64, 73, 74, 76 OTHER AUTHORITIES 2012 N.Y. Sess. Laws 1273 (McKinney) ................................................................ 78 Black’s Law Dictionary (4th ed. 1951) ............................................................. 60, 61 Black’s Law Dictionary (9th ed. 2009) ............................................................. 59, 61 Title VII of the Civil Rights Act of 1964 ..........................................................passim Webster’s New International Dictionary 1828 (Unabridged 2d ed. 1961) ....................................................................................................... 59, 60 TABLE OF AUTHORITIES PAGE xx Uniform Notice of Claim Act (2012) ...................................................................... 78 PRELIMINARY STATEMENT Prior to this action, the City of Buffalo was sued in two federal Title VII lawsuits by African-American firefighters who alleged that examinations, which were developed by NYS Civil Service and used by the City to make promotional decisions, caused unlawful disparate impact discrimination against them. The City decided not to extend the civil service promotional eligible lists based on the exams for their maximum legal duration, as the first of those cases was nearing trial. By this point, the City had litigated the case for several years, evaluated the plaintiffs’ evidence, obtained discovery from NYS Civil Service, and considered expert opinions and legal advice. Based on that, the City had a strong basis in evidence to believe that it would be subject to disparate impact liability, both in the pending cases and beyond. It therefore discontinued use of those lists. The thirteen Caucasian firefighter plaintiffs in this case commenced this action alleging that the City engaged in reverse, disparate treatment racial discrimination by permitting the promotion eligible lists to expire, thereby violating the Human Rights Law, the Civil Service Law, and the NYS Constitution. The plaintiffs contend that the City’s wrongful acts transgressed their civil rights and other personal interests by depriving them of promotions, 2 causing long-term wage and benefit losses, impairing their occupational interests, and causing them personal injuries. The City’s appeal brings up for review two prior Orders of the Appellate Division, Fourth Department, which declined to dismiss the complaint on threshold legal questions. The City contends that its C.P.L.R. 3211(a) motion to dismiss should have been granted due to plaintiffs’ failure to file a notice of claim in accordance with General Municipal Law § 50-i. The court below held that Human Rights Law claims as against cities are not subject to this requirement. The City also maintains that its decision to permit the lists to lapse in order to comply with disparate impact anti-discrimination law is protected by the safe harbor created by the U.S. Supreme Court’s landmark decision in Ricci v. DeStefano, 557 U.S. 557 (2009). Thus, notwithstanding any claimed disparate treatment to the plaintiffs that resulted from the lapsing of the eligible lists, the City cannot be held liable. Thus, the City’s motion for summary judgment was improperly denied by the courts below. Had either of these threshold motions been granted (and the plaintiffs’ partial summary judgment on liability been denied), the case would not have proceeded to trial. But it did. 3 After a bench trial on damages, the trial court adopted the plaintiffs’ expert’s calculations on economic damages and also awarded plaintiffs emotional/mental distress damages. On appeal, the Fourth Department reduced the economic damages awards, concluding that the trial court had improperly shifted the burden of proof to the City, that the plaintiffs’ expert’s assumptions were speculative, and that the plaintiffs failed to meet their burden to establish damages with “reasonable certainty.” The court then reduced the economic damages award to the figures determined by the City’s expert, concluding that the “only competent proof in the record regarding the economic damages” were the assumptions and calculations of the City’s expert. On this appeal, the City contends that even though the Fourth Department properly recognized that the trial court had erroneously shifted the burden of proof to the City, it ultimately perpetuated the same error. Upon determining that plaintiffs failed to meet their burden to establish their damages with “reasonable certainty,” the Fourth Department should have reduced the economic damages claims to $0 as a matter of law, without regard to the City’s calculations. 4 This brief also responds to the plaintiffs’ appeal of that same Order, which is limited to three main fact-findings made by the Fourth Department pertaining to the unsupportable and speculative factual assumptions used by their expert, and which resulted in the reduction in economic damages by the Fourth Department. The Fourth Department’s findings, however, comport with the weight of the evidence presented at trial. So to the extent the City’s burden-of-proof argument does not wholly eliminate the plaintiffs’ economic damages awards, the City’s expert’s calculations must be sustained as the only legally competent evidence of damages. JURISDICTION AND FINALITY This appeal involves issues decided in three separate Orders of the Appellate Division, Fourth Department. On October 17, 2013, this Court granted the City and the plaintiffs leave to appeal from the July 5, 2013 final Order of the Appellate Division, Fourth Department, under N.Y. C.P.L.R. §§ 5602(a)(1)(i) and 5611. The July 5, 2013 Appellate Division Order is the final disposition of the matter and leaves nothing for further judicial action in the lower courts. That Order modified the post-trial Memorandum Decision and Order of Supreme Court, Erie County (Michalek, J.), entered on February 8, 2012, by reducing the trial 5 court’s damages awards to the plaintiffs. A20-56.1 As so modified, the Fourth Department affirmed. Under N.Y. C.P.L.R. § 5501(a), the City’s appeal brings up for review two prior non-final Orders that necessarily affected the final judgment, and which have not yet previously been reviewed by this Court. The first of these Orders is the Fourth Department’s June 5, 2009 Memorandum and Order, which affirmed the denial of the City’s pre-answer motion to dismiss under N.Y. C.P.L.R. § 3211. In reaching this result, the Fourth Department held, among other things, that Human Rights Law claims against cities are not subject to the notice of claim requirements under General Municipal Law § 50-i. A11-16. The second non-final Order brought up for review was issued by the Fourth Department on April 29, 2011. A9-10. This Order addressed the City’s appeal from the trial court’s summary judgment decision and order (Michalek, J.), which held that the City was liable to a group of Caucasian firefighter plaintiffs for disparate treatment discrimination under the New York Human Rights Law as a result of the City’s decision to permit promotion eligible lists to expire without 1 Record Citations beginning with “A” in this brief refer to the Joint Appendix. Citations beginning with “RA” refer to the Respondent-Cross- Appellant City’s Supplemental Appendix. 6 renewing them, thereby depriving the plaintiffs of promotional opportunities. The lapsing of the lists was motivated by the City’s serious concerns, amply supported by strong evidence and expert advice, that the promotional exams - and therefore the resulting promotion eligible lists - were likely having an unlawful adverse impact upon minority firefighters (who had already commenced suit against the City in federal court) and should no longer be used. On appeal, the Fourth Department affirmed summary judgment in the plaintiffs’ favor, concluding that the City was not entitled to the safe harbor protection devised by the U.S. Supreme Court in Ricci v. DeStefano, 557 U.S. 557 (2009), for defending against Title VII claims in these circumstances. The Fourth Department’s April 29, 2011 Order went on to hold that the City “did not have a strong basis in evidence to believe that they would be subject to disparate-impact liability if they failed to take the race-conscious action, i.e., allowing the eligibility lists to expire, inasmuch as the examinations in question were job-related and consistent with business necessity.” A10. While the Fourth Department cited Ricci, it nonetheless went on to fashion its own test for use in this Human Rights Law case that implicitly rejected the very essence of Ricci and the safe harbor protection afforded by it. The Fourth Department concluded, in effect, that 7 because the City had successfully defended the examinations at a trial of a disparate impact claim brought by a group of minority firefighters, the safe harbor did not apply. Lastly, the City appeals the July 5, 2013 final Order of the Fourth Department to the extent that, upon determining that plaintiffs failed to meet their burden of proof on economic damages at trial, the court failed to reduce the plaintiffs’ award to $0. QUESTIONS PRESENTED ON CITY’S CROSS-APPEAL 1. Whether plaintiffs must satisfy the notice of claim requirements of General Municipal Law § 50-i as a condition precedent to commencing a New York Human Rights Law race-based discrimination suit against a city to recover lost wages and benefits, pain and suffering, and other tort-like compensatory damages for their personal injuries and impairment of personal property interests? This issue is preserved at A15, 73, 228, 336, 339, 345. 2. Whether the “strong-basis-in-evidence” safe harbor created by the United States Supreme Court in Ricci v. DeStefano for Title VII 8 discrimination cases applies equally to New York Human Rights Law discrimination cases? This issue is preserved at A9-10, 357-58, 437-50, 465-73, 1049-55, 1257-66. 3. Whether the City of Buffalo had a strong basis in evidence to believe that discontinuing the use of suspect Fire Department promotional examinations was necessary to avoid disparate impact liability to African-American firefighters such that the City is entitled to safe harbor protection under Ricci v. DeStefano for any disparate treatment claims by Caucasian firefighters resulting from the decision to permit certain eligibility lists to expire without promoting anyone else (of any race) from the lists? This issue is preserved at A9-10, 357-58, 437-50, 465-73, 1049-55, 1257-66. 4. Whether the Fourth Department erred, as a matter of law, by failing to reduce the plaintiffs’ economic damages awards to $0 upon concluding that the plaintiffs’ expert’s assumptions and calculations 9 were speculative and that plaintiffs failed to meet their burden at trial to establish economic damages with “reasonable certainty”? This issue is preserved at A6-7, RA25-36, 75, 81-93. COUNTER-STATEMENT OF QUESTIONS PRESENTED ON PLAINTIFFS’ APPEAL 5. Whether the Fourth Department’s modification and reduction of the economic damages awards to the “active duty” plaintiffs should be affirmed when the Fourth Department made a factual finding that the assumptions utilized by the plaintiffs’ expert at trial were “not fairly inferable from the evidence,” because the expert’s opinion and calculation on damages was based on speculation? 6. Whether the Fourth Department’s modification and reduction of the economic damages awards to the “injured on duty” plaintiffs should be affirmed where the Fourth Department made a finding that the assumptions and calculations of the plaintiffs’ expert were contrary to the record evidence and utilized unsupportable “injury” as opposed to “disability” data, such that plaintiffs did not establish their damages 10 with “reasonable certainty,” leaving as “the only competent proof in the record . . . the calculation of defendant’s expert?” BACKGROUND AND PROCEDURAL HISTORY A. The Parties The caption lists thirteen plaintiffs, all of whom are Caucasian firefighters. They allege that the City discriminated against them by permitting civil service eligible lists for promotional vacancies to expire. The plaintiffs contend that had the lists been extended up to their maximum duration of four years in accordance with historical practice, they would have received promotions to various positions, including lieutenant, captain, battalion chief, and division chief. A57-71. The trial court dismissed the claims of one plaintiff, Anthony Hynes, on February 8, 2012, finding that the City’s actions had not harmed him. A22-23. His counsel served notice of entry with respect to this ruling on February 8, 2012. Hynes did not appeal. Thus, this appeal involves 12 plaintiffs. Defendant City of Buffalo is a municipal corporation organized under New York law. A62. In an Order granted September 10, 2007, the trial court dismissed from the suit defendant “City of Buffalo Department of Fire” for lack of 11 capacity. A339. By Order granted November 19, 2010, the trial court also dismissed defendant (former Human Resources Commissioner) Leonard Matarese in his individual capacity on qualified immunity grounds. A1259. The plaintiffs did not appeal these rulings and the time to do so has long since expired. B. The Remedial Decree In 1974, the United States sued the City of Buffalo in the United States District Court for the Western District of New York. Among other things, the suit alleged that the written civil service examination developed by NYS Civil Service and used by the City to select entry-level firefighters and police officers had a discriminatory adverse impact against minorities. The District Court found that the City’s continued use of the State’s examination was part of a pattern or practice of discrimination against African Americans, Hispanics, and women in the Fire and Police Departments. See United States v. City of Buffalo, 457 F. Supp. 612 (W.D.N.Y. 1978). On November 23, 1979, the District Court issued a Final Decree and Order (the “Remedial Decree”) designed to remedy the effects of past discrimination. A451-63. Among other relief, the Remedial Decree enjoined the City “from engaging in any act or practice with respect to hiring, assignment, 12 promotion, transfer, training or compensation which has the purpose or effect of discriminating against any employee or future employee . . . with, the Buffalo . . . Fire Department because of such individual’s race, sex or national origin, nor will they engage in any other acts or practices which deny to blacks, Spanish-surnamed Americans and/or persons of Spanish language . . . or women equal employment opportunities.” A451-52. The Remedial Decree imposed interim hiring ratios and affirmative recruitment efforts to increase the percentages of underrepresented classes. A452-53. The City appealed certain fact-findings of the district court and remedial elements of the Remedial Decree, but the Second Circuit ultimately modified and affirmed it. United States v. City of Buffalo, 633 F.2d 643 (2d Cir. 1980). The Remedial Decree, as modified over the years, still remains in effect today and is subject to judicial monitoring. A445. C. The MOCHA Actions In 1998, MOCHA, a not-for-profit organization composed of African- American firefighters, brought a putative class action against the City of Buffalo in the United States District Court for the Western District of New York, alleging racially discriminatory practices by the Fire Department in violation of Title VII of 13 the Civil Rights Act of 1964 and New York’s Human Rights Law (“MOCHA I”). A162-83 (M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 98-CV-99, Second Amended Complaint B). Among other things, the plaintiffs in MOCHA I claimed that the examination used to select firefighters for promotion to lieutenant - which was developed by the New York State Department of Civil Service, Testing Services Division (“NYS Civil Service”) and given by the City in 1998 (along with other New York jurisdictions) - had an illegal “disparate impact” against African- American firefighters. A163-83. In other words, according to the MOCHA plaintiffs, the examination was an arbitrary measure that discriminated against African-Americans by disproportionately selecting Caucasian candidates for promotion without in fact identifying the best qualified individuals. MOCHA filed a second putative class action in 2003. This second suit alleged that the 2002 administration of the State-developed lieutenant’s exam had a discriminatory disparate impact against African-American firefighters, just like the 1998 administration of the same exam (“MOCHA II”). A200-08 (M.O.C.H.A. Soc’y of Buffalo, Inc., 03 CV 580, Class Action Complaint). The plaintiffs in the MOCHA I and MOCHA II actions sought millions in compensatory damages, emotional/mental distress damages, preferential hiring, 14 retroactive appointment and seniority, punitive damages, and attorneys’ fees. A182, 204. D. Evaluation and Defense of the MOCHA Claims To assist with the defense of the MOCHA actions, the City retained Nancy Abrams, Ph.D. Abrams was a former Personnel Psychologist with the United States Office of Personnel Management, where her responsibilities included auditing NYS Civil Service. She had decades of experience consulting for municipalities throughout New York State with respect to civil service examinations. A465-66. In 2001, Dr. Abrams, advised the City that the lieutenant’s examination had a marked statistical adverse impact on minorities. A468. At that point, the City knew that the plaintiffs would be able to make out a prima facie case of discrimination and that the City would bear the burden of demonstrating with appropriate scientific evidence that the examination was valid, i.e., that it was “predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated.” Albemarle Paper Co. v. Moody, 422 U.S. 405, 431 (1975); see also 42 15 U.S.C. § 2000e-2(k)(1)(A)(i) (2013); People v. NYC Trans. Auth., 59 N.Y.2d 343, 348-49 (1983). A467. As the MOCHA litigation progressed, the City obtained discovery from NYS Civil Service, including the “job analysis” used to develop the exam and other evidence relevant to determining whether the exam in fact was a valid predictor of job performance. A447. In late January and early February 2003, the parties conducted the deposition of Dr. Wendy Steinberg, Ph.D., who was the NYS Civil Service employee principally responsible for developing the examination. A509-865. In January 2004, the parties deposed Paul Kaiser, who was Dr. Steinberg’s supervisor at the time she developed the tests. A866-969. While Steinberg and Kaiser gave testimony supportive of their own work, they also made significant admissions that revealed problematic deficiencies in methodology and the underlying research. A535-36, 539-41, 613-14, 811, 904-05, 909-10. On February 23, 2004, the plaintiffs then provided the City with the report of their expert, Kevin R. Murphy, Ph.D. A969-83. Among other qualifications, Dr. Murphy was the head of the Department of Psychology at Pennsylvania State University and had decades of experience in developing and 16 evaluating personnel selection procedures. A969. He was also known to the City, which itself had retained him as an expert on prior cases. A1016. Dr. Murphy’s report confirmed that the examination had a statistical adverse impact on minorities. His analysis showed that African Americans had only a 57% chance of passing the exam compared to Caucasians. For each of the exam’s six subtests, he opined that the likelihood that mere “chance” explained the differences in the scores between Caucasian and African-American candidates was less than 1 in 100. A973-74. Dr. Murphy also examined whether the 1998 lieutenant’s examination was a valid predictor of performance and whether it identified the best candidates for promotion. Based on his systematic review of the testimony and documents produced in MOCHA, including that provided by the NYS Civil Service witnesses, Dr. Murphy concluded that there was no “credible evidence” to support the use of the lieutenant’s examination as a personnel selection device. A970. In particular, Dr. Murphy identified three major flaws in the exam. First, Dr. Murphy found that there was no scientific evidence showing that three of the exam’s six subtests, namely “Training Practices,” “Supervision,” and “Understanding and Interpreting Written Materials,” were even valid measures of 17 the aptitudes that they purportedly tested. Indeed, Dr. Murphy noted that there was not even any evidence “of any effort to investigate validity” of these subparts by NYS Civil Service. Second, Dr. Murphy opined that the job analysis performed by Dr. Steinberg as a foundation for developing the examination was inadequate, among other reasons, due to “a systematic failure to sample fire departments in larger cities.” A974-75. By Dr. Steinberg’s own admission, the response rate to empirical surveys that she distributed to incumbent firefighters throughout New York State was “ridiculously low” in Buffalo and other large upstate cities. A975- 76. So, according to Dr. Murphy, there was again no evidence that the exam actually tested for aptitudes required of fire lieutenants in Buffalo and similar municipalities. And, third, Dr. Murphy concluded that Dr. Steinberg’s job analysis did not support including the same three subtests for which there was allegedly no evidence of validity. A974. So, even assuming the subtests in fact measured the very qualities they were supposed to, Dr. Murphy found no evidence showing these qualities were important for performing the lieutenant’s position so as to justify their inclusion in the examination. 18 On September 27, 2004, the City had the opportunity to depose Dr. Murphy and probe further his highly critical conclusions about the examination. A983. E. The City’s Own Expert - Dr. Abrams - Advised the City That the Plaintiffs Will Likely Prevail in MOCHA I and That It Would Not Be in the City’s Interest to Call Her as a Witness By the summer of 2005, the City was preparing for a court-ordered mediation in the MOCHA actions, which was scheduled for September 20, 2005. A443, 446. The City’s then Human Resources Commissioner, Leonard Matarese, consulted at length with the City’s legal counsel and with Dr. Abrams, to discuss case prospects and exposure. A443-44. By then, Dr. Abrams had independently reviewed the evidence accumulated in the MOCHA actions, including Dr. Murphy’s expert report and testimony. A469. Dr. Abrams informed Matarese that the plaintiffs’ expert, Dr. Murphy, was an acknowledged scholar in the field of personnel psychology and that his criticisms of the lieutenant’s examination were not only substantial and legitimate, but they echoed many of her own concerns. A445, 469-70. The concerns, which Dr. Abrams expressed to the City, included: (1) the job analysis performed by Dr. Steinberg was an inadequate basis for the 19 validation of the examination in Buffalo because it was based on data that came predominantly from smaller localities; (2) Dr. Steinberg had placed too much reliance on a small panel of firefighting experts that did not include anyone from the Buffalo Fire Department; (3) Dr. Steinberg relied on the firefighting experts to draw conclusions about what content to include on the examination, even though the data from her job analysis did not support some of those conclusions; (4) the examination included several subparts that measured general traits that were not specifically linked to the fire lieutenant’s job; and (5) the pass-fail cut-off point for the examination was inadequately justified. A470. Abrams further informed Commissioner Matarese that in her expert opinion, there was a substantial risk that the MOCHA plaintiffs would prevail against the City because the scientific evidence supporting the validity of the lieutenant’s examination - i.e., whether the test was job-related and in fact selected candidates best suited for the position - was quite limited. A444, 470-71. Dr. Abrams further explained that her serious concerns about the lieutenant’s examination were equally applicable to the other fire promotional exams for captain, battalion chief, and division chief because they were all produced by NYS Civil Service at the same time and in the same manner as the 20 lieutenant’s examination, and they were all based on the same research or “job analysis” that Dr. Wendy Steinberg, performed in the mid-to-late 1990s. A444, 472. NYS Civil Service had never repeated Dr. Steinberg’s job analysis. For this reason, Dr. Abrams told the City that her conclusions also applied to the promotional examinations given to the Fire Department in 2002 because the same validity evidence was used to create all of those exams as well. A444, 472. In light of her opinions and conclusions, Abrams ultimately advised Matarese that it might not be in the City’s best interest to call her to testify as an expert in the MOCHA actions. A471. F. Decision to Permit the Eligible Lists to Expire and Develop New Examinations Matarese now faced a difficult decision. Not only was the MOCHA litigation coming to trial, but the evidence pointed to a strong likelihood that the examinations were causing a disparate impact and were indefensible. Statistically, as of the first half of 2005, only ten of the approximately two hundred promotional positions within the Fire Department were held by African-Americans, even though the Department was nearly 40% minority at the time. A445. The City and Matarese were likewise well aware of the Remedial Decree and the District Court’s finding in the U.S. v. Buffalo matter that State-developed entry-level 21 examinations had previously contributed to the Department becoming nearly exclusively Caucasian. A445. The plaintiffs’ expert - Dr. Murphy - had identified numerous serious deficiencies in the 1998 promotional examination developed by NYS Civil Service, and sharply criticized the developers for relying upon deficient research and an inadequate job analysis. Dr. Murphy opined that administration of the examination contributed to a strong racial imbalance between the Fire Department’s hierarchy and its rank and file. A445. The City’s own expert - Dr. Abrams - not only echoed the concerns of the plaintiffs’ expert, but she offered up even more bad news. Not only did she tell Matarese that the plaintiffs were likely to prevail in the MOCHA litigation, but the deficiencies in the 1998 lieutenant’s exam extended to the entire series of the 1998 and 2002 promotional examinations. A444, 472. Thus, Matarese learned that all of these examinations were having a statistically adverse impact on African-Americans because they selected proportionately fewer African- American candidates compared to candidates belonging to other racial groups. A445, 471. Given Dr. Abrams’ conclusions, Dr. Murphy’s report and testimony, the requirements of the Remedial Decree, and the long history of litigation 22 concerning the Fire Department’s employment practices (past and pending), Matarese concluded that continued reliance on the State-developed exams would likely expose the City to even more litigation, further potential liability, and innumerable new claims. If the MOCHA plaintiffs prevailed in their challenge to the lieutenant’s examination, the City surely would face similar challenges contesting the validity of other exams in the same series. A445-46. Indeed the MOCHA plaintiffs had also pleaded a deliberate discrimination claim based upon the allegation that the City was knowingly using invalid exams that favored Caucasians. A173. As a result, Matarese feared that any further use of the exams - in light of all the evidence available to the City at the time - could provide a credible foundation for this separate theory of liability both in the MOCHA litigation and for future litigants. A446. In the face of what appeared to be an impending avalanche of liability, the City retained a nationally-recognized consultant in personnel measurement to develop an entirely new examination series for the Fire Department while permitting the existing promotional eligible lists to expire automatically under the Civil Service Law between September 18, 2005 and February 3, 2006. A446, 448. 23 G. The Margerum Action is Commenced While MOCHA I and MOCHA II were still pending, and in the wake of the City’s decision to permit the eligible lists to expire, a group of Caucasian firefighters commenced this action on February 12, 2007. Their complaint alleges intentional or “disparate treatment” discrimination based on their race under the New York Human Rights Law, the Civil Service Law, and the Equal Protection and Due Process Clauses of the New York State Constitution based on the City’s decision to permit the fire promotional lists to expire. This action purportedly deprived them of promotional opportunities that allegedly would have existed if the lists had been renewed through their maximum four-year duration. A57-71. The City filed a pre-answer motion to dismiss the Complaint under N.Y. C.P.L.R. § 3211, raising, among other grounds, the plaintiffs’ undisputed failure to file notice of their claims in accordance with General Municipal Law § 50-i. A72-73. The City argued that the statutory provision required the plaintiffs, as a precondition to commencing suit, to provide prior notice of their claims in order to permit timely investigation and an opportunity for early resolution. In response, plaintiffs cross-moved for partial summary judgment on liability. A221-22. 24 In an Order entered on September 10, 2007, Supreme Court, Erie County (Michalek, J.), denied the City’s initial motion to dismiss and granted the plaintiffs’ pre-answer cross-motion for summary judgment on liability, even though there had been no answer or discovery in the case. In reaching this result, the trial court converted the City’s motion to dismiss into a motion for summary judgment under N.Y. C.P.L.R. § 3212(c). The trial court decided liability on the merits, and impliedly rejected - without discussion or analysis - the City’s arguments that Human Rights Law claims are subject to the notice of claim requirements under the General Municipal Law. A336-40. On October 10, 2007, the City filed and served a notice of appeal from the September 10, 2007 Order. A341. H. The City Obtains a Federal Court Injunction to Stay Margerum Pending the Outcome in MOCHA Shortly after Supreme Court, Erie County, granted partial summary judgment to the Margerum plaintiffs, the City moved to enjoin the Margerum action in the U.S. District Court for the Western District of New York, where the MOCHA I litigation was then nearing trial. The City sought this relief in order to avoid the risk of inconsistent judgments should the MOCHA plaintiffs prevail and the City be required to provide monetary and other relief to both sets of plaintiffs. 25 In an Order filed on December 19, 2007 (the “Federal Injunction”), the District Court granted the City’s motion “to the extent it seeks to enjoin the plaintiffs in Margerum, et al. v. City of Buffalo, et al., Index No. 1462/2007, and their attorneys, from proceeding any further in the state courts pending the outcome of the trial in this action, M.O.C.H.A. v. City of Buffalo, No. 98-CV-99 . . . .” M.O.C.H.A. Soc’y., Inc. v. City of Buffalo, 2007 U.S. Dist. LEXIS 93066, at *15-16 (W.D.N.Y. Dec. 13, 2007). A1143-52. In granting the injunction, the District Court recognized the seriousness of the claims raised in the MOCHA actions and the quandary facing the City: “There is a significant risk that the state court could order relief in favor of the Margerum plaintiffs . . . which might then be subject to some type of corrective order from this court should the federal trial result in a judgment in favor of the MOCHA plaintiffs.” Id. at *13; A1150. The District Court emphasized that the “possibility of incompatible relief is real, not speculative.” Id. The District Court further noted that the City’s actions in discontinuing the use of the prior exams and developing new exams was “precisely what is required under the Remedial Decree.” Id. at *14; A1150-51. 26 I. The MOCHA Plaintiffs Fail to Prove their Claims at Trial The District Court then ordered a bench trial in MOCHA I, which proceeded over five days during the summer of 2008. The trial’s limited purpose was to determine whether the lieutenant’s examination was “job related and consistent with business necessity, as required under Title VII to validate the use of the Exam notwithstanding disparate impact.” A370. Among other witnesses, the Court heard testimony from Dr. Steinberg, the exam’s developer, Paul Kaiser, her supervisor at NYS Civil Service, and the plaintiff’s expert, Dr. Murphy. The City did not call Dr. Abrams, heeding her advice that calling her would not be in the City’s best interests. A373-84. On March 9, 2009, the U.S. District Court dissolved the December 19, 2007 injunction and issued an Order dismissing the Title VII claims in the MOCHA I action to the extent the plaintiffs sought relief based on the City’s 1998 administration of the lieutenant’s exam. M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 2009 U.S. Dist. LEXIS 20070 (W.D.N.Y. Mar. 9, 2009); A405. The District Court’s Order reflects that it evaluated and balanced the evidence before it, and ultimately elected to credit Dr. Steinberg, the NYS Civil Service test developer, over the MOCHA plaintiffs’ expert: 27 To summarize, the court finds the proof presented at the hearing sufficient to show that the 1998 Lieutenant’s Exam was developed by the Testing Services Division of the New York State Civil Service Department in a manner that is significantly correlated with important elements of work behavior which are relevant to the position of fire lieutenant as performed in the City of Buffalo. Accordingly, the City has met its burden of demonstrating that the Exam is job-related for the position and consistent with business necessity . . . . A405 After coming to this conclusion, the District Court observed that the burden then shifted to the MOCHA plaintiffs to demonstrate that other tests or devices were available that would satisfy business necessity, but would do so without producing the disparate effect. A405. The Court went on to conclude that: “[u]pon review of the record, and despite the long history of this litigation, the court finds no proof that could be considered sufficient to meet this burden of persuasion, or to raise a genuine issue of fact requiring further proceedings in this regard.” A405. In effect, the District Court determined that the evidence the plaintiffs presented at trial was inadequate to prove that the use of the civil service tests resulted in illegal disparate impact discrimination under Title VII. A370-406. A year later, on May 12, 2010, the District Court dismissed the MOCHA II action as well, finding that the African-American firefighter plaintiffs 28 in that action were collaterally estopped from challenging the 2002 administration of the lieutenant’s examination because there was “a substantial identity of the dispositive issues and proof regarding the validity of the Lieutenant’s Exams litigated in M.O.C.H.A. I and M.O.C.H.A. II.” M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 03 cv 580, 2010 U.S. Dist. LEXIS 46628, at *11 (W.D.N.Y. May 12, 2010). J. The Notice-of-Claim Appeal in Margerum With the District Court’s injunction having been dissolved on March 9, 2009, the City’s appeal from the Supreme Court’s September 10, 2007 Order in Margerum proceeded. On June 5, 2009, the Fourth Department issued a Memorandum and Order affirming the trial court’s denial of the City’s motion to dismiss, holding, among other things, that dismissal of the Human Rights Law claims were not warranted for plaintiffs failure to file a notice of claim under the General Municipal Law prior to commencing this action. A15; see also Margerum v. City of Buffalo, 63 A.D.3d 1574, 1580 (4th Dep’t 2009). In addition, the Fourth Department’s June 5, 2009 Order modified Supreme Court’s Order by reversing the grant of partial summary judgment to the plaintiffs on their pre-answer motion. Id. After adopting and applying a strict 29 scrutiny standard, the Fourth Department concluded that the plaintiffs were not entitled to summary judgment, among other reasons, because they had failed to establish that the City’s actions were not narrowly tailored to meet a compelling interest as a matter of law. Id. In so holding, the Fourth Department also distinguished the Second Circuit’s decision in Ricci v. DeStefano, 530 F.3d 87 (2d Cir. 2008), rejecting the strict scrutiny analysis, and noting that the implications of Ricci were unclear and that the lapsing of the lists was a race- conscious decision. At the time, the U.S. Supreme Court had granted certiorari in Ricci but a decision had not yet come down. K. The U.S. Supreme Court Decides Ricci v. DeStefano Three weeks later, on June 29, 2009, the U.S. Supreme Court issued its landmark decision in Ricci v. DeStefano, 557 U.S. 557 (2009). For the first time, the Court considered whether and under what circumstances an employer could appropriately take race-based action in order to achieve voluntary compliance with Title VII’s prohibition against unintentional disparate impact discrimination. In other words, the Court weighed to what extent disparate treatment of majority employees - the type of discrimination alleged by the Margerum plaintiffs - was permissible to remedy disparate impact discrimination 30 against minority employees - the type of discrimination alleged by the MOCHA plaintiffs. In ruling for the plaintiffs, the Supreme Court concluded that an employer could not act based on mere statistical disparity alone. Ricci, 557 U.S. at 579. (“Without some other justification, . . . race-based decision making violates Title VII’s command that an employer cannot take adverse employment actions because of an individual’s race.” Ricci, 557 U.S. at 579. At the same time, the Court made clear that an employer could legally take race-based measures to achieve compliance. Id. at 583-85. The Court held that “before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.” Id. at 585. In formulating this standard, the Court specifically rejected, “as overly simplistic and too restrictive,” the rule that an employer “in fact must be in violation of the disparate-impact provision [of Title VII] before it can use compliance as a defense in a disparate- treatment suit.” Id. at 580-81. The Court noted that a more stringent requirement “would run counter to what we have recognized as Congress’ intent that voluntary 31 compliance be the preferred means of achieving the objectives of Title VII.” Id. at 581. After Ricci came down, the Margerum plaintiffs and the City moved the Fourth Department to renew their arguments on the grounds that Ricci represented a change in controlling law, or, in the alternative, for leave to appeal to the Court of Appeals from the Fourth Department’s non-final Order. On October 2, 2009, the Fourth Department denied the parties’ motions “without prejudice to motions for the same or similar relief at Supreme Court.” A365-66; see also Margerum v. City of Buffalo, 66 A.D.3d 1502 (4th Dep’t 2009). The Court likewise denied the alternative cross-motions for leave to appeal to the Court of Appeals. Id. L. Supreme Court Grants Summary Judgment on Liability to the Margerum Plaintiffs With the matter pending in the trial court, the Margerum plaintiffs again moved for partial summary judgment on liability and the City cross-moved for summary judgment dismissal of the plaintiffs’ claims. Both sides argued that Ricci controlled and required relief in their favor. A353-54, 437-39. Among other contentions, the plaintiffs argued that the City lacked a strong basis in evidence because: (1) testimony by Commissioner Matarese in a prior proceeding allegedly 32 showed that he permitted the lists to lapse strictly due to racial disparities; (2) the City’s conduct in defending the MOCHA actions was purportedly inconsistent with permitting the lists to lapse; and (3) the U.S. District Court’s subsequent decision dismissing MOCHA supposedly made clear that the City should have known all along that the examinations at issue were in fact valid. A1154-74. The City contended that, at the time it acted, it had a “strong basis in evidence” to conclude that the eligible lists had a discriminatory adverse impact on African-Americans, notwithstanding the District Court’s subsequent ruling some three years later that the MOCHA I plaintiffs had failed to establish their claims at trial. To support its summary judgment motion, the City submitted the affidavits from Commissioner Matarese and the City’s independent consultant, Nancy Abrams, Ph.D., the expert report and deposition transcript of Kevin R. Murphy, Ph.D., and the deposition transcripts of Dr. Murphy, Dr. Steinberg, and Paul Kaiser, as well as other evidence from the MOCHA actions. A440-50, 465-73, 509-1048. In opposing the City’s evidentiary submissions, the plaintiffs submitted no expert testimony or other new evidence to show that Dr. Abrams’ conclusions about the risks the City faced from continued use of the eligible lists 33 were unfounded or that otherwise suggested the City’s reliance on her independent review of the evidence in the MOCHA actions was ill considered. A355-63, 1154-74. In an Order entered on November 29, 2010, Supreme Court granted partial summary judgment to the plaintiffs on liability, concluding that the City failed to raise a triable issue of fact sufficient to preclude the relief sought by the plaintiffs, and failed to meet its burden on the cross motion. A1261. In reaching this result, the court purported to apply the “strong basis in evidence” standard announced by the U.S. Supreme Court in Ricci v. DeStefano, 557 U.S. 557 (2009). The court acknowledged that the City consulted with Dr. Abrams but nonetheless concluded - without elaboration - that testimony given by Human Resources Commissioner Matarese in a prior proceeding demonstrated that the City could not meet the Ricci standard. A1262-64. The court further emphasized that the City continued to defend the MOCHA actions, while broadly accusing the City of “turning a blind eye” towards evidence supporting the exam’s validity. A1265. The court’s decision did not analyze the Ricci decision or explain how the “strong basis in evidence” standard was to be applied. Also absent from the trial court’s decision was any discussion of actual evidence from the MOCHA actions or the 34 substance of Dr. Abram’s and Dr. Murphy’s conclusions, and why these were inadequate as a matter of law to establish a strong basis in evidence for the City’s voluntary compliance actions. A1262-65. M. The Fourth Department Affirms the Grant of Partial Summary Judgment to the Margerum Plaintiffs The City appealed the trial court’s November 19, 2010 summary judgment Order imposing liability on the City. On April 29, 2011, the Fourth Department affirmed in a cursory Memorandum and Order: “We agree with the [trial] court that the City defendants did not have a strong basis in evidence to believe that they would be subject to disparate-impact liability if they failed to take race-conscious action, i.e., allowing the eligibility lists to expire, inasmuch as the examinations in question were job-related and consistent with business necessity.” Margerum v. City of Buffalo, 83 A.D.3d 1575, 1576 (4th Dep’t 2011). Whether the examinations “were job-related and consistent with business necessity,” however, was not a question before the Fourth Department or otherwise ever a matter for determination in State court. Rather, that language came from the standard applied by the District Court in evaluating the City’s defense to the disparate treatment claims asserted by the MOCHA I plaintiffs. The Fourth Department thus concluded that the City could not have had a strong basis 35 in evidence to act in 2005 solely because the District Court found that the MOCHA I plaintiffs failed to succeed on their proof at trial some three years later. The Fourth Department reached this result as a matter of law and despite Ricci’s unambiguous statement that an employer may validly discontinue a suspect employment practice without liability even where it cannot be certain that the suspect practice will ultimately be found to be illegal. Ricci v. DeStefano, 557 U.S. 557, 581 (2009). In this way, the Fourth Department rejected Ricci by holding that there is no strong-basis-in-evidence safe harbor for defendants in Human Rights Law cases if a suspect practice is later shown to be legal (or not proved by other plaintiffs to be illegal). N. The Trial on Damages in Margerum With liability established as a matter of law by the Fourth Department’s April 29, 2011 affirmance, the trial court proceeded with a bench trial on damages over fourteen non-consecutive days between August 23, 2011 and October 25, 2011. A20. An overview of the different categories of plaintiffs, their alleged claims, the expert testimony, and the trial court’s damages awards are discussed below to provide the Court with a synopsis of the issues. A more detailed discussion and analysis of the relevant facts, and how they bear upon the 36 calculation of damages, are reserved for the Argument section of the brief where they can be presented in appropriate context and as relevant to the expert testimony. 1. The Plaintiffs The biographical data relevant for determining the plaintiffs’ alleged damages is summarized in the tables below. For analytical convenience and simplicity, the plaintiffs were divided into three groups for damages purposes: (1) those who were promoted subsequent to the expiration of the eligible lists; (2) those who had not been promoted as of the time of trial in the fall 2011; and (3) those who were either receiving or applying for disability retirements, also known as permanent “injured-on-duty” or “IOD” status, for having suffered disabling injuries in the line of duty as firefighters. 37 The Subsequently-Promoted, Active-Duty Plaintiffs Name Age (at trial) Position Sought in 2006 Status (at trial) Relevant testimony 1. Kertzie 54 Battalion Chief Promoted to Battalion Chief on 10/23/08; active A1392- 1421 2. Lotocki 50 Captain Promoted to Captain on 10/23/08; active A1499- 1505 3. Osinski 40 Lieutenant Promoted to Lieutenant on 09/04/09; active A1422-43 4. Reddington 53 Captain Promoted to Captain on 09/04/09; active A1316-44 The Non-Subsequently-Promoted, Active-Duty Plaintiffs Name Age (at trial) Position Sought in 2006 Status (at trial) Relevant testimony 5. Cassel 45 Lieutenant Active A1451-62 6. Fahey 49 Battalion Chief Active A1275- 1308 7. Hazelet 50 Battalion Chief Active A1357-66 8. Margerum 41 Lieutenant Active A1309-15 9. Skinner 57 Captain Active A1345-56 38 The IOD Plaintiffs Name Age (at trial) Position Sought in 2006 Status (at trial) Relevant testimony 10. Abad 48 Lieutenant Sustained disabling injury 01/19/07; disability retirement approved March 2009 A1444-50, 1918-20 11. Arnone 55 Lieutenant Sustained disabling injury 11/18/06; disability retirement approved August 2009 A1485-98, 1921-22 12. Denz 52 Lieutenant Sustained disabling injury 12/00/09; applied for disability retirement early 2011 A1367-89, 1923 2. Testimony on Economic Damages Issues While the City presented arguments and evidence addressed to proximate cause issues, a substantial portion of the trial was consumed by the parties’ damages experts. Richard A. Shick, Ph.D., Professor of Economics and Finance and Dean Emeritus of the Wehle School of Business, testified for the plaintiffs. A1511-12. Kelly Besaw, C.P.A., a partner at the accounting firm of Chiampou, Travis, Besaw, and Kershner, testified for the City. A1936. While the 39 plaintiffs bore the burden of proof on damages, the City engaged its own expert to challenge and analyze the opinions and conclusions of the plaintiffs’ expert, and to perform his own analyses and calculations. Fundamentally, both experts employed the same basic methodology in determining the plaintiffs’ alleged damages. Each determined probable damages by calculating the difference between the plaintiffs’ projected “recalculated” earnings and benefits - i.e., what they would have likely earned had they received the promotions at issue - and their “baseline” earnings and benefits - i.e., what they are likely to earn given that they did not receive promotions in 2005 or 2006. A1519-22, 1930-31, 1938-39, 1987-88, 2816-48. Each expert further included in their damages analysis not only lost front and back pay but also losses attributable to diminished pension earnings. Lastly, each expert allowed for such factors as interest, inflation, and the present value of future damages. A1545-46, 2816-48. The differences in the end calculations are chiefly attributable to the factual assumptions underlying their analyses. The plaintiffs’ appeal focuses on three particular assumptions, which became focal points of the City’s damages arguments at the Fourth Department. 40 a. Overtime Overtime is a substantial component of the plaintiffs’ overall compensation as firefighters. Both experts relied upon historical data to project the plaintiffs’ future overtime earnings. A1526-29, 1955-57. The plaintiffs’ expert relied on data from 2008, 2009, and 2010 when overtime reached peak levels. A1531-32, 2097. In contrast, the City’s expert utilized data from 2000 to 2005, when overtime levels were closer to historic norms. A1954-58. At trial, multiple witnesses testified that overtime was extraordinarily high during the later period relied upon by plaintiffs’ expert. According to current Fire Commissioner, Garnell Whitfield, overtime levels within the Fire Department from 2005 to 2010 “doubled or in some cases tripled or quadrupled compared to previous years.” A1809. Former Fire Commissioner Michael Lombardo (called by plaintiffs to support their case) agreed that when he was Commissioner during the years 2006 to 2009, those years were “not at all” typical for overtime and that “[the Fire Department’s] overtime expenditures probably went up three times what they were when we came [in].” A1779-80. Numerous plaintiffs, including Fahey, Reddington, and Skinner, likewise acknowledged that overtime amounts had been unusually high in recent years. A1282, 1308, 1321, 1338-39, 1348. Among other 41 factors, an extraordinary number of vacancies within the Fire Department and unusually high sick time drove the uncommonly high overtime from 2005 to 2010. A1808-09. Since 2010, however, vacancies began decreasing substantially as a result of the Department hiring three new classes of recruits - totaling over 100 firefighters, which also drove down overtime hours. A1349, 1457, 1780, 1816-18. Prior to these classes, the Department had not hired a single new firefighter since 2001. A1349, 1457, 1780, 1816-18. Likewise, sick time declined by 40% in 2010 after peaking in 2008 and 2009. A1822-26; RA128. Commissioner Whitfield testified that he anticipated overtime would continue to trend downward due to his implementation and enforcement of policies designed to discourage firefighters from using sick leave unnecessarily. A1818-20, 1822. In fact, during the 2010/2011 fiscal year, overtime expenditures in the Fire Department had already dropped by $1 million over the preceding fiscal year. A2315-16. And the overtime budget for 2011/2012 was projected to be an additional $1 million lower. A2316. Even plaintiffs Fahey and Reddington agreed and acknowledged that overtime had begun to come down in the Department after hiring of the new recruits and implementation of other controls. A1308, 1339. 42 b. Likelihood of Future Promotions The second main area where the experts differed substantially was their respective calculations of front pay damages, which incorporated their analyses concerning possible future promotions of the nine active-duty plaintiffs. The experts’ conclusions about the average interval to, and probability of, future promotions were very close to one another. A1939-47. In fact, even though each relied on different data, they agreed that the average interval between promotions is seven years; and likewise determined probabilities of promotion between the various ranks that were nearly the same. A1939-47, 2851, 2854-55, 2863. Each expert also used a similar method for calculating front pay damages, which consisted of performing two essential calculations - a “baseline” scenario and a “recalculated” scenario. The baseline scenario was intended to reflect the plaintiffs’ anticipated future earnings based on their current status, given the alleged denial of their promotions in 2005 and 2006. The recalculated scenario was intended to reflect what the plaintiffs’ would have earned had they not been denied promotions. In essence, the quantifiable gap between the baseline and recalculated scenarios was the measure of the plaintiffs’ “damages.” 43 As noted above, each party’s expert was able to quantify both the average interval to promotion and the probability of promotion between ranks based on historical (albeit different) Fire Department data. But Dr. Shick failed to incorporate these same averages and probabilities - which he admittedly was able to calculate - into his baseline scenario; thus falsely inflating the gap between the two scenarios and wrongly increasing his damages calculation for each of the plaintiffs. Shick’s only explanation for why he applied this assumption in one scenario but not the other was that “in the post discrimination world . . . we have to consider the effect not only on the individuals but also the willingness of the Department to promote.” A1607. In Shick’s view, “we don’t have enough information to make a reasonable projection, so therefore I have projected that they would not get promotions.” A1607. Notably, Shick reached this conclusion, even though each of the six active-service plaintiffs questioned on this issue - Reddington, Skinner, Kertzie, Osinski, Cassel, and Lotocki - testified that they planned to continue seeking promotions. A1318, 1363-64, 1403, 1415, 1425, 1434-35, 1505; RA68-70. And four of the nine plaintiffs had, in fact, already received promotions. A1397, A1503-04, A1424, A1317-18. 44 In contrast, Besaw concluded that incorporating interval to and probability of promotion into the baseline scenarios was appropriate for a number of reasons. First, both experts agreed that they could determine, to a reasonable degree of certainty, both the probability of and the interval to promotion. A1625- 26, 1939-47. Second, four of the remaining nine active-service plaintiffs had already received promotions by the time of trial, and many plaintiffs had “many, many years left in their work-life expectancy, often far exceeding those average time intervals to promotion.” A1993. Third, the data showed that probability of promotion increases with successive promotions, A1942-44, and in calculating their rank on eligible lists, firefighters also receive points for longevity. Both of these factors make it more likely that those with greater years of service will be promoted. A2230-31, 2321, RA98-127. Importantly, however, Besaw, did not assume that any of the plaintiffs would in fact receive a future promotion. He made clear that, “under no circumstances do my calculations assume a 100% probability of promotion. They assume the average probability for the department based on that data.” A2119-20 (emphasis added). On cross-examination, Besaw acknowledged that an individual plaintiff’s damages might go up if he never received another promotion but 45 emphasized that a plaintiff’s damages would likewise go down if he were promoted. A2231-32. c. Assumptions Concerning IOD Plaintiffs The third assumption where the experts differed is whether the IOD plaintiffs would have become disabled had they received the promotions at issue. This assumption substantially influenced the IOD plaintiffs’ damages because their current disability income is largely tax free and, when so adjusted, effectively exceeds what they might earn in active service even assuming promotions and a higher rank. A2021-22, 2029-30. Shick initially testified that he based his calculations using a 100% probability that these plaintiffs would not have been injured had they been promoted. A1577-78, 2286, 2816-48. That assumption was fully consistent with the IOD plaintiffs’ own testimony, each of whom insisted that they would not have become disabled had they received the promotions at issue. A1577-78, 1919-20, 1922, 1923. But in performing his original calculations, Shick failed to account for the tax-exempt status of the IOD plaintiffs’ disability income (which he admitted at trial). A1577-78. 46 Besaw’s calculations assumed - just as Shick did initially - that the IOD plaintiffs would not have become disabled had they received promotions. A2020. Besaw’s calculations, however, also accounted for the tax exempt status of these plaintiffs’ disability income. Once tax equalized, the IOD plaintiffs’ disability income exceeded the projections of their income had they remained in active service. Accordingly, Besaw determined that the IOD plaintiffs had negative damages. A2021-22, 2029-30; see also A3098-99, 3102. After reviewing Besaw’s calculations, Shick was forced to concede the defects in his calculations, and admitted, somewhat candidly, that if he had factored in the tax-exempt status of this income, as he should have, it “wipe[d] out the loss” identified in his original calculations. A1578. In other words, the IOD plaintiffs had no recoverable damages. To avoid this outcome, Shick completely altered course in an effort to create a damages award for these plaintiffs. To do so, he reworked his calculation using the exact opposite assumption, i.e., that the IOD plaintiffs would all have become disabled even if they had been promoted, even though that assumption completely contradicted the IOD plaintiffs’ testimony. Shick then compared the projected disability income they would receive if disabled as lieutenants to the 47 income they received as disabled firefighters (not promoted) in order to recalculate these plaintiffs’ alleged damages. A1578-82, 2857-59. By changing the fundamental factual assumption, Shick’s calculations of the IOD plaintiffs’ combined economic damages went from $0 (when appropriately tax-equalized) to $610,856. A2857-59. The trial court ultimately requested that the parties’ experts perform a weighted analysis of the IOD plaintiffs’ damages: one which factored in the probabilities of becoming disabled both as firefighters and, separately, as lieutenants. Shick claimed that his weighted analysis showed that the IOD plaintiffs would have become disabled even if they had been promoted. A2257-61, 2957. But he was forced to acknowledge that his conclusion was based on a single year’s worth of injury data which showed that lieutenants reported injuries (whether minor or major) about 85% as frequently as firefighters. A2262-65, 2957, 2995-97, A2259, 3180-82. And he acknowledged that Besaw’s analysis was “within just a small number spot on” with a study of departmental disability retirements that Shick had performed in this case, but which, for unexplained 48 reasons, he chose not to utilize in analyzing the IOD plaintiffs’ damages. A2263, 2957. Besaw, by contrast, studied and relied upon fifteen years of disability retirement data from the department between 1996 and 2010, to conclude that a lieutenant was only about 59% as likely as a firefighter to receive a disability retirement. A2023-28, 2877. Applying this probability weight (as directed by the Court), Besaw determined that Abad’s and Arnone’s damages continued to be negative, A2029-30, while Denz’s damages under the same analysis were $40,966. A3087. 3. The Experts’ Supplemental Calculations After hearing their testimony, the trial court requested each expert to provide supplemental submissions post-trial which calculated the plaintiffs’ alleged damages under various assumptions specified by the Court. Among other instructions, the court requested each expert to recalculate the plaintiffs’ future damages, basing their overtime assumptions on average overtime by rank for the years 2006, 2007, 2008, and 2010. The court also directed the City’s expert, Besaw, to use Shick’s assumption that none of the plaintiffs would receive any further promotions during the course of their careers to calculate the plaintiffs’ 49 baseline earning projections (but not to calculate their recalculated earning projection, which would continue to incorporate a likelihood of promotion). A2038-41, 2096-2100. Besaw submitted a report complying with the court’s request. A3083-3177. Shick did not, completely ignoring this aspect of the Court’s instruction. A43-44, 48. 4. Non-economic Damages During the course of trial, the plaintiffs offered testimony concerning their alleged emotional and mental distress injuries, which they claimed were the result of the City’s alleged failure to promote them. Their claims, however, were not supported by medical evidence and consisted largely of subjective, “garden- variety” physical and emotional symptoms such as headaches, stomach distress, inability to concentrate, distraction, lack of motivation, irritability, anxiety, and feelings of depression. Eleven of the twelve admitted not seeking any psychiatric treatment or counseling whatsoever. RA52 (Abad), RA59, RA-61(Arnone), A1459, RA56-57 (Cassel), A1387-88 (Denz), RA49 (Hazelet), A1420 (Kertzie), RA71-73 (Lotocki), RA38-40 (Margerum), A1441-42 (Osinski), RA95-96 (Reddington), A1355 (Skinner). In addition, virtually all of the plaintiffs acknowledged that any promotions denied them did not substantially impact their 50 family, work, or other social relationships. RA60 (Arnone), A1378-79 (Denz), A1301-03 (Fahey), RA50 (Hazelet), A1420 (Kertzie), RA71, RA64 (Lotocki), A1441-43 (Osinski), A1335-36 (Reddington), RA46-48 (Skinner). A majority of them admitted that they continue to participate in the same activities they enjoyed before they were denied the promotions to which they claim to have been entitled. RA53 (Abad), A1458, RA54-55 (Cassel), RA62-63, RA66-67 (Lotocki), RA41-44 (Margerum), A1432-33 (Osinski). O. The Margerum Plaintiffs are Awarded Damages in Excess of $2.7 Million On February 8, 2012, the trial court (Michalek, J.) entered a Memorandum Decision and Order awarding the Margerum plaintiffs a total of $2,765,170. A20-56. Of this amount, $2,610,170 represented the plaintiffs’ aggregate economic damages, while $255,000 represented their aggregate emotional distress damages. In determining the plaintiffs’ economic damages, the court adopted assumptions consistent with those of the plaintiffs’ expert, Shick, with respect to the three issues now under appeal. The court thus ruled that the years 2006, 2007, 2008, and 2010 - when overtime exceeded historical averages by as much as three to four times - provided the most appropriate data for projecting future 51 overtime levels for the active-duty plaintiffs. A47-48. In determining their future damages, the trial court similarly adopted Shick’s assumption that no active-duty plaintiff would ever be promoted again, A49-50, even though it recognized that four of the nine remaining active duty plaintiffs had, in fact, already been promoted since the time of the alleged discrimination. A30, 34, 36, 39. The court likewise adopted Shick’s assumption that lieutenants are 85% as likely as entry-level firefighters to become permanently disabled in determining the IOD plaintiffs’ economic damages - despite the fact that this assumption was based on injury, not disability data. A51-53; A3180-82. The City timely filed a Notice of Appeal to challenge the damages award. A17. The plaintiffs did not appeal. P. The Fourth Department’s Final Order In Margerum In an Order and Memorandum entered on July 5, 2013, the Fourth Department rendered its decision on the City’s appeal from the February 8, 2012 trial court order awarding damages. A5-10. The Appellate Division agreed with the trial court’s finding that the plaintiffs had established that their alleged damages were proximately caused by the City’s actions, and also upheld the trial court’s $255,000 aggregate award for emotional and mental distress damages as 52 reasonable. A6. The Fourth Department, however, disagreed with the trial court’s economic damages award, concluding that the trial court had erroneously placed the burden of proof on the City to establish the plaintiffs’ damages and further erred by relying on assumptions not supported in the record. A6. With respect to the active-duty plaintiffs, the Fourth Department concluded that the assumptions relied upon by the plaintiffs’ expert in calculating his damages opinions were “not fairly inferable from the evidence,” and further that his opinion was “based on speculation about [the plaintiffs’] future job prospects.” A7. For these reasons, the court rejected the trial court’s damages awards to these plaintiffs, and instead adopted Besaw’s calculations, finding that they were “accurately inferable from the evidence.” A7; cf. A3086 (Table 1, column: “Original Assumptions”). With respect to the IOD plaintiffs, the Fourth Department concluded that “the weighted probability calculation of the plaintiffs’ expert was not established with ‘reasonable certainty,’ and that the court instead should have used the weighted probability calculation of defendants expert to determine the economic damages of the IOD plaintiffs.” A7. The court observed that all three IOD plaintiffs testified that they would not have been injured if they had been 53 promoted, and other plaintiffs testified that the probability of injury was lower at higher ranks. A7. The Court observed that plaintiff’s expert initially agreed with that testimony until he realized that tax equalization would wipe out the IOD plaintiffs’ damages; and only then did he deem it necessary to recalculate the IOD plaintiffs’ alleged damages by incorporating the completely opposite assumption - i.e., that they would have been injured on duty even if they had been promoted between 2005 and 2006. The Fourth Department further noted that Shick relied on only one year of injury data in recalculating his weighted probability, as opposed to the 15 years of disability data relied upon by Besaw. A7. Thus, the Fourth Department rejected Shick’s testimony, concluding that the plaintiffs’ expert failed to establish damages with “reasonable certainty” and finding that “the only competent proof in the record regarding the economic damages to the IOD plaintiffs is the calculation of defendants’ expert.” A7-8; cf A3087 (Table 2, column: “Original Assumptions”). Accordingly, the court modified the individual damages awards of all the plaintiffs by reducing them from a total of $2,765,170 to $1,621,007 (inclusive of $255,000 in emotional distress damages), and, as so modified, affirmed. A5-8. The awards are summarized in the tables below: 54 The Subsequently-Promoted, Active-Duty Plaintiffs Name Fourth Dept.’s Econ. Damages Award Trial Court’s Econ. Damages Award Emotional Distress Award (Both Courts) 1. Kertzie $41,638 $49,859 $20,000 2. Lotocki $92,397 $102,577 $20,000 3. Osinski $46,171 $118,859 $20,000 4. Reddington $64,455 $107,061 $20,000 The Non-subsequently Promoted, Active Duty Plaintiffs Name Fourth Dept.’s Econ. Damages Award Trial Court’s Econ. Damages Award Emotional Distress Award (Both Courts) 5. Cassel 282,819 $511,193 $20,000 6. Fahey $70,567 $179,095 $25,000 7. Hazelet $211,054 $232,309 $20,000 8. Margerum $288,445 $528,706 $30,000 9. Skinner $228,095 $226,913 $20,000 The IOD Plaintiffs Name Fourth Dept.’s Econ. Damages Award Trial Court’s Econ. Damages Award Emotional Distress Award (Both Courts) 10. Abad 0 $147,545 $20,000 11. Arnone 40,966 $155,584 $20,000 12. Denz 0 $150,469 $20,000 55 Q. The U.S. Court of Appeals Affirms Dismissal of the MOCHA Actions Before the appeal from the February 8, 2012 Order was perfected, the U.S. Court of Appeals for the Second Circuit issued a July 30, 2012 Order affirming the District Court’s judgments in favor of the City in the MOCHA I and II actions. M.O.C.H.A. Soc’y. Inc. v. City of Buffalo, 689 F.3d 263 (2d Cir. 2012). The majority of the three-judge panel, however, made clear that it was finding in the City’s favor on narrow evidentiary grounds regarding the quantum of proof presented at trial, and that its Order should thus not be construed as determinative of the City’s arguments under Ricci: We hold only that the district court, acting as fact finder after a bench trial, did not commit clear error in finding that a preponderance of the evidence showed that the 1998 examination was job related and consistent with business necessity. Whether such a relatively narrow and fact-dependent determination compels the broader legal conclusion, that, at the time it certified the test results, the municipal employer lacked a ‘strong basis in evidence to believe it [was] subject to disparate-impact liability’ is a question we leave for future courts. Id. at 282, n.14. The Second Circuit did no more than affirm the District Court’s conclusion that the MOCHA plaintiffs had failed to succeed on the proof presented at trial. The closeness of the decision upholding the promotional exams is also 56 evident from the vigorous dissent, which listed numerous reasons why there was insufficient evidence to support the validity of the exams. Given the scant evidence, the dissent unsuccessfully urged that the District Court’s decision be reversed. Id. at 286-88. ARGUMENT I. THE PLAINTIFFS’ HUMAN RIGHTS LAW CLAIMS SHOULD HAVE BEEN DISMISSED AS A MATTER OF LAW DUE TO THEIR FAILURE TO FILE NOTICES OF CLAIM IN ACCORDANCE WITH GENERAL MUNICIPAL LAW § 50-i In its June 5, 2009 Order, the Fourth Department held that the plaintiffs were not required to file a notice of claim under General Municipal Law § 50-i before commencing their action. Margerum v. City of Buffalo, 63 A.D.3d 1574, 1580 (4th Dep’t 2009). In reaching this result, the court relied on prior Appellate Division rulings holding that the language of General Municipal Law § 50-i by itself does not encompass discrimination claims under the Human Rights Law. Id. (citing Picciano v. Nassau Cnty. Civ. Serv. Comm’n, 290 A.D.2d 164 (2d Dep’t 2001); Sebastian v. NYC Health & Hosps. Corp., 221 A.D.2d 294 (1st Dep’t 1995)). That prior case law appears to treat section 50-i as being limited to tort claims, but justification for such interpretation cannot be found in those cases, nor is it consistent with other case law applying the statute to non-tort claims against 57 cities. As detailed below, the plain language of the statute, the doctrine of in pari materia, and public policy considerations all compel a broader reading of the statute. Indeed, some Appellate Division cases have effectively so held in other statutory contexts. For the reasons that follow, this Court should hold that discrimination-based Human Rights Law claims against cities are subject to the notice of claim requirements of General Municipal § 50-i, and dismiss this case. A. The Plain Language of General Municipal Law § 50-i Encompasses Human Rights Law Claims General Municipal Law § 50-i states, in relevant part: No action or special proceeding shall be prosecuted or maintained against a city . . . for personal injury, wrongful death or damage to real or personal property alleged to have been sustained by reason of the negligence or wrongful act of such city . . . or of any officer, agent or employee thereof . . . unless, (a) a notice of claim shall be made and served upon the city . . . in compliance with section fifty-e of this article . . . . N.Y. GEN. MUN. LAW § 50-i(1) (2014) (emphasis added). The plain language of General Municipal Law § 50-i is nowhere limited to “tort” claims. “Personal injury” and “damage to real or personal property” are not, in themselves, recognized torts. They are simply forms of injury or damage that could arise from the “negligence” or “wrongful act” that gives rise to the 58 requirement to give notice of claim. Thus, the focal point of the General Municipal Law § 50-i analysis should be whether a city’s alleged liability arises out of negligence or other “wrongful act,” not whether the substance of the claim is a tort. While a “wrongful act” could certainly arise out of different species of tort, an alleged violation of a statute or deprivation of civil rights is no less a “wrongful act” than a tort. So the question under Section 50-i is not whether a claim under the Human Rights Law or New York State Constitution is a tort, but whether the alleged breach of the protections afforded by them is a “wrongful act” that allegedly resulted in a personal injury or damage to personal property in the broadest sense. As discussed below, Human Rights Law claims of the type asserted here fall squarely within the statute’s scope. 1. Personal Injury The phrase “personal injury” is not statutorily defined. Human Rights Law claims, however, invariably seek recovery for personal injury. For example, the Human Rights Law claims set forth in the Complaint allege racial discrimination that personally harmed each plaintiff. A59-71. The plaintiffs thus allege that they “have suffered, are now suffering and will continue to suffer 59 irreparable injury and monetary damages as a result of the Defendants’ discriminatory practices.” They seek monetary relief for lost wages and benefits as well as “an award for their past and future pain and suffering.” A67-68. To recover, each plaintiff thus must present evidence of the uniquely personal injuries and damages that they have endured as the result of the alleged discrimination. The Legislature’s choice of the term “personal injury,” as opposed to “bodily injury” or “physical injury,” is significant. A “bodily injury” is defined as “physical damage to a person’s body - also termed physical injury.” BLACK’S LAW DICTIONARY 856 (9th ed. 2009) (italics in original). A “personal injury,” however, is a far broader term. And that distinction was made abundantly clear in 1959, when General Municipal Law § 50-i was enacted. In the late 1950s, “personal injury” as a phrase was not a recognized, common dictionary term. The dictionary defined the words separately. “Personal” meant: “of or pertaining to a particular person; affecting an individual, or each of many individuals; peculiar or proper to private concerns; not public or general.” WEBSTER’S NEW INTERNATIONAL DICTIONARY 1828 (Unabridged 2d ed. 1961). “Injury” was understood to include: 60 1. Damage or hurt done to or suffered by a person or thing; detriment to, or violation of, person, character, feelings, rights, property, or interests, or the value of a thing. 2. An act which damages, harms, or hurts; as, an injury to the feelings; slander is an injury to the character; also, a hurt or damage sustained, as, they suffered severe injuries. 3. Abusive or offensive speech; an insult. 4. Law. An actionable wrong; that is, any violation of another’s rights for which the law allows an action to recover damages or specific property or both. Id. at 1280 (emphasis added). Black’s Law Dictionary of the time offered a like definition. It defined “personal” as “appertaining to the person; belonging to an individual; limited to the person; having the nature or partaking of the qualities of human beings, or of movable property.” BLACK’S LAW DICTIONARY 1300 (4th ed. 1951). The word “injury” meant “any wrong or damage done to another, either in his person, rights, reputation or property.” Id. at 924 (emphasis added). The phrase “personal injury,” though often associated with torts today, was not and is not exclusive to the tort context. When General Municipal 50-i was enacted, “personal injury” was recognized to have a broader legal definition that encompassed intangible rights and claims created by legislation: 61 A hurt or damage done to a man’s person, such as a cut or bruise, a broken limb, or the like, as distinguished from an injury to his property or his reputation. The phrase is chiefly used in connection with actions of tort for negligence . . . But the term is also used (chiefly in statutes) in a much wider sense, and as including any injury which is an invasion of personal rights, and in this signification it may include such injuries as libel or slander, criminal conversation with a wife, seduction of a daughter, and mental suffering. BLACK’S LAW DICTIONARY 925 (4th ed. 1951) (emphasis added). To be sure, these definitions have not changed appreciably in over fifty years. According to the most recent Black’s Law Dictionary, an “injury” is defined broadly as “the violation of another’s legal right, for which the law provides a remedy; a wrong or injustice.” BLACK’S LAW DICTIONARY 856 (9th ed. 2009) (emphasis added). A “personal injury” means: 1. In a negligence action, any harm caused to a person, such as a broken bone, a cut, or a bruise; bodily injury. 2. Any invasion of a personal right, including mental suffering and false imprisonment - Also termed private injury. 3. For purposes of workers’ compensation, any harm (including a worsened preexisting condition) that arises in the scope of employment. Id. at 857 (emphasis added). 62 These definitions readily encompass the types of injuries for which relief is provided under the Human Rights Law. At its core, an employment discrimination claim involves an invasion of rights and resulting injuries that are uniquely personal in nature. For this reason, discrimination plaintiffs routinely seek not just lost economic damages but also compensation for non-economic tort damages for emotional and mental duress resulting from the deprivation of their civil rights. In this case, for example, the courts below awarded the plaintiffs $255,000 in emotional and mental distress damages. A6, 25-42. The State Legislature further recognized the personal and individual nature of rights protected under the Human Rights Law in setting forth its purpose. See N.Y. EXEC. LAW § 290(3) (2014). More importantly, the Legislature declared that “the opportunity to obtain employment without discrimination because of age, race, creed, color, national origin, sexual orientation, military status, sex, marital status, or disability, is hereby recognized as and declared to be a civil right.” Id. § 291(1) (emphasis added); see also State Div. of Human Rights v. Kilian Mfg. Corp., 35 N.Y.2d 201, 207 (1974). On its face, the plain meaning of “personal injury” in General Municipal Law § 50-i encompasses Human Rights Law damage claims. And given the common use and legal definitions, both historically and 63 presently, the Legislature undoubtedly intended the notice of claim provisions of section 50-i to encompass statutory claims of the type brought in this action. 2. Damage to Personal Property While a claim for “personal injury” is one way to trigger an obligation to give notice of claim, the obligation is alternatively triggered where a claimant pursues a claim for damage to “personal property” arising from negligence or wrongful act. N.Y. GEN. MUN. LAW § 50-i(1). The law recognizes a broad range of property interests, both tangible and intangible, including specifically a public employee’s interest in his or her position. See Gould v. Bd. of Educ., 81 N.Y.2d 446, 451 (1993) (tenured teacher has property interest in position); Briggins v. McGuire, 67 N.Y.2d 965, 967 (1986) (police officer has protected property interest in position); Economico v. Village of Pelham, 50 N.Y.2d 120, 125 (1980) (a permanent civil servant has a recognized property interest in his position), superseded on other grounds by Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985), as explained in Prue v. Hunt, 78 N.Y.2d 364, 366 (1991). The present case again provides a clear illustration of how personal property rights are implicated in Human Rights Law cases. The complaint here specifically alleges that each plaintiff had already received the promotional 64 appointments in question. A65. At the core of the plaintiffs’ claims is an implied assertion that each of them had a property interest in these promotional positions (and associated wages and benefits), and that the City damaged their property interests by “refus[ing] to process Plaintiffs’ various and timely appointments.” A65.2 Importantly, the ultimate merit of a plaintiff’s alleged damages for “personal injury” or “property damage” is not the issue on a motion under N.Y. C.P.L.R. § 3211 to dismiss for failure to satisfy notice of claim requirements. The allegations must be accepted as true for purposes of the motion. 1455 Washington Ave. Assocs. v. Rose & Kiernan, Inc., 260 A.D.2d 770 (3d Dep’t 1999); see also Henrickson v. City of New York, 285 A.D.2d 529 (2d Dep’t 2001) (affirming dismissal of action against municipality based on motion made at the close of evidence that the notice of claim was deficient); Matter of Smuckler v. City of New York, Index No. 112267/08, 2009 N.Y. Misc. LEXIS 5322 (Sup. Ct. N.Y. Cnty. 2 The plaintiffs’ Complaint also alleges violations of the Due Process clause of the New York State Constitution. A59, 69-70. A Due Process claim necessarily depends upon the existence of an underlying “property right” or liberty interest. See Petix v. Connelie, 47 N.Y.2d 457, 459 (1979). This further underscores that the plaintiffs’ claims in particular, and the Human Rights Law in general, implicate the types of interests whose vindication requires notice of claim under the General Municipal Law § 50-i. 65 Apr. 7, 2009) (dismissing action for, among other reasons, failure to file a notice of claim). And because the Complaint directly or impliedly alleges personal injuries, damage to personal property, and wrongful conduct of the defendants as the grounds for recovery, General Municipal Law 50-i required them to give the City timely notice of claim as a condition precedent to suit. They did not do so, and the City’s motion should therefore have been granted. That personal injury and property damage were at issue is also implicit in subsequent rulings and the eventual damage awards at trial. Indeed, the lower courts expressly found that defendants’ alleged wrongful conduct proximately caused the plaintiffs’ economic and emotional distress damages. A6. While the City most certainly disputed proximate cause substantively, the fact remains that plaintiffs’ eventual mental and emotional distress damage awards were based on highly personalized injuries and testimony, and the economic awards stemmed from unrealized promotions to which they claimed they were immediately entitled and which would have led to future promotions. The type and nature of damages awarded plaintiffs thus plainly evidences the subversion of General Municipal Law § 50-i and highlights why the statute should have served as grounds for dismissal. 66 B. The Fourth Department is in Direct Conflict with the Second Department The Fourth Department’s holding that Human Rights Law discrimination claims against a city are not subject to notice of claim under General Municipal Law § 50-i is in direct conflict with the Second Department’s ruling in Mompoint v. City of New York, 299 A.D.2d 527 (2d Dep’t 2002). Mompoint commenced an employment discrimination claim against the City of New York under both the Human Rights Law and 42 U.S.C. § 1983 for alleged discrimination due to race and a speech impediment. The City of New York promptly filed a pre-answer motion to dismiss the complaint for failure to timely serve a notice of claim under General Municipal Law §§ 50-i and 50-e, and as time-barred. The trial court granted the City of New York’s motion, denied a cross-motion for leave to serve a late notice of claim, and dismissed the entirety of the complaint. On appeal, the Second Department modified only the branch of the motion that related to dismissal of the third cause of action, holding that the General Municipal Law notice of claim requirements are inapplicable to federal discrimination claims under 42 U.S.C. § 1983. See Mompoint, 299 A.D.2d at 527. The Court reinstated the federal claim and went on to hold that it was not time- 67 barred because “[a] federal civil rights claim is a personal injury claim that is governed by the three-year statute of limitations contained in CPLR 214(5).” Id. at 528. As so modified, the Second Department otherwise affirmed, which necessarily included an affirmance of those parts of the order that dismissed the Human Rights Law claims for failure to serve a timely notice of claim upon the city. It is also significant that the Second Department treated the federal civil rights claim as a type of “personal injury claim.” A civil rights-based claim under the analogous provisions of the Human Rights Law involves no less a personal injury than under federal law. Compensatory damages for personal injuries are permitted under the Human Rights Law. Walsh v. Goldman Sachs & Co., 185 A.D.2d 748, 749 (1st Dep’t 1992); Consol. Edison Co. of New York, Inc. v. NYS Div. of Human Rights, 77 N.Y.2d 411, 420-21 (1991); State Div. of Human Rights v. NYS Dep’t of Corr. Servs., 90 A.D.2d 51, 58 n.2 (2d Dep’t 1982); N.Y. EXEC. LAW § 297(9); see also Thoreson v. Penthouse Int’l, 80 N.Y.2d 490, 495 (1992). And, indeed, this Court has further observed that claims for race-based discrimination where a plaintiff seeks money damages for lost wages and reputational damages is a claim “properly 68 characterized as one seeking the enforcement of private rights.” Mills v. Cnty. of Monroe, 59 N.Y.2d 307, 312 (1983), cert. denied, 464 U.S. 1018 (1983), overruled in part by Felder v. Casey, 487 U.S. 131 (1988), as stated in Hoger v. Thomann, 189 A.D.2d 1048 (3d Dep’t 1993). These decisions underscore why Human Rights Law claims should be encompassed by Section 50-i. Moreover, in affirming the dismissal of state and federal employment discrimination claims for failure to file notice of claim, the Mills court noted that “[t]his court . . . does not find that the State’s notice requirements are antithetical to the policy underlying the civil rights laws.” Mills, 59 N.Y.2d at 310. While the U.S. Supreme Court’s subsequent holding in Felder v. Casey, 487 U.S. 131, 138 (1988), superseded on other grounds by statute, 42 U.S.C. § 1997e(a) (2014), invalidated State notice of claim provisions as they pertain to federal civil rights claims on Supremacy Clause and federalism grounds, Mills and its discussion of the important governmental interests underlying notice of claim requirements remain instructive for State-based Human Rights Law claims. See Mills, 59 N.Y.2d at 310-11. 69 C. The In Pari Materia Doctrine Likewise Dictates that Human Rights Law Claims Should Be Subject to Notice of Claim under the General Municipal Law It is a well-recognized legal principle that “statutes which relate to the same or to cognate subjects are in pari materia and are to be construed together unless a contrary intent is clearly expressed by the Legislature.” Plato’s Cave Corp. v. State Liquor Auth., 68 N.Y.2d 791, 793 (1986) (sections of the Alcoholic Beverage Control Law and the Penal Law were in pari materia and to be construed together). Following the in pari materia doctrine requires that Human Rights Law claims against cities should likewise be subject to notice of claim. Under established case law, Human Rights Law claims are subject to notice of claim provisions governing municipalities and governmental agencies other than cities. See, e.g., Picciano, 290 A.D.2d at169, 171 (Human Rights Law claim subject to notice of claim requirements under County Law § 52); Town of Brookhaven v. NYS Div. of Human Rights, 282 A.D.2d 685, 685-86 (2d Dep’t 2001) (Human Rights Law claims subject to notice of claim requirements under Town Law § 67); Mendell v. Salamanca Hous. Auth., 12 A.D.3d 1023, 1024 (4th Dep’t 2004) (Human Rights Law claims subject to notice of claim provisions under Public Housing Law § 157); Munro v. Ossining Union Free Sch. Dist., 55 A.D.3d 697, 70 698 (2d Dep’t 2008) (Human Rights Law claims subject to notice of claim under Education Law § 3813). Indeed, courts have found Human Rights Law claims to be subject to notice of claim under cognate statutes whose scope of application is either equivalent to or even narrower than General Municipal Law § 50-i. For example, consider the notice of claim requirement under Town Law § 67: Any claim . . . which may be made against the town or town supervisor for damages for wrong or injury to person or property or for the death of a person, shall be made and served in compliance with section fifty-e of the general municipal law. N.Y. TOWN LAW § 67(1) (2014) (emphasis added). Although the face of Town Law § 67 is limited to claims for damages “for wrong or injury to person or property,” courts have consistently held that Human Rights Law claims are subject to notice of claim under the Town Law. See, e.g., Henderson v. Town of Van Buren, 15 A.D.3d 980, 981 (4th Dep’t 2005); Town of Brookhaven, 282 A.D.2d at 685-86; Scopelliti v. Town of New Castle, 210 A.D.2d 308, 309 (2d Dep’t 1994). The same is true with respect to Public Housing Law § 157(2), which provides, in relevant part: 71 An action against an authority for damages for injuries to real or personal property, or for the destruction thereof, or for damages for personal injuries, alleged to have been sustained by reason of . . . negligence . . . or the creation or maintenance of a nuisance . . . shall be commenced within one year and ninety days after the cause of action therefor shall have accrued, provided that a notice of the intention to commence such action shall have been served upon the authority. All the provisions of Section fifty-e of the General Municipal law shall apply to such notice. N.Y. PUB. HOUS. LAW § 157(2) (2014) (emphasis added). The Fourth Department previously made clear that this language was sufficient to require a plaintiff alleging a Human Rights Law discrimination claim to give notice of claim to a housing authority, even though the statute only required the claim to arise out of “negligence” or “nuisance.” See Mendell, 12 A.D.3d at 1024. The use of the phrase “personal injuries” or “injuries to . . . personal property” in Public Housing Law § 157(2), or “injury to person or property” in Town Law § 67(1), is certainly no more expansive than the phrase “personal injury” or “damage to . . . personal property” as used in General Municipal Law §50-i. Why, then, should the City be treated differently, or Section 50-i be more narrowly construed than cognate statutes? Decisions requiring notice of claim 72 under substantially similar language create a conflict in the law that deprives cities of the same protection afforded other governmental bodies. D. Multiple Courts have held that Statutory and Non-Tort Claims Trigger General Municipal Law § 50-i Notice of Claim Requirements as to Cities Several courts have upheld notice of claim requirements with respect to statutory and other non-tort claims against cities. These decisions focus less on the type of claim and more on the nature of the damages as being tort-like and the fact that the challenged act stemmed from a duty imposed by law. The Fourth Department itself previously held on two occasions that the notice of claim provisions of General Municipal Law § 50-i applied to an employee’s claims against the City seeking to recover the wage differential between his workers’ compensation benefits and his wages for the period he was injured. While the claims in the suit involved neither a personal injury nor a tort claim but the interplay between a City Code provision and a collective bargaining agreement, it was enough for the Fourth Department that the employee’s claim that the City failed to pay him the wage differential “sounded in tort,” and that the employee had sought “money damages allegedly caused by the failure of the City to discharge a duty imposed upon it by law.” Estate of Kalis v. City of Buffalo, 306 73 A.D.2d 932, 934 (4th Dep’t 2003), leave denied, 100 N.Y.2d 515 (2003); see also Melia v. City of Buffalo, 306 A.D.2d 935, 935-36 (4th Dep’t 2003), leave denied, 100 N.Y.2d 516 (2003) (same result). In Mutuel Ticket Agents, Local 23293 v. Roosevelt Raceway Assocs., 172 A.D.2d 595 (2d Dep’t 1991), the Second Department similarly concluded that notice of claim was required in a contract action where the fifth cause of action alleged that the defendant failed to discharge its duty pursuant to General Municipal Law §§ 856(2), 858(16), and 874(1) (pertaining to organization, powers, and taxation of industrial development agencies). While this was clearly a statutory compliance claim, the Second Department nonetheless held that notice of claim was required under General Municipal Law § 50-e because the cause of action “sounded in tort” and sought damages based on the alleged failure to discharge duties imposed by the statute. Id. The plaintiffs’ claims in Phelps Steel, Inc. v. City of Glens Falls, 89 A.D.2d 652 (3d Dep’t 1982) were likewise born out of contract and involved a city’s alleged failure to discharge legal duties associated with public bidding. While the suit involved several tort claims, the plaintiffs also alleged a cause of action under the New York State Constitution seeking money damages allegedly 74 caused by Glens Falls’ failure to discharge a duty imposed upon it by law, i.e., taking of property without compensation. The Third Department held that the Constitutional claim “sounded in tort” and sought money damages. Phelps Steel, Inc., 89 A.D.2d 652. It was therefore subject to the notice of claim requirement in General Municipal Law § 50-i. Id. It is clear from these cases that a claim need not be an actual tort, nor necessarily involve a physical injury, for the notice of claim requirements to be triggered under General Municipal Law § 50-i. It is enough that the claim merely “sound in tort,” involve a failure of a city to discharge some obligation imposed by law or statute, or seek tort-like damage remedies. The remedies available in Human Rights Law cases are generally little different from those available to a typical tort plaintiff. And discrimination claims necessarily rest on the assertion that the government entity failed to discharge duties imposed by law, including those specifically imposed by the Human Rights Law. As with each of the above cases, the plaintiffs here sought recovery against the City for alleged failures of the City to discharge duties under the Human Rights Law, the Civil Service Law, and the New York State Constitution. A67-70. The plaintiffs alleged in their Complaint that the City’s discriminatory 75 conduct included: (1) “refusing to recognize the appointment of each and every Plaintiff” to a promotional position prior to the expiration of the list; (2) “expiring certain eligibility lists to avoid promoting” the plaintiffs; (3) “renewing other eligibility lists for the sole purpose of appointing African-American candidates”; (4) “intending to appoint African-American candidates who were not otherwise eligible for promotion solely on the basis of their race”; and (5) “expiring eligibility lists before a subsequent eligibility list was in place.” A67. Each plaintiff also alleged an entitlement to recover damages that included lost economic opportunities, including front pay, back pay, and loss of increased future salary and benefits. They specifically sought recovery for “past and future pain and suffering” and other unspecified tort-like compensatory damages. A66, 68-71. Indeed, the IOD plaintiffs sought to recover the wage differentials between their projected salaries and disability benefits, much like the plaintiffs did in Kalis and Melia. See Kalis, 306 A.D.2d at 934; Melia, 306 A.D.2d at 935-36. The active duty plaintiffs similarly sought to recover wage differentials and lost benefits, but their claims were based on the impairment of their individual earning capacity and lost promotional opportunities resulting from the City’s 76 failure to promote them and discharge its duties under the Human Rights Law, the Civil Service Law, and the New York State Constitution. A57-71. These statutory claims involve the City’s alleged failure to discharge duties imposed by law, and the alleged damages claims are legally indistinguishable from the types of claims that have been held to fall squarely within the breadth of General Municipal Law § 50-i. In short, there is no logical reason why a plaintiff alleging past and future lost earnings and emotional distress damages arising out of a city’s negligence or other tort must satisfy notice of claim requirements, while a plaintiff who seeks past and future lost earnings and emotional distress damages from discriminatory employment practices prohibited by the Human Rights Law would not be obligated to file such a notice. The statute does not make such distinctions on its face. E. Public Policy Supports Notice of Claim Requirements The “plain purpose of statutes requiring prelitigation notice to municipalities is to guard them against imposition by requiring notice of the circumstances . . . upon which a claim for damages is made, so that its authorities may be in a position to investigate the facts as to time and place, and decide whether the case is one for settlement or litigation.” Rosenbaum v. City of New 77 York, 8 N.Y.3d 1, 11 (2006) (internal quotes and citations omitted). Notice of claim thus permits a municipality to assess a claim, budget for contingencies, and take appropriate measures to resolve it at the earliest possible juncture. It also triggers a right to an investigative hearing under General Municipal Law § 50-h, an important tool for preserving evidence, testing claims, and minimizing liability. These considerations are particularly forceful with respect to Human Rights Law discrimination and harassment claims that frequently turn on eyewitness recollections, which grow stale or shift over time. Additionally, notice of claim provides municipalities with an early opportunity to take remedial action, which is critical in the discrimination arena. For example, an employer might be held liable for the actions of a rogue employee such as a harasser whose offensive conduct was not revealed until suit was filed near the end of a statutory limitations period, or after the employee resigned. Similarly, an employer might not be aware that a class of protected employees believe a facially neutral practice has a disproportional adverse impact on them at a time when the employer still could take timely action to investigate, and perhaps alter, the suspect practice to allay concerns or prevent future claims. In this way, notice of claim not only conserves limited public resources by offering an opportunity for early resolution, but also 78 provides municipalities the opportunity to take prompt, effective, investigative and remedial action as may be appropriate to eradicate discriminatory conduct and protect additional employees who may be or may become at risk. Lastly, the 2012 enactment of the Uniform Notice of Claim Act evidences the importance the Legislature assigned to the uniform interpretation and application of notice of claim requirements. This legislation was designed to implement a uniform time period and other filing procedures with respect to notice of claim requirements arising under multiple statutes and affecting a broad range of municipalities and other governmental units. 2012 N.Y. Sess. Laws 1273 (McKinney). The Act embodies a strong public policy to apply statutory notice of claim provisions consistently across different governmental units in the absence of contrary, declared legislative intent (of which there is none here). Accordingly, this Court should hold that Human Rights Law plaintiffs must satisfy the notice of claim requirements of General Municipal Law §§ 50-i and 50-e as a condition precedent to commencing suit against a city. Applying that rule of law further warrants reversal of the Fourth Department’s June 5, 2009 Order and granting of the City’s N.Y. C.P.L.R. § 3211(a) motion to dismiss the 79 Complaint. See, e.g., Scantlebury v. N.Y.C. Health & Hosps. Corp., 4 N.Y.3d 606, 607-09 (2005); Mendell, 12 A.D.3d at 1024; Kalis, 306 A.D.2d at 934. II. NEW YORK SHOULD ADOPT AND APPLY RICCI’S “STRONG BASIS IN EVIDENCE” STANDARD IN NEW YORK HUMAN RIGHTS LAW CASES A. New York’s Standard for Recovery under the Human Rights Law Tracks Federal Case Law under Title VII This Court has not previously addressed or adopted Ricci’s “strong basis in evidence” test for use in New York Human Rights Law cases. See Ricci v. DeStafano, 557 U.S. 557, 563 (2009). Nor has it previously had occasion to reach the question. The Court has, however, consistently held that the standards for recovery under the New York Human Rights Law are in nearly all instances identical to Title VII of the Civil Rights Act of 1964 and other federal law. See Forrest v. Jewish Guild for the Blind, 3 N.Y.3d 295, 305 n.3 (2004), superseded on other grounds, as stated in Bennett v. Health Mgmt. Sys., Inc., 92 A.D.3d 29 (1st Dep’t 2011); Mittl v. NYS Div. of Human Rights, 100 N.Y.2d 326, 330 (2003); see also Ferrante v. Am. Lung Ass’n, 90 N.Y.2d 623, 629 (1997); Laverack & Haines v. NYS Div. of Human Rights, 88 N.Y.2d 734, 738 (1996); Miller Brewing Co., v. NYS Div. of Human Rights, 66 N.Y.2d 937, 938 (1985) (following federal 80 precedent).3 New York courts thus look to Title VII case law for authoritative guidance when deciding discrimination cases under the Human Rights Law. In short, “[b]ecause both the Human Rights Law and title VII address the same type of discrimination, afford victims similar forms of redress, are textually similar and ultimately employ the same standards of recovery, federal case law in this area also proves helpful to the resolution of this appeal.” Aurecchione v. NYS Div. of Human Rights, 98 N.Y.2d 21, 26 (2002) (following federal precedent in holding plaintiff entitled to pre-determination interest under the Human Rights Law). Here, all parties have consistently urged the application of Ricci as controlling authority for the resolution of this dispute. A9-10. Neither the plaintiffs nor the courts below have identified a statutory basis or other compelling reason to depart from the U.S. Supreme Court’s landmark decision in Ricci. Accordingly, Ricci should govern here. 3 One recognized exception to this rule is that the statutory definition of disability is broader under the Human Rights Law than the Americans with Disabilities Act. See Weissman v. Dawn Joy Fashions, Inc., 214 F.3d 224, 233 (2d Cir. 2000). 81 B. The Ricci Standard 1. Disparate Impact and Disparate Treatment Distinguished Appreciating Ricci’s holding and significance first requires an understanding of the distinction between two broad categories of discrimination recognized by both the State Human Rights Law and Title VII: “disparate treatment” and “disparate impact.” Under the “disparate-treatment” theory, an employer may not discriminate “because of an individual’s race, color, religion, sex or national origin.” 42 U.S.C. § 2000e-2(a)(1) (2013); Ricci, 557 U.S. at 577. To prevail, a disparate-treatment plaintiff therefore must establish “that the defendant had a discriminatory intent or motive for taking a job-related action.” Ricci, 557 U.S. at 577 (internal quotation marks and citation omitted); see also Forrest, 3 N.Y.3d at 322-23 (G.B. Smith, J. concurring) (“Disparate treatment . . . is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. Proof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment”) (internal quotation marks and citation omitted). In contrast, under the “disparate-impact” theory, an employer has a duty to avoid discrimination through any employment practice that causes “a 82 disparate impact on the basis of race, color, religion, sex, or national origin[,]” unless the practice is “job related for the position in question and consistent with business necessity[.]” 42 U.S.C. § 2000e-2(k)(1)(A)(i) (2013); Ricci, 557 U.S. at 578; see also People v. NYC Transit Auth., 59 N.Y.2d 343, 348-49 (1983); Kilian Mfg. Corp., 35 N.Y.2d at 207; Mete v. NYS Office of Mental Retardation and Developmental Disabilities, 21 A.D.3d 288, 296 (1st Dep’t 2005).4 In other words, an employer must avoid practices that are “fair in form, but discriminatory in operations.” Ricci, 557 U.S. at 583 (citing Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971)). Any practice that excludes minorities is prohibited “unless the employer can show justification for the practice in terms of employee performance.” People v. NYC Transit Auth., 59 N.Y.2d at 348-49; see also Griggs, 401 U.S. at 431. Finally, even if a challenged practice is job related, it may still be illegal if the plaintiffs can prove that there is an “available alternative employment 4 In deciding a matter under the New York City Human Rights Law, this Court noted that the local statute, in contrast to the State Human Rights Law, included a provision “explicitly creating a disparate impact cause of action.” Levin v. Yeshiva Univ., 96 N.Y.2d 484, 492-93 (2001). But neither the Levin court nor any other court has ever purported to overrule or otherwise question this Court’s recognition of disparate impact claims under the Human Rights Law in New York City Transit Authority and Kilian. 83 practice that has less disparate impact and serves the employer’s legitimate needs.” Ricci, 557 U.S. at 578 (interpreting 42 U.S.C. §§ 2000e-2(k)(1)(A)(ii) and (C)). So, while the disparate treatment theory of discrimination prohibits intentional conduct that is based on an individual’s race, ethnicity, sex, or other protected characteristics, the disparate impact theory prohibits unintentional conduct that disadvantages a protected class of individuals and cannot otherwise be justified as job related or consistent with business necessity. 2. The Ricci Court’s Careful Fashioning of the Strong Basis in Evidence Standard Resolved Any Conflict Between the Disparate- Treatment and Disparate-Treatment Provisions of Title VII In Ricci, the U.S. Supreme Court addressed for the first time how an employer should proceed when the results of a selection procedure - such as the promotional exams at issue here - favor members of one protected class over other classes. Ricci recognized the conundrum facing employers in these circumstances. If the employer continues to use the procedure, it may be held liable for “disparate impact” discrimination because the procedure is “discriminatory in operation” even though it is facially neutral. Ricci, 557 U.S. at 577-78 (citing Griggs, 401 U.S. at 431). But if the employer engages in voluntary compliance and discontinues the practice, it risks liability for “disparate treatment” 84 discrimination if its actions adversely affect the majority class. See id. at 580-81. In this way, the Supreme Court recognized the competing pressures employers face with respect to use of civil service exams and other selection procedures that may statistically disadvantage protected groups. In balancing these competing interests, the Supreme Court created a safe harbor for employers who might face disparate treatment claims as a result of efforts to correct a practice suspected to have a disparate impact upon minorities. In fashioning its safe harbor test, the Court held that “under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.” Ricci, 557 U.S. at 585. The Court adopted the “strong basis in evidence” standard specifically “to resolve any conflict between the disparate-treatment and disparate-impact provisions of Title VII.” Id. at 584. The standard’s objective thus is to “give[] effect to both . . . provisions, allowing violations of one in the name of compliance with the other only in certain, narrow circumstances.” Id. at 583. As Justice Kennedy emphasized in delivering the Court’s opinion, the standard “leaves ample 85 room for employers’ voluntary compliance efforts, which are essential to the statutory scheme [under Title VII of the Civil Rights Act of 1964, as amended] and to Congress’s efforts to eradicate workplace discrimination.” Id. The “strong basis in evidence” standard thus creates a safe harbor for employers, who operate in a highly litigious environment and must decide - just as the City had to in this case - whether to permit a potentially discriminatory practice to continue in the face of damning evidence, but who lack a “crystal ball” to predict with certainty how a court or a jury might ultimately rule if the matter is eventually fully litigated. Ricci accounted for this and expressly rejected the proposition that employers may only discontinue an employment practice suspected of having a disparate impact if they are certain that it is illegal. See Ricci, 557 U.S. at 580-81. It did so precisely because a rule requiring certainty would discourage employers from taking voluntary compliance actions for fear of later being proven wrong: [The Ricci plaintiffs] next suggest that an employer in fact must be in violation of the disparate-impact provision before it can use compliance as a defense in a disparate-treatment suit. Again, this is overly simplistic and too restrictive of Title VII’s purpose. The rule [the Ricci plaintiffs] offer would run counter to what we have recognized as Congress’s intent that voluntary 86 compliance be the preferred means of achieving the objectives of Title VII. Forbidding employers to act unless they know, with certainty, that a practice violates the disparate-impact provision would bring compliance efforts to a near standstill. Even in the limited situations when this restricted standard could be met, employers likely would hesitate before taking voluntary action for fear of later being proved wrong in the course of litigation and then held to account for disparate treatment. Id. at 580-81 (internal quotation marks and citations omitted) (emphasis added). As the court explained further, the “strong basis in evidence” standard is designed to strike a balance between the sometimes conflicting requirements of Title VII, while permitting employers to engage in voluntary compliance efforts to avoid disparate-impact discrimination: Applying the strong-basis-in-evidence standard to Title VII gives effect to both disparate-treatment and disparate-impact provisions, allowing violations of one in the name of compliance with the other only in certain, narrow circumstances. The standard leaves ample room for employers’ voluntary compliance efforts, which are essential to the statutory scheme and to Congress’s efforts to eradicate workplace discrimination. And the standard appropriately constrains employers’ discretion in making race-based decisions: It limits that discretion to cases in which there is a strong basis in evidence of disparate-impact liability, but it is not so restrictive that it allows employers to act only when there is a provable, actual violation. 87 Id. at 583 (internal citations omitted) (emphasis added). Building on Ricci, the Second Circuit held that “a strong basis in evidence” under Ricci means “an objectively reasonable fear of disparate-impact liability” that is “more than a mere fear of litigation, but less than the preponderance of evidence that would be necessary for actual liability.” United States v. Brennan, 650 F.3d 65, 109-10 (2d Cir. 2011). Importantly, Brennan made clear that an employer’s strong basis in evidence is “evaluated at the time an employer takes a race-conscious action,” not based on hindsight. Id. at 113. Any other rule would be unworkable and unrealistic. The “strong basis in evidence” standard implicitly recognizes that whether a given employment practice has an illegal disparate impact is rarely a clear-cut, yes-or-no question. This is particularly true when dealing with standardized assessments like aptitude exams, where employers invariably must turn to experts for guidance. See Gulino v. NYS Educ. Dep’t, 460 F.3d 361, 383 (2d Cir. 2006) (“The study of employment testing, although it has necessarily been adopted by the law as a result of Title VII and related statutes, is not primarily a legal subject. Because of the substantive difficulty of test validation, courts must take into account the expertise of test validation professionals.”) (internal quotation 88 marks and citation omitted); Solo Cup Co. v. Fed. Ins. Co., 619 F.2d 1178, 1188 (7th Cir. 1980) (“[S]tatistical proofs in disparate impact actions, most particularly those involving employment testing, have become increasingly complex and employers now often retain batteries of experts to validate their selection criteria.”); Kerner v. City & Cnty. of Denver, 11-cv-00256, 2013 U.S. Dist. LEXIS 41280, at *10-11 (D. Colo. Mar. 25, 2013). Even then, there is no exact calculus, as disparate impact litigation claims when litigated frequently boil down to a “battle of the experts.” See Guardians Ass’n of NYC Police Dep’t, Inc. v. Civil Serv. Comm’n, 633 F.2d 232, 243 (2d Cir. 1980) (likening court’s role in trial on disparate impact to “umpiring a battle of experts who speak a language it does not fully understand”) (internal quotation marks and citations omitted). Ultimately, an employer’s belief that it will be subject to disparate impact liability is a risk assessment and judgment call that must factor in many variables and uncertainties, including the fallibility of even the best qualified and conscientious expert. Ricci and Brennan thus teach that while an employer cannot invoke the safe harbor based merely upon the “fear of litigation,” an employer need not wait until litigation is actually commenced, let alone completed, to institute race-based compliance efforts to correct a suspect practice, so long as the 89 employer has a strong basis in evidence to believe that failure to take race- conscious corrective action may result in disparate impact liability. C. The Fourth Department Applied Its Own Standard, not the Ricci Standard The Margerum plaintiffs sued the City for disparate treatment discrimination (i.e., race-based, reverse discrimination) because the City in 2005 and 2006 made a decision to permit civil service eligible lists to expire without making any further promotions. A57-71. These Caucasian plaintiffs claimed they would have been promoted in due course had the City permitted the lists to be renewed for their maximum duration of four years. A65. For its part, the City defended its decision as a compliance measure to ensure that its promotional practices did not contain an illegal bias against African-Americans in violation of the disparate impact prohibitions of state and federal law. A76-77, 155, 343-47. In analyzing the City’s actions, the Fourth Department cited the Ricci “strong basis in evidence” standard, but went on to create and apply a new and different standard for Human Rights Law claims. In its April 29, 2011 Order affirming the trial court’s finding of liability against the City, the Fourth Department offered no discussion concerning Ricci’s appropriate application but offered instead only a cryptic holding: 90 We agree with the [trial] court that the City defendants did not have a strong basis in evidence to believe that they would be subject to disparate-impact liability if they failed to take the race-conscious action, i.e., allowing the eligibility lists to expire, inasmuch as the examinations in question were job-related and consistent with business necessity. A10; Margerum, 83 A.D.3d at 1576 (emphasis added). The first half of this holding is an obvious reference to the Ricci safe harbor standard. The bolded language from the second half of this sentence, however, has nothing to do with the Ricci safe harbor standard. Rather, these words define a defense available to employers in disparate impact cases. Under 42 U.S.C. § 2000e-2(k)(1)(A)(i), an employer is not liable for an employment practice that causes a disparate impact where the employer proves that the practice is “job related for the position in question and consistent with business necessity.” See also Griggs, 401 U.S. at 431. But Margerum is a disparate treatment case. So, whether the examinations at issue “were job-related and consistent with business necessity” was never a matter for determination by the trial court or the Fourth Department below. 91 In this way, the Fourth Department relied upon the final outcome of the MOCHA I trial to determine liability in this case. On March 9, 2009, the Western District of New York concluded after a bench trial in MOCHA I - and primarily based on testimony from the NYS Civil Service witness who created the test - that the City had established its defense to disparate impact liability by demonstrating that its lieutenant examination was job-related and consistent with business necessity. The District Court further concluded that the MOCHA plaintiffs had failed to offer sufficient evidence at trial to meet their burden to overcome that defense. M.O.C.H.A. Soc’y Inc. v. City of Buffalo, 2009 U.S. Dist. LEXIS 20070, at *56 (W.D.N.Y. Mar. 9, 2009), aff’d, 689 F.3d 263 (2d Cir. 2012). Despite the warnings and considerations expressed in Ricci and otherwise by the Second Circuit, the Fourth Department concluded that the District Court’s factual findings on the proof presented during the trial of the MOCHA plaintiffs’ disparate impact claims was necessarily dispositive of the Margerum plaintiffs’ disparate treatment claims. In effect, the Fourth Department held that an employer who ultimately succeeds at the trial of a Title VII disparate impact claim is not, as a matter of law, entitled to the Ricci safe harbor protection against a Human Rights Law disparate 92 treatment claim. Thus, if a trial fact-finder eventually concludes that a challenged practice, like the exams at issue here, are job-related and consistent with business necessity, then under the Fourth Department’s test the employer is necessarily liable for disparate treatment associated with any race-based voluntary compliance actions that were undertaken to avoid disparate impact liability. Thus, liability for disparate treatment turns not on the strong evidentiary basis considered by the employer when the compliance action was taken, but on who managed to put on the better evidence at trial in the separately litigated disparate impact suit. That is not what Ricci teaches. The Fourth Department’s rule not only arbitrarily hinges on the outcome of another discrimination suit brought under a different theory, but it is ill-equipped to serve as a guidepost or general rule of law. What if the affected minority employees never commenced a disparate impact lawsuit? Or what if the disparate impact suit remains unresolved when it comes time for another court to determine liability in the disparate treatment case? Or what would be the outcome if the disparate impact claim was settled without an acknowledgement or determination of liability? 93 Nothing in Ricci requires an employer to be certain that it has violated the disparate-impact provisions of Title VII before discontinuing a challenged or possibly ille gal selection procedure. Even if the employer discontinues a suspect legal practice that a court or fact-finder ultimately determines to be legally defensible, the employer is still entitled to safe-harbor protection for any disparate treatment discrimination that resulted from implementing corrective actions as long as the employer’s actions were grounded in a strong basis in evidence. See Ricci, 557 U.S. at 580-83. As the Second Circuit held in Brennan, Ricci begins to afford protection to employers at a point “less than the preponderance of the evidence that would be necessary for actual liability.” Brennan, 650 F.3d at 109-10. How much less has yet to be determined, but clearly a strong basis in evidence to believe there is a 50/50 chance of being held liable is well within the scope of protection. Whether protection begins when an employer, at the time the decision was made, has an objectively reasonable belief that it faces a 30%, 20%, or even 10% likelihood of being held liable perhaps depends upon the specific case and strength of the evidence, but neither Ricci nor Brennan draw a specific threshold line except 94 that “mere fear of litigation” is not enough to garner protection. Brennan, 650 F.3d at 109-10. Actual litigation alone is, no doubt, well beyond the “mere fear of litigation.” The Fourth Department’s holding thus departed from the careful balance struck by Ricci, rejected the Supreme Court’s express concern that employers should not be deterred from undertaking voluntary compliance purely out of fear of subsequently being proven wrong at trial, and did not even attempt to factor in the evidentiary information available and other practical considerations that may prevail at the time the City made a decision to act. The Fourth Department turned the “strong basis in evidence” analysis on its head, focusing not on what the substantial evidence available showed at the time of the City’s decision, but upon what a judicial fact-finder determined years later after considering only the select evidence admitted at trial, which may or may not be representative of what was available to the employer when the decision had to be made. Indeed, trial evidence is extensively screened and narrowed through numerous filters before it ever reaches a fact-finder - i.e., what the parties collected or failed to collect in discovery, the questions that were asked and not asked at deposition, the outcome of pre-trial in limine motions, the availability and 95 cooperation of witnesses, the evidentiary rulings at trial, the quality of advocacy and cross-examination, the credibility of experts and witnesses, and the many other lenses of the litigation process that color the collection and interpretation of evidence ultimately presented to the fact-finder. By making the test for Human Rights Law cases turn upon the outcome of the disparate impact litigation, the Fourth Department returns employers to the pre-Ricci “damned if you do, damned if you don’t” Hobson’s choice that the Ricci safe harbor was intended to eliminate. If the Fourth Department’s outcome-determinative rule is permitted to stand, public and private employers in New York will have a strong disincentive to refrain from even the most carefully considered voluntary compliance actions for fear of subjecting themselves to yet additional disparate treatment liability. Significantly, the Fourth Department offered no explanation for its radical departure from Ricci’s teachings. New York has long recognized disparate impact discrimination as a ground for liability. Like Title VII of the Civil Rights Act of 1964, the New York Human Rights Law is remedial in nature and intended to be construed liberally. See Sanders v. Winship, 57 N.Y.2d 391, 395 (1982); see also N.Y. EXEC. LAW § 290(3). So, it makes little sense that race-conscious 96 voluntary compliance actions would be safe-harbored under Ricci in the Title VII context based on the strong basis in evidence test, but would still remain illegal under the New York Human Rights Law. Such a result creates an irreconcilable conflict between state and federal standards that compromises both statutes’ fundamental goals of eradicating workplace discrimination. D. The Second Circuit’s Affirmance in MOCHA Emphasizes the Distinct Inquiry that Exists under Ricci At the time the Fourth Department ruled on April 29, 2011 that the City was liable, the Second Circuit had yet to consider the MOCHA plaintiffs’ appeal of the district court’s decision dismissing their disparate impact claims. On July 30, 2012, the Second Circuit affirmed the judgment of dismissal, but offered words of caution about the district court’s findings for Ricci purposes: Our court, has only begun to define this “strong basis in evidence” standard. . . . We hold only that the district court, acting as fact finder after a bench trial, did not commit clear error in finding that a preponderance of the evidence showed that the 1998 examination was job related and consistent with business necessity. Whether such a relatively narrow and fact-dependent determination compels the broader legal conclusion that, at the time it certified the test results, the municipal employer lacked a “strong basis in evidence to believe it [was] subject to disparate-impact liability” is a question we leave for future courts to address. 97 M.O.C.H.A. Soc’y Inc. v. City of Buffalo, 689 F.3d 263, 282 n.14 (2d Cir. 2012) (internal citations omitted). Knowing full well that Margerum was still pending in State court, and with the Fourth Department’s decision tied to the MOCHA trial outcome, the Second Circuit’s comments underscored that the Ricci safe harbor is a distinct inquiry. III. THE CITY IS ENTITLED TO PROTECTION UNDER THE SAFE HARBOR CREATED BY RICCI The City’s strong basis in evidence under Ricci is demonstrated by a variety of factors. The City did not rush to judgment based on initial statistical disparities the way the City of New Haven did. Ricci, 557 U.S. at 593 (noting that the “raw racial results became the predominant rationale” for New Haven’s actions). To the contrary, the City continued to defend the State exams and initially promoted from the eligible lists. Only in September 2005, after the MOCHA I litigation had reached an advanced stage and the City had the benefit of substantial discovery did the City conclude that mounting evidence of disparate impact justified race-conscious compliance action. The City made a cautious and well-considered decision supported by an irrefutably strong basis in evidence (statistics, analyses, deposition testimony, expert opinions, etc.) that more than satisfies the Ricci standard for granting safe harbor protection. The City was also 98 still subject to the federal district court’s continuing supervision under the Remedial Decree, was confronted with a renewed summary judgment motion by the MOCHA plaintiffs, and faced weak trial prospects even if the City survived the motion. A282. A. The City’s Strong Basis in Evidence 1. The 1979 Remedial Decree The events leading up to the City’s decision to permit the eligible lists to lapse transpired against the backdrop of on-going federal civil rights litigation affecting the City’s Police and Fire Departments stretching back some thirty-five years. Under a 1979 Remedial Decree, the federal district court enjoined the City from discriminating against African-Americans and other minorities and subjected the City’s employment practices, including promotional practices, to the court’s continuing supervision. A442-43, 451-52. The federal litigation was spawned by State-developed civil service examinations the City had used in the early 1970s to select entry-level firefighters, which had a stark statistically-adverse impact on minorities even though correlated with job performance. United States v. City of Buffalo, 457 F. Supp. 612, 623 (W.D.N.Y. 1978). The ongoing implications of the Remedial Decree, as amended over the years, served as a continuing reminder to 99 City officials of the long history of contentious race relations affecting the Fire Department. A442-43. 2. The MOCHA I Disparate Impact Litigation Is Commenced In stark contrast to the City of New Haven in the Ricci matter, the City did not act out of mere “fear of litigation alone.” See Ricci, 557 U.S. at 592. Rather, the City acted after years of active litigation and with the benefit of evidence and information learned through the litigation process. In 1998 and again in 2003, the MOCHA plaintiffs commenced two suits against the City in federal court, challenging the Fire Department’s promotional practices under both Title VII of the Civil Rights Act of 1964 and the New York Human Rights Law. Among other claims, the MOCHA plaintiffs challenged the State-developed examination for lieutenant administered by the City in 1998 and 2002 as having an illegal adverse impact against African American firefighters. A163-83, 200-08. The MOCHA plaintiffs sought millions in compensatory damages, preferential hiring, retroactive appointment and seniority, punitive damage, and attorneys’ fees. A182, 204. 100 3. Dr. Abrams’ Early Evaluation In response to MOCHA I, the City retained Nancy Abrams, Ph.D. Dr. Abrams was a former Personnel Psychologist with the United States Office of Personnel Management, where she was responsible for auditing the New York State Department of Civil Service. She had decades of experience consulting for municipalities throughout New York State with respect to civil service examinations. A465-66. In 2001, Dr. Abrams advised the City that the lieutenant’s examination had a marked statistical adverse impact on racial minorities. A468. At that point, the City knew that the MOCHA plaintiffs would be able to make out a prima facie case of discrimination and that the City would bear the burden of demonstrating with appropriate scientific evidence that the examination was valid, i.e., that it was “predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated.” Albemarle Paper Co. v. Moody, 422 U.S. 405, 431 (1975)); see also 42 U.S.C. § 2000e-2(k)(1)(A)(i); A467. Dr. Abrams, however, still had not drawn any conclusions concerning whether the examination’s validity as a predictor of job performance could be 101 scientifically established. Her conclusions on this critical issue would have to wait for deposition testimony and relevant documents from the developer of the examination, the New York State Department of Civil Service. The State, however, does not readily provide such information to municipalities that utilize these examinations. Only in the context of a subpoena was the City able to obtain testimony and information about the research and analyses underlying the test. A447. 4. The Deposition Testimony of the Exam Developer, Wendy Steinberg, Ph.D., and Her Supervisor, Paul Kaiser In late January and early February 2003, the parties conducted the deposition of Dr. Wendy Steinberg, Ph.D., who was the NYS Civil Service employee principally responsible for developing the examination at issue in MOCHA. A509-865. Dr. Steinberg insisted that the 1998 lieutenants’ examination was a scientifically valid predictor of job performance. A745-46, 758, 769-70. But she made several admissions that simultaneously undermined this conclusion. Dr. Steinberg acknowledged, for instance, that she did not personally develop or validate three of the exam’s six subparts - including those which purportedly tested comprehension and interpretation of written material, training practices, and supervision. Instead, she had “subcontracted” these “generic” non- 102 fire specific subparts from specialized units within the Testing Services Division of NYS Civil Service. A535-36, 539-41, 811. Dr. Steinberg likewise admitted that the job analysis she had performed to determine what subject matter to include on the exam did not show that the subjects of any of the three subcontracted subtests were relevant to the “day-one” duties of the job. A662-64, 668-69, 672. And Dr. Steinberg acknowledged that incumbent firefighters in larger fire departments, including the City of Buffalo, did not respond “at a meaningful level” to the detailed surveys that she sent to fire departments across the state in order to prepare her job analysis. A613-14. In January 2004, the parties then deposed Dr. Steinberg’s supervisor, Paul Kaiser, who at the time of deposition was Assistant Director of the Testing Services Division within NYS Civil Service. A539, 866-969. Much of the questioning focused on the three generic subtests that Dr. Steinberg had “subcontracted” from other units within NYS Civil Service. Kaiser testified that it was his “understanding and my recollection” that a “criterion” validity study had been performed for the “understanding and interpreting written material” generic subtest, but he was unaware of the results and acknowledged that another type of validity study had not been performed for that subtest. A904-05. He further 103 admitted that no validity studies had been performed for the generic subtests for “supervision” or “training practices.” A909-10. These admissions by Dr. Steinberg and Kaiser reflected poorly on the City’s ability to defend the exam because they showed, among other troubling deficiencies, that there was limited scientific evidence to demonstrate that three of the exam’s six subtests actually tested for what they were supposed to test. 5. The MOCHA Plaintiffs Deliver the Expert Report of Kevin R. Murphy, Ph.D. The seriousness of the MOCHA plaintiffs’ challenge was further underscored by the February 23, 2004 report of their expert, Kevin R. Murphy, Ph.D., which the City received in advance of permitting the eligible lists to expire. A969-82. Dr. Murphy was the head of the Department of Psychology at Pennsylvania State University and had decades of experience developing and evaluating personnel selection procedures. A969. He was also the past President of the Society for Industrial and Organizational Psychology and had, at the time, already published nine books and over one hundred articles and chapters concerning performance appraisal, personnel selection, psychological 104 measurement, statistics, and research methods. Id. Dr. Murphy had also served as the Chair of the U.S. Department of Defense Advisory Committee on Military Personnel Testing. A969. In short, Dr. Murphy had formidable credentials. He was also known to the City, which itself had retained him as an expert on prior cases. A1016. In addition to the deposition testimony of Dr. Steinberg and Mr. Kaiser from the NYS Office of Civil Service, Murphy reviewed dozens of documents relating to the development of the examination, including the exam booklet, the answer keys, test results evaluation and score reports, the job analysis conducted by Dr. Steinberg, and other relevant information. A980-81. Dr. Murphy first considered whether the examination had a statistical adverse impact on minorities. His analysis showed that African-Americans had only a 57% chance of passing the exam compared to Caucasians. For each of the exam’s six subtests, he further found that there was less than a 1% likelihood that differences in the scores of Caucasians and African-American candidates was attributable to chance. A973-74. So, in his opinion, the examination had a very marked statistical adverse impact. 105 Dr. Murphy then considered whether the examination was valid, i.e., whether there was evidence that “examinees who passed the test would be more likely than examinees who failed the test to perform well in the job of Fire Lieutenant.” A974. Based upon his review of the relevant materials, Dr. Murphy’s report concluded that “neither Dr. Steinberg nor the City of Buffalo has presented credible evidence that promotion decisions based on the Buffalo Fire Lieutenant Exam are related to the likelihood that examinees who passed the test would be more likely than examinees who failed the test to perform well in the job of Fire Lieutenant.” A970. In particular, Dr. Murphy identified three major flaws in the exam. First - consistent with Dr. Steinberg’s and Kaiser’s admissions at deposition - Dr. Murphy found that there was no scientific evidence of validity or even “of any effort to investigate validity” of three of the examination’s six subtests, namely “Training Practices,” “Supervision,” and “Understanding and Interpreting Written Materials.” A973. Thus, in Dr. Murphy’s expert opinion, there was no evidence at all available to support the validity of fully half of the exam parts. This was potentially devastating to the City, which carried the burden of establishing that the exam was a valid measure of job performance and not 106 simply some arbitrary selection device. 42 U.S.C. § 2000e-2(k)(1)(A)(i); Gulino v. N.Y. State Educ. Dept., 460 F.3d 361, 382 (2d Cir. 2006). Second, Dr. Murphy opined that the job analysis performed by Dr. Steinberg as a foundation for developing the examination was inadequate, among other reasons, due to “a systematic failure to sample fire departments in larger cities.” A974-75. By Dr. Steinberg’s own admission, the response rate to empirical surveys that she distributed to incumbent firefighters throughout New York State was “ridiculously low” in Buffalo and other large upstate cities. “Because of the systematic failure to collect adequate data from larger fire departments, the Department of Civil Service . . . ha[d] no way of testing the hypothesis that the same test can be validly used to test for promotion to fire lieutenant in large vs. small fire departments.” A975-76. In other words, according to Dr. Murphy, Dr. Steinberg designed the examination based on data collected from small municipalities without any way of knowing whether fire lieutenants performed the same duties in both large and small jurisdictions. Third, Dr. Murphy opined that the job analysis performed by Dr. Steinberg did not support the inclusion on the examination of the same three subtests - namely, Training Practices, Supervision, and Understanding and 107 Interpreting Written Materials - for which there was allegedly no evidence of validity at all. A974. So, even assuming the subtests were a valid measure of the qualities they were supposed to test for, Dr. Murphy found that Dr. Steinberg lacked empirical evidence showing these qualities were important for performing the lieutenant’s position so as to justify the inclusion of the subtests on the examination. Accordingly, Dr. Murphy concluded that there was no evidence to support the use of the examination for making promotion decisions: The Buffalo Fire Lieutenant exam is made up of six separate subtests. Three of these are believed by the test developer to be linked to the content of the Fire Lieutenant’s job, but the job analysis that is used to support this inference is both incomplete (i.e., the task list fails to include many critical facets of performance) and biased (there is a systematic under-sampling of larger fire departments; participation by firefighters in the City of Buffalo was notably low). No evidence exists to show that the generic subtests actually measure what they claim to measure or to show that the constructs have anything to do with performance in the job. The Buffalo Fire Lieutenant exam has substantial levels of adverse impact for African American examinees, and it has not been shown to be a valid test for making promotion decisions. A978-79. 108 6. The City’s Expert, Nancy Abrams, Ph.D., Expresses Significant Concerns about the Examinations and Cautions the City to Avoid Calling Her at Trial The City’s own expert, Dr. Abrams, likewise had very serious concerns about the examination and concurred with many of Dr. Murphy’s conclusions. Like Dr. Murphy, Dr. Abrams performed her own in-depth evaluation of the evidence, including the pleadings and document discovery in MOCHA I, the exam booklet and answer keys, the transcripts from Dr. Steinberg and Kaiser’s deposition, Dr. Steinberg’s job analysis, Dr. Murphy’s report, and other records relating to the examinations’ validity and impact on minority applicants. A468. After evaluating these materials, Dr. Abrams had serious concerns about the validity of the exams and the City’s ability to defend their use at trial. A468-69. Dr. Abrams’ concerns not only echoed many of Dr. Murphy’s concerns, but she identified several additional weaknesses in the exam. The concerns Dr. Abrams expressed to the City included the following: (1) the job analysis was an inadequate basis for the validation of the examination in Buffalo because it was based on data that came predominantly from smaller localities; (2) Dr. Steinberg had placed too much reliance on a small panel 109 of firefighting experts, who did not include anyone from the Buffalo Fire Department; (3) Dr. Steinberg relied in the firefighting experts to draw conclusions about what content to include in the examination, even though the data from her job analysis did not support some of those conclusions; (4) the examination included several subparts that measured general traits that were not specifically linked to the fire lieutenant’s job; and (5) the pass-fail cut-off point for the examination was not adequately justified. A470. Dr. Abrams advised the City’s Human Resources Commissioner, Leonard Matarese, and other City officials of her opinion that there was a “substantial risk” that the MOCHA plaintiffs would prevail against the City at trial because the scientific evidence supporting the validity of the lieutenant’s examination was limited. A470-71. Indeed, her concerns were so significant that she told the City that it would not be in its best interest to call her as an expert witness in the MOCHA actions. A471. Moreover, Dr. Abrams’ concerns extended beyond the 1998 lieutenant’s examination at issue in MOCHA I. She determined that the 1998 and 2002 lieutenant’s examinations were both based on the same job analysis and underlying research performed by Dr. Steinberg. So, her conclusions about the 110 1998 lieutenant’s examination were equally valid for the 2002 lieutenant’s examination at issue in MOCHA II. A471. But her opinion had even further reaching implications. The Lieutenant, Captain, Battalion Chief, and Division Chief examinations administered in 1998 and 2002 were all part of the same examination series. Not only did all four examinations contain substantial overlap in content, but they were all based on the same job analysis and research that were being criticized by both Dr. Murphy and Dr. Abrams as being invalid. Thus, these same deficiencies and concerns necessarily extended to all four exams. A472. Accordingly, Dr. Abrams advised the City that her conclusions about the paucity of scientific evidence supporting the use of the lieutenant examination applied to the entire Fire promotional exam series for both 1998 and 2002 because they were created based upon the same underlying research and analysis performed by Dr. Steinberg. A444, 472. 7. The City’s Decision to Permit the Lists to Expire By the summer of 2005, the City was preparing for mediation in an attempt to settle the MOCHA actions. In this context, Commissioner Matarese consulted with Dr. Abrams and the City’s legal counsel at length in order to familiarize himself with the MOCHA actions in greater depth, and to evaluate the 111 options available to him and the City. A441, A443-44. Matarese learned that the exam series clearly had an adverse impact on minorities and thus Buffalo could only prevail by carrying its burden to prove that the examinations were valid, i.e., “predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated.” Albemarle Paper Co., 422 U.S. at 431. Even then, the City could still lose if the plaintiffs demonstrated an “available, alternative practice that has less disparate impact and serves the employer’s legitimate needs.” 42 U.S.C. §§ 2000e- 2(k)(1)(A)(ii) and (C) (2013); Bridgeport Guardians, Inc. v. Bridgeport, 933 F.2d 1140, 1145 (2d Cir. 1991). By the time the mediation took place on September 20, 2005, the City and Matarese had before them a litany of damning evidence that reflected a strong likelihood that the City would lose at trial and be held liable to the MOCHA plaintiffs. This evidence included: • The district court judge presiding over the MOCHA actions was the same judge who was continuing to maintain supervision of the Fire Department under a 1979 Remedial Decree. A157, 463. 112 • Indisputable statistically adverse impact on the passage rate of African-American firefighters, as confirmed by both Dr. Murphy and the City’s own expert, Dr. Abrams. A468, 972. • Dr. Steinberg’s and Kaiser’s admissions of serious flaws in the exam, including the troubling lack of any available analysis or evidence demonstrating that three of the exam’s six subparts even actually tested what they were supposed to test. A535-36, 539-41, 811, 904-05, 909-10. • Dr. Murphy’s damning report, emphasizing, among other serious concerns, that there was no evidence at all that three of the exam’s six subparts actually tested for the traits they were supposed to - as Dr. Steinberg and Kaiser acknowledged - or even that these traits were relevant to predicting job performance. A969-81. • The evaluation by the City’s own independent expert, Dr. Abrams, who like Dr. Murphy expressed serious reservations about whether there was scientific evidence to support the exam’s use. A465-73. • Dr. Abrams’ candid and pointed statements and advice to the City that it would not be in its best interest to call her as a witness. A471. 113 As the City faced the prospect of trial, not only did the evidence appear to overwhelmingly suggest a true disparate impact, but the City would be forced to litigate its defense without the assistance of an expert. The City would instead be forced to shape its trial defense around the testimony of the two Civil Service witnesses who created the test, but who had also been forced at deposition to admit several deficiencies that were strongly criticized by both experts. After evaluating all of the mounting evidence, and with the guidance of its own expert and counsel, it became evident to Matarese and the City that the MOCHA plaintiffs’ challenge was very serious and likely to result in liability to the City. The City rightly feared that it would be unable to demonstrate the exam’s validity at trial. A443-46. Commissioner Matarese further recognized that continued use of the State-developed examinations and associated eligible lists could potentially expose the City to additional disparate impact liability if the City continued to fill promotional vacancies without scientific evidence to show that the examinations selected the best qualified candidates. A445-46. Materese also became concerned that if he did not promptly discontinue use of the eligible lists, the City might subject itself to new disparate treatment claims from minority firefighters for “intentionally and purposefully” 114 employing an illegal selection device that favored Caucasians over African-Americans - a secondary claim that the MOCHA plaintiffs were already alleging. A173. These allegations worried Matarese in light of Dr. Abrams’ conclusions and other compelling evidence that the exam was not valid, as minority plaintiffs could potentially argue that the City deliberately continued to use the State exams to exclude African-Americans after learning that the exams were arbitrary predictors of job performance that did not select the best candidates. A446. Given this strong evidence, the City did what any responsible employer would or should have done.5 The City discontinued the suspect eligible lists. On September 18, 2005, Matarese allowed the Battalion Chief and Division 5 Notably, under prevailing Second Circuit precedent at the time, the City did not require a strong basis in evidence showing the exams were not valid predictors of job performance in order to undertake race-conscious corrective action; evidence of a statistical racial disparity alone was sufficient to permit voluntary compliance action. See, e.g., Hayden v. Cnty. of Nassau, 180 F.3d 42, 50 (2d. Cir. 1982) (holding that governmental purpose in avoiding disparate impact discrimination on a protected group, in spite of adverse effects upon other identifiable groups, did not evince an intent to discriminate). Nevertheless, the City continued to use the State exams and only considered further action when the difficulties the City would face in proving that the exams were valid selection devices became overwhelmingly manifest. 115 Chief lists to lapse automatically. A448. Since settlement discussions were still continuing in the MOCHA actions, however, he did not immediately terminate the Lieutenant’s and Captain’s eligible lists in case it might prove necessary to promote African-American candidates off those lists as part of a federal court- ordered settlement. A440. Once it became clear that a settlement was not feasible, he allowed those lists to lapse on February 3, 2006. A448. Finally, Matarese determined going forward that the City would no longer rely on State-developed civil service tests but would hire its own, independent consultant to develop new fire promotional exams. In this way, the City could better ensure that its selection procedures were not only legally defensible and fair to all candidates, but in fact also identified the best candidates for promotion based on merit and fitness. A446-47. B. The District Court Recognizes the Substantial Nature of the MOCHA Plaintiffs’ Claims by Enjoining the Margerum Plaintiffs On December 19, 2007, the district court recognized the seriousness of the claims raised in the MOCHA actions by enjoining the Caucasian plaintiffs in this action from proceeding with their claims pending the completion of a trial in the MOCHA actions. See M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 2007 U.S. Dist. LEXIS 93066 (W.D.N.Y. Dec. 13, 2007) (MOCHA I); A1143-152. The City 116 sought this relief after the trial court granted the Margerum plaintiffs summary judgment on a pre-answer motion on September 10, 2007. In granting the City’s motion, the district court emphasized, “there is a significant risk that the state court could order relief in favor of the Margerum plaintiffs . . . which might then be subject to some type of corrective order from this court should the federal trial result in a judgment in favor of the MOCHA plaintiffs.” A1150 (emphasis added). The district court further expressly endorsed Matarese’s decision to discontinue the use of the State-developed exams and to develop new promotional exams. The district court found these actions to be “precisely what is required under the remedial decree in the Fire Case.”. M.O.C.H.A. I, 2007 U.S. Dist. LEXIS 93066, at *14-15; A1150-51. The district court would not have taken the extraordinary step under the rarely invoked federal All Writs Act of enjoining parties not otherwise before it from proceeding with a separate state court action unless it had concluded that the MOCHA plaintiffs had substantial claims on which they could prevail. Notably, the district court issued the injunction after having just denied the parties’ cross-motions for summary judgment on a record that included Dr. Murphy’s 117 report and other evidence considered by Matarese in permitting the eligible lists to lapse. See M.O.C.H.A. I, Soc’y, Inc. v. City of Buffalo, 2007 U.S. Dist. LEXIS 83544 (W.D.N.Y. Nov. 9, 2007). C. If the Ricci Strong-Basis-in-Evidence Standard is Not Met Here, How Could It Ever Be Met? If the City’s actions do not satisfy the Ricci safe harbor in this case, it is difficult to conceive how the “strong basis in evidence” test could ever be satisfied. The decision was not made for the purpose of discriminating against Caucasian majority firefighters, but to comply with anti-discrimination laws prohibiting employment practices that result in illegal race-based discrimination against racial minorities. That is precisely the situation in which Ricci was intended to operate and provide cover. The City need only establish that it had a strong basis in evidence to support an “objectively reasonable fear of disparate-impact liability” that was comprised of “more than a mere fear of litigation, but less than the preponderance of evidence that would be necessary for actual liability.” United States v. Brennan, 650 F.3d 65, 109-10 (2d Cir. 2011). Regardless of the precise quantum of proof that might be required, the standard is more than met here. 118 When Commissioner Matarese made his decision in late 2005, the City was not facing merely the threat of litigation; it was approaching the trial stage of a bitter and prolonged litigation with the MOCHA plaintiffs. The City remained conscious of its obligations to avoid discriminatory promotional practices under the Remedial Decree. The primary evidence available to support the City’s defense in MOCHA was the testimony of Dr. Steinberg and Mr. Kaiser regarding their development of the Civil Service examinations. But the City had every reason to conclude that their testimony would not carry the day, given their significant admissions which severely undercut the validity of the exams the City was left to defend. Indeed, the plaintiffs would present their case with their expert - Dr. Murphy - who levied sharp criticism of the exams and the practices and assumptions utilized by the NYS Civil Service personnel who created them. This evidence alone should be more than sufficient to satisfy any objective standard of fear of disparate impact liability to trigger application of the Ricci safe harbor. As if this were not bad enough, the City had no expert to present at trial. Dr. Abrams agreed with Dr. Murphy’s criticisms of the test and told the City not to call her as a witness. Faced with the evidence and dim trial prospects, Matarese concluded that corrective action was necessary - so he allowed the 119 eligible lists to expire. If these circumstances do not support taking voluntary compliance actions to remedy suspected disparate impact, what circumstances possibly could? What more can reasonably be demanded from the City in order to establish a “strong basis in evidence” for its actions? When compared to the facts in Ricci and United States v. New Jersey, discussed below, it is clear that the City’s decision is not only justifiable, but that its entitled to protection under the Ricci safe harbor. 1. The City’s Conduct is the Opposite of the Actions of New Haven that Resulted in Liability in Ricci In Ricci, the City of New Haven and the other defendants discarded the results of a promotional exam for fire lieutenant before even certifying an eligible list, making appointments, or being sued by minority plaintiffs. Ricci, 557 U.S. at 567-74. Acting on statistical disparity alone, New Haven made no meaningful attempt to determine whether the underrepresentation of successful minority candidates was indicative of illegal disparate impact discrimination. The Supreme Court criticized New Haven because it “turned a blind eye” to evidence supporting the examination’s use by deliberately instructing the exam developer not to provide it with a study that would have shown that the exam was a valid predictor of job performance. Id. at 589. So, when a group of majority plaintiffs 120 sued based on New Haven’s failure to certify an eligible list from which they stood to be promoted, the Supreme Court found that New Haven had no defense. Id. at 592. As discussed and demonstrated previously, the City of Buffalo’s actions are a far cry from those of New Haven. The City took considered and measured action in the face of ongoing litigation, continued investigation, expert and legal advice, and legitimate fears of disparate impact liability. 2. This Case Closely Parallels United States v. New Jersey, in which the Employer Received Safe Harbor Protection Under Ricci The Supreme Court did not create the Ricci safe harbor to be unattainable. The U.S. District Court’s decision in United States v. New Jersey illustrates an appropriate application of the Ricci safe harbor.6 In that case, the 6 Only a small handful of courts have had occasion to apply the strong basis in evidence standard since Ricci was handed down in 2009. Other than Ricci itself, Margerum, and the State of New Jersey case discussed below, the only published decision that has directly determined whether a defendant could meet the strong basis in evidence standard is Oakley v. City of Memphis, 2010 U.S. Dist. LEXIS 143451 (W.D. Tenn. June 17, 2010). But that decision is readily distinguishable from the facts presented here since it was undisputed that the defendants “took no steps to ascertain the validity [of the challenged selection procedures] prior to terminating [the examination].” Id. at *34-35. Here, obviously, the City had very substantial evidence that the exams at issue were not valid when it acted, including the conclusions of two experts (one of which was its own). 121 United States sued the State of New Jersey and its Civil Service Commission alleging that an examination used to make promotions to police sergeant had a discriminatory disparate impact against minorities. United States v. New Jersey, 2012 U.S. Dist. LEXIS 113175, at *5-8 (D.N.J. June 12, 2012), aff’d, 522 Fed. Appx. 167 (3d Cir. 2013), cert denied, ___ U.S. ___, 134 S. Ct. 527 (2013). After engaging in substantial discovery, the parties sought to enter a consent decree providing both for monetary and injunctive relief, including discontinuance of existing eligible lists, development of new selection procedures, and priority promotions and retroactive seniority for affected minority candidates. Id. at *9-17. In the wake of the settlement, majority candidates objected and argued specifically that Ricci barred the race-based relief contemplated by the consent decree. The district court rejected their arguments, noting that the defendants had defended the test through a nearly two-year investigative period and then defended this case for a year and a half . . . . In other words, the agreement behind the consent decree was not prompted by the fear of litigation. Rather, it was a calculated decision based on an evaluation of significant evidence, including expert reports and depositions. State of New Jersey, 2012 U.S. Dist. LEXIS 113175, at *50-51. 122 The operative facts here are indistinguishable from State of New Jersey. As we have seen, just like the defendants in that case, the City of Buffalo evaluated extensive discovery from the MOCHA litigation and considered the conclusions of two well-respected experts and legal counsel before taking voluntary compliance actions. 3. The Trial Outcome in MOCHA does not Deprive the City of Safe Harbor Protection That the City ultimately managed to narrowly escape liability in the MOCHA I litigation does not serve to deprive the City of the Ricci safe harbor. If anything, the close 2-1 vote and vigorous dissent at the Second Circuit demonstrate only that the MOCHA plaintiffs’ claims could have easily resulted in liability to the City. M.O.C.H.A. Soc’y, Inc. v. City of Buffalo, 689 F.3d 263, 286-88 (2d Cir. 2012) (Kearse, J., dissenting). Indeed, the dissent would have ruled that the City failed to carry its burden and voted to reverse the trial court’s determination. Id. at 288. In affirming the district court’s dismissal in MOCHA, even the majority emphasized that its “relatively narrow and fact-dependent determination” hardly compels the conclusion that the City “lacked a strong basis in evidence to believe it was subject to disparate impact” when it acted. Id. at 282 n.14. 123 While the Fourth Department’s new outcome-oriented test puts the focal point on the City’s avoidance of liability in MOCHA I as the unassailable proof of disparate treatment liability in Margerum, the simple distinction between a “strong basis in evidence” and the “trial evidence” demonstrates the fragility of the Fourth Department’s rule. Indeed, “trial evidence” is merely that which is presented and admitted at trial - i.e., that which is available to the fact-finder for consideration. An employer’s “strong basis in evidence” under Ricci is much broader, and also includes documents, statistical information, witness testimony, statements, expert advice, privileged legal advice, and other material that was considered by the employer but would not necessarily be presented to the fact- finder at a trial to determine disparate impact liability. Under Ricci, the applicable inquiry is whether the employer had a “strong basis in evidence” to justify race- conscious compliance actions when it acted, not whether a court years later ultimately finds the challenged practice to have had an illegal disparate impact based on the “trial evidence.” Ricci, 557 U.S. at 585. The plaintiffs’ trial evidence in MOCHA I largely consisted of the testimony of the plaintiffs’ expert witness - Dr. Murphy - who spoke of statistical disparities and sharply criticized the examinations and the research 124 supporting their use as a predictor of job performance. In its defense, the City relied on the only helpful evidence it could muster - the testimony of the two NYS Civil Service witnesses involved in creating the promotional examinations. A1215-1230. What the fact-finder never heard were the views of the City’s own expert - Dr. Abrams - who also strongly criticized the exam and NYS Civil Service and begged off of the trial. A470-71. The significance of Dr. Abrams’ expert evaluation and advice, and how it informed the decision of Commissioner Matarese, cannot be understated or disregarded in the Ricci analysis. While not part of the “trial evidence,” Dr. Abrams’ expert analyses and advice were certainly key pieces of evidence that formed the City’s “strong basis in evidence.” One need only consider how different the trial outcome in MOCHA I would have been had the district court: (1) heard the City’s own expert corroborate the exam deficiencies identified by Dr. Murphy; or (2) heard the additional deficiencies that the City’s expert identified in her own expert review; or (3) learned that the City’s own expert had advised the City not to call her at trial because her testimony would be unlikely to support the City’s defense. 125 Indeed, the Supreme Court in Ricci recognized precisely what the Fourth Department chose to ignore: the inherent risks and vagaries of litigation and the need to fashion a rule that allows for the exercise of employer discretion under appropriate circumstances, not one that sets an impossible hindsight standard or one that requires absolute certainty. IV. PLAINTIFFS FAILED TO CARRY THEIR BURDEN OF ESTABLISHING THEIR ALLEGED ECONOMIC DAMAGES WITH “REASONABLE CERTAINTY,” AND THUS THE APPELLATE DIVISION SHOULD HAVE REDUCED THE PLAINTIFFS’ DAMAGES AWARD TO ZERO The burden of proof in establishing damages with “reasonable certainty” rests with the plaintiff at all times. Haughey v. Belmont Quadrangle Drilling Corp., 284 N.Y.136, 142 (1940) (“Damages are recoverable for losses caused by the breach only to the extent that the evidence affords a sufficient basis for estimating their amount in money with reasonable certainty and the plaintiff has always the burden of producing evidence sufficient to form a basis for the estimate.”); Lodato v. Greyhawk N. Am., LLC, 39 A.D.3d 494, 495 (2d Dep’t 2007) (“It was the plaintiff’s burden to establish damages for past and future lost earnings ‘with reasonable certainty, such as by submitting tax returns or other relevant documentation’. . . . Since the plaintiff failed to meet his burden, he is, as 126 a matter of law, not entitled to recover damages for past or future lost earnings.”) (quoting Karwacki v. Astoria Med. Anesthesia Assoc., P.C., 23 A.D.3d 438, 439 (2d Dep’t 2005)). This burden encompasses more than just proof that damages may be generally inferable, but rather the production of “sufficient evidence to form a basis for an estimate of damages with some degree of exactness.” Henderson v. Holley, 112 A.D.2d 190, 191 (2d Dep’t 1985) (reversing judgment based on plaintiffs’ failure to prove damages and dismissing the complaint) (internal quotation marks and citations omitted). Here, the Fourth Department ruled with respect to the nine active-duty plaintiffs, that “the assumptions on which plaintiffs’ expert relied [were] not fairly inferable from the evidence, and thus his opinion concerning the non-IOD plaintiffs, which was based on speculation about their future job prospects, cannot support the awards made by the [trial court].” Margerum v. City of Buffalo, 108 A.D.3d 1021, 1023 (4th Dep’t 2013). The Fourth Department reached a similar conclusion with respect to the three IOD plaintiffs, stating: Because [the IOD] plaintiffs themselves testified that they would not have been injured and retired on IOD status had they been promoted, because plaintiffs’ expert initially agreed with that testimony and changed his calculation only when it became clear that the tax 127 equalization of his calculations would ‘wipe out the [IOD plaintiffs’] loss,’ and because the recalculated weighted probability of plaintiffs’ expert relied only on injury data for a single year, not data relating to actual disability retirements, we conclude that the IOD plaintiffs, through plaintiffs’ expert, did not establish their economic damages with reasonable certainty. Id. at 1024 (emphasis added). The Fourth Department’s overarching rationale in reaching this determination, and reversing the trial court’s decision, was that “the [trial court] applied the wrong burden of proof and erred in relying on assumptions not supported by the record.” Id. at 1022 (emphasis added). The Fourth Department thus simultaneously ruled that the trial court committed not one, but a near-perfect trifecta of errors in assessing damages against the City: (1) by applying the wrong burden of proof; (2) by affirmatively placing the burden of proof on defendants to establish plaintiffs’ economic damages; and (3) by awarding damages to the plaintiffs not tethered to the evidence before it. Completing the picture, the Fourth Department then held that the plaintiffs, themselves, had failed to provide sufficient evidence to demonstrate their economic damages with the requisite “reasonable certainty.” Id. at 1022-23. Given plaintiffs’ failure to proffer anything but speculative evidence in support of 128 their request for damages, “the court was constrained to render judgment in favor of defendants.” Charles Hyman, Inc. v. Olsen Indus, Inc., 227 A.D.2d 270, 277 (2d Dep’t 1996). It was improper to consider and use the testimony of defendants’ expert to fill this gap; essentially acknowledging but nevertheless perpetuating the trial court’s misapplication of the burden of proof. In other words, once the Fourth Department determined that the trial court had committed reversible error, and that plaintiffs had failed to meet their burden, the inquiry should have ended. Rather than revert to Besaw’s calculations, the Fourth Department should have determined, as a matter of law, that the plaintiffs were entitled to no award because they had failed to meet their burden to prove damages to a reasonable certainty, regardless of any evidence proferred by the defense. City of New York v. State, 27 A.D.3d 1, 8-9 (1st Dep’t 2005), leave denied 6 N.Y.3d 711 (2006). That the City’s expert prepared sustainable damages calculations does not alter this result. The City had no obligation to do so, but had little choice in light of how the trial proceeded. At the outset of trial on August 23, 2011, the trial court heard motions from the parties to clarify a dispute over who bears the burden of proof on causation and damages. RA25-36. The trial court reserved decision and declined 129 to decide the ultimate burden issues at that time, but clearly indicated that, in its view, the burden of proof appeared to lie with defendants. RA33-35. The issue was not revisited until after all proof was in the record, when the City was finally permitted to present its C.P.L.R. 4401 motions. RA75, 81-93. While the City could have simply used its expert at trial to discredit Shick’s assumptions and calculations as speculative and unrealistic, the City was left with little choice but to also have Besaw present his own calculations and methodologies in light of the trial court’s unwillingness to resolve the burden-of-proof motions. Under these circumstances, the Fourth Department should have, as a matter of law, reduced plaintiffs’ economic damages to $0 upon concluding that the plaintiffs’ expert’s testimony was speculative, incompetent, and inadequate to establish the economic damages with “reasonable certainty.” A6-7. V. THE APPELLATE DIVISION PROPERLY CONCLUDED THAT PLAINTIFFS’ EXPERT OFFERED INCOMPETENT PROOF GROUNDED IN UNSUPPORTABLE AND SPECULATIVE ASSUMPTIONS THAT FAILED TO ESTABLISH DAMAGES TO A REASONABLE DEGREE OF CERTAINTY The plaintiffs’ appeal is limited to the measure and proof of damages, and whether the Appellate Division erroneously concluded that plaintiffs’ expert failed to prove damages to the “reasonable certainty” required by law. In contrast, 130 the City’s cross-appeal goes to more fundamental threshold questions of liability. Accordingly, the reversal of either one of two prior Fourth Department orders appealed by the City, which concern the notice of claim and the Ricci safe harbor issues, would render the plaintiffs’ damages appeal moot. The plaintiffs’ appeal, in any event, must be rejected. Their contentions focus on claimed notions of equity and justice in arguing that they - not the City as a “wrongdoer” - should be accorded the benefit of the doubt in their damages proof when it comes to matters of uncertainty and speculation. Pltf.’s Br. at 82. But that is not the law. As the Fourth Department recognized, plaintiffs bore the burden at trial to prove up their damages to a reasonable degree of certainty, and the trial court improperly shifted that burden to the defendants. A6-7. Proof of economic damages is not about equities but the submission of competent expert proof and foundationally reasonable and supportable assumptions and projections. The Appellate Division properly concluded that plaintiffs’ expert’s proof and factual assumptions on several critical issues were incompetent and speculative and - in at least one instance - contrived to manufacture damages for the IOD plaintiffs where there were none. 131 A. This Court’s Scope of Review of the Factual Findings Is Narrowly Circumscribed The plaintiffs’ appeal challenges the Fourth Department’s July 5, 2013 Order insofar as it modified and reduced the trial court’s damage awards. The plaintiffs’ limited appeal of the damage determinations implicates this Court’s narrow authority to review facts, including the Fourth Department’s new factual determinations that have not been previously reviewed. N.Y. C.P.L.R. § 5501(b). This Court, however, does not conduct de novo reviews of fact-findings to supplant those of a lower court. Rather, this Court’s review of the competing fact-findings below is generally limited to determining whether the evidence in the record “more nearly comports with the trial court’s finding or with those of the Appellate Division.” Friedman v. State, 67 N.Y.2d 271, 285 (1986); In re Nathaniel T., 67 N.Y.2d 838, 840 (1986); Weiss v. Karch, 62 N.Y.2d 849, 850 (1984). In effect, the Court must choose between two options and decide which is more closely in accord with the weight of the evidence. Marine Midland Props. Corp. v. Srogi, 60 N.Y.2d 885, 887 (1983). B. The Standard for Damages in a Discrimination Case The purpose of damages under the New York Human Rights Law is to make the plaintiff whole, “not to punish the employer or provide a windfall to the 132 employee.” Mittl v. NYS Div. of Human Rights, 307 A.D.2d 881, 882 (1st Dep’t 2003) (reducing back wage award by over 80%). Damages for lost earnings are therefore limited to the difference between what the plaintiff would have earned if not for the alleged wrongful conduct and what the plaintiff in fact earned. Wantagh Union Free Sch. Dist. v. NYS Div. of Human Rights, 122 A.D.2d 846, 847-48 (2nd Dep’t 1986). Compensatory damages resulting from loss of earnings “must be established with reasonable certainty . . . .” Clanton v. Agoglitta, 206 A.D.2d 497, 499 (2d Dep’t 1994) (directing new trial on damages for impairment of earning ability unless the parties consented to reduce the jury award by 74% where jury’s award “deviate[d] materially from what would be reasonable compensation” because plaintiff failed to establish those damages with “reasonable certainty”); Burdick v. Bratt, 203 A.D.2d 950, 951 (4th Dep’t 1994) (deleting from jury award amounts awarded for past loss of earnings, future loss of earnings, and past impairment of earning ability where “[p]laintiff’s proof did not allow the loss of earnings to be ascertained with reasonable certainty”); Bailey v. Jamaica Buses Co., 210 A.D.2d 192, 192 (2d Dep’t 1994) (deleting award of damages for past and future lost earnings where proof at trial was “unsubstantiated and conclusory”). 133 Speculation and conjecture are insufficient to establish damages with reasonable certainty. See, e.g., Fiederlein v. NYC Health & Hosps. Corp., 56 N.Y.2d 573, 574 (1982); Bailey, 210 A.D.2d at 192; Ciraolo v. Miller, 138 A.D.2d 443, 444 (2d Dep’t 1988); Schneider v. New York, 38 A.D.2d 628, 628 (3d Dep’t 1971). “[E]xpert testimony must be based on facts supported by the evidence.” Cross v. Bd. of Educ. of Delaware Acad. & Cent. Sch. Dist. No. 1, 49 A.D.2d 67, 70 (3d Dep’t 1975) (internal citations omitted). “Expert testimony [may] not be based on mere speculation.” Id. (internal citations omitted); see also Plainview Water Dist. v. Exxon Mobil Corp., 18 Misc. 3d 1121(A), at *26 (Sup. Ct. Nassau Cnty. Jan. 9, 2008) (dismissing plaintiff’s complaint after close of testimony because plaintiff’s experts’ testimony was not supported by the facts and was based on unrealistic assumptions and, therefore, plaintiff failed to prove its case), aff’d in part, 66 A.D.3d 734 (2d Dep’t 2009). As this Court has emphasized, “an expert’s opinion not based on facts is worthless.” Caton v. Doug Urban Constr. Co., 65 N.Y.2d 909, 911 (1985); see also Amatulli v. Delhi Constr. Corp., 77 N.Y.2d 525, 533 n.2 (1991) (“Where the expert states his conclusion unencumbered by any trace of facts or data, his testimony should be given no probative force whatsoever . . . indeed, no reason is 134 apparent why his testimony should not simply be stricken.”); Cassano v. Hagstrom, 5 N.Y.2d 643, 646 (1959) (an expert may not draw inferences from assumed facts but must rely on facts in evidence); Adair v. Tully-Kuzman, 91 A.D.3d 1228, 1229 (3d Dep’t 2012) (expert’s opinion must be based on facts in the record); Gilleo v. Elizabeth A. Horton Mem. Hosp., 196 A.D.2d 569, 570 (2d Dep’t 1993) (finding reversible error where court below allowed hypothetical questioning of expert that was supported neither by facts in evidence nor facts fairly inferable from the evidence); Cross, 49 A.D.2d at 70 (reversing jury award where expert testimony was based on surmise and speculation). Courts are further particularly skeptical of front-pay claims extending years into the future due to their inherently speculative nature. See, e.g., Hybert v. Hearst Corp., 900 F.2d 1050, 1056 (7th Cir. 1990) (discussing “highly speculative” nature of front-pay damages), abrogated on other grounds by Price v. Marshall Erdman & Assocs., Inc., 966 F.2d 320 (7th Cir. 1992). Expert testimony concerning future lost earnings therefore must be based on a “solid and logical foundation for the evidence sought to be introduced, [and] surrounded . . . with safeguards . . . .”) Dennis v. Dachs, 85 A.D.2d 223, 225 (1st Dep’t 1982). 135 In this case, both experts employed the same basic methodology to calculate the plaintiffs’ damages. They compared projections of the plaintiffs’ earnings with the promotions at issue against the plaintiffs’ actual and projected earnings without the promotions. The differences in their calculated amounts turn upon the factual assumptions that formed the foundation for their calculations. The Appellate Division properly held that Shick’s assumptions were speculative and unsupported by the trial testimony and record evidence. Besaw’s assumptions were, by contrast, grounded in the plaintiffs’ own testimony, historical data, and reasonably inferable from the evidence. VI. THE EVIDENCE AT TRIAL MOST CLOSELY COMPORTS WITH THE FACTUAL FINDINGS OF THE APPELLATE DIVISION A. The Weight of the Evidence Supports the Appellate Division’s Findings Regarding the Overtime Assumptions for the Active Duty Plaintiffs The plaintiffs first urge that the Fourth Department erred by rejecting the overtime assumption adopted by the trial court and used as the basis to determine the plaintiffs’ future lost wage claims. Both experts acknowledged that overtime is a substantial component of the plaintiffs’ compensation as firefighters by including projected overtime earnings in their calculation of the plaintiffs’ alleged damages. A3027-82, 3089-3177. The main difference in their calculations 136 is based on one key assumption - the projected number of overtime hours that the plaintiffs would work in the future. While both experts relied on historical data to project the plaintiffs’ future overtime earnings, A1526-29, 1955-57, the differences in amount lie in the years on which each expert based his assumption. Plaintiff’s expert - Shick - relied upon overtime data for the 2008-2010 period when overtime was at historical highs. A1531-32, 2097, 2860. The City’s expert - Besaw - utilized data from the 2000 to 2005 time period as more representative of historical norms. A1954-57. As discussed below, only Besaw’s overtime assumption is well grounded in the facts and record evidence. Accordingly, the Fourth Department’s fact-finding should be affirmed as most closely comporting with the weight of the trial evidence. 1. The Trial Evidence The City’s current Fire Commissioner, Garnell Whitfield, offered extensive testimony concerning historical overtime levels within the Fire Department. He testified that during the five-year period from 2005 to 2010, overtime had been “very high”; it had “doubled or in some cases tripled or 137 quadrupled compared to previous years.” A1809. Former Fire Commissioner Michael Lombardo agreed that the years 2006 to 2009, when he was Commissioner, were “not at all” typical for overtime and that “[the Fire Department’s] overtime expenditures probably went up three times what they were when we came [in].” A1779-80. Numerous plaintiffs, including Fahey, Reddington, and Skinner, likewise acknowledged that overtime amounts had been unusually high in recent years. A1282, 1308, 1321, 1338-39, 1348. Commissioner Whitfield testified that Exhibit 218, A2860, summarized his understanding of historical overtime trends within the Fire Department. A1812-13. The exhibit shows, for example, that average annual overtime for fire captains was 115 hours between 2000 and 2005. But between 2006 and 2010, the average had jumped to 429 hours - i.e., an increase of more than 3.5 times. A1813-14. Overtime in other ranks experienced comparable increases during the same two periods as summarized below: 138 Rank 00-05 Avg. 06-10 Avg. Lieutenant 112 397 Captain 115 429 Battalion Chief 162 508 Division Chief 187 452 A2860. In the first year after Commissioner Whitfield assumed office in January 2010, overtime went down substantially, as summarized below: Rank 2009 2010 Lieutenant 535 420 Captain 529 369 Battalion Chief 552 520 Division Chief 629 436 A1817, 2860. As Commissioner Whitfield pointed out, a number of factors drove overtime amounts within the Fire Department, including vacancies, sick time, and emergency situations. A1808-09. These factors also explained why overtime had declined since Commissioner Whitfield took charge of the Department. 139 In 2010-2011, job vacancies began to decrease substantially as a result of the Department hiring three new classes of recruits - over 100 new firefighters. The Department had not hired a single new firefighter since 2001. A1349, 1457, 1780, 1816-18. The filling of job vacancies reduced overtime needs. A substantial decrease in sick time has also contributed to the decline in overtime. Sick time “drives overtime tremendously” due to minimum staffing mandates that require the Department to fill positions when a firefighter is absent due to illness. A1822-23. In 2010, sick time for the entire Department declined by over 40% to 62,099 hours - after peaking in 2008 and 2009 at 110,518 hours and 107,167 hours, respectively. This was in stark contrast to the Department’s total sick time for 2000 and 2001, which were 31,536 hours and 37,467 hours, respectively. A1823-26; RA128. The recent decline in sick time was also attributable to Commissioner Whitfield’s implementation and enforcement of several policies. A1818-19. These policies included the “fourteen day rule,” which discourages firefighters from using sick leave unnecessarily by making them ineligible for overtime for fourteen days after returning from being out on sick leave. The Department began enforcing its house confinement policy, which requires ill firefighters to remain at 140 home during their shift and provide a doctor’s note upon returning to duty. A1818- 19; RA128. The Department likewise prohibited firefighters from “swapping” overtime calls, a practice that some firefighters had used to accrue additional overtime in order to pad their pensions. A1819-20, 1822. As a result of these changes, overtime expenditures in the Fire Department for the 2010/2011 fiscal year was $1 million less than the prior fiscal year. A2315-16. Commissioner Whitfield further testified that overtime should continue to trend downward for the fiscal year beginning July 1, 2011. The overtime budgeted for 2011/2012 was over $1 million less than the amount in the prior fiscal year. A2316. At trial, plaintiffs Fahey and Reddington readily admitted that their overtime opportunities were now beginning to decrease. A1308, 1339. Cassel also conceded that overtime is highly dependent on staffing levels. A1456-57. And Skinner described staffing as the “number one reason” contributing to overtime, explaining that, “in the two thousands they stopped hiring and [overtime] skyrocketed.” A1348-49. This testimony corroborated Commissioner Whitfield’s testimony that overtime can be expected to return to its pre-2005 levels, among 141 other reasons, because of additional recent hiring. A1349, 1457-58, 1800, 1816- 18. The great weight of the evidence at trial made clear that overtime was trending to historical highs over the course of 2005 to 2010, peaking in 2008 and 2009. Indeed, plaintiffs’ counsel himself conceded that there is a “bubble . . . in the vast amount of overtime for the time frames 2000, really in 2005 on, even through today . . . because of a shortage of hirings . . . among other reasons.” A2076. 2. Expert Testimony During trial, Shick acknowledged that the data period he used (2008- 2010) reflected an obvious “uptick” in overtime, which was confirmed for him by at least two plaintiffs. A1531-32, 1611, 2097. Shick admitted that he did not talk to anyone within the Fire Department except two of the plaintiffs (Skinner and Hynes) to determine which years would provide the best basis for projecting overtime. A1611. Nonetheless, he chose to use the peak overtime years in his calculations despite overwhelming testimony and witness interviews indicating that overtime in those years was driven by unusual circumstances and had begun a downward trend. 142 In contrast, Besaw based his overtime assumption on average data for the entire Fire Department for the six-year period from 2000 through 2005. A2209-10. Based on his interview of Commissioner Whitfield and the plaintiffs’ own deposition testimony, he concluded that the dramatically higher overtime levels between 2006 and 2010 - which were often three to four times as many hours on average by rank as in prior years - were unusual. A1957. He further observed that overtime levels had declined substantially in 2010 and would return to their pre-2006 levels due to a variety of factors. A1954-57, 2209-10. These include alleviating significant understaffing related to the City’s prior fiscal crisis and the various personnel procedures that the Fire Department implemented after Whitfield became Fire Commissioner in January 2010. A1954-57, 2209-10, 2126- 27, 2870; see also A1339, 1348-49. Using the 2000-2005 data, Besaw determined average annual overtime hours for each rank. A1951. Besaw then multiplied these by the 2010 Departmental overtime rates, adjusted by a 2.5% inflation rate, to project the plaintiffs’ overtime for each year in the front-pay period. A2071. In this way, Besaw’s overtime projections average in the “total mix” of overtime worked by 143 Department members. A2209, 2253-54, 2291-92.7 Besaw’s projections were thus firmly rooted in a large statistical data sample, whose carefully selected parameters were consistent with the evidence in the Record. 7 In contrast, Shick did not rely on departmental averages in projecting overtime but constructed “peer groups” (of six or fewer firefighters) for each individual plaintiff based on the plaintiff’s date of hire. A1528-29, 1609-10, 2853. Shick, however, acknowledged that he did not apply the peer group analysis uniformly. For example, he conceded that he deviated upwards from his peer group analysis for plaintiff Hazelet because Hazelet historically tended to work more overtime than his peer group. But Shick did not similarly deviate downwards for any plaintiff who may have averaged less than his respective peer group. In other words, where Shick’s peer group average was higher than the historical overtime performance of a particular plaintiff - as it was for a majority of the plaintiffs here - Shick gave that plaintiff the benefit of the higher peer group overtime average, even if it did not reflect the plaintiff’s historical overtime performance. A2253-54, 2291-92. In Besaw’s opinion, the peer groups were too small to constitute meaningful samples. Shick’s reliance on the very small set of data points represented by the peer groups therefore was unlikely to yield accurate results, given the considerable differences and volatility in individual career paths and work- life expectancies within the Department. A2040-42. Besaw also found that the average overtime hours worked by the plaintiffs under Shick’s analysis would put them well above the Departmental average even for the 2006- 2010 period when overtime was extraordinarily high. Indeed, many of the plaintiffs would be extreme outliers. A1958-59, 1961-65. Since the Fourth Department adopted both Besaw’s assumptions and calculations, it did not rely on Shick’s peer group analysis. The trial court, however, relied on Shick’s calculations, which were premised on his peer group analysis, in determining the IOD plaintiffs’ damages. A43-44, 52. 144 3. The Trial Court Adopted Its Own Assumption After hearing the testimony, including the critiques of Shick’s analyses as levied by Besaw, the trial court observed that Shick’s numbers were “not only high, but as Besaw asserted, somewhat out of bounds.” A47. Rather than stop there and simply conclude that Shick’s assumption was too speculative and that plaintiffs had failed to establish their alleged damages with reasonable certainty, the trial court went on to criticize Besaw’s adoption of the 2000-2005 period and the uncertainties of continued future downward trending of overtime hours despite the reductions that had begun in 2010. A48. The trial court ultimately fashioned its own assumption, concluding that only 2009 should be disregarded, and that the appropriate overtime assumption should be drawn from 2006, 2007, 2008 and 2010. A47-48. The trial court then directed Shick and Besaw to submit revised calculations based on overtime data for only those four years. Besaw complied, but Shick did not. A43-44, 3180-81. The trial court nonetheless awarded damages based on the recalculation that Besaw was ordered to perform using the years selected by the trial court. A 2038-41, 2096-2100, 3083-3177. 145 On appeal, the Fourth Department observed that the trial court had improperly shifted the burden of proof to the defendants to establish damages. A6-7. The Fourth Department went on to hold that Shick’s assumptions were not fairly inferable from the evidence and concluded that “the awards calculated by defendants’ expert” (Besaw) were “accurately inferrable [sic] from the evidence.” In so holding, the Fourth Department impliedly rejected the trial court’s selection of 2006, 2007, 2008, and 2010 as the proper years on which to base overtime assumptions, and it went on to adopt Besaw’s original damages calculation based on the 2000 through 2005 data. The difference in overtime assumptions accounts for more than $309,526 of the overall $1,184,829 difference between the trial court and Fourth Department’s awards for economic damages. A3086 (compare column “Original Assumptions” with “Increased Overtime”). 4. The Weight of the Evidence Supports The Appellate Division’s Determination on Overtime On appeal, the plaintiffs urge this Court to reinstate the trial court’s decision to use overtime data from 2006, 2007, 2008, and 2010 as the appropriate basis for overtime assumptions. Notably, the plaintiffs are not arguing that their expert’s assumptions (to use only 2008-2010) were proper or that his calculations should control. Rather, they contend that the record supports the trial court’s 146 determinations regarding overtime and the Appellate Division abused its discretion. Pltfs. Br. at 11. As a threshold matter, and as recognized by the Appellate Division, the defendants do not have the burden of proof on damages. The trial court rejected Shick’s assumptions and testimony as unsupportable. That finding was impliedly affirmed by the Fourth Department, which criticized Shick’s opinion as speculative and insufficient to meet plaintiffs’ burden of proof. A6-8. While plaintiffs spend Point V of their brief on the overtime issue, nowhere do they point to evidence in the record to demonstrate how or why the trial court’s selection of overtime rates from 2006, 2007, 2008, and 2010 was appropriate when neither expert made that assumption. Instead, much of the plaintiffs’ claimed reasoning and factual references supports the conclusion that unusual factors and the lack of hiring were responsible for the spike in overtime between 2006 and 2010. Pltfs. Br. at 52. The plaintiffs themselves acknowledged that overtime began declining and that Commissioner Whitfield implemented new policies that had reduced overtime since 2010. Pltfs. Br. at 52-53. The crux of plaintiffs’ argument seems to be that there is no guarantee that overtime rates will continue to decline after 2011, and there is no proof that 147 they will return to the historical averages seen in 2000-2005. They first argue that the hiring of new recruit classes beginning in 2008 did not reduce overtime. But, this ignores common sense; the recruits came in several classes and were deployed in the field over a period of years. A1457, 1816-18. Plaintiffs also cite the overtime earnings of Margerum and Skinner, which they erroneously8 claim exceeded Besaw’s projections for the first ten months of 2011. Pltfs. Br. at 53-54. Plaintiffs’ argument, in any event, is based upon two stray data points for a few months in early 2011, not a historical pattern or long term trends of overtime for the department at large. Plaintiffs’ argument confirms only that isolated examples of individual overtime are subject to volatility from year to year and serve as a poor basis for long-term overtime projections for the entire Department. Indeed, the record reflects that the nine active-duty plaintiffs worked widely varying amounts of overtime during this same period. A2908. 8 Plaintiffs misstate Besaw’s testimony. Margerum’s overtime in 2011 was in fact consistent with Besaw’s projections of approximately $4,000. See A2122. This is also reflected on an exhibit prepared by the plaintiffs’ expert, Shick. A2908. Upon cross-examination, Besaw acknowledged that his projection of Margerum’s overtime for 2011 was less than the overtime worked by Margerum in 2010, not that the overtime worked by Margerum in 2011 exceeded Besaw’s projection for that year. A2122. 148 Commissioner Whitfield also testified that while overtime was trending downward in 2011, a variety of factors contributed to somewhat higher than anticipated overtime during the 2011 calendar year (as opposed to the fiscal year), including 17 officer vacancies that have since been filled, A2311, the unusual occurrence of two four-alarm fires in a single year, A2312, and the deployment of 20 firefighters to Schoharie County in the aftermath of Hurricane Irene. A2313. Commissioner Whitfield also made clear that overtime data from the first nine months could not be meaningfully extrapolated to estimate overtime for the entire year as the Department’s overtime needs are typically higher during the summer months due to scheduled vacations and other time off. A2309-10. In short, the plaintiffs offered no evidentiary support for the trial court’s assumption that overtime rates for 2006, 2007, 2008, and 2010 represented a reasonable and valid predictor for calculating future lost overtime damages. The overtime assumptions applied by the trial court were arbitrary, unsupported by record evidence or expert testimony, and lacked reasonable certainty. The overwhelming testimonial evidence showed not only that overtime amounts between 2006 and 2010 were inflated due to unusual circumstances that should not be repeated, but that overtime had begun a downward trend beginning in 2010 that 149 was reasonably expected to continue. In light of that, the only credible way to calculate future damages on this record was to use the uninflated historical data that Besaw used, as recognized by the Appellate Division. B. The Weight of the Evidence Supports the Appellate Division’s Findings on the Probability of Promotion As part of their future damages calculations, each expert made factual assumptions necessary to calculate what the plaintiffs future earnings would be had they been promoted from the eligible lists. Both experts had data available to them concerning the average interval to and likelihood of promotion between ranks in the Fire Department. A2851, 2853. Despite using different data sets, the two experts’ conclusions concerning these parameters were nearly the same. A1939- 47. And both Shick and Besaw utilized the average interval to promotion and likelihood of promotion in projecting the plaintiffs’ future lost earnings, assuming they had received the promotions that were allegedly denied them in 2005 and 2006. Where Shick’s and Besaw’s calculations materially differed was in the baseline assumption used to compute the wage differential. The baselines represent the projected career paths of the individual plaintiffs after not having 150 been promoted from the lapsed promotion eligible lists. The difference between the departmental averages and the baseline assumptions represents the lost wages. Shick assumed that the plaintiffs’ likelihood of promotion, for purposes of his baseline calculation, was 0% after having been denied promotions in 2005 and 2006. A1594-96. In other words, the baseline remained flat over time, which greatly inflated his damages calculations. Shick assumed, in essence, that these plaintiffs’ careers would not track the statistical averages he utilized to calculate their lost wages assuming they had been promoted. In contrast, Besaw assumed that the plaintiffs had at least some probability, albeit not a certainty, of promotion. A1993, 2119-2226, 2231-32. So instead of a flat baseline, Besaw’s baseline trended upward to reflect the plaintiffs’ probability of promotion. Unlike Shick, Besaw incorporated into his baseline projections the same statistical averages used to calculate the plaintiffs lost wages had they been promoted. This approach recognizes the mitigation of damages that occurs when income rises with promotions. In this case, the differences in assumptions yields a $243,798 difference in the resulting calculations. A3086 (compare column “Original Assumptions” with “No Baseline Promotion”). 151 As detailed below, Shick’s 0% assumption was contrary to the evidence, and the Fourth Department correctly determined that his opinion was based upon speculation as to the plaintiffs future promotional prospects. 1. The Factual Evidence The relevant facts here are simple. It is undisputed that four of the nine active-service plaintiffs (Kertzie, Lotocki, Osinski, Reddington) had already received promotions between the short period between the lapsing of the eligible lists in 2005/2006 and the time of trial. A1318, 1363-64, 1403, 1415, 1425, 1434- 35, 1505; RA68-70. Both experts recognized that the average interval to promotion and likelihood of promotion were calculable, and each included these projections in their respective calculations of future earnings had the plaintiffs been promoted - i.e., their “recalculated” scenarios. Using historical data for a group of 169 firefighters hired between 1980 and 1988 (Shick’s “peer groups”), Shick determined that the average interval between promotions is seven years. A1522- 26, 1553, 2851. Shick also relied on the same data to determine the probability of promotion. Besaw based his assumptions concerning the interval to and likelihood of promotion on 21 years of data concerning actual promotions derived from the 152 Fire Department’s personnel card system. Despite using different data, Besaw’s numbers concerning likelihood of and interval to promotion (approximately 7 years) were nearly identical to those of Shick, and served to corroborate each other in that regard. A1939-47, 2851, 2854, 2863, 2865. Departmental data further showed that probability of promotion increased with successive promotions. A1942-44. In calculating their rank on eligible lists, firefighters also receive points for longevity, which makes it more likely that those with greater years of service will be promoted. A2230-31, 2321- 22. While several of the plaintiffs gave testimony that in the wake of the lapsing of the lists their motivation waned and they had difficulty concentrating and preparing for the next round of tests, see, e.g., A1313-14, 1370, 1424-25, 1454, testimony was offered primarily for the purpose of establishing emotional and mental distress damages, for which plaintiffs were separately compensated. A6, 23-42, 1313-14, 1370, 1424-25, 1454. More importantly, at least six active- service plaintiffs questioned on this issue - Reddington, Hazelet, Kertzie, Osinski, Cassel, and Lotocki - all testified that they plan to continue taking tests 153 and seeking promotions. A1318, 1363-64, 1403, 1415, 1425, 1434-35, 1505, RA68-70; RA131. 2. Shick’s Baseline Assumption was Speculative and Unsupported by the Factual Evidence Despite the record evidence reflecting that four of the nine plaintiffs had already been promoted, and that the others were continuing to pursue promotional opportunities, Shick refused to incorporate the average interval to promotion or probability of promotion into his baseline scenarios when projecting the plaintiffs’ future wage differentials. Shick readily admitted that he could have included these same assumptions in his baselines representing the plaintiffs’ alternate career paths, but he chose not to do so. A1602-03, 1605-06. And he readily admitted that had he incorporated this data into his baseline calculations, his overall estimate of the plaintiffs’ alleged damages would have been substantially less. A1602-03, 1605-06. At trial, Shick acknowledged that his baseline earning projections for each plaintiff assumed that none of them will be promoted again, ever. A1594-96. By way of example, Shick projected plaintiff Fahey will work another 11 years (or until 2022) but calculated Fahey’s losses by assuming that there is a 0% chance that Fahey will actually be promoted over the remainder of his working life. 154 A1594-95. Similarly, Shick projected that Cassel will continue working for another 17 years (or until 2028) without any possibility of future promotion. A1605. The only explanation Shick offered for this assumption was his own speculation that “in the post discrimination world . . . we have to consider the effect not only on the individuals but also the willingness of the department to promote.” A1607. He further offered, “we don’t have enough information to make a reasonable projection, so therefore I have projected that they would not get promotions.” A1607. In other words, Shick offered only skepticism and the possibility that the future might not track the past. Although Shick was forced to acknowledge that in fact, four of the nine plaintiffs still on active service had already been promoted, and that multiple plaintiffs still had many years of active service ahead of them according to his own projections of their work-life expectancies, he could offer little explanation. He simply assumed that none of the plaintiffs will ever again be promoted in their “damaged” state. A1607-08, 2816-48. 3. Besaw’s Baseline Assumption was Well-Grounded in the Plaintiffs Testimony and Other Record Evidence Besaw’s baseline calculations built in a probability of promotion using the same interval to and likelihood of promotion he used to calculate the 155 plaintiffs’ projected future wages in his recalculated scenarios. Besaw rejected as unsupportable Shick’s conclusion that there was “a 0% probability of future promotion for each of the plaintiffs in their ‘damaged’ state.” A1991-93, 1612. As Besaw noted, “it’s acknowledged by both experts that there is probability of promotion. It simply wasn’t utilized by Shick in the baseline.” A2230-31. Besaw concluded that incorporating probability of promotion into the baseline scenarios was appropriate for a number of reasons. First, both parties’ experts agreed that they could determine - and did determine - to a reasonable degree of certainty both the probability of and the interval to promotion. A1625-26, 1939-47. Second, four of the remaining nine active-service plaintiffs had actually been promoted. Third, several plaintiffs still “had many, many years left in their work-life expectancy, often far exceeding those average time intervals to promotion.” A1993. Fourth, the departmental data reflected that probability of promotion increased with successive promotions. A1942-44. In calculating their rank on eligible lists, firefighters also receive points for longevity, which makes it more likely that those with greater years of service will be promoted. A2230-31, 2321-22. 156 Besaw was quite clear in stating, however, that he did not assume that any individual plaintiffs would, in fact, be promoted. “[U]nder no circumstances do my calculations assume a 100% probability of promotion. They assume the average probability for the department based on that data.” A2119-20. In other words, Besaw incorporated the same assumptions regarding the average probability of promotion and interval to promotion in the lost wages and baseline calculations for each plaintiff. On cross-examination, Besaw acknowledged that an individual plaintiff’s damages might go up if he never received another promotion, but emphasized that a plaintiff’s damages would likewise go down if he were promoted. A2231-32. 4. The Plaintiffs’ Contentions on Appeal are Meritless The thrust of plaintiffs’ argument seems to be that Besaw’s baseline assumptions are grounded in pre-discrimination data, while plaintiffs’ expert’s assumption of a zero chance of promotion better represents the post-discrimination world because there is insufficient evidence to determine if pre-discrimination trends will hold true. Plaintiffs’ position is essentially that because the City now employs the “rule of one of three” for promotion selection, it is unclear whether the City will discriminate again in the future; and because it is unknown if eligible lists 157 in the future will last for four years, it is appropriate to assume a zero chance of promotion, thereby making the City bear that uncertainty as the “wrongdoer.” Pltfs. Br. at 63-65, 84-86. Significantly, four of the nine plaintiffs actually were promoted in the so called post-discrimination world, an indisputable truth the plaintiffs’ argument continues to ignore. It would seem that the plaintiffs’ argument does little more than demonstrate that Shick’s own assumptions are wholly speculative. He unrealistically assumed that none of the plaintiffs will ever be promoted in the post-discrimination world, even though other promotional candidates who are subject to the same rules and future tests will be. No rational explanation, much less foundational factual support, was offered by Shick or the plaintiffs to explain how the departmental average interval to promotion or likelihood of promotion would change. Positions will be vacated, and people will be promoted. There is no competent proof to suggest that these plaintiffs would in the future face any unique impediment to receiving promotions beyond those which other candidates would likewise face. There is simply no authority to support Shick’s novel proposition that the denial of a promotion in 2005/2006 renders these plaintiffs incapable of being promoted ever again. That assumption also flies in the face of 158 case law recognizing that the plaintiffs have a duty to mitigate damages by continuing to seek career advancement. See Griffin v. William M. Mercer, Inc., 1998 WL 1050968, at *12 (Sup. Ct. N.Y. Cnty. Mar. 25, 1998) (both front-pay and back-pay damage calculations are affected by a plaintiff’s continuing duty to mitigate their damages); Thomas v. iStar Fin., Inc., 508 F. Supp. 2d 252, 260 (S.D.N.Y. 2007) (front pay awards must consider the ability of the plaintiff to mitigate damages in the future and should not place the plaintiff in a better position than he would otherwise have occupied). The “post-discrimination world” theory is just that - a theory or concept that has no factual foundation or legal support, and which invites speculation. By contrast, the historical “pre-discrimination” data provides the only available data for projecting the likelihood of future promotions. Anything else is pure guesswork and conjecture, which is insufficient to establish lost earnings with the requisite “reasonable certainty” required by law. Damages awards for front-pay losses that extend for a plaintiff’s entire remaining work-life are regarded by the courts as “highly speculative.” Hybert v. Hearst Corp., 900 F.2d 1050, 1056 (7th Cir. 1990). For this reason, courts have held that front pay should generally be cut off at “the first unhindered 159 opportunity for promotion.” Alexander v. City of Milwaukee, 474 F.3d 437, 453 (7th Cir. 2007); see also Biondo v. City of Chicago, 382 F.3d 680, 691 (7th Cir. 2004); Rasic v. City of Northlake, 2010 U.S. Dist. LEXIS 134552 at *46 (N.D. Ill. Aug. 24, 2010) (“front pay cannot extend past the time a reasonable person needs to achieve the same or an equivalent position in the absence of discrimination”); Thomas, 508 F. Supp. 2d. at 260 (reducing front-pay award to two years as it was speculative that the plaintiff would have remained in defendant’s employment for a longer period, even if not terminated); Forrest v. Jewish Guild for the Blind, 3 N.Y.3d 295, 305 n.3 (2004) (the standards for recovery under the New York Human Rights Law and Title VII are substantially the same). Shick and the plaintiffs argue that the City should be responsible for paying the worst case scenario, contrary to the law and common sense principles underlying the mitigation of damages. The plaintiffs also wrongly suggest that the Appellate Division’s reliance upon Besaw’s calculations was improper because Besaw assumed that the plaintiffs’ promotions were merely “delayed,” rather than denied. Pltfs. Br. at 57. That is a mischaracterization of Besaw’s testimony and calculations. Besaw made no assumption about any specific plaintiff’s likelihood of promotion. He simply 160 built into his analysis both a probability that each plaintiff might be promoted as well as a probability that each might never be promoted. A2119-20, 2225-26. The fact that four of them were actually promoted after taking a subsequent examination serves to corroborate the reasonableness and appropriateness of using such probability calculations. By contrast, Shick simply assumed that none of the plaintiffs will be promoted ever again, A1594-96, even though his own calculations of their likelihood of promotion - and the plaintiffs’ actual experience - prove the contrary.9 Certainly, there is no dispute that both the probability of promotion and the average interval to promotion can be determined with reasonable certainty based on the historical data. If historical data must be disregarded because the 9 Equally confused is the plaintiffs’ contention that in calculating the probability of promotion Besaw “did not include in his sample those who were never promoted.” Pltfs. Br. at 59. To begin with, the plaintiffs provide no record cite for this assertion. And even Besaw’s uncorrected calculations indicated that a firefighter had less than a 70% chance of promotion. A2865. The plaintiffs further point to testimony by Besaw on cross examination concerning what the likelihood of promotion for an individual firefighter would be based on his uncorrected calculations assuming three standard deviations from the average time to promotion. Pltfs. Br. at 59. Once again, though, it is impossible to discern what this argument proves, especially given that Besaw’s and Shick’s conclusions concerning both the interval to and likelihood of promotion were nearly the same. A1939-47, 2851, 2854, 2863, 2865. 161 world changed, as plaintiffs contend, every plaintiff in every discrimination case in this State would have a zero baseline and would receive windfall damages each time he or she is promoted. Plaintiffs also expend considerable ink arguing that the trial court appropriately rejected Besaw’s assumption about promotions due to a mathematical error. But, as the plaintiffs acknowledge, Besaw corrected this error. Pltfs. Br. at 58. Moreover, the calculations in his report, which were adopted by the Appellate Division, specifically noted that the corrected figure increased the plaintiffs’ overall damages by $57,223, and was included in his final calculation. A3083; RA3086. That Besaw corrected a calculation hardly justifies Shick’s assumption that no plaintiff will ever be promoted again.10 While plaintiffs offer a great deal of distraction and rhetoric, the issue here is simple and straightforward. The assumptions utilized by Besaw in his 10 The plaintiffs similarly make much of Besaw’s collection of data from a personnel card system maintained by the City. Pltfs. Br. at 58. But the plaintiffs never raised this as an objection at trial or to the Fourth Department. So, it is unpreserved. And, even more to the point, Besaw’s and Shick’s conclusions concerning both the interval to and probability of promotion are very close, even though they relied on different data sets. A1947, 2851, 2865. The differences are immaterial for purposes of this appeal. 162 calculations are soundly supported by the weight of the evidence in the record, as the Appellate Division fully recognized. Shick’s assumption was speculative and insufficient to prove damages to a reasonable certainty. C. The Weight of the Evidence Supports the Appellate Division’s Factual Findings Regarding the “IOD” Plaintiffs’ Likelihood of Becoming Disabled The IOD plaintiffs are a group of three plaintiffs who became disabled and are entitled to collect permanent disability benefits as firefighters. In order to assess their economic damages, both experts concluded that it was necessary to consider whether the IOD plaintiffs would have become disabled as lieutenants, had they been promoted from the 2002 Eligible Lists. There were two methods presented to the trial court on how to do that. Initially, each expert made the same factual assumption that the IOD plaintiffs would not have become disabled had they been promoted. This method resulted in negative damages to the IOD plaintiffs after their disability benefits were tax equalized. Each expert also undertook a weighted-analysis approach as an alternative method for determining damages. The experts determined a probability of the likelihood that the IOD plaintiffs would and would not become disabled 163 after being promoted. In simple terms, the percentage likelihood of becoming disabled as a lieutenant as opposed to a firefighter substantially influences the calculation of the IOD plaintiffs’ damages (i.e., projected wages versus disability income). The higher the likelihood of a plaintiff becoming permanently disabled after being promoted to the rank of lieutenant, as compared to becoming disabled at the rank of firefighter, the higher the claimed economic damages. Shick concluded that the IOD plaintiffs’ odds of becoming disabled after they had been promoted to lieutenant were 85% the risk they faced of becoming permanently disabled as a firefighter. A2257, 2261, 2957, 2995. Shick’s probability assumption was drawn from a single year’s worth of injury data, which included both minor and major injuries reported by lieutenants, not disability data. A2264-65, 2957, 3180-82. Although Shick also conducted his own analysis of disability data, A2264-65, 2957, he declined to use it in his assumptions and calculations, presumably because, he recognized the IOD plaintiffs’ damages would have been significantly lower. Besaw determined that the odds of becoming permanently disabled at the rank of lieutenant were only 59% as great as at the rank of firefighter. A2023- 28, 2877. Besaw based his data on 15 years worth of historical disability 164 retirement data. A1993, 2024, 2877, 3181. Notably, Besaw’s end calculations were consistent with the disability calculations that Shick had performed using disability data (which he disregarded in his calculations), thus corroborating Besaw’s disability assumptions. A2263. 1. The Factual Evidence Each of the IOD plaintiffs suffered an injury that resulted in his permanent disability sometime after the eligible lists would have reached their maximum duration on September 18, 2006, had the City not permitted the lists to lapse earlier. A1800. Arnone sustained his injury on November 18, 2006, A1494- 96; Abad on January 19, 2007, A1447-48, 1918-19; Denz on December 2009. A1375-76. Unlike wages, permanent disability income is tax free. A2017-18. Each of the IOD plaintiffs acknowledged that their disability income is tax-free. A1377-78, 1385-86, 1449-50, 1497-98. Once tax equalized, both experts agreed that the IOD plaintiffs’ current projected income - even without promotions - exceeds what the IOD plaintiffs likely would have earned through continued active service, including promotions. A1578, A2021-22, 2029-30. 165 The IOD plaintiffs also testified that they would not have suffered the injuries that caused them to apply for permanent IOD status had they been promoted to lieutenant in 2006. A1919-20 (Abad), 1921-22 (Arnone), 1923 (Denz). For example, according to Arnone, he would not have become disabled because he planned to move away from active firefighting to perform training in the Fire Department’s Training Bureau. A1921-22. Abad, Arnone, and Denz also noted that, had they been promoted, they would not have been where they were at the time they sustained their disabling injuries. A1919-23. Instead, each would have had other assignments with distinct responsibilities, and their lives would have taken different paths. A1919-23. Other witnesses also indicated that the likelihood of becoming injured decreases as you progress through the ranks. RA71-72, 129. 2. Both Experts Initially Reached the Same Conclusion on the Same Assumption - the IOD Plaintiffs had no Damages Both experts initially assumed a 100% probability that the IOD plaintiffs would not have been injured had they been promoted to lieutenant. A2020, 2286. That assumption was consistent with the IOD plaintiffs’ own testimony. A1577-78, 1919-20, 1922-23. 166 In order to compute damages for the IOD plaintiffs, the experts followed a similar methodology to that used for the active duty plaintiffs. Shick compared projections of their “recalculated earnings” assuming the promotions at issue with their projected “baseline” earnings based on their actual disability retirement incomes. A1577-78, 2286, 2816-48. This calculation yielded a number claimed to represent the economic damage to each IOD plaintiff. Besaw effectively did the same thing, but his calculations also recognized the “tax free” status of the disability income. Besaw “gross[ed] up” or tax equalized the IOD plaintiffs’ benefits in order to compare them to projections of the fully taxable wages that they would have earned if they had not been disabled. A2017-18. Once tax equalized, Besaw’s calculations reflected that the IOD plaintiffs’ disability income exceeded Besaw’s projections of their income derived from active service - even when incorporating the probability of further promotions. Accordingly, Besaw determined, within a reasonable degree of professional certainty based on assumptions founded in the actual evidence presented at trial, that all three IOD plaintiffs had negative damages. A2021-22, 2029-30; see also A3098-99, 3102. 167 3. Shick Altered his Assumption and Testimony to Manufacture Damages Once he Realized the IOD Plaintiffs had None After Accounting for Taxes After reviewing Besaw’s calculations, Shick realized he had made a crucial mistake by failing to acknowledge that his initial damages projections failed to account for the tax free status of the disability income. A1578. He readily admitted at trial that the tax consideration first occurred to him only after he reviewed Besaw’s damages calculations, which tax equalized the damages. A1578. Shick admitted that once he also accounted for the tax-exempt status of this income (as he should have), it “wipe[d] out the loss” under the original assumptions he used to calculate the IOD plaintiffs’ damages. A1578. So in order to avoid this outcome, Shick came to trial with a radically altered factual assumption that was not contained in his original report. A1271-74, 2285-86. Rather than assuming that the IOD plaintiffs would not have become disabled as lieutenants had they been promoted, he instead assumed the exact opposite - that they had a 100% chance of becoming disabled as lieutenants. A1578. Shick adopted this assumption even though all three IOD plaintiffs testified to the contrary. A1919-20 (Abad), 1921-22 (Arnone), 1923 (Denz). And when pressed about the assumption in the face of testimony to the contrary; Shick 168 simply asserted that he was not aware that the IOD plaintiffs had themselves denied that they would have become disabled had they received the promotions at issue. A2303-04. Using his new and factually unsupported assumption, Shick recalculated the IOD plaintiffs’ projected income as if they had become permanently disabled Lieutenants. He then compared the results of that scenario with their income streams as permanently disabled firefighters, this new difference now being what he claimed to be the IOD plaintiffs’ economic damages. A1578- 82, 2857-59. Using this assumption, claimed damages soared from $0 for all three IOD plaintiffs to $221,253 (Denz), $219,827 (Abad), and $169,776 (Arnone). A1582-85. 4. Besaw Performed and Offered a Weighted-Loss Analysis as an Alternative Method to Calculate Damages Although Besaw had made initial calculations that assumed, consistent with the factual evidence, that these plaintiffs would not have become disabled had they been promoted, he also prepared a second weighted analysis to reflect injury probability. A2022-31, 3087. Specifically, Besaw developed and 169 presented at trial a weighted-loss analysis11 of the IOD plaintiffs’ damages based on the relative probability of a firefighter becoming disabled at the rank of lieutenant as opposed to the rank of firefighter. A1993, 2022-24. Besaw explained at trial that the weighted-loss analysis was an alternate way to calculate damages that used historical data and recognized that probabilities could be determined on the relative likelihood of becoming disabled at different ranks. A1993, 2022-24. Using fifteen years (1996 to 2010) worth of disability retirement data, Besaw divided the percentage of retirements by Lieutenants for disability reasons with the percentage of retirements by Firefighters for disability reasons during this period. Based on this calculation, Besaw concluded that a Lieutenant was about 59% as likely as a Firefighter to receive a disability retirement. A1993, 2023-28, 2877. 11 As both experts explained during the course of their testimony, a weighted loss analysis involves determining damages under two or more different scenarios and then applying statistical weights reflecting the scenarios’ relative likelihood of occurring to derive a single damages estimate that factors in the relative odds of each scenario taking place. A1517, 1624-25, 2856, 2023-26, 2877. 170 Besaw then completed his weighted analysis by applying this percentage to two scenarios, one reflecting the IOD plaintiffs’ damages, assuming promotions and active duty, and the other reflecting their damages, assuming disability even if promoted. In other words, he applied a 41% probability to the scenario that assumed that the IOD plaintiffs would have remained on active service if promoted, and a 59% probability to the scenario that they would have become disabled had they been promoted. Besaw explained that this approach fundamentally was no different from the weighted analysis of possible career path scenarios that both experts had employed for the active-duty plaintiffs. A2026-28. Under this weighted-loss analysis, Besaw again determined that Abad’s and Arnone’s damages continued to be negative, while Denz’s damages rose to $7,032. A2028-31.12 5. Shick’s Rebuttal And Disability Study After hearing Besaw’s testimony about the weighted analysis, Shick remained steadfast in assuming that all three IOD plaintiffs had a 100% probability 12 Ultimately, Besaw determined Denz’s damages under a weighted analysis to be $40,966. A3087. The latter number reflects a correction to the probabilities of promotion made by Besaw after an error became apparent at trial. A3083. 171 of becoming disabled had they been promoted to Lieutenant. A2261. In support of that position, he testified that the 100% assumption was appropriate because of his own studies and analysis, and because even Besaw had concluded that 59% of lieutenants would become injured. A2258-61. Shick testified that he had conducted a review of injury statistics to lieutenants, which reflected that lieutenants were 85% as likely to become disabled as firefighters. A2260-61. But Shick had to acknowledge that he based this conclusion largely on a single year’s worth of data, which showed that lieutenants reported injuries (whether minor or major) about 85% as frequently as firefighters. A2262-65, 2957. Shick also acknowledged that he had conducted his own calculation of disability retirements for the same period evaluated by Besaw. A2258-61, 2957. Using the same 15 years of retirement data as Besaw, Shick likewise determined that the probability of becoming disabled as a Lieutenant was around 59%. A2262-63. Shick even admitted that Besaw’s results were “within just a small number spot on” with Shick’s own disability calculations. A2263. Shick offered his findings to purportedly “buttress” his use of the 100% assumption of disability in his original calculations, even though both of his own calculations fell short of 172 100%. A2261. He nonetheless claimed that these probabilities somehow buttressed or bolstered his conclusions that a substantial award was due the IOD plaintiffs. A2257-61, 2957. Shick’s testimony did not include his own weighted analysis calculations or different damages calculations. He simply stuck to his original calculations and offered criticism of Besaw. But in reality his testimony about his own studies only served to confirm and corroborate Besaw’s weighted analysis and 59% probability of injury. 6. Shick Offers this Flawed Weighted Analysis in a Post-Trial Supplemental Submission At the close of trial, the trial court had directed Shick and Besaw to submit supplemental damage reports based upon certain assumptions relating to overtime and promotion probabilities. Besaw complied and submitted a supplemental report. A3180-82. Shick’s report did not comply with the trial court’s instructions and included something neither requested nor expected. In response to Besaw’s weighted-loss analysis and the other criticisms levied against Shick’s calculations and assumptions over the course of trial, Shick’s post-trial report submitted a brand new set of calculations to offer his own, 173 not-previously-seen-before weighted loss analysis. A2995-97. In it, Shick maintained that the 85% probability, based on the single data point of lieutenant injuries in one particular year, should be the basis for calculating damages. A2264-65, 2995, 3180-81. He completely ignored his own analysis of the long- term disability data statistics he mentioned at trial, and which resulted in a nearly identical 59% probability as calculated by Besaw. A2258-59, 2023-26. It was also contrary to his trial testimony, in which Shick recognized that it would be inappropriate to base damages projections on a single year of data13 given the volatility and inherent unreliability of small data samples. A2287. Using the 85% probability, Shick’s calculations projected $147,545 in damages for Abad, $155,584 for Arnone, and $150,429 for Denz. A2999, 3009, 3026. 7. The Trial Court Awarded Damages to the Plaintiffs Based on Shick’s Post-Trial Weighted Analysis, but the Appellate Division Rightly Reversed The trial court adopted Shick’s assumption that the IOD plaintiffs were 85% as likely to have become disabled as lieutenants as they were as 13 Although the specific discussion was about overtime data, the principle is the same. 174 firefighters. A51. The trial court awarded economic damages as follows: Abad - $147,545; Arnone - $155,584; and Denz - $150,469. A52-53. These are the exact numbers set forth in Shick’s post trial weighted analysis (under the assumption that 3% interest is applied). A2999, 3009, 3026. The Appellate Division rightly modified the award, concluding that neither approach taken by Shick was sustainable on the record or established damages with reasonable certainty. As to Shick’s original opinion, the court observed that Shick changed his key assumption only after realizing that the tax free nature of the disability benefits eliminated the damages, just as Besaw had determined. A7. The court observed that Shick’s new and opposite factual assumption (a 100% probability that they would be injured as lieutenants) was contrary to plaintiffs’ own testimony that they would not have been disabled had they been promoted. A7. With regard to Shick’s post-trial weighted loss analysis, the Fourth Department noted that Shick relied only on injury data for a single year, not data relating to disability retirement. A7. Moreover, the plaintiffs testified that they would not have been injured had they been promoted, and the testimony reflected that the probability of being injured at higher ranks was, in any event, lessened. A7. The Fourth Department thus held that “the weighted probability 175 calculation of plaintiffs’ expert was not established with the requisite ‘reasonable certainty,’” and that the trial court should not have used that calculation to determine damages. A7. The court went on to hold that Besaw’s testimony and weighted analysis was consistent with the evidence and that “the only competent proof in the record regarding the economic damages to the IOD plaintiffs is the calculation of defendants’ expert.” A8. Accordingly, it modified the damages award to match the figures set forth in Besaw’s supplemental report: Abad - $0, Arnone - $0, and Denz - $40,966. The Appellate Division thus reduced the three IOD plaintiffs’ economic damages by $412,632 in the aggregate. 8. The Plaintiffs Factual Contentions on this Appeal are Meritless, as the Weight of the Evidence Supports the Appellate Division’s Modification The plaintiffs’ arguments on this appeal are focused on ill-fated attempts to substantiate the use of the 85% injury figure as an appropriate factual substitute for historical disability data in Shick’s weighted analysis calculations. The plaintiffs thus argue that Shick’s analysis “incorporates what we know happened with certain likelihoods of what we could have expected to happen: Each of these plaintiffs became disabled, thus, there is no need to hypothesize what their futures would have looked like.” Pltfs. Br. at 68 (emphasis added). This 176 reasoning is not only circular, but even Shick implicitly rejected it by initially assuming that the IOD plaintiffs would not have become disabled if they had been promoted. Additionally, while we may know what happened, we do not know what would have happened if the IOD plaintiffs had been promoted. For this reason, both experts ultimately concurred that a weighted analysis was an appropriate means for projecting the IOD plaintiffs’ likely damages. A52-53. But while Besaw supported his analysis with appropriate comparative data, Shick elected not to, even though his own study of disability retirements concurred with Besaw’s. A2262-65, 2957. Equally unpersuasive is the plaintiffs’ contention that the IOD plaintiffs invariably would have become permanently disabled because they had suffered serious injuries in the past. Pltfs. Br. at 68-69. But there was no medical evidence proffered that these men’s disability retirements were related to, let alone, rendered inevitable by their prior injuries. On the contrary, each of the IOD plaintiffs denied that was the case by testifying that they would have not become disabled if they had been promoted. A1919-20, 1921-22, 1923. So, their counsel cannot rescue the day for them with rank speculation that their prior injuries rendered their ultimate disability inevitable. Built on speculation with no 177 evidentiary foundation, Shick’s assumptions lack probative force and were properly rejected by the Appellate Division. Shick’s damages calculations served only to create a windfall to the IOD plaintiffs and the trial court’s award was tantamount to punishing the City in contravention of the make-whole purpose of damages under the New York Human Rights Law. Mittl v. NYS Div. of Human Rights, 307 A.D.2d 881, 882 (1st Dep’t 2003). The plaintiffs’ desperation is lastly underscored by their belated objection to Besaw’s reliance on the City’s personnel card system to determine disability probabilities. A76. This objection was never raised at trial, nor before the Fourth Department, so it may not be considered here for the first time. See Rios v. Smith, 95 N.Y.2d 647, 654 (2001); Snyder v. Wetzler, 84 N.Y.2d 941, 942 (1994). Moreover, it is entirely unpersuasive, given that Shick acknowledged that his own study of disability retirements corroborated Besaw’s conclusions. A2262- 65, 2957. While the plaintiffs urge that the Fourth Department erred by rejecting Shick’s weighted analysis of the IOD plaintiffs’ damages in favor of Besaw’s, they ultimately fail to explain how or why the Fourth Department’s criticisms of Shick’s underlying assumptions are invalid or unsupported on the record. They 178 ignore the fact that Shick’s theories changed multiple times over the course of the case, each time making assumptions that were further afield from the evidentiary proof and more highly attenuated and speculative. His ever-shifting opinions evidenced an air of unreasonable uncertainty from the individual giving them, which was hardly the type of foundationally sound and factually supported opinion that would meet the legal definition of “reasonable certainty.” Clanton v. Agoglitta, 206 A.D.2d 497, 499 (2d Dep’t 1994); Bailey v. Jamaica Buses Co., Inc., 210 A.D.2d 192, 192 (2d Dep’t 1994). The Appellate Division properly recognized this, and modified the award accordingly. That award closely comports to the weight of the evidence. CONCLUSION The record before this Court demonstrates that this case should have been dismissed as a matter of law and it should never have gone through a damages trial. First, the plain language of General Municipal Law § 50-i, the in pari materia doctrine, and important public policy considerations, all demonstrate that Human Rights Law claims should be subject to notice of claim requirements when plaintiffs assert them against cities, just like they are when plaintiffs bring them 179 against other municipalities and public entities. Because these plaintiffs never filed a notice of claim, the City’s pre-answer CPLR 3211 motion to dismiss the complaint should have been granted in 2009. Second, the U.S. Supreme Court’s decision in Ricci created a safe harbor that protects employers from the exact liability that has been litigated here. The Fourth Department should have adopted and faithfully applied Ricci in full form for Human Rights Law cases - not develop a different standard that turns upon the outcome of a separately-litigated disparate impact case. The record amply established that the City had a strong basis in evidence to believe it would face disparate impact liability at the time the City made its decision to allow the promotional lists to expire. That is all that Ricci requires. Accordingly, the City’s CPLR 3212 summary judgment motion should have been granted, and the complaint dismissed. Third, while this case should have been dismissed prior to the trial stage, the plaintiffs nonetheless failed to establish their damages at trial. While the trial court’s damages award adopted the damages calculations of the plaintiffs’ expert, Shick, the Fourth Department properly concluded that Shick failed to establish damages with reasonable certainty. His assumptions were speculative, 180 contrary to plaintiffs’ testimony, and unreasonable. Upon determining that plaintiffs failed to meet their burden of proof on damages, the Fourth Department should have dismissed the economic damages claim in its entirety. While that court recognized that the trial court had improperly shifted the burden to the defendants to prove the economic damages, the Fourth Department did exactly the same thing by using the calculations of the City’s expert - Besaw - as the basis for the modified damages award. The correct result should have been an award of $0 in economic damages to the plaintiffs, as it was their burden of proof. Finally, assuming for the sake of argument that the Fourth Department had the power to search the record as stated in its decision, it correctly held that the only competent proof in the record was that of the City’s expert. While the plaintiffs argue that the trial court’s damages award should be reinstated, they struggle to establish the foundational viability of their expert’s assumptions and calculations, just as they did at the Fourth Department. That’s because the great weight of the testimony and other evidence most closely comports with the assumptions and calculations utilized by Besaw. For all of the above reasons, the Fourth Department’s orders should be reversed, the judgment below vacated, the complaint dismissed, and judgment 181 entered in favor of the City with costs and such other and further relief as this Court deems just and proper. 182 Dated: Buffalo, New York May 8, 2014 HODGSON RUSS LLP Attorneys for City of Buffalo By: s/Jason E. Markel Adam W. Perry, Esq. Jason E. Markel, Esq. Stephen W. Kelkenberg, Esq., and Joshua Feinstein, of counsel The Guaranty Building 140 Pearl Street, Suite 100 Buffalo, NY 14202-4040 716.856.4000 017635.00023 Litigation 12038540v1
