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Fresquez v. BNSF Railway Co.

United States District Court, D. Colorado

December 17, 2019

BRANDON FRESQUEZ, Plaintiff,
v.
BNSF RAILWAY CO., Defendant. Year Fresquez Estimate (ECF No. 198-1 at 11) BNSF Estimate (ECF No. 194-1 at 4) Average

          ORDER GRANTING IN PART REMAINDER OF PLAINTIFF'S MOTION FOR BACK PAY AND DIRECTING ENTRY OFJUDGMENT

          William J. Martínez, United States District Judge.

         Plaintiff Brandon Fresquez sued Defendant BNSF Railway Co. (“BNSF”), his former employer, for retaliating against him for engaging in protected activity, in violation of the Federal Railroad Safety Act, 49 U.S.C. § 20109 (“FRSA”). The case proceeded to a 6-day jury trial before Senior U.S. District Court Judge Wiley Y. Daniel. On February 19, 2019, the jury returned a verdict in favor of Fresquez, finding that BNSF retaliated against Fresquez in violation of the FRSA, and awarded Fresquez $800, 000 in compensatory damages and $250, 000 in punitive damages. (ECF No. 152.)

         Judge Daniel reserved questions of back pay and front pay for judicial determination. (ECF No. 159 at 131-32.) The parties briefed the issues of back pay and front pay, and Judge Daniel set a hearing on the matter. (ECF Nos. 155 & 166.) Sadly, prior to the hearing, Judge Daniel passed away. On May 16, 2019, the matter was drawn to the undersigned, and the Court held a hearing on the issues on September 6, 2019. (ECF Nos. 171 & 192.)

         After the hearing, the Court entered an Order resolving certain disputes between the parties regarding calculation of back pay and front pay, taking under advisement the precise dollar amount of back pay and front pay to be awarded, and directing the parties to submit simultaneous, supplemental briefs on the issue of the dollar amount to be awarded consistent with the Court's rulings in the Order. (ECF No. 193 at 34.)

         Among the disputes resolved, the Court found that Fresquez is entitled to ten years of front pay from the date of the jury verdict, or until February 19, 2029. (Id. at 17.) Implicit in this finding was that back pay should run from the date Fresquez was fired to the date of the jury verdict. The Court also instructed the parties to not reduce Fresquez's back pay by the amount Fresquez received in unemployment benefits (id. at 25); to omit any health insurance payments from the back pay calculation for failure to prove the amount spent due to lack of health insurance (id. at 29); to calculate Fresquez's estimated but-for wages[1] using the method of expert witness Jeffrey Opp (id. at 26); to calculate the relative loss in health benefits using a multiplier (id. at 30); and include prejudgment interest using a fixed rate of 5.54%, compounded monthly and according to a formula approved by the Tenth Circuit (id. at 33). The parties were also instructed to calculate prejudgment interest as of December 17, 18, and 19. (Id. at 34.)

         I. SUPPLEMENTAL BRIEFING ON AMOUNT DUE TO FRESQUEZ

         BNSF timely filed its supplemental brief on November 25, 2019. (ECF No. 194.) Due to a scheduling error at Fresquez's counsel's firm, Fresquez filed his supplemental brief the following day, along with an unopposed motion for leave to belatedly file the supplement as well as another supplement brief with interest calculations the following week. (ECF Nos. 196 & 198.) The Court granted the Motion for Leave. (ECF No. 197.) Because both sets of calculations deviated from the Court's Order directing supplemental briefing, the Court requested the native file used by each expert to calculate back pay, front pay, and prejudgment interest.

         A. Fresquez Calculations

         Contrary to the Court's Order that front pay be calculated for ten years from the jury verdict on February 19, 2019, Fresquez calculated front pay for ten year after the date of September 6, 2019 hearing. (Compare ECF No. 193 at 17 (“Fresquez is entitled to ten years of front pay from the date of the jury verdict”) with ECF No. 198-2 at 2 (front pay calculated from September 7, 2019 to September 7, 2029) and Id. at 3 (“Date of Report/Trial: 09/06/19”).) It also appears that Fresquez calculated back pay from the date of his termination until the date of the hearing. (ECF No. 198-2 at 2; see Id. at 3 (“Date of Report/Trial: 09/06/19”).) Plaintiff's expert calculations for back pay and front pay are therefore inconsistent with the Court's Order, and of little use to the Court. This error influenced the Court's decision to request the native files with calculations from the experts.

         The Court also ordered the parties to “calculate prejudgment interest using a fixed interest rate of 5.54% with such interest compounded monthly” and to “use the formula approved by the Tenth Circuit in Reed v. Mineta, 438 F.3d 1063, 1067 n.4 (10th Cir. 2006).” (ECF No. 193 at 33.) The formula used in Reed takes the future value of each payment owed to a plaintiff from the date the each payment was due, subtracts the original value of each payment, thus leaving only the interest component, and then adds the interest components of each payment. 438 F.3d at 1067 n.4. In other words, it calculates the amount of interest due on the amount owed over time, and takes into account that, absent the discriminatory action, the plaintiff would have earned money over time. Contrary to the Court's Order, Fresquez calculated prejudgment interest on the entire amount of the award from May 27, 2016. (ECF No. 198-2 at 15.)

         These two errors make it difficult for the Court to rely on Fresquez's model for calculating front pay and back pay. Even if the Court were to adjust the date ranges for back pay and front pay in Fresquez's model, the Court would still need to separately calculate prejudgment interest in accordance with its ruling, rather than rely on Fresquez's model to calculate prejudgment interest.

         B. BNSF Calculations

         Although BNSF did not present an expert at the hearing on back pay and front pay, after the Court issued its Order, BNSF retained economist Mark Erwin to calculate the amount of back pay, front pay, benefits, and interest to be awarded. (ECF No. 194 at 2.)

         1. Back Pay

         Erwin calculated back pay from termination (May 27, 2016) to the jury verdict (February 19, 2019) omitting any health benefits or unemployment benefits from the calculations. (ECF No. 194-1 at 4.) Erwin also deducted “unreimbursed railroad employee expenses” (essentially, union dues) from Fresquez's but-for wages. He also deducted income taxes on Fresquez's but-for wages and non-railroad wages. However, once Erwin arrived at a final recommended back pay and front pay award, he provided an estimate of taxes on that lump sum.

         2. Front Pay

         Consistent with the Court's Order, Erwin calculated lost front pay from February 19, 2019 through February 18, 2029. (ECF No. 194-1.)

         To calculate estimated future wages, Erwin began with Opp's 2019 but-for wage estimate and Fresquez's actual 2019 wages for his non-railroad wages. (Id. at 6.) Erwin then projected the but-for wages forward from 2019 using forecasted changes in the Employment Cost Index. (Id.) For projected non-railroad wages, Erwin used the forecasted changes in the Employment Cost Index and gradually adjusted Fresquez's earnings from the entry-level wage to median-occupational earnings by 2029.

         Erwin calculated health benefits in the following manner: He found that in 2019, Fresquez's health benefits at BNSF would have been approximately $9, 459, or 8.98% of Fresquez's but-for wages. He therefore added 8.98% to Fresquez's but-for wages each year. For non-railroad healthcare benefits, Erwin assumed, based on a Kaiser Family Foundation report, that employers typically pay $5, 946 in annual premiums for employee-only coverage. This amount was equal to 11.66% of Fresquez's 2019 post-railroad wages. Thus, Erwin added 11.66% to Fresquez's post-railroad wages each year.

         Erwin's calculations include three data points that BNSF did not raise in the briefing on back pay and front pay or at the hearing: (1) unreimbursed railroad employee expenses; (2) income taxes; and (3) life/employment expectancy. As with the back pay calculations, Erwin deducted unreimbursed railroad employee expenses from Fresquez's projected but-for wages, and deducted income taxes from Fresquez's but-for wages and non-railroad wages. Also as noted above, Erwin estimated the taxes due on the lump sum, and provided an estimate to the Court of the tax liability that would accompany the award.

         Finally, Erwin adjusted but-for earnings and post-railroad earnings based on “Plaintiff's expected likelihood of remaining in the labor force from the date of judgment through the end of his lost front pay period in 2029.” (ECF No. 194-1 at 10.) He therefore concluded that, on average during the ...


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