It’s a case that has been to the Second Circuit twice, resulting first in a win and then a “bonus” for the prevailing Defendants. After an approximately one-month trial in November 2005 before the United States District Court for the Eastern District of New York, the jury returned a verdict in favor of the Town of Huntington and an individual board member and dismissed Plaintiff’s claims of sexual harassment, discrimination, hostile work environment, and retaliation. The United States Court of Appeals for the Second Circuit affirmed the verdict. 

After winning the case, Defendants requested reimbursement for their “costs” incurred during the lawsuit, including copying costs, deposition transcripts, and daily trial transcripts, pursuant to Federal Rule of Civil Procedure 54(d) and a federal statute, 28 U.S.C. §1920. The request involved a significant amount of money. During the trial, the Defendants had ordered daily transcripts of the trial testimony from the court reporter. Those transcripts cost approximately $50,000 for over 3,000 pages of testimony generated during the course of the lengthy trial.

District Court Clerks have the power to award costs initially. The Clerk’s decision, however, is reviewable de novo by the District Court which tried the case. The Clerk denied Defendants’ request for the high cost of the daily transcripts, but the District Court reviewed the Clerk’s decision and granted the request – including fees for daily trial transcripts.

Such costs are not customarily awarded. Daily trial transcripts are taxable to the losing party as costs only if they are “necessarily obtained for use in the case.” 28 U.S.C. §1920. In this case, the District Court agreed with the Defendants that all relevant factors favored awarding the cost of daily transcripts. The District Court cited the length of the case, Plaintiff’s “confusing and muddled” presentation, the fact that Plaintiff’s credibility was a crucial issue in the case, and the fact that the Court and the Defendants’ counsel had to resolve confusion by pointing to the record, as factors requiring the use of daily transcripts. The Court also noted that the Plaintiff failed to make any affirmative showing that he was financially unable to bear the cost of the daily transcripts. In some cases, indigency may convince a District Court that a significant award of costs is not appropriate. Perks v. Town of Huntington, Slip Op. 99-cv-4811 (March 31, 2008).

Plaintiff appealed the award of costs to the Second Circuit, challenging the District Court’s award of costs as an abuse of discretion. On May 27, 2009, the Second Circuit issued a summary order affirming the District Court's decision. Perks v. Town of Huntington, Slip Op. 08-cv-2123 (May 27, 2009). As a result, the Defendants not only won their case but the Plaintiff was also required to pay them over $58,000 in costs.

The Defendant Town of Huntington was represented by Ernest R. Stolzer of Bond, Schoeneck & King, PLLC in Garden City, New York.

In what appears to be the first reported decision of its kind, the United States District Court for the Northern District of New York recently interpreted an Equal Employment Opportunity Commission (EEOC) regulation to permit an employer’s efforts to control retiree health insurance costs by coordinating its retiree health insurance plan with Medicare. Lefevre v. Niagara Mohawk Power Corp., slip op. no. 1:06-CV-768 (N.D.N.Y. April 21, 2009). The employer provided health insurance benefits to retirees under a plan that required a Medicare eligible employee to apply for Medicare Parts A and B. Medicare then became the primary health insurance coverage, and the plan paid benefits to supplement the benefits paid by Medicare. Due to the terms of the plan, a Medicare eligible retiree’s share of the plan premium was somewhat greater than that of a non-Medicare eligible employee. 

Several Medicare eligible employees sued alleging that the higher premium share constituted age discrimination in violation of the Age Discrimination in Employment Act (ADEA). The ADEA prohibits discrimination based on age in terms and conditions of employment, including the terms of benefit plans. 29 U.S.C. §§ 623(a) & 630(l) However, the ADEA also authorizes the EEOC to create reasonable exemptions from the statute’s prohibitions when necessary and proper in the public interest. 29 U.S.C. § 628 EEOC created a coordination with Medicare exemption for employee benefit plans that provide health insurance benefits that are altered, reduced, or eliminated when the plan participant becomes Medicare eligible. 29 C.F.R. § 625.32(b) 

In the Lefevre case, the Court found that the regulation applied and required dismissal of the plaintiffs’ age discrimination claim. Because the premium differences were the result of the coordination with Medicare, they fell squarely within the regulatory exemption, even though they only impacted individuals who were age 65 (the age of Medicare eligibility) and older.

The Court also examined and applied a safe harbor provision within the ADEA which permits employers to implement a bona fide employee benefit plan which treats older and younger workers differently when either the costs are the same for both sets of workers, or the benefits are the same, the equal cost/equal benefit provision. 29 U.S.C. § 623(f)(2)(B)(1).  In Lefevre, the Court found that the equal cost provision did not apply – the employer was in fact trying to lower its retiree health insurance costs by coordinating benefits with Medicare – but that the equal benefit rule did apply because the Medicare eligible retirees received the same benefit as non-Medicare eligible retirees. The plan supplemented any benefit provided by Medicare to provide full coverage.

Because the plan fell within the EEOC’s regulatory exemption, as well as qualifying under the equal benefit rule, the Court granted summary judgment to the employer and dismissed the complaint. The employer was represented by Robert A. LaBerge and Louis Orbach of Bond, Schoeneck & King, PLLC, in Syracuse, New York.