Henry v. Daytop Village Brief for Plaintiff-Appellant

    94-7188
IN THE

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

CELIA HENRY,
Plaintiff-Appellant,

V.
DAYTOP VILLAGE, INC., 
Defendant-Appellee.

On Appeal from the 
United States District Court 

for the Eastern District of New York

BRIEF FOR PLAINTIFF-APPELLANT

ELAINE R. JONES 
DIRECTOR-COUNSEL
THEODORE M. SHAW 
CHARLES STEPHEN RALSTON 
NAACP LEGAL DEFENSE AND 
EDUCATIONAL FUND, INC.
99 Hudson Street 
Suite 1600
New York, New York 10013 
(212) 219-1900

Counsel for Plaintiff-Appellant



TABLE OF CONTENTS
TABLE OF A U T H O R I T I E S ............................................ ii
DECISION BELOW ................................................  1
JURISDICTION ..................................................  1
STATEMENT OF THE C A S E .......................................... 2

A  Nature o f the Case, Course o f Proceedings, and Disposition Below. . . 2
B. Statement o f Facts..........................................  2

STATEMENT OF THE ISSUE PRESENTED ............................. 6
ARGUMENT .......................................................  6
I. THE DISTRICT COURT ERRED AS A MATTER OF LAW WHEN IT

GRANTED SUMMARY JUDGMENT FOR THE DEFENDANT..............  6
A. Plaintiff Established a Prima Facie Case of

Discrimination.......................................  6
B. Defendant Articulated a Legitimate,

Nondiscriminatory Reason............................. 7
C. Was the Articulated Reason Pretextual? .............  7
D. Was There A Dispute Over Whether the Proffered

Reason Was True? ...................................  8
E. Was the Disputed Fact M a t e r i a l ? .......................10
F. Other Evidence of Discrimination ....................  13

II. S U M M A R Y ..................................................... 14
C O N C L U S I O N ....................................................... 16
CERTIFICATE OF SERVICE ........................................ 17

i



Cases: Pages:

Alexander v. Gardner-Denver, 415 U.S. 36 (1974).............  15
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) . 2, 6, 10,

13
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) ......... 6
St. Mary's Honor Society v. Hicks, ___ U.S. ___, 125 L.Ed.2d 407

(1993)..............................................  7, 10, 12
Texas Department of Community Affairs v. Burdine, 450 U.S. 248

(1981)...................................................... 6-8
United States Postal Service Board of Governors v. Aikens, 460

U.S. 711 (1983)  8

Statutes and Rules: Pages:

28 U.S.C. § 1 2 9 1 ..................................................2
28 U.S.C. § 1343  1
42 U.S.C. § 1 9 8 1 ............................................1# 14
42 U.S.C. § 2000e, et seq. ......................................... 1
Rule 8, F. R. Civ. Proc........................................... 11
Title VII of the Civil Rights Act of 1964 . . . .  1, 2, 5, 6, 14

TABLE 07 AUTHORITIES

ii



No. 94-7188

IN THE
UNITED STATES COURT OF APPEALS 

FOR THE SECOND CIRCUIT

CELIA HENRY, 
Plaintiff-Appellant,

V.
DAYTOP VILLAGE, INC., 
Defendant-Appellee.

On Appeal from the 
United States District Court 

for the Eastern District of New York

BRIEF FOR PLAINTIFF-APPELLANT

DECISION BELOW
This is an appeal from a decision of Hon. I. Leo Glasser, 

United States District Judge. The decision of January 7th, 1994, 
granting summary judgment in favor of the defendant-appellee, is 
unreported and is set out in the Joint Appendix (hereinafter 
"J.A."), at pp. 249-278.

JURISDICTION
The complaint in this action states claims under Title VII of 

the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq.,

and 42 U.S.C. § 1981. Jurisdiction is established by 28 U.S.C. §§ 
1343(3) and 1343 (4) .

This is an appeal from a final order and judgment entered on 
January 11, 1994, granting defendant's motion for summary judgment 
against the plaintiff-appellant. (J.A. 279.) Plaintiff-appellant



filed a timely notice of appeal on February 4, 1994. (J.A. 280.)
Jurisdiction over this appeal is established by 28 U.S.C. § 1291.

STATEMENT OF THE CASE
A. Nature o f the Case, Course o f Proceeding?, and Disposition Below.

This is an appeal from the order of the district court 
granting summary judgment against the plaintiff-appellant, Celia 
Henry. This action is based on Title VII of the Civil Rights Act 
of 1964 and on 42 U.S.C. § 1981, and alleges that the plaintiff was 
discriminated against because of her race, African American, and 
sex, female, when she was discharged from her employment with the 
defendant-appellant, Daytop Village, Inc. (J.A. 6-9.)

Following discovery, the defendant filed a motion for summary 
judgment, to which the plaintiff responded. (J.A. 17-239; 240- 
248.) The motion for summary judgment was granted in a memorandum 
and order signed on January 7, 1994, (J.A. 249-278) and judgment
was entered for the defendant and against the plaintiff on January 
11. (J.A. 279.) A timely notice of appeal was filed by plaintiff 
on February 4, 1994. (J.A. 280.)
B. Statement o f Facts.

Since the district court granted summary judgment in favor of 
the defendant, the facts must be construed in favor of the 
plaintiff. Anderson v. Liberty Lobby, In c., 477 U.S. 242, 255 (1986)

Celia Henry was employed by Daytop Village in various 
accounting positions over a period of seventeen years. At all 
times her performance in her job was satisfactory, and in her last 
performance evaluation she received ratings of excellent and good.

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(J.A. 75-77.) On January 16, 1990, she was terminated from her 
employment for allegedly misrepresenting the coverage of her 
husband's health insurance in order to obtain overpayments for her 
own benefit. (J.A. 78-79.) Ms. Henry at all times asserted that 
she had never misrepresented that coverage, but had furnished her 
employer on a regular basis with descriptions of her husband's 
health plan so that it was fully acquainted with its coverage. 
(J.A. 244-246.)

However, a Reviewing Panel at Daytop had rejected this
explanation (J.A. 79) , as had the EEOC in finding no probable cause
for a finding of discrimination. (J.A. 127-129.)

In her response to the motion for summary judgment, plaintiff
relied on a decision of the New York State Department of Labor on
her claim for unemployment insurance as establishing a dispute over
the facts surrounding her termination. Daytop Village had opposed
her unemployment claim on the ground that she had "allegedly
submitted fraudulent insurance claims." (J.A. 248.) The New York
State Administrative Law Judge, after hearing testimony from
plaintiff and representatives of the employer, made the following
findings of fact and conclusions:

Claimant did not submit fraudulent insurance claims nor 
did she conduct herself in an unethical or improper 
manner. Claimant's husband did have insurance and
claimant informed the employer of his insurance. For the 
last four years claimant had submitted forms of insurance 
for herself and her husband who did not have full
coverage as claimant did. The employer's records
disclosed that the employer was aware that claimant's 
husband's insurance did not provide full coverage. As a 
result of various claims for the medical and
hospitalization coverage a number of claims were overpaid 
by the employer. On a few instances the employer under 
paid claimant. Over a four year period there was 
approximately $750 which was paid in error. At no time

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did claimant deliberately misinform or submit fraudulent 
information.
OPINION: Based upon the entire record I find claimant's 
employment terminated under conditions which would not 
rise to the level of misconduct. The evidence reflects 
that claimant and her husband had insurance coverage and 
that claimant made this information know [sic] to her 
employer. It is significant that the employer's benefit 
fund officer was aware of this and had indicated same on 
a number of the forms submitted.........

(J.A. 248.)
Plaintiff further stated in her response to the motion for 

summary judgment that her immediate supervisor, Yasser Hijazi, the 
person who terminated her, had on a number of occasions referred to 
her race and sex in a derogatory manner. (J.A. 242.) Thus, on 
the occasion of plaintiff's annual salary review, he told plaintiff 
that she made enough money for "you people," a reference to her 
race. (J.A. 242-43.)

Finally, plaintiff stated that at a Daytop management retreat 
in October, 1987, plaintiff and two other black women raised 
complaints of discrimination against them by Daytop on the basis of 
their race and sex. As a result of her having so complained, she 
was denied promotion to the position of controller and was 
subsequently terminated so that a white person could be placed in 
her position. (J.A. 243-44.)

In sum, the plaintiff presented evidence in opposition to the 
motion for summary judgment that would have shown that the reason 
given for her termination, ie., that she had knowingly submitted

false forms for reimbursement for medical expenses, was not true, 
but was a pretext for discrimination. (J.A. 246.) In addition, 
plaintiff stated that a number of white persons who were charged

4



with misconduct were allowed to remain on the payroll or resign 
pending the disposition of charges against them. (J.A. 246-47.)

The district court granted defendant's motion for summary 
judgment. It first held that plaintiff had established a prima 
facie case of discrimination in that she was a member of a 
protected class, her performance had been satisfactory, she was 
discharged, and Daytop continued to seek persons to fill her 
position. (J.A. 260.) The court then held that the defendant had 
articulated a legitimate, nondiscriminatory reason for her 
termination, Le., her falsification of her husband's medical

insurance coverage. (J.A. 260.) With regard to the decision of 
the New York State Department of Labor that this reason was not 
valid, the court held that the decision was immaterial. Since the 
plaintiff had also alleged that similarly situated non-minority 
employees were treated less harshly for similar misconduct, she had 
"for purposes of her Title VII and Section 1981 action, admitted 
misconduct." (J.A. 261.) Finally, the district court held that 
none of the examples presented of non-minority employees who were 
disciplined showed disparate treatment (J.A. 266-270), and that 
none of the racially and sexually discriminatory remarks made by 
her supervisor and other superior officers of Daytop were 
sufficient to establish discriminatory animus in her termination. 
(J.A. 270-76.) Therefore, the defendant's motion for summary 
judgment was granted. (J.A. 278.)

5



STATEMENT OF THE ISSUE PRESENTED
Did the lower court err in holding that there were no material 

facts in dispute and thus in granting defendant's motion for 
summary judgment?

ARGUMENT
I.

THE DISTRICT COURT ERRED AS A MATTER OF LAW WHEN IT GRANTED 
SUMMARY JUDGMENT FOR THE DEFENDANT.

The law is clear that summary judgment may not be granted if
there is a genuine issue as to a material fact. Anderson v. Liberty

Lobby, In c., 477 U.S. 242, 247-48 (1986). It is plaintiff-appellant's
position that there was a genuine dispute concerning a fact not 
only material to but central to the question of whether she 
suffered intentional discrimination: whether the claimed reason for 
her discharge was true or whether it was but a pretext for 
discrimination. This follows from an analysis of the evidence 
under the legal standards that govern decision of a claim of 
intentional discrimination, as established by the Supreme Court in 
M cDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) an d  Texas Department o f

Community Affairs v. Burdine, 450 U.S. 248 (1981).

A. Plaintiff Established a Prima Facie Case o f Discrimination.

The district court found, based on undisputed facts, that 
plaintiff had established a prima facie case of intentional 
discrimination in violation of both Title VII and § 1981, when
Daytop Village terminated her employment. Thus, the court found

6



that she was a member of a protected class (black and female) ; that 
her performance had been fully satisfactory; that she was 
terminated; and that the defendant continued to look for someone to 
fill her position. (J.A. 260-61.)

B. Defendant Articulated a Legitimate, Nondiscriminatory Reason.

There is also no dispute that the reason articulated by 
defendant would be, if true, a legitimate, nondiscriminatory reason 
for her termination. That is, defendant introduced admissible 
evidence in the form of declarations by appropriate employees of 
Daytop that plaintiff had falsified her husband's medical insurance 
forms and thereby misappropriated Daytop funds.

C. Was the Articulated Reason Pretextual?

Under the M cDonnelDouglas/Burdine analysis as recently explicated 

by the United States Supreme Court in St. M ary’s H onor Society v. H icks, ___

U.S. ___, 125 L.Ed.2d 407 (1993), the burden is then on the
plaintiff to prove by a preponderance of evidence that the reason 
proffered was pretextual, i e ., was but a mask for unlawful 

discrimination. It is clear that a crucial question in that 
inquiry is whether the proffered reason is true. As the Court 
stated in H icks:

The factfinder's disbelief of the reasons put forward by 
the defendant (particularly if disbelief is accompanied 
by a suspicion of mendacity) may, together with the 
elements of the prima facie case, suffice to show 
intentional discrimination. Thus, rejection of the 
defendant's proffered reasons, will perm it the trier of 
fact to infer the ultimate fact of intentional

7



discrimination, and the Court of Appeals was correct when 
it noted that, upon such rejection, "[n]o additional 
proof of discrimination is required," . . . .

125 L.Ed.2d at 418-19 (emphasis in original; footnote omitted).1 
As stated in Burdine, 450 U.S. at 256, and United States Postal Service Board

o f Governors v. A ikens, 460 U.S. 711, 716 (1983), one way to establish 

pretext is to show that the "employer's proffered explanation is 
unworthy of credence."

D. Was There A  Dispute Over Whether the Proffered Reason Was True?

It cannot be seriously questioned that whether or not the 
reason given for plaintiff's termination was true was disputed 
below and that both parties submitted evidence regarding that 
dispute. The defendants offered declarations that plaintiff had 
not informed Daytop of her husband's medical coverage, despite 
repeated requests to do so by Ms. Flores, the insurance 
administrator. (J.A. 23-27; 130-142.) Moreover, a Daytop
employment termination review panel, after hearing testimony from 
plaintiff and Ms. Flores, concluded that Ms. Henry was not truthful 
and that Ms. Flores was. (J.A. 79.) The EEOC found no probable 
cause that discrimination had occurred, albeit without hearing 
testimony or resolving the conflicting evidence regarding whether 
plaintiff had fraudulently received overpayments. (J.A. 127-29.)

Plaintiff's declaration in opposition to the motion for 
summary judgment denied that Ms. Flores had ever even spoken to her

1The Court went on to hold that the lower court erred in 
holding that rejection of the defendant's proffered reason compelled 
entry of judgment for the plaintiff. Id.

8



concerning her husband's medical insurance. To the contrary, she 
asserted that she had told Daytop's personnel director of her 
husband's medical insurance and that the personnel director did not 
understand why Ms. Flores stated that she did not know about 
plaintiff's husband's insurance. (J.A. 244-45.) Plaintiff further 
declared that she had, for years, submitted proof of her husband's 
insurance, that the defendant was fully aware of the coverage of 
that insurance, and that defendant had confirmed that coverage with 
the administrator of Daytop's insurance plan. Moreover, plaintiff 
saw memos documenting these facts in her personnel file on the day 
she was terminated, but when those same files were produced in 
discovery in this action those memos were not in the documents 
produced by the defendant. (J.A. 245.)

Finally, and significantly, a neutral fact-finder who heard 
the testimony of the plaintiff and representatives of defendant 
held in plaintiff's favor. An Administrative Law Judge for the New 
York Department of Labor made findings of fact that plaintiff did 
not submit fraudulent insurance claims and that plaintiff had, 
during the four years before her termination, provided the 
defendant with documentation demonstrating her husband's insurance 
coverage, and that Daytop's benefit fund officer, Le., Ms. Flores,

was aware of his coverage and had so indicated on a number of the 
forms submitted. (J.A. 245-46.) Thus, the ALJ concluded not only 
that the reason given for plaintiff's termination was not true, but 
that the defendant knew that it was not true, since its responsible 
employees knew that the plaintiff had provided all the information 
necessary for it to determine her husband's coverage.

9



Thus, it would be difficult to conceive of a case in which 
there is more clearly a dispute over the facts. Two different fact 
finders, one composed of employees of the defendant, the other an 
impartial state administrative law judge, came to diametrically 
opposed conclusions after hearing the testimony of plaintiff and of 
representatives of the defendant. A resolution of the conflict in 
testimony depending upon an assessment of the credibility of the 
opposing witnesses. Thus, the dispute could only be resolved after 
a full hearing at which witnesses testified, if, that is, the 
disputed fact was material.2

E. Was the D isputed Fact Material?

As the Supreme Court has held:
As to materiality, the substantive law will identify which 
facts are material. Only disputes over facts that might 
affect the outcome of the suit under the governing law will 
properly preclude the entry of summary judgment.

Anderson v. Liberty Lobby, In c., 477 U.S. at 248. Clearly, it would appear,

whether or not the reason given for plaintiff's termination is true 
would "affect the outcome of the suit" under the governing law as 
set out most recently in St. M ary’s Honor Society v. H icks, supra. The

district court, however, concluded that the truth of the reason was 
"immaterial" because plaintiff had somehow admitted misconduct by 
arguing that similarly situated non-minority employees had been

2"Our holding . . . by no means authorizes trial on
affidavits. Credibility determinations, the weighing of the 
evidence, and the drawing of legitimate inferences from the facts 
are jury functions, not those of a judge . . . ." Anderson v. Liberty 
L obby, 477 U.S. at 255.

10



treated less harshly by the defendant. (J.A. 260-61.) This
conclusion was wrong.

F irst, the fact that plaintiff sought to establish pretext by

also showing that non-minority employees who were charged with 
similar offenses were treated more leniently in no way constitutes 
an admission that she had done anything wrong herself. Simply 
stated, plaintiff's claim was that she had not committed the 
misconduct she was charged with and that, moreover, the discipline 
imposed, L e., termination, was itself discriminatory because the

defendant had not treated non-minority employees as harshly when 
they in fact had been guilty of misconduct. To infer from the

second proposition an admission of guilt is a complete non 
sequitur .3

Second, even assuming the logic of the district court's

decision, its result is to resurrect the long-dead prohibition 
against inconsistent claims or defenses. Essentially, the district 
court held that plaintiff could not simultaneously claim that she 
had not committed the misconduct and urge that even if she did 
commit misconduct she had been treated discriminatorily with regard 
to the level of discipline. However, Rule 8, F. R. Civ. Proc. 
states that "a party may also state as many separate claims or 
defenses as the party has regardless o f consistency . . . ." (Emphasis

^ he conclusion that plaintiff somehow admitted her misconduct 
is particularly groundless in light of the fact that the central 
focus of her response to the motion for summary judgment was her 
claim that she had not done anything wrong and that defendant knew 
it. Her claim that white employees charged with misconduct were 
treated more leniently takes up only one paragraph of her response. 
See J.A. at 240-247.

11



added.) It is clear that plaintiff's two claims are not 
inconsistent; but even if they were, she could assert both under 
the rule.

The district court advanced what is evidently an alternative
ground for totally discounting plaintiff's evidence that she did
not commit the act that was advanced as the reason for her
termination. That ground is equally faulty. The court essentially
held that once the employer submitted evidence of a legitimate,
nondiscriminatory reason, it was clear that a jury would have to
conclude that Daytop had born its burden of articulating such a
reason. Therefore, the burden of proof was shifted back to
plaintiff to establish pretext. (J.A. 261-62.) To this point, the
district correctly stated the law. It then, however, took a leap
that was wholly unexplained and simply concluded that:

The ALJ's opinion that plaintiff did not engage in 
misconduct does not, therefore, raise an issue of 
material fact regarding defendant's reason for 
plaintiff's termination thus defeating defendant's motion 
for summary judgment.

(J.A. 262.) It is clear, however, that the ALJ's opinion (and, for 
that matter, plaintiff's declaration in opposition to the motion 
for summary judgment) does raise an issue of material fact since it,

if believed, would establish that the reason given by the defendant 
was not only untrue, but that the employer knew it to be untrue. 
Under Hicks, the factfinder could not only disbelieve the reason

given by Daytop, but that disbelief could be "accompanied by a 
suspicion of mendacity" that would reinforce a finding of 
intentional discrimination. 125 L.Ed.2d at 418.

12



"The plaintiff, to survive the defendants motion, need only 
present evidence from which a jury might return a verdict in [her] 
favor." Anderson v. Liberty Lobby, In c., 477 U.S. at 257. Plaintiff has

clearly met this burden, and the decision below must be reversed.

F. Other Evidence o f Discrimination.

In her declaration in opposition to the motion for summary 
judgment plaintiff alleged that her supervisor, Mr. Hijazi, who 
made the decision to terminate her, had during the course of her 
employment "repeatedly referred to plaintiff's race in a derogatory 
manner," and gave a number of specific examples. She further 
stated that she and two other black women raised complaints of 
discrimination by Daytop based on their race and sex, and that 
thereafter plaintiff was denied a promotion. Rather, it was given 
to a less-gualified white male. (J.A. 242-44.)

The district court dismissed this evidence as irrelevant to 
the motion for summary judgment on the ground that it only showed 
"stray" remarks. (J.A. 273-76.) Again, the district court 
misconstrued the nature of the evidence. If believed, as it must 
be assumed it would be for the purpose of ruling on the motion for 
summary judgment, the evidence would support the conclusion that 
the reason advanced for Ms. Henry's termination was a pretext for 
discrimination. Indeed, it is precisely the type of direct
evidence of racial animus that is highly probative of intent to 
discriminate.

In essence, plaintiff claims that there was a racially hostile 
atmosphere at Daytop Village. Her immediate supervisor expressed

13



discriminatory attitudes towards both her race and sex on a number 
of occasions. Her complaints, made internally, not only did not 
lead to improvement, but resulted in her being denied a deserved 
promotion. Further, high officials at Daytop wished to get rid of 
her because of her race and sex. However, her excellent 
performance in her job made it difficult for them to do so. Thus, 
they seized on the first pretext that offered itself to fire her. 
When allegations were made that she had misrepresented her 
husband's medical insurance coverage, they refused to listen to her 
side of the story and, indeed, deliberately ignored the evidence in 
Daytop's own files that proved that she had in fact fully informed 
appropriate Daytop personnel of that coverage. (J.A. 244-246.)

In short, the reason given was pretextual and the real reasons 
were the desire to replace her with a white person and to punish 
her for complaining about discrimination. (J.A. 246.) This
evidence, if believed by the trier of fact, was more than enough to 
establish the ultimate question of fact in the case, that plaintiff 
was the victim of discrimination made illegal by Title VII and by 
§ 1981.

II.
SUMMARY

It is important to state what is not at issue here. 
Plaintiff-appellant does not contend that the parties are bound by 
the findings of the state administrative law judge. Nor, 
conversely, are the findings of Daytop's internal review committee 
or the conclusions of the EEOC binding on the parties or the 
federal courts. Under long-standing and clearly established law,

14



plaintiff is entitled to a trial de novo of her claims of 

discrimination because of her race and/or sex. Alexander v. Gardner- 

Denver, 415 U.S. 36 (1974). While the various findings of the 
administrative agencies involved might be admitted into evidence 
and given whatever weight is appropriate, the final decision of the 
ultimate issue to be decided - was plaintiff terminated because of 
her race and/or sex - must be made by the fact-finder in federal 
court.

Summary judgment cannot be granted where there are material

facts in dispute. As plaintiff has demonstrated above, a fact that 
was not only material, but central to the case, was as in dispute 
as a fact can be. Therefore, the grant of summary judgment on 
behalf of the defendant was error and must be reversed.

15



CONCLUSION
For the foregoing reasons, the decision of the court below 

should be reversed, and the case remanded for a full trial on the 
merits.

DIRECTOR-COUNSEL
THEODORE M. SHAW 
CHARLES STEPHEN RALSTON 

NAACP LEGAL DEFENSE AND 
EDUCATIONAL FUND, INC.
99 Hudson Street 
Suite 1600
New York, New York 10013 
(212) 219-1900

Counsel for Plaintiff-Appellant

16



CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing BRIEF FOR 

PLAINTIFF-APPELLANT and of the JOINT APPENDIX, have been served 
by depositing same in the United States mail, first class postage 
prepaid, on this 13th of May, 1994,, addressed to the following:

PARISIS G. FILIPPATOS, ESQ. 
MENAGH, TRAINOR, MUNDO, & 

FALCONE
386 Park Avenue South 
New York, NY 10016

17