Michael Churma, Appellant, v. United States Steel Corporation, 514 F.2d 589 (3d Cir. 1975)

Plaintiff Michael Churma appeals from a district court judgment¹  which dismissed as time-barred his action for adjustment of his employment seniority status.²  We affirm that judgment.

When he entered military service in November 1961, Churma was employed by United States Steel Corporation³  as a Production Record Clerk, Production Planning Department, 160 Inch Mill, Job Class 5.⁴  This position was one of a number of jobs which form the Production Planning Pool. All employees are hired into a pool job. Employees can then bid for the bottom job in one of several promotional sequences, one of which is the 160 Inch Mill. The bidding employee with the greatest continuous department service is awarded the job.⁵  On October 26, 1961, before his tour of duty with the Army, Churma bid for the bottom job in the 160 Inch Mill, but it was awarded to an employee having greater seniority. On at least six occasions in 1962, while Churma was on active military duty, he bid for the same bottom job. On four of these occasions, the job was awarded to employees with more seniority. However, awards were also made to two employees, Joseph Baksi and George Toth, who would have had less seniority right to the job than Churma⁶  had he been working, rather than serving in the Army, at that time. Company policy in force in 1962 precluded Churma from consideration for any of these openings. Churma received an honorable discharge on November 13, 1963, and made a timely application for reemployment.⁷  He was rehired by the Company on December 2, 1963, at the same position he had left in November 1961.⁸  Churma's assigned seniority date on the job was June 13, 1961; the same date established his unit and departmental seniority. He nevertheless progressed along the promotional sequence behind Baksi and Toth, who had not transferred into the bottom job in the 160 Inch Mill until April 1962.⁹  See N.T. 183; Amended Pretrial Stipulation.

Some six years after Churma returned from the Army, Foremsky v. United States Steel Corp., 297 F. Supp. 1094 (W.D. Pa. 1968), invalidated the Company's practice of rehiring veterans into the same job category they had occupied at the time they entered military service. The Foremsky court held that a veteran was "entitled to the seniority rights he would have acquired had his employment not been interrupted by military service." 297 F. Supp. at 1097. When Churma learned of both the decision and the availability of assistance from the Department of Labor,¹⁰  he immediately filed a complaint with the Department, requesting an adjustment of his seniority status.¹¹  The Department promptly notified the Company of Churma's claim and entered into unsuccessful negotiations to advance Churma's name ahead of Toth's¹²  on the seniority list.¹³ 

In dismissing the claim eventually filed in the district court pursuant to 50 U.S.C.App. § 459(d), the court found that Churma had "delayed from the time his rights accrued on December 2, 1963, until January 17, 1972, to institute suit." Churma v. United States Steel Corp., Civ. Action No. 72-38 (W.D. Pa., at 7a, slip op.). The court also found that Churma was not to blame for the three years that the Department spent seeking to negotiate with the Company. Nevertheless, Churma was found to have indulged in "inordinate delay" by taking no action to adjust his status prior to March 1969. Id. Since Churma had failed to carry the burden of proving both that the delay was excusable and that the defendant had suffered no undue prejudice from that delay, the court held the action barred by laches.¹⁴  Churma then filed a timely appeal to this court.

On appeal, Churma argues that "the district court abused its discretion in applying laches to bar the claim . . .." Brief for the appellant at 10-11. We do not agree, however, that our review is limited solely to inquiring whether the district court has abused its discretion.

"Though the existence of laches is a question primarily addressed to the discretion of the trial court," Gardner v. Panama R. Co., 342 U.S. 29, 30, 72 S. Ct. 12, 13, 96 L. Ed. 31 (1951), that discretion is free to operate only within narrowly defined parameters. "Where there has been no inexcusable delay in seeking a remedy and where no prejudice to the defendant has ensued from the mere passage of time, there should be no bar to relief." Id. at 30-31, 72 S. Ct. at 13. These elements of laches "inexcusable delay in light of the equities of the case and prejudice to the defendant"¹⁵  comprise not only discretionary components but also questions of law and fact, which are to be reviewed as such. See Katz v. Carte Blanche, 496 F.2d 747, 756-57 (3d Cir. 1974). Both the length of delay and the existence of prejudice are questions of fact to be reviewed by this court according to the "clearly erroneous" standard. See Gutierrez v. Waterman S.S. Corp., 373 U.S. 206, 215-16, 83 S. Ct. 1185, 10 L. Ed. 2d 297 (1963); Krasnov v. Dinan, 465 F.2d 1298 (3d Cir. 1972); F.R.Civ.P. 52(a). On the other hand, the conclusion that a delay is "inexcusable" comprehends both the application of a legal standard and an exercise of the trial court's sound discretion in assessing the equitable circumstances of a particular case. See Czaplicki v. The Hoegh Silvercloud, 351 U.S. 525, 533-34, 76 S. Ct. 946, 100 L. Ed. 1387 (1956). Whether the district court has utilized the correct legal principles is freely reviewable by this court, but we will not disturb the trial judge's assessment of the equities absent an abuse of discretion. Cf. Sobosle v. United States Steel Corp., 359 F.2d 7, 13 (3d Cir. 1966).

Churma does not argue that the trial court erred in terming his delay "inexcusable." He attacks instead both the factual finding of prejudice to the Company and the allocation of the proof burden on the issue of laches. Since the correctness of the district court's finding of prejudice, even under the "clearly erroneous" standard is a function of the burden of proof in this case, we will examine the propriety of that allocation first.

The district court dismissed Churma's complaint on February 14, 1974, and the notice of appeal was filed on March 14, 1974. Churma argues that the controlling rule on burden of proof is that set forth in Gruca v. United States Steel Corp., 495 F.2d 1252 (3d Cir.), which was decided on April 17, 1974.

Before Gruca, the Third Circuit rule concerning burden of proof as to laches was that enunciated in Burke v. Gateway Clipper, Inc., 441 F.2d 946 (3d Cir. 1971), which was relied upon by the district court in this case. Burke recognized that other circuits required the defendant to prove laches as an affirmative defense, but reaffirmed that in this circuit the plaintiff had to "come forward and prove that his delay was excusable and that it did not unduly prejudice the defendant." 441 F.2d at 949. Gruca, while consistent with Burke,¹⁶  made clear that the allocation of the burden depends on whether the statute of limitations has run. Prior to the running of the statute, the defendant has to prove laches, but thereafter the plaintiff has to disprove laches. 495 F.2d at 1259 and n. 8.

In arguing that the Gruca rule would have required the Company to prove laches, Churma notes that the district court found the delay "during the time when the matter was pending before the Department of Labor" was not attributable to Churma. Slip op. at 7a. The five-year and three-month delay which the district court did charge to Churma would then be insufficient to shift the burden from the Company. However, we find ourselves in agreement not with the district court, but with the Fifth Circuit cases holding that the Department's tardiness does accrue against the veteran who seeks its aid. Bell v. Aerodex, Inc., 473 F.2d 869, 873 (5th Cir. 1973); Blair v. Page Aircraft Maintenance, Inc., 467 F.2d 815, 819-20 (5th Cir. 1972).¹⁷  To hold, as Churma urges,¹⁸  that filing a complaint with the Department prior to the running of the statute effectively shifts the burden of proof on laches to the employer would tend to defeat Congress' aim of settling these matters expeditiously, see Blair, supra at 820, and vitiate the protection against stale claims which both the statute of limitations and the Gruca rule were designed to afford.¹⁹  495 F.2d at 1258. As the court noted in Blair, the defendant is no less disadvantaged by the lapse of time merely because that lapse is occasioned by the Department's inaction rather than the veteran's. See 467 F.2d at 820. With the Department's delay thus attributable to Churma, under Gruca as well as under Burke, the burden was on Churma to disprove the elements of laches.²⁰ 

Churma attacks the district court's finding of prejudice as unsupported by the record.²¹  Under our analysis at Part II, supra, however, the relevant inquiry is whether the record supports Churma's claim of "no prejudice." If he introduced no credible evidence on the point, the district court's ruling is not clearly erroneous and must be upheld. See Burke,supra, 441 F.2d at 949; Gruca, supra, 495 F.2d at 1260. We find in the record no evidence on the point offered by Churma. Conversely, there is support for the district court's conclusion. See, e. g., N.T. 112-19; 225-32; 238-42; 252-61. On this record, we are unable to hold that the district court's finding of prejudice is clearly erroneous.

For the foregoing reasons, the judgment of the district court will be affirmed.