Brief as appellant
June 10, 2005
ORAL ARGUMENT REQUESTED
Case Nos. 05-7011 & 05-7016
__________________________________________________________
IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
__________________________________________________________
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff-Appellant/Cross-Appellee,
v.
HEARTWAY CORPORATION
d/b/a York Manor Nursing Center,
Defendant-Appellee/Cross-Appellant.
________________________________________________________
On Appeal from the United States District Court
For the Eastern District of Oklahoma, No. 03-534-WH,
The Honorable Ronald A. White, Presiding
_________________________________________________________
OPENING BRIEF OF THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION AS APPELLANT
_________________________________________________________
ERIC S. DREIBAND JOSEPH A. SEINER
General Counsel Attorney
U.S. EQUAL EMPLOYMENT
VINCENT J. BLACKWOOD OPPORTUNITY COMMISSION
Acting Associate General Counsel Office of General Counsel
1801 L Street, N.W., Room 7018
CAROLYN L. WHEELER Washington, D.C. 20507
Assistant General Counsel (202) 663-4772
FOUR ATTACHMENTS TO BRIEF; THREE IN WRITING ONLY; ONE
ATTACHMENT SUBMITTED BOTH DIGITALLY AND IN WRITING
TABLE OF CONTENTS
Page
TABLE OF CONTENTS .................................................. i
TABLE OF AUTHORITIES ............................................... iii
PRIOR OR RELATED APPEALS ........................................... vi
STATEMENT OF JURISDICTION .......................................... 1
STATEMENT OF THE ISSUE ............................................ 2
STATEMENT OF THE CASE .............................................. 2
STATEMENT OF THE FACTS ............................................. 4
DECISION BELOW...................................................... 7
STANDARD OF REVIEW ................................................. 8
SUMMARY OF ARGUMENT ................................................ 9
ARGUMENT ........................................................... 11
THE DISTRICT COURT ERRED IN FAILING TO GIVE
A PUNITIVE DAMAGE INSTRUCTION TO THE JURY...................... 11
A. The Company Knew that its Actions were in
Violation of the ADA................................. 14
B. Heartway Should be Held Liable for Townsend's
Actions.............................................. 18
C. Heartway Has Not Satisfied Its Burden of Showing
that the Company Acted in Good Faith................. 21
CONCLUSION ......................................................... 26
STATEMENT REGARDING ORAL ARGUMENT................................... 26
CERTIFICATE OF COMPLIANCE
ADDENDUM
EEOC v. Wal-Mart Stores, Inc., 35 Fed.Appx. 543,
2002 WL 1003133, No. 00-16887 at *3
(9th Cir. May 16, 2002) (unpublished) (submitted digitally)
Plaintiff's Proposed Jury Instructions and Verdict Form
(filed July 8, 2004) (submitted in writing only)
Trial Transcript on Punitive Damage Issue (pp. 270-71, 274-79)
(submitted in writing only)
December 10, 2004 District Court Order (submitted in
writing only)
CERTIFICATE OF SERVICE
CERTIFICATE OF DIGITAL SUBMISSION
TABLE OF AUTHORITIES
FEDERAL CASES
Anderson v. G.D.C., Inc.,
281 F.3d 452 (4th Cir. 2002)....................................... 19
Bell, Boyd & Lloyd v. Tapy,
896 F.2d 1101 (7th Cir. 1990)...................................... 26
Bruso v. United Airlines, Inc.,
239 F.3d 848 (7th Cir. 2001).................................... 17, 22
Cadena v. The Pacesetter Corp.,
224 F.3d 1203 (10th Cir. 2000).................................. 23-24
Che v. Mass. Bay Transport Authority,
342 F.3d 3 (1st Cir. 2003)...................................... 16-17
Cooper Indus. v. Leatherman Tool Group,
532 U.S. 424 (2001)................................................. 12
Davey v. Lockheed Martin Corp.,
301 F.3d 1204 (10th Cir. 2002).............................. 14, 21, 23
Deffenbaugh-Williams v. Wal-Mart Stores, Inc.,
188 F.3d 278 (5th Cir. 1999)................................ 19, 22, 24
Dilley v. Supervalu, Inc.,
296 F.3d 958 (10th Cir. 2002)................................... 8, 14
EEOC v. Wal-Mart Stores, Inc., 35 Fed.Appx. 543,
2002 WL 1003133, No. 00-16887 (9th Cir. May 16, 2002)
(unpublished)......................................................... 24
EEOC v. Wal-Mart Stores, Inc.,
187 F.3d 1241 (10th Cir. 1999)....................... 12-14, 17, 19-21
Faragher v. Boca Raton,
524 U.S. 775, 802 n.3, 806 (1998)................................ 22
Gloria v. Valley Grain Products,
72 F.3d 497 (5th Cir. 1996)...................................... 25
Gore v. BMW,
517 U.S. 559 (1996).............................................. 12
Hardeman v. City of Albuquerque,
377 F.3d 1106 (10th Cir. 2004)................................... 8
Hertzberg v. SRAM Corp.,
261 F.3d 651 (7th Cir. 2001)..................................... 24
Knowlton v. Teltrust Phones, Inc.,
189 F.3d 1177, 1187-88 (10th Cir. 1999) ........................ 25
Kolstad v. American Dental Association,
527 U.S. 526 (1999)............................................ passim
Lowery v. Circuit City Stores, Inc.,
206 F.3d 431 (4th Cir. 2000)..................................... 23
MacGregor v. Mallinckrodt, Inc.,
373 F.3d 923 (8th Cir. 2004)..................................... 22
Medlock v. Ortho Biotech, Inc.,
164 F.3d 545 (10th Cir. 1999).................................... 9
Ogden v. Wax Works, Inc.,
214 F.3d 999 (8th Cir. 2000)..................................... 23
Passantino v. Johnson & Johnson Consumer Products, Inc.,
212 F.3d 493 (9th Cir. 2000)...................................... 22
Praseuth v. Rubbermaid, Inc.,
406 F.3d 1245 (10th Cir. 2005) ............................... 8, 14
Robertson Oil Co., Inc. v. Phillips Petroleum Co.,
930 F.2d 1342 (8th Cir. 1991).................................... 25
Smith v. Ingersoll-Rand Co.,
214 F.3d 1235 (10th Cir. 2000)................................... 9
Smith v. Wade,
461 U.S. 30 (1983) .............................................. 17
State Farm Mutual Automobile Insurance Company v. Campbell,
538 U.S. 408 (2003).............................................. 12
Wheeler v. John Deere Co.,
986 F.2d 413 (10th Cir. 1993).................................... 25
Zimmermann v. Associates First Capital Corp.,
251 F.3d 376 (2d Cir. 2001)................................... 17, 22
FEDERAL STATUTES
28 U.S.C. §§ 451, 1291, 1331, 1337, 1343, and 1345 ................ 1, 2
28 U.S.C.A. § 1961(a)................................................. 25
42 U.S.C. § 1981a.................................................. 11, 13
The Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq..... passim
OTHER AUTHORITY
Restatement (Second) of Agency....................................... 18
Restatement (Second) of Torts........................................ 19
1 L. Schlueter & K. Redden,
Punitive Damages, § 4.4(B)(2)(a) ............................ 18-19
Tenth Circuit Rule 36.3 ............................................. 24
PRIOR OR RELATED APPEALS
PRIOR APPEALS
There are no prior appeals.
RELATED APPEALS
There are no related appeals.
Case Nos. 05-7011 & 05-7016
__________________________________________________________
IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
__________________________________________________________
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff-Appellant/Cross-Appellee,
v.
HEARTWAY CORPORATION
d/b/a York Manor Nursing Center,
Defendant-Appellee/Cross-Appellant.
________________________________________________________
On Appeal from the United States District Court
For the Eastern District of Oklahoma, No. 03-534-WH,
The Honorable Ronald A. White, Presiding
_________________________________________________________
OPENING BRIEF OF THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION AS APPELLANT
_________________________________________________________
STATEMENT OF JURISDICTION
The district court had jurisdiction over this case pursuant to 28 U.S.C.
§§ 451, 1331, 1337, 1343, and 1345. This action was authorized and instituted
pursuant to the Americans with Disabilities Act (ADA), 42 U.S.C. §§
12101 et seq.
The district court's final judgment entered on December 11, 2004 (Joint Appendix
of the Equal Employment Opportunity Commission and Heartway Corporation
("JA") at 79-83) constitutes a final decision that this Court has
jurisdiction to
review pursuant to 28 U.S.C. § 1291. Plaintiff-Appellant Equal Employment
Opportunity Commission ("EEOC" or "Commission") filed a timely notice of
appeal on February 7, 2005. JA at 84. The defendant filed a timely
cross-appeal
on February 18, 2005. JA at 86.
STATEMENT OF THE ISSUE
Whether the district court erred in failing to instruct the jury
on punitive
damages where there was sufficient evidence at trial that the defendant
terminated Edwards because of her Hepatitis C with the knowledge that it
was violating federal law.
The EEOC raised this issue below in its proposed jury instructions, and it
was addressed orally at the close of the Commission's case. JA at 28,
330, 334-39
(The Plaintiff's Proposed Jury Instructions and Verdict Form at 6;
Trial Transcript
(Tr.) at 270, 274-79).
STATEMENT OF THE CASE
On September 29, 2003, the Commission filed this lawsuit against Heartway
Corporation d/b/a York Manor Nursing Center (Heartway) in the U.S. District
Court for the Eastern District of Oklahoma alleging that the company
violated the
ADA when it terminated Janet Edwards because of a perceived
disability. JA at 17
(Complaint). The case was tried to a jury on August 16 and 17, 2004. The jury
returned a verdict in favor of the Commission and awarded Edwards $30,000.00 in
back pay and $20,000.00 in compensatory damages. JA at 63-64 (Verdict Form).
The district court declined to give the jury an instruction on punitive damages,
however, maintaining that the evidence was insufficient to support such an
instruction in light of Supreme Court precedent. JA at 334-39 (Tr. at
274-79). On
October 19, 2004, the district court entered judgment for the EEOC.
JA at 65-76.
The court awarded the $20,000 given by the jury but reduced the amount of back
pay to $1,240.00, maintaining that the record did not support the
jury's award. Id.
The court also declined to award any interest on the judgment, stating that
"[i]nsufficient evidence exists to justify" such an award. JA at 73 n.8.
On October 29, 2004, the Commission moved to amend the judgment. On
November 2, 2004, Heartway moved for judgment notwithstanding the verdict,
maintaining that the Commission had failed to show that Heartway regarded
Edwards as being disabled. On November 29, 2004, the court denied the
defendant's JNOV motion, and on December 10, 2004, the court also denied the
Commission's motion to amend the judgment (entered on December 11, 2004). JA
at 78-83. The Commission filed a timely notice of appeal on February
7, 2005. JA
at 84. On February 18, 2005, Heartway filed a timely cross-appeal. JA at 86.
STATEMENT OF THE FACTS
Janet Edwards was diagnosed with Hepatitis C. JA at 94-96 (Tr. at 26-28).
By January, 2001, after completing twenty-four weeks of treatment, Edwards'
condition improved and there was no longer a detectable virus in her
blood. JA at
96-97 (Tr. at 28-29). Based on her successful response, Edwards' physician
prescribed an additional twenty-four weeks of treatment. JA at 97-98
(Tr. at 29-
30). Edwards continued to respond to this treatment, and on July 9, 2001, there
was still no detectable Hepatitis C virus in Edwards' blood. JA at
102 (Tr. at 34).
Edwards testified that her Hepatitis C was in remission. JA at
127-28, 157 (Tr. at
59-60, 89).
On August 13, 2001, Edwards applied for a position at the York Manor
Nursing Center in Muskogee, Oklahoma (Heartway). JA at 125, 128 (Tr. at 57,
60). As part of the application process, Edwards completed a physical
requirements questionnaire which asked "[i]n order that we may protect our
residents from disease, please indicate if you are under a doctor's
care or taking
medications now." JA at 128-29, 356 (Tr. at 60-61, EEOC's Trial Ex. 8).
Edwards checked "no" in response to this question and testified that she was not
taking any medication at that time or under a doctor's care. JA at 129-130, 356
(Tr. at 61-62, EEOC's Trial Ex. 8). Edwards was offered a position as a dietary
aide at Heartway on August 15, 2001. JA at 132 (Tr. at 64). After
working in this
job, Edwards was eventually moved to the cook's position. JA at 133
(Tr. at 65).
As a cook, Edwards prepared food for the residents and employees. Id. While
working at Heartway, Edwards was never reprimanded or written up and on one
occasion was voted employee of the month. JA at 134 (Tr. at 66).
While employed at Heartway, Edwards had a conversation with the director
of nursing, Theresa Rains, in which Edwards revealed that she had been diagnosed
with Hepatitis C. JA at 134-35 (Tr. at 66-67). Two days later,
Edwards received a
call from Rains informing her that she would need a doctor's note
before she could
return to work. JA at 136 (Tr. at 68). Edwards' doctor testified
that there would be
no problem with her working around residents in a nursing home or in preparing
food. JA at 106-07 (Tr. at 38-39). Her physician saw no danger that she would
transmit Hepatitis C to others. Id. He testified that "[i]t was my
opinion she could
return to work without restrictions, that she could resume her
employment duties at
that time." Id.
Thus, on April 4, 2002, Edwards' physician prepared a letter
releasing her to
return to work, which was sent to Edwards. JA at 106-07, 137, 354-55
(Tr. at 38-
39, 69, EEOC Trial Ex. 7). After Edwards received the letter, she
also received a
call from her supervisor at the kitchen, who fired her. JA at 138 (Tr. at 70).
Edwards' employment was officially terminated by Mitchell Townsend, the facility
administrator, on April 5, 2002. JA at 126 (Tr. at 58). Edwards and her sister
(another Heartway employee) met with Townsend. JA at 138-39 (Tr. at 70-71).
Edwards asked if she could have her job back, to which Townsend replied "you
having Hepatitis C, you will not work in our kitchen." JA at 139 (Tr.
at 71). When
Edwards asked if she was being terminated because of her medical condition,
Townsend replied that he was firing her because she "falsified
information" on her
application. Id. Edwards' sister asked if they could see her
application, to which
Townsend responded by opening his door and stating "[y]ou're dismissed." JA at
139-40 (Tr. at 71-72). Rains later responded to Edwards' application for
unemployment benefits by indicating that "Edwards failed to give the facility
adequate information regarding her health status of having a communicable
disease." JA at 269-70, 359 (Tr. at 201-02, EEOC Trial Ex. 27).
Edwards filed a timely charge of discrimination on June 13, 2002, alleging
that Heartway had terminated her employment in violation of the ADA. JA at 126,
357 (Tr. at 58, EEOC Trial Ex. 13). During an investigation of the charge, the
EEOC investigator discussed Edwards' employment with Townsend. JA at 226,
358 (Tr. at 158, EEOC Trial Ex. 19). Townsend asked the investigator
if the call
was "about the Hepatitis C case," to which the investigator responded
that it was.
JA at 226 (Tr. at 158). Townsend then asked "[w]ould you like to eat some food
with her blood on it?" Id. Townsend further stated that "[i]f the
clients found out
about the employee having Hepatitis C, they would have a mass exodus." JA at
226-27, 255 (Tr. at 158-59, 187). And, at trial, Townsend conceded
that based on
training he had received in prior jobs he was aware in April, 2002
that it was illegal
to terminate an employee because that individual had been diagnosed with
Hepatitis C. JA at 253 (Tr. at 185).
DECISION BELOW
On August 17, 2004, at the close of the EEOC's case, the district
court held
a hearing on whether a punitive damage instruction should be given to
the jury. JA
at 330, 334-39 (Tr. at 270, 274-79). The EEOC had submitted a proposed jury
instruction setting forth the relevant standard for awarding punitive
damages and
citing the Supreme Court's decision in Kolstad v. American Dental Association,
527 U.S. 526 (1999). JA at 28 (Plaintiff's Proposed Jury Instructions
and Verdict
Form at 6).
In refusing to give the instruction, the district court saw "no
basis under the
trilogy of Supreme Court cases I have mentioned or under the ADA or under the
evidence to send the issue of punitive damages to the jury." JA at
338 (Tr. at 278).
In support of its decision, the court cited to three Supreme Court
decisions that all
arose outside the employment context and addressed the constitutionality of
punitive damage awards. Id. The district court did not address the
standards for a
punitive damage award in an employment discrimination case that are set forth in
Kolstad, thereby disregarding the Commission's citation to this case in its
proposed jury instruction.
STANDARD OF REVIEW
The district court's decision that there was insufficient
evidence to instruct
the jury on a punitive damage award is reviewed by this Court de novo. See
Praseuth v. Rubbermaid, Inc., 406 F.3d 1245, 1254 (10th Cir. 2005) ("Whether
sufficient evidence exists to support punitive damages in an ADA case is a
question of law which is reviewed de novo."); Dilley v. Supervalu,
Inc., 296 F.3d
958, 966 (10th Cir. 2002) ("[Plaintiff] asserts that he was entitled to a jury
determination of his punitive damages claim. . . . Whether sufficient evidence
exists to support punitive damages is a question of law reviewed de novo.")
(quotation omitted); Hardeman v. City of Albuquerque, 377 F.3d 1106, 1120 (10th
Cir. 2004) ("The district court's determination of whether sufficient evidence
exists to support punitive damages is a question of law that we review de novo")
(quotation omitted). This Court should therefore "consider [the] jury
instructions
in their entirety, applying de novo review to determine whether the
jury was misled
on the applicable law." Smith v. Ingersoll-Rand Co., 214 F.3d 1235, 1250 (10th
Cir. 2000). See also Medlock v. Ortho Biotech, Inc., 164 F.3d 545,
552 (10th Cir.
1999) ("To determine whether the jury was adequately instructed on the
applicable
law, we review the instructions in their entirety de novo to determine
whether the
jury was misled in any way.").
SUMMARY OF ARGUMENT
The district court erred in not instructing the jury on punitive damages
where it submitted to the jury the issues of whether Edwards was a covered
individual under the ADA and whether the company terminated her because of her
Hepatitis C, and there was sufficient evidence at trial that the
company took that
action with the knowledge that it was violating federal law. In
failing to provide
this instruction, the district court cited to three Supreme Court
decisions that all
arose outside the employment context and addressed the constitutionality of
punitive damage awards. These decisions are inapposite to this case.
The district
court ignored the most relevant Supreme Court decision, Kolstad v. American
Dental Association, 527 U.S. 526 (1999), which established the standards for
punitive damage awards in employment discrimination cases. Under Kolstad and
its progeny, the jury should have been permitted to consider a punitive damage
award if: (1) Townsend, the facility administrator, knew that it was
a violation of
the ADA to terminate an employee because that individual had Hepatitis C; (2)
Townsend's actions can be imputed to the company; and (3) there is a question of
fact whether Heartway acted in good faith. The EEOC's evidence meets these
requirements.
Townsend testified that he knew at the time of Edwards' termination that it
was a violation of the ADA to fire an employee because that employee had
Hepatitis C. The jury concluded that Townsend terminated Edwards because of
her perceived disability. Thus, the jury believed that Townsend disregarded his
knowledge of the ADA when he terminated Edwards. Townsend also
demonstrated that he recklessly disregarded Edwards' ADA rights when he asked
an EEOC investigator whether he would "like to eat some food with her blood on
it" and noted that there would be a "mass exodus" if the customers knew that
Edwards had Hepatitis C. Townsend's actions should be imputed to the company
under the principles of agency because Townsend was the administrator of the
entire York Manor Nursing Center, made sure that the facility was making money,
oversaw all budget issues, and had the authority to terminate an employee.
Moreover, the company has the burden of showing that it acted in good
faith if it is
to avoid liability for punitive damages, and the evidence presented at
trial does not
satisfy that burden. The district court therefore erred in failing to
give the jury a
punitive damage instruction, and this case should be remanded for a new trial on
this issue.
ARGUMENT
THE DISTRICT COURT ERRED IN FAILING TO GIVE A PUNITIVE
DAMAGE INSTRUCTION TO THE JURY
The Civil Rights Act of 1991 provides that a covered individual such as
Edwards who proves intentional discrimination in violation of the ADA may
recover compensatory and punitive damages in addition to equitable
relief. See 42
U.S.C. § 1981a(a)-(b). The statute provides that punitive damages may
be awarded
"if the [plaintiff] demonstrates that the [defendant] engaged in a
discriminatory
practice . . . with malice or with reckless indifference to the
federally protected
rights of an aggrieved individual." 42 U.S.C. § 1981a(b)(1).
The district court's decision to refuse to instruct the jury on punitive
damages fails to address either this statutory standard or the relevant Supreme
Court or Tenth Circuit case law. In refusing to give this
instruction, the district
court saw "no basis under the trilogy of Supreme Court cases I have mentioned or
under the ADA or under the evidence to send the issue of punitive damages to the
jury." JA at 338 (Tr. at 278). In support of its decision, the court
cited to three
Supreme Court cases – none of which arise in the employment context or set forth
the standard of punitive damages for a victim of employment discrimination.
Rather, these cases all address the constitutionality of punitive
damage awards.
See Cooper Indus. v. Leatherman Tool Group, 532 U.S. 424 (2001) (addressing
standard of review to be applied when considering the
constitutionality of punitive
damage award of 4.5 million dollars where jury awarded other damages of only
fifty thousand dollars on plaintiff's false advertising, unfair competition and
"passing off" claims); Gore v. BMW, 517 U.S. 559 (1996) (two million dollar
punitive damage award violated Due Process Clause where jury awarded other
damages of only four thousand dollars to automobile purchaser to compensate for
undisclosed damage to vehicle); State Farm Mut. Auto. Ins. Co. v. Campbell, 538
U.S. 408 (2003) ($145 million dollar punitive damage award violated Due Process
Clause where insureds were awarded one million dollars in compensatory damages
in claim brought for bad-faith failure to settle, fraud, and
intentional infliction of
emotional distress).
In reaching its decision, the district court failed even to
address Kolstad v.
American Dental Association, 527 U.S. 526 (1999), the seminal Supreme Court
decision on this issue that was cited in the Commission's proposed jury
instructions. JA at 334-39 (Tr. at 274-79). See EEOC v. Wal-Mart Stores, Inc.,
187 F.3d 1241, 1246 (10th Cir. 1999) ("[w]e thus apply the Kolstad
standard to the
facts before us to determine whether there was sufficient evidence to justify an
award of punitive damages against" the defendant). In Kolstad, the
Supreme Court
set forth the standard for punitive damages in cases arising under
Title VII.<1> The
Court in Kolstad held that liability for punitive damages turns on the
defendant's
state of mind, not on the nature of the defendant's discriminatory conduct. 527
U.S. at 535. All that a plaintiff need prove to be eligible for
punitive damages, the
Court held, is that the employer "discriminate[d] in the face of a
perceived risk that
its actions [would] violate federal law." Id. at 536. In meeting
this threshold, the
"plaintiff must impute liability" to the employer. Id. at 539-40.
Additionally, the
Court carved out a defense for employers where they "engage in good
faith efforts
to comply with Title VII." Id. at 544.
Interpreting Kolstad, this Court has succinctly set forth a
three-step analysis
for determining when punitive damages are appropriate:
First, the plaintiff must establish that the employer acted with knowledge
that its actions violated federal law. . . . If able to do so, the
plaintiff must
then demonstrate that the . . . employee who discriminated against the
plaintiff is a managerial agent who acted within the scope of employment. .
. . The Court in Kolstad also provided employers with a defense to punitive
damages. The Court stated that even if the plaintiff establishes that the
employer's managerial employees recklessly disregarded
federally-protected rights while acting within the scope of employment,
punitive damages will not be awarded if the employer shows that it engaged
in good faith efforts to comply with Title VII.
Davey v. Lockheed Martin Corp., 301 F.3d 1204, 1208-09 (10th Cir. 2002); see
also Praseuth, 406 F.3d at 1254 ("To satisfy this standard [for
punitive damages],
the employer must engage in prohibited conduct with knowledge that it may be
acting in violation of federal law, not mere awareness that it is engaging in
discrimination"); Wal-Mart, 187 F.3d at 1245-49 (setting forth intent,
agency, and
good faith factors from Kolstad); Dilley v. Supervalu, Inc., 296 F.3d
958, 966-67
(10th Cir. 2002) (discussing intent requirement of Kolstad). Applying
this analysis
to the facts of this case makes clear that the district court should
have instructed the
jury on punitive damages.
A. The Company Knew that its Actions were in Violation of the ADA
In this case, the record is replete with evidence that the
company knew that
by terminating Edwards on the basis of her perceived disability, it
was violating
federal law. Townsend, the administrator of the nursing center,
testified that he
terminated Edwards. JA at 252 (Tr. at 184). Townsend further acknowledged that
in prior jobs he had received some training on the ADA, was aware that it is
against the law to fire someone because of her disability, and
believed that it was
unlawful to terminate an employee because of her diagnosis with Hepatitis C. JA
at 253 (Tr. at 185). Specifically, Townsend testified:
Q. And you were aware, based on your training that you received, that it
was against the law to fire someone because they had a disability; is that
right?
A. That's right.
Q. And you knew, based on your training about the Americans with
Disabilities Act, in April of 2002, that it was against the law simply
because someone had been diagnosed with Hepatitis C; right?
A. Correct.
JA at 253 (Tr. at 185). The jury concluded that Townsend terminated Edwards
because of her perceived disability. Thus, the jury believed that Townsend
disregarded his understanding of federal disability law when he decided to
terminate Edwards.
Townsend further demonstrated reckless disregard for Edwards' rights in his
comments to Edwards and an EEOC investigator:
• When Edwards asked if she could return to the York facility,
Townsend replied "you having Hepatitis C, you will not work in our
kitchen." JA at 139 (Tr. at 71).
• When an EEOC investigator contacted Townsend about the matter,
Townsend asked "[w]ould you like to eat some food with her blood on
it?" JA at 226-27 (Tr. at 158-59).
• Townsend further told the EEOC Investigator that "[i]f the clients
found out about the employee having Hepatitis C, they would have a
mass exodus." JA at 226-27, 255 (Tr. at 158-59, 187).
This evidence clearly supports the jury's finding that Townsend terminated
Edwards because of her disability – an illegal action that Townsend
knew violated
federal law. Since Heartway (through Townsend) was admittedly aware that it was
illegal to terminate an employee on the basis of her disability, proof that the
company engaged in such intentional discrimination was sufficient to establish
Edwards' eligibility for punitive damages, unless the company offered evidence
that it reasonably believed the conduct was legal, or was justifiably
unclear about
whether the conduct was legal or not. Kolstad, 527 U.S. at 536-37. Heartway
offered no such evidence here.
In reversing a district court's refusal to give a punitive damage
instruction in
a Title VII case, the First Circuit recently emphasized the importance
of leaving the
punitive damage issue for the jury where intentional discrimination is present:
The [Supreme] Court has described situations where an employer may
intend to discriminate, but does not intend to violate the law. [Citing
Kolstad]. These include situations when the employer is unaware of the
federal law prohibiting discrimination, when the employer believes he
can lawfully discriminate, when the underlying theory of discrimination
is novel or poorly recognized, or when the employer believes its
discrimination falls within a statutory exception. See id. None of these
situations, or others like them, are present in this case. Nor do we see
any other compelling reason why a jury should be prevented from
exercising its "discretionary moral judgment" as to punitive damages in
this case.
Che v. Mass. Bay Transp. Auth., 342 F.3d 31, 42 (1st Cir. 2003), citing Smith v.
Wade, 461 U.S. 30, 52 (1983). For the same reasons, there is no basis for
preventing the jury from considering the punitive damage issue in this
case, where
the facility administrator conceded that he had knowledge in April, 2002, that
terminating an employee because of Hepatitis C would violate the ADA. JA at 253
(Tr. at 185). See Wal-Mart, 187 F.3d at 1246 ("reasonable jury could have
concluded that [defendant] intentionally discriminated against
[plaintiff] in the face
of a perceived risk that its action would violate federal law" where manager who
was responsible for employee's improper suspension "testified that he
was familiar
with the accommodation requirements of the ADA and its prohibition against
discrimination and retaliation in the workplace"); Bruso v. United
Airlines, Inc.,
239 F.3d 848, 858 (7th Cir. 2001) ("A plaintiff may satisfy this
[first] element by
demonstrating that the relevant individuals knew of or were familiar with the
antidiscrimination laws and the employer's policies for implementing
those laws");
Zimmermann v. Assocs. First Capital Corp., 251 F.3d 376, 385 (2d Cir. 2001)
("[W]e agree with [the district court] that [the manager's] acknowledgment of
training in 'equal opportunity' permits an inference of the requisite
mental state.").
B. Heartway Should Be Held Liable for Townsend's Actions
In Kolstad, the Supreme Court clarified when, under the rules of agency, an
employer is liable for punitive damages based on the malice or reckless
indifference of one of its agents. Kolstad, 527 U.S. at 540-45. In
clarifying this
standard, the Court applied the general common law of agency, using the
Restatement (Second) of Agency as its "starting point." Id. at 542.
In particular,
the Court focused on section 217 C(c) of the Restatement (Second) of Agency,
which (as one of four circumstances where "an agent's misconduct may be
imputed to the principal for purposes of awarding punitive damages") allows for
"liability for punitive awards where an employee serving in a 'managerial
capacity' committed the wrong while 'acting in the scope of
employment.'" Id. at
542-43 (quoting Restatement (Second) of Agency § 217 C(c)).
In analyzing § 217 C(c), the Supreme Court defined the meaning of the term
"managerial capacity." Id. at 543. The Court explained that, although no
satisfactory definition of the term was available, courts assessing whether an
employee met the definition should make a fact-intensive inquiry,
reviewing "'the
type of authority that the employer has given to the employee, [and]
the amount of
discretion that the employee has in what is done and how it is
accomplished.'" Id.
(quoting 1 L. Schlueter & K. Redden, Punitive Damages, § 4.4(B)(2)(a),
p. 181 (3d
ed. 1995)). The Court noted that the examples provided in the Restatement
(Second) of Torts § 909 suggested that an employee must be "important," but
rejected the notion that the employee must be "the employer's 'top management,
officers or directors,' to be acting 'in a managerial capacity.'" 527
U.S. at 543
(quoting 1 L. Schlueter & K. Redden, Punitive Damages, § 4.4(B)(2)(a), p. 181).
In this case, Townsend's willful termination of Edwards should be imputed
to the company under the agency principles set forth in Kolstad and
applied by this
Court. See Wal-Mart, 187 F.3d at 1247 ("Under the common law, one means by
which a plaintiff can prevail in a vicarious liability claim against
an employer is to
establish that the employer's agent committed a wrong while (1) serving in a
managerial capacity; and (2) acting in the scope of employment.") (citation and
quotation omitted); see also Anderson v. G.D.C., Inc., 281 F.3d 452,
461 (4th Cir.
2002) (holding that general manager/dispatcher was "unquestionably a managerial
employee [for purposes of imputing liability under Kolstad]. The
evidence at trial
established that he possessed authority to hire and fire drivers and
to impose lesser
forms of discipline, including docking a driver's wages."); Deffenbaugh-Williams
v. Wal-Mart Stores, Inc., 188 F.3d 278, 285 (5th Cir. 1999)
("sufficient evidence to
survive JMOL exists that [district manager] was a requisite
'managerial agent'" for
purposes of imputing liability under Kolstad).
Here, Townsend, as the administrator of the entire York Manor Nursing
Center, made sure that the facility was making money, oversaw all budget issues,
and had obvious authority over Edwards' employment. JA at 252-54 (Tr. at 184-
86). Indeed, Townsend is the individual who decided to discharge
Edwards. JA at
252, 263 (Tr. at 184, 195). In Wal-Mart, this Court held that an
assistant manager
who had "independent authority to suspend her subordinates" and could "make
hiring and firing recommendations" was a manager "for purposes of vicarious
liability." Wal-Mart, 187 F.3d at 1247 (emphasis added). Thus, there can be no
question that Townsend's authority as facility administrator was sufficient for
purposes of vicarious liability. Townsend was acting as an agent of the company
within the scope of his employment when he terminated Edwards, and the
company should not escape liability for his actions.
Where there is sufficient evidence for a reasonable jury to conclude that
defendant's conduct constituted intentional discrimination and showed malice or
reckless disregard for plaintiff's federally protected rights, the
district court should
instruct the jury on punitive damages. See generally Kolstad, 527
U.S. at 534-546
(establishing standard for punitive damages and stating that the
"employer must at
least discriminate in the face of a perceived risk that its actions
will violate federal
law to be liable in punitive damages"); Wal-Mart, 187 F.3d at 1244-48 (applying
analysis set forth in Kolstad and concluding that two managers engaged in
"recklessly indifferent intentional discrimination against [plaintiff]
so as to warrant
an award of punitive damages"); Kolstad, 527 U.S. at 551 ("so long as
a Title VII
plaintiff proffers sufficient evidence from which a jury could conclude that an
employer acted willfully, judges have no place making their own value judgments
regarding whether the conduct was 'egregious' or otherwise presents an
inappropriate candidate for punitive damages; the issue must go to the jury.")
(Stevens, J., concurring and dissenting). The district court erred in
not submitting
the issue here.
C. Heartway Has Not Satisfied Its Burden of Showing that the Company
Acted in Good Faith.
In Kolstad, the Supreme Court held that an employer could avoid vicarious
liability for punitive damages by showing good-faith efforts to comply
with Title
VII because, "[w]here an employer has undertaken such good faith
efforts . . . it
demonstrates that it never acted in reckless disregard of federally
protected rights."
527 U.S. at 544 (quotation and internal brackets omitted). This Court
has not taken
a position on whether it is the employer's burden to establish the good-faith
defense, but it has acknowledged that numerous other appellate courts have taken
this approach. See Davey v. Lockheed Martin Corp., 301 F.3d 1204, 1209 n.4
(10th Cir. 2002). Because the Supreme Court in Kolstad based its
rationale for the
good faith defense on the same agency principles it had discussed in creating an
affirmative defense to liability for supervisors in the sexual harassment of
employees,<2> the lower courts have appropriately treated the punitive damage
limitation as an affirmative defense where the employer has the burden of
establishing that it acted in good faith to comply with the statute.
See MacGregor
v. Mallinckrodt, Inc., 373 F.3d 923, 931 (8th Cir. 2004) ("A
corporation may avoid
punitive damages by showing that it made good faith efforts to comply with Title
VII after the discriminatory conduct."); Zimmermann v. Assocs. First Capital
Corp., 251 F.3d 376, 385 (2d Cir. 2001) (the Kolstad defense "requires an
employer to establish both that it had an antidiscrimination policy
and made good
faith effort to enforce it"); Bruso v. United Airlines, 239 F.3d 848,
858 (7th Cir.
2001) ("the employer may avoid liability for punitive damages if it
can show that it
engaged in good faith efforts to implement an antidiscrimination policy");
Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 516 (9th
Cir. 2000) ("Kolstad extends the [affirmative defense] by allowing defendants to
assert it in response to punitive damages claims, even in cases
involving tangible
employment action"); Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d
278, 286 (5th Cir. 1999) (the evidence elicited by defendant "does not
suffice to
establish, as a matter of law, [defendant's] good faith in requiring
its managers to
obey Title VII"); see also Ogden v. Wax Works, Inc., 214 F.3d 999,
1009 (8th Cir.
2000) (describing good faith defense as an exception to vicarious
liability); Lowery
v. Circuit City Stores, Inc., 206 F.3d 431-446 (4th Cir. 2000) (same).
Based on the evidence at trial, the district court could not
properly conclude
that Heartway satisfied its burden of establishing the good-faith
defense as a matter
of law, and thus the issue should have gone to the jury. The company
presented no
evidence at trial that it enforced an anti-discrimination policy or attempted to
educate its employees regarding disability discrimination in any way.
See Davey,
301 F.3d at 1209 ("at a minimum, an employer must at least adopt
anti-discrimination policies and make a good faith effort to educate
its employees
about these policies and [the statute's] prohibitions"); Cadena v. The
Pacesetter
Corp., 224 F.3d 1203, 1210 (10th Cir. 2000) ("Kolstad itself suggests that the
good-faith-compliance standard requires the employer to make good
faith efforts to
enforce an antidiscrimination policy") (quotation omitted) (emphasis
in original).
Indeed, Theresa Rains, the director of nursing at the York Manor
nursing facility,
testified that she had never received ADA training while employed by Heartway.
See JA at 268 (Tr. at 200). Because a reasonable jury could conclude under the
controlling Kolstad standard that Heartway had not made good faith efforts to
comply with the ADA when it terminated Edwards because of her hepatitis C, a
jury should have been permitted to decide the factual issue of whether
Heartway is
entitled to this defense. See Cadena, 224 F.3d at 1210 ("Because sufficient
evidence was presented on which a jury could have found [defendant] did not
make good faith efforts to comply with Title VII, this court will not
enter judgment
as a matter of law in favor of [defendant] on the question of punitive
damages");
Deffenbaugh-Williams, 188 F.3d at 286 ("the evidence of [defendant's]
antidiscrimination good faith was certainly not so overwhelming that reasonable
jurors could not conclude otherwise"); Hertzberg v. SRAM Corp., 261 F.3d 651,
664 (7th Cir. 2001) ("Given the constant nature of the harassment and
[defendant's] lack of managerial response to the problem, we believe a jury was
entitled to conclude that [defendant] did not make good faith efforts
to implement
its sexual harassment policy").
The case should therefore be remanded to the district court for a
new trial on
punitive damages. See, e.g., EEOC v. Wal-Mart Stores, Inc., 35 Fed.Appx. 543,
2002 WL 1003133, No. 00-16887 at *3 (9th Cir. May 16, 2002) (unpublished)<3>
(attached) (remanding for separate trial on punitive damage issue and
stating that
"the EEOC is entitled to present the finding of facts implicit in the
first jury's
finding that Wal-Mart intentionally discriminated against [plaintiff]
on the basis of
her pregnancy. . . . [the defendant] is prohibited from making any argument or
eliciting any testimony that would contradict any of these findings"); Robertson
Oil Co., Inc. v. Phillips Petroleum Co., 930 F.2d 1342, 1344-45 (8th Cir. 1991)
(discussing district court's handling of punitive damage trial on
remand). See also
Knowlton v. Teltrust Phones, Inc., 189 F.3d 1177, 1187-88 (10th Cir. 1999)
(remanding "for the specific purpose of submitting to a jury the issue
of punitive
damages" where "the district court erred when it ruled that there was
no evidence
from which a jury could make a reasonable inference that [the defendant] acted
recklessly and with disregard for [plaintiff's] federally protected
civil rights").
This Court's order should also instruct that on remand any award should include
postjudgment interest <4>.
CONCLUSION
The district court erred by not instructing the jury on punitive
damages. The
evidence at trial clearly demonstrated that the administrator of the Heartway
facility knew that by terminating Edwards because of her Hepatitis C, he was
violating the ADA. The administrator's actions should be imputed to
the company.
The company has the burden of showing that it acted in good faith if
it is to avoid
liability for punitive damages, and the evidence presented at trial
does not satisfy
that burden. This case should therefore be remanded for a new trial on punitive
damages.
STATEMENT IN SUPPORT OF REQUEST FOR ORAL ARGUMENT
The Commission believes that oral argument would materially assist this
Court in resolving the complex legal and factual issues presented by this
employment discrimination case. In addition, the question of when a punitive
damage instruction can be submitted to the jury is important to the Commission's
statutory obligation of enforcing the ADA. The Commission therefore believes
that a discussion of this and related issues at oral argument would be
beneficial to
the Court.
Respectfully submitted,
ERIC S. DREIBAND
General Counsel
VINCENT J. BLACKWOOD
Acting Associate General Counsel
CAROLYN L. WHEELER
Assistant General Counsel
____________________________
JOSEPH A. SEINER
Attorney
Illinois State Bar No. 6257474
U.S. EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
Office of General Counsel
1801 L Street, N.W., Room 7018
Washington, D.C. 20507
(202) 663-4772
joseph.seiner@eeoc.gov
CERTIFICATE OF COMPLIANCE
I certify that this brief complies with the type-volume
limitation set forth in
F.R.A.P. 32(a)(7)(B). This brief contains 6129 words. See Fed. R. App. P.
32(a)(7)(B)(i). The brief was prepared using the WordPerfect 9
processing system,
in 14-point proportionally spaced type for text and 14-point type for
footnotes. See
Fed R. App. P. 32(a)(5).
_____________________
Joseph A. Seiner
June 10, 2005
ADDENDUM
(c) 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
35 Fed.Appx. 543, 2002 WL 1003133 (9th Cir.(Ariz.))
(Cite as: 35 Fed.Appx. 543, 2002 WL 1003133 (9th Cir.(Ariz.)))
<KeyCite History>
Briefs and Other Related Documents
This case was not selected for publication in the
Federal Reporter.
Please use FIND to look at the applicable circuit
court rule before citing this opinion. (FIND CTA9
Rule 36-3.)
United States Court of Appeals,
Ninth Circuit.
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION, Plaintiff--Appellant,
v.
WAL-MART STORES, INC, a Delaware
corporation, Defendant--Appellee.
No. 00-16887.
D.C. No. CV-94-00465-WDB.
Argued and Submitted Feb. 13, 2002.
Decided May 16, 2002.
Equal Employment Opportunity Commission
(EEOC) brought Title VII action alleging that
employer discriminated against job applicant on basis
of pregnancy. Following jury verdict for EEOC on
liability issue, EEOC appealed district court's refusal
to instruct jury on punitive damages issue. The Court
of Appeals, 156 F.3d 989, reversed and remanded
for punitive damages trial. After jury rendered
verdict for employer on punitive damages issue, the
United States District Court for the District of
Arizona, William D. Browning, J., entered judgment
for employer, and EEOC appealed. The Court of
Appeals held that: (1) evidence that employer
attempted to cover-up its discriminatory conduct
towards pregnant employee was admissible during
punitive damages trial in Title VII pregnancy
discrimination case; (2) district court's abuse of
discretion in excluding such evidence was prejudicial
and warranted remand for new punitive damages
trial; (3) district court abused its discretion when it
allowed employer's managers to testify during trial
to their version of events surrounding pregnant
employee's application for employment; (4) on
remand for new punitive damages trial, EEOC was
entitled to present to jury, and have jury instructed
on, the finding of facts that were implicit in first
jury's finding that employer intentionally
discriminated against employee on basis of her
pregnancy, and employer was. The EEOC appealed
to this court. On September 24, 1998, we held that
the EEOC had presented sufficient evidence of Wal-
Mart's malice or reckless indifference to support an
award of punitive damages and therefo prohibited
from making any argument or eliciting any testimony
that would contradict any of those findings; and (5)
EEOC could present evidence on remand during
punitive damages trial of any cover-up conducted by
employer after employee's application was rejected.
Reversed and remanded.
West Headnotes
[1] Civil Rights k1542
78k1542
(Formerly 78k381)
Evidence that employer attempted to cover-up its
discriminatory conduct towards pregnant employee
was admissible during punitive damages trial in Title
VII pregnancy discrimination case; such evidence
was relevant to determination of whether punitive
damages were warranted, under Title VII, for
employer's pregnancy discrimination, and to the
question of whether employer had good-faith
defense. Civil Rights Act of 1964, § 701 et seq., 42
U.S.C.A. § 2000e et seq.
[2] Federal Courts k901.1
170Bk901.1
District court's abuse of discretion in excluding
evidence, during punitive damages trial in Title VII
pregnancy discrimination case, that employer
attempted to cover-up its discriminatory conduct
towards pregnant employee, was prejudicial, and
warranted remand for new punitive damages trial;
evidence would have made a difference on issue of
punitive damages and would have directly
contradicted employer's evidence of good faith
defense. Civil Rights Act of 1964, § 701 et seq., 42
U.S.C.A. § 2000e et seq.
[3] Civil Rights k1542
78k1542
(Formerly 78k389)
District court abused its discretion when it allowed
employer's managers to testify, at punitive damages
trial in Title VII pregnancy discrimination action, to
their version of events surrounding pregnant
employee's application for employment, since jury,
in finding that employer was liable for intentional
discrimination against employee during liability
phase of case, necessarily rejected employer's
version of events. Civil Rights Act of 1964, § 701 et
seq., 42 U.S.C.A. § 2000e et seq.
[4] Federal Courts k951.1
170Bk951.1
On remand for punitive damages trial in Title VII
pregnancy discrimination action, Equal Employment
Opportunity Commission (EEOC) was entitled to
present to jury, and have jury instructed on, the
finding of facts that were implicit in first jury's
finding that employer intentionally discriminated
against employee on basis of her pregnancy, and
employer was prohibited from making any argument
or eliciting any testimony that would contradict any
of those findings. Civil Rights Act of 1964, § 701 et
seq., 42 U.S.C.A. § 2000e et seq.
[5] Civil Rights k1542
78k1542
(Formerly 78k381)
Equal Employment Opportunity Commission
(EEOC) could present evidence on remand, during
punitive damages trial in Title VII pregnancy
discrimination action, of any cover-up conducted by
employer after pregnant employee's application was
rejected. Civil Rights Act of 1964, § 701 et seq., 42
U.S.C.A. § 2000e et seq.
*544 Appeal from the United States District Court
for the District of Arizona, William D. Browning,
District Judge, Presiding.
Before REINHARDT, FISHER, Circuit Judges, and
MOLLOY, [FN*] District Judge.
FN* The Honorable Donald Molloy, Chief
United States District Judge for the District
of Montana, sitting by designation.
MEMORANDUM [FN**]
FN** This disposition is not appropriate for
publication and may not be cited to or by
the courts of this circuit except as may be
provided by Ninth Circuit Rule 36-3.
**1 In 1992, the Equal Employment Opportunity
Commission ("EEOC") sued the defendant, Wal-
Mart Stores, Inc. ("Wal-Mart"), alleging that it
wrongfully discriminated against Jamey Stern in
violation of Title VII of the Civil Rights Act of
1964, 42 U.S.C. § 2000e et seq., when it refused to
rehire her on the basis of her pregnancy. A jury
subsequently found that Wal-Mart intentionally
discriminated against Stern and awarded her
approximately $1700 in back pay and interest. The
district court, however, ruled that the EEOC failed
to present sufficient evidence to support an award of
punitive damages and therefore refused to submit the
issue of punitive damages to the jury re remanded for
the district court to conduct a trial solely on the issue
of punitive damages. See EEOC v. Wal-Mart
Stores, Inc., 156 F.3d 989, 992-93 (9th Cir.1998)
[hereinafter EEOC I ].
In February 1999, the first punitive damages trial
ended with a deadlocked jury and the district court
declared a mistrial. Before the second punitive
damages trial began, the Supreme Court issued its
opinion in Kolstad v. American Dental Assoc., 527
U.S. 526, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999).
The Court held that in order to hold an employer
liable for *545 punitive damages, the plaintiff must
demonstrate that the employer discriminated "in the
face of a perceived risk that its actions will violate
federal law." Id. at 536, 119 S.Ct. 2118. The
Court also held that a claim for punitive damages
could be defeated by a showing that the managerial
agents' discriminatory acts were "contrary to the
employer's good-faith efforts to comply with Title
VII." Id. at 545, 119 S.Ct. 2118 (internal quotation
omitted). Following that decision, the parties
conducted discovery based on the issues raised by
Kolstad and then proceeded to trial.
The second punitive damages trial began on May
23, 2000. Prior to trial, the district court ruled that
the EEOC was prohibited from presenting any
evidence of Wal-Mart's alleged "cover-up" of its
discriminatory acts--that is, the district court
excluded all evidence related to events after Wal-
Mart made its decision not to hire Stern in 1991.
On May 25, 2000, the jury deadlocked and the
district court again declared a mistrial.
The third punitive damages trial commenced on
August 2, 2000. Despite the earlier jury verdict that
Wal-Mart intentionally discriminated against Stern,
and over the EEOC's objection, the district court
allowed Wal-Mart's personnel manager and assistant
manager to testify about their version of their
interview with Stern and their treatment of Stern's
application for employment. Additionally, evidence
about Wal-Mart's cover-up was again excluded by
the district court. At the conclusion of the evidence,
the jury found for Wal-Mart. The EEOC again
appealed to this court.
**2 [1] On appeal, the EEOC first contends that the
district court erred in excluding all evidence on
matters that were "after the critical events" and
"post-1991"--namely, all evidence of Wal-Mart's
attempts to cover-up its discriminatory acts in
refusing to hire Stern on the basis of her pregnancy.
We agree. The following are examples of the
excluded evidence:
. During the EEOC investigation in 1992--
approximately one year after Stern's application
for employment was rejected--Wal-Mart claimed
that Stern was not hired because she indicated on
her job application that due to her pregnancy, she
could only work limited hours. However, Stern
never made such a request on her application or
elsewhere.
. At the very first trial on the claim of intentional
discrimination, an assistant manager of Wal-Mart
testified that she conducted a face-to-face interview
with Stern and filled out a corresponding
"Interview Comment Sheet." Wal-Mart was unable
to produce this comment sheet, although it had this
sheet for every one of the other fifty applicants
interviewed approximately at the same time.
It is self-evident that this evidence is highly
probative for a determination of punitive damages.
In EEOC I, we explicitly stated that "the evidence
regarding the attempts by Wal-Mart managers to
cover up their discriminatory conduct supports the
EEOC's claim of reckless indifference to Stern's
federally protected rights." EEOC I, 156 F.3d at
993. There is no question that the evidence of Wal-
Mart's attempts to cover-up its discriminatory
conduct after 1991 is relevant to a determination of
punitive damages and to the question of whether
Wal-Mart has a good-faith defense. See Passantino
v. Johnson & Johnson Consumer Products, Inc., 212
F.3d 493, 516 (9th Cir.2000) (stating that relevant
evidence sufficient for allowing award of punitive
damages included fact that "the jury could have
found that defense witnesses lied ... about their *546
actions, as part of a continuing effort to cover up
their campaign against her").
[2] Wal-Mart argues that the exclusion of this cover-
up evidence was harmless because the jury heard
similar evidence. It is incorrect. [FN1] Although
the jury was informed that a previous jury found
Wal-Mart guilty of intentional discrimination, the
jury also heard two Wal-Mart employees testify to
their version of the events surrounding Stern's
application. The EEOC was not able to introduce
any direct or specific evidence that Wal-Mart
employees lied. This evidence would have made a
difference, and its exclusion was prejudicial. [FN2]
We said as much in EEOC I and it is unfortunate that
we have to say it again here. [FN3] So we will state
it as plainly as possible: the district court abused its
discretion in excluding this evidence and upon retrial
this evidence must be allowed.
FN1. Wal-Mart also argues that the EEOC
waived its right to object to the exclusion of
this evidence because it failed to object at
trial. Again, it is incorrect. The EEOC
objected to the exclusion of this evidence
after the district court ruled prior to trial
that the body of such evidence was
excluded. The EEOC did not need to
renew its objection or make a new offer of
proof later at trial. See Heyne v. Caruso,
69 F.3d 1475, 1481 (9th Cir.1995);
Fed.R.Evid. 103(a)(2).
FN2. We also reject Wal-Mart's argument
that the jury could have found that Wal-
Mart presented a satisfactory good-faith
defense. The verdict form simply stated
that the jury found in favor of Wal-Mart.
There is no evidence that the jury's verdict
was on the basis of accepting Wal-Mart's
good-faith defense. Moreover, the
wrongfully excluded cover-up evidence
directly contradicts evidence of Wal-Mart's
alleged good-faith. Therefore, we cannot
uphold the jury verdict on any supposed
acceptance of Wal-Mart's defense.
FN3. In EEOC I, we stated:
In sum, the jury was presented with
evidence that an assistant manager at Wal-
Mart's Green Valley store intentionally
discriminated against Stern based on her
pregnancy and that the assistant manager
and other Wal-Mart officials attempted to
cover up their discriminatory conduct.
Under these circumstances, we hold that the
district court, as a matter of law, should
have allowed the jury to determine whether
punitive damages were warranted.
EEOC I, 156 F.3d at 993.
[3] The EEOC also argues that the district court
erred in allowing Wal-Mart managers to testify to
their version of the events surrounding Stern's
application for employment. The EEOC is correct.
When the first jury found that Wal-Mart intentionally
discriminated against Stern, the jury necessarily
rejected Wal-Mart's version of the events and
credited the EEOC's. For example, it is highly
likely that the jury credited the EEOC's evidence that
Wal-Mart lied when stating that Stern requested
limited hours, as there was no evidence that Stern
made such a request. Therefore, the district court
abused its discretion when it allowed Wal-Mart
employees to testify to their version of events--a
version which directly contradicts the first jury's
finding of intentional discrimination. [FN4] See Los
Angeles Police Protective League v. Gates, 995 F.2d
1469, 1473 (9th Cir.1993).
FN4. We reject Wal-Mart's argument that
the EEOC waived any objection to this
error because it did not object at trial. The
EEOC did object to the relevance of the
evidence Wal-Mart presented on this issue.
This objection is sufficient to preserve this
issue on appeal.
**3 In sum, we reverse the jury's verdict and
remand for trial. The district court abused its
discretion by excluding the cover-up evidence.
Additionally, it abused its discretion when it allowed
Wal-Mart employees to testify to their version of the
events surrounding Stern's application for
employment.
*547 [4][5] In light of the fact that the forthcoming
trial will be the fourth trial on the issue of punitive
damages, we state a few guidelines to the district
court. First, the EEOC is entitled to present the
finding of facts implicit in the first jury's finding that
Wal-Mart intentionally discriminated against Stern
on the basis of her pregnancy. See Robertson Oil
Co. v. Phillips Petroleum Co., 930 F.2d 1342, 1344-
45 (8th Cir.1991). To that end, it may present the
EEOC's Proposed Statement of Established Facts or
a similar document to the jury. The factual findings
of which the jury are to be informed include, among
others, the following:
1. Wal-Mart intentionally discriminated against
Stern.
2. Wal-Mart refused to hire Stern because of her
pregnancy and not for any other reason.
3. Stern at no time expressed doubts about her
desire or ability to perform the job.
4. Stern did not withdraw her employment
application at any time.
5. Wal-Mart fabricated the story that Stern
withdrew her application.
6. Wal-Mart fabricated the story that Stern
expressed doubts about her desire or ability to
perform the job.
7. Wal-Mart fabricated the story that Stern
requested limited hours on her job application.
Wal-Mart is prohibited from making any argument
or eliciting any testimony that would contradict any
of these findings. Moreover, the EEOC is entitled
to have the jury instructed on any of these findings
(or others that, based on the arguments that may be
made to the district court on remand, the court finds
were necessarily found by the first jury). Second,
the EEOC may present evidence of any cover-up
conducted by Wal-Mart after Stern's application was
rejected. With these mandates, we remand for a
fourth, and, we hope, final, punitive damages trial.
REVERSED AND REMANDED.
35 Fed.Appx. 543, 2002 WL 1003133 (9th
Cir.(Ariz.))
Briefs and Other Related Documents (Back to top)
. 2001 WL 34097626 (Appellate Brief) Reply Brief
of the Equal Employment Opportunity Commission
(Jun. 12, 2001)
. 2001 WL 34097627 (Appellate Brief) Brief of
Appellee, Wal-Mart Stores, Inc. (May. 23, 2001)
. 00-16997 (Docket)
(Oct. 24, 2000)
. 2000 WL 33985662 (Appellate Brief) Brief of the
Equal Employment Opportunity Commission as
Plaintiff-Appellant (2000)
END OF DOCUMENT
CERTIFICATE OF SERVICE
I, Joseph A. Seiner, hereby certify that on the 10th day of
June, 2005, I caused
copies of the attached Opening Brief of the Equal Employment Opportunity
Commission as Appellant to be sent via first class U.S. mail to:
JEFFREY C. TASKER NEAL TOMLINS
KANE, RUSSELL, RONALD E. GOINS
COLEMAN & LOGAN, P.C. TOMLINS AND GOINS
3700 Thanksgiving Tower Utica Plaza Building
1601 Elm Street 2100 South Utica, Suite 300
Dallas, Texas 75201 Tulsa, Oklahoma 74114
ATTORNEYS FOR DEFENDANT
AND
Clerk of Court
U.S. Court of Appeals for the 10th Circuit
1823 Stout Street
Byron White U.S. Courthouse
Denver, CO 80257
(sent original and seven copies of brief)
______________________
JOSEPH A. SEINER
Attorney
Illinois State Bar No. 6257474
Equal Employment
Opportunity Commission
Office of General Counsel
1801 L Street, N.W., Room 7018
Washington, D.C. 20507
(202) 663-4772
joseph.seiner@eeoc.gov
Certificate of Digital Submission
I, Joseph A. Seiner, hereby certify that:
1. All required privacy redactions have been made (NONE);
2. On June 10, 2005, I will send an email containing the attached
brief in digital
form to the Tenth Circuit clerk's office at
esubmission@ca10.uscourts.gov, and to
counsel for the defendant. The document submitted in digital form
will be an exact
copy of the written document filed with the Court, but for the signature which
appears in accordance with the Amended Emergency Order governing digital
filings in the 10th Circuit Court of Appeals (Amended Emergency Order).
Additionally, in accordance with the Amended Emergency Order and my
discussions with a court clerk (Carol), three documents in the addendum (not
available in digital format) and all of the documents in the joint appendix (not
available in digital format) are being submitted in writing only.
3. The digital submissions have been scanned for viruses by the EEOC's virus
scanning software, and, according to this program, are free of
viruses. The EEOC
utilizes Symantec AntiVirus Corporate Edition. The software was most recently
updated in June, 2005.
_______________________
JOSEPH A. SEINER
Attorney
Illinois State Bar No. 6257474
U.S. EEOC
Office of General Counsel
1801 L Street, N.W., Room 7018
Washington, D.C. 20507
(202) 663-4772
joseph.seiner@eeoc.gov
June 10, 2005
************************
<NOTES>
<1> The damages provision in the statute itself, 42 U.S.C. § 1981a, explicitly
applies to both Title VII and the ADA. The Supreme Court implicitly
acknowledged
that its analysis of the punitive damages standard would also apply
to ADA claims,
Kolstad, 527 U.S. at 529, 534, and this Court has explicitly so held.
See EEOC v.
Wal-Mart Stores, Inc., 187 F.3d 1241, 1245 n.2 (10th Cir. 1999) ("The punitive
damages analysis is the same for Title VII and ADA claims").
<2> Kolstad, 472 U.S. at 545-46 (citing and discussing Faragher v. Boca Raton,
524 U.S. 775, 802 n.3, 806 (1998)).
<3> An unpublished decision may be cited to this Court where "it has persuasive
value with respect to a material issue that has not been addressed in
a published
opinion" and "it would assist the court in its disposition." 10th
Cir. R. 36.3.
The EEOC believes that this case satisfies these criteria.
<4> The district court declined to award any interest on the judgment,
stating that
"[i]nsufficient evidence exists to justify" such an award. JA at 73 n.8. This
language is ambiguous as to whether it is referring to prejudgment or
postjudgment
interest. While a district court may have very limited discretion to deny
prejudgment interest, postjudgment interest is mandatory. See 28
U.S.C. § 1961(a)
("Interest shall be allowed on any money judgment in a civil case
recovered in a
district court") (emphasis added); Wheeler v. John Deere Co., 986 F.2d 413, 415
(10th Cir. 1993) (discussing mandatory nature of statute as it relates
to interest
on damage awards); Gloria v. Valley Grain Products, 72 F.3d 497, 500
(5th Cir. 1996)
("we agree that prejudgment interest 'should' normally be included" in
a backpay
award). Though we presume that the district court's statement is
limited only to
prejudgment interest, this Court's instructions should clarify this
issue. To the
extent that the district court intended to restrict the recovery of
postjudgment
interest, it erred as a matter of law. See, e.g., Bell, Boyd & Lloyd
v. Tapy, 896
F.2d 1101, 1104 (7th Cir. 1990) ("section 1961(a) allows the judge no
discretion
to deny the interest authorized by that section") (emphasis added).
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