Today the Supreme Court issued one decision, described below, of interest to the business community.

• Sprint/United Mgmt. Co. v. Mendelsohn, No. 06-1221 (Employment Discrimination--Evidence--Nonparty Testimony of Discrimination)

Sprint/United Mgmt. Co. v. Mendelsohn, No. 06-1221 (previously discussed in the June 11, 2007 Docket Report).  A recurring issue in employment discrimination cases is whether courts are required to admit the testimony of employees (other than the plaintiff) who allege that they have been discriminated against by other supervisors.  The Supreme Court held today that, under the Federal Rules of Evidence, such testimony "is neither per se admissible nor per se inadmissible" (slip op. 1), but instead must be determined on a case-by-case basis.

The Court's decision is an important one for employers that routinely defend against employment discrimination lawsuits.  The decision clarifies that the admissibility of such evidence requires examination of the facts and context of a particular case, and is generally a matter that falls within the district court's discretion.

The plaintiff in Mendelsohn sued Sprint, alleging disparate treatment in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634, based on her termination as part of a reduction in force (RIF).  She sought to introduce testimony of five other employees who had been terminated as part of the same RIF, although "[n]one of the five witnesses worked in" the same group as Mendelsohn, "nor had any of them worked under the supervisors in her chain of command."  Slip op. 2.  The district court granted Sprint's motion in limine to exclude that evidence, and Sprint subsequently prevailed at trial.  The Tenth Circuit reversed, holding that the district court abused its discretion in excluding the evidence because it was relevant and not unduly prejudicial.

In a unanimous opinion by Justice Thomas, the Supreme Court vacated the Tenth Circuit's judgment and remanded the case.  The Court noted that, if the district court had "applied a per se rule excluding" the proffered evidence of discrimination by other supervisors, the court of appeals "would have been correct to conclude" that the district court abused its discretion.  Id. at 8.  The Court explained that the concepts of relevance and prejudice under Federal Rules of Evidence 401 and 403 "are determined in the context of the facts and arguments in a particular case, and thus are generally not amenable to per se rules."  Id.   But the Court held that the Tenth Circuit had "erred in concluding" that the district court applied a per se rule to exclude the nonparty testimony (slip op. 4), because the "district court's language [was] ambiguous" on that score and it was "improper for the court of appeals to presume that the lower court reached an improper legal conclusion" (id. at 7).  The Court also concluded that the court of appeals erred in "assess[ing] the relevance of the evidence itself and conduct[ing] its own balancing of [the] probative value and potential prejudicial effect" of the evidence, because "a district court virtually always is in the better position to assess the admissibility of the evidence in the context of the particular case before it."  Id. at 7-8.  Thus, the Court ordered that the case be remanded so that the district court could "clarify the basis for its evidentiary ruling."  Id. at 9.

On the underlying issue of whether evidence of discrimination by other supervisors is admissible, the Court provided only general guidance.  Whether such evidence is relevant under Rule 401, the Court said, is a "fact based" inquiry that "depends upon many factors, including how closely related the evidence is to the plaintiff's circumstances and theory of the case."  Id. at 8-9.  And the Court explained that "[a]pplying Rule 403 to determine if evidence is prejudicial" likewise requires "a fact-intensive, context-specific inquiry."  Id. at 9.  In the absence of more specific guidelines, there is certain to be further litigation in the lower courts over whether such nonparty testimony is admissible.