Linda Sondesky v. Cherry Scaffolding Inc. ( 2021 )


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  •                                                                   NOT PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    _____________
    Nos. 19-2899 & 19-2900
    _____________
    LINDA SONDESKY
    v.
    CHERRY SCAFFOLDING INC.; STEPHEN ELLIS,
    Appellants in No. 19-2899
    STEPHEN EDWARD ELLIS,
    Appellant in No. 19-2900
    _____________
    On Appeal from the United States District Court
    for the Eastern District of Pennsylvania
    (D.C. Civ. Nos. 2-16-05667, 2-17-04280)
    District Judge: Honorable Anita B. Brody
    ______________
    Submitted Under Third Circuit L.A.R. 34.1(a)
    December 14, 2020
    ______________
    Before: GREENAWAY, JR., SHWARTZ, and FUENTES, Circuit Judges.
    (Opinion Filed: September 13, 2021)
    ______________
    OPINION*
    ______________
    *
    This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7,
    does not constitute binding precedent.
    GREENAWAY, JR., Circuit Judge.
    Appellee Linda Sondesky brought claims against her former employer, Cherry
    Scaffolding, Inc., and Cherry Scaffolding’s president, Stephen Ellis (together, the
    “Appellants”), for, among other things, retaliation under the Fair Labor Standards Act of
    1938 (“FLSA”), 
    28 U.S.C. § 201
     et seq., and defamation.1 Appellants counterclaimed for
    conversion of the overtime monies paid to Sondesky. A jury found in Sondesky’s favor
    on all claims, and Appellants moved for judgment notwithstanding the verdict, or, in the
    alternative, a new trial. The District Court denied the motions. Appellants appealed,
    arguing that (1) Sondesky was an exempt employee under the FLSA, and therefore her
    retaliation claims failed, and (2) punitive damages were improperly granted. We will
    affirm the District Court’s order.
    I.    BACKGROUND
    Sondesky worked as a bookkeeper for Cherry Scaffolding from October 2015 to
    March 2016. Sondesky testified that early in her employment, she had a telephone
    conversation with Ellis, in which they agreed that the office was “a mess,” and that it
    would take Sondesky overtime hours to get “all of this straightened out.” App. 56.
    Sondesky testified that Ellis agreed to her additional hours during this conversation and
    that she proceeded to submit weekly timesheets to Ellis reflecting her overtime hours.
    In 2016, Cherry Scaffolding terminated Sondesky for insubordination. Following
    Sondesky’s termination, Cherry Scaffolding filed a lawsuit against Sondesky in a
    1
    Sondesky filed two separate lawsuits—one against Cherry Scaffolding and one
    against Ellis. The cases were consolidated for trial.
    Pennsylvania small claims court, accusing her of stealing money for overtime and
    seeking to recover overtime compensation from Sondesky. Although Sondesky prevailed
    in the suit in small claims court, the matter did not end there. Ellis contacted several of
    Sondesky’s former employers, emailing at least one, and accused Sondesky of stealing
    money from Cherry Scaffolding.
    As a result of Ellis’s actions, Sondesky brought suit against Appellants in the
    Eastern District of Pennsylvania, claiming, inter alia, that: (1) Cherry Scaffolding and/or
    Ellis unlawfully retaliated against her, in violation of the FLSA, by suing her in small
    claims court; (2) Ellis unlawfully retaliated against her, in violation of the FLSA, by
    sending an email to her former employer which stated, among other things, that Sondesky
    stole money from Cherry Scaffolding; and (3) Ellis unlawfully defamed Sondesky when
    he sent that email to her former employer.2 Appellants brought counterclaims for breach
    of fiduciary duty and conversion.
    The District Court held a jury trial. At the close of Sondesky’s case, Appellants
    made a Federal Rule of Civil Procedure 50 motion seeking judgment as a matter of law.
    The District Court denied the motion, and all the claims proceeded to the jury, which
    found in favor of Sondesky and against Appellants with respect to all claims. The jury
    awarded Sondesky $1,000 in compensatory damages for her first retaliation claim, $1 in
    nominal damages for her second retaliation claim, and $100,000 in punitive damages for
    2
    Sondesky’s other claims were either dismissed or withdrawn before trial.
    her defamation claim. The jury did not award compensatory damages for Sondesky’s
    defamation claim.
    Thereafter, Appellants moved for judgment notwithstanding the verdict pursuant
    to Federal Rule of Civil Procedure 50(b), or, in the alternative, a new trial. The District
    Court denied the motion. This timely appeal followed.
    II.    DISCUSSION3
    Appellants argue that the District Court erred in denying its motion for judgment
    notwithstanding the verdict. We exercise plenary review over the District Court’s denial
    of judgment notwithstanding the verdict. In re Lemington Home for the Aged Official
    Comm. of Unsecured Creditors, 
    777 F.3d 620
    , 626 (3d Cir. 2015).
    A motion for judgment notwithstanding the verdict pursuant to Rule 50(b) should
    only be granted “if, as a matter of law, the record is critically deficient of that minimum
    quantity of evidence from which a jury might reasonably afford relief.” 
    Id.
     (quoting
    Trabal v. Wells Fargo Armored Serv. Corp., 
    269 F.3d 243
    , 249 (3d Cir. 2001)). In
    making that determination, “we must examine the record in a light most favorable to
    [Sondesky as the non-moving party], giving her the benefit of all reasonable inferences,
    even though contrary inferences might reasonably be drawn.” 
    Id.
     (quoting Dudley v. S.
    Jersey Metal, Inc., 
    555 F.2d 96
    , 101 (3d Cir. 1977)).
    3
    The District Court had jurisdiction pursuant to 
    28 U.S.C. § 1331
    , because
    Sondesky’s Amended Complaint asserted a claim arising under the FLSA, and
    supplemental jurisdiction over Sondesky’s Pennsylvania state law claims and Cherry
    Scaffolding’s counterclaims pursuant to 
    28 U.S.C. § 1367
    . We have jurisdiction under
    
    28 U.S.C. § 1291
    .
    A. Appellants Forfeited the Argument Regarding Sondesky’s
    Employment Status
    As a preliminary matter, Appellants argue that the District Court erred by finding
    that Sondesky was a non-exempt employee under the FLSA.4 This general issue was
    presented to the District Court, including in a pretrial order and in proposed jury
    instructions. The District Court declined to give those instructions to the jury.5
    However, we need not decide whether that action by the District Court was proper
    because that question is not before us today—Appellants do not appeal the District
    Court’s decision to not instruct the jury on that point. See Barna v. Bd. of Sch. Dirs. of
    the Panther Valley Sch. Dist., 
    877 F.3d 136
    , 145 (3d Cir. 2017) (noting that this Court
    does not reach arguments not raised in an appellant’s opening brief).
    Appellants only appeal the denial of their motion for judgment notwithstanding the
    verdict. Therefore, whether the evidence supported that Sondesky was a non-exempt
    employee, for the purposes of a motion for judgment notwithstanding the verdict, is now
    raised for the first time on appeal.6
    4
    The FLSA creates two classifications of employees—exempt and non-exempt.
    See 
    29 U.S.C. § 213
    . Pursuant to the FLSA, employers are not required to pay exempt
    employees overtime wages. 29 U.S.C §§ 207(a)(1), 213. Thus, Appellants now argue
    that Sondesky was not entitled to overtime pay thereby undermining her retaliation
    claims.
    5
    While the parties do not explain the District Court’s decision on appeal, the
    record supports that the District Court found Sondesky’s employment status was
    irrelevant for determining Sondesky’s retaliation claims.
    6
    To the extent Appellants are insinuating that the District Court was required to
    address this issue sua sponte in its order denying the motion for judgment
    notwithstanding the verdict, they provide no case law or argument to support this
    proposition.
    It is clearly established that this Court does not generally consider arguments that
    are not preserved in the district court. See, e.g., id. at 145–47; Garza v. Citigroup Inc.,
    
    881 F.3d 277
    , 284 (3d Cir. 2018); DIRECTV Inc. v. Seijas, 
    508 F.3d 123
    , 125 n.1 (3d Cir.
    2007). Arguments that are not preserved are either waived or forfeited. Barna, 877 F.3d
    at 146. Appellants have forfeited, rather than waived, this claim as they failed to timely
    assert it before the District Court.7 See id. at 147.
    In civil cases, while this Court does not review waived claims, we will review
    forfeited ones when “exceptional circumstances” exist, such as “when the public interest
    requires that the issue[s] be heard or when a manifest injustice would result from the
    failure to consider the new issue[s].” Id. (quotations and citations omitted) (alterations in
    original). No such circumstances exist here. Accordingly, because Appellants’ argument
    that Sondesky was an exempt employee under the FLSA is forfeited, and because no
    exceptional circumstances exist, we will not reach the merits of this claim.
    B. Sufficient Evidence Supports the Jury’s Verdict
    Appellants contend that the evidence presented at trial was insufficient to support
    the jury’s verdict on both of the retaliation claims. To establish a retaliation claim, a
    plaintiff must show that (1) she engaged in protected activity; (2) she suffered an adverse
    employment decision; and (3) the adverse decision was causally related to the protected
    activity. Daniels v. Sch. Dist. of Phila., 
    776 F.3d 181
    , 193 (3d Cir. 2015).
    7
    Waiver is the “intentional relinquishment or abandonment of a known right,”
    whereas, in contrast, forfeiture “is the failure to make the timely assertion of a right.”
    Barna, 877 F.3d at 147 (quoting United States v. Olano, 
    507 U.S. 725
    , 733 (1993)).
    i. 1st Retaliation Claim
    In addition to its forfeited argument that Sondesky was an exempt employee,
    Appellants contend that trial evidence was insufficient for a jury to conclude that they
    retaliated against Sondesky in violation of the FLSA when they sued her in small claims
    court as a result of her making a complaint asking to be paid overtime. Appellants assert
    that the trial evidence was insufficient because (1) Sondesky engaged in no protected
    activity and (2) there was no causal connection between such complaint and the small
    claims court action. This argument fails because, taking the evidence in the light most
    favorable to Sondesky, there was sufficient evidence presented at trial from which the
    jury reasonably could find that Sondesky engaged in a protected activity and that
    Appellants’ lawsuit was causally related to her filing a complaint seeking overtime.
    “To fall within the scope of the [FLSA] antiretaliation provision, a complaint must
    be sufficiently clear and detailed for a reasonable employer to understand it, in light of
    both content and context, as an assertion of rights protected by the statute and a call for
    their protection.” Kasten v. Saint-Gobain Performance Plastics Corp., 
    563 U.S. 1
    , 14
    (2011). Oral complaints meet this standard. 
    Id.
    At trial, Sondesky testified that, shortly after she began working for Cherry
    Scaffolding, she had a telephone conversation with Ellis asking for overtime wages, and
    that she sent Ellis a weekly breakdown of payroll timesheets that clearly indicated her
    overtime hours. Contrary to Appellants’ argument that these actions do not “even
    remotely suggest an assertion of rights or objection[s],” Appellants’ Br. 23, this is
    sufficient evidence to support the jury’s finding: Sondesky told Ellis she would need to
    work more hours given the state of the business and submitted payroll sheets reflecting
    that request, thus asserting her rights to overtime pay and engaging in a protected activity
    under the FLSA.
    Additionally, there is sufficient evidence presented at trial from which the jury
    could find a causal connection between Sondesky’s protected activity and the small
    claims court action as Ellis testified that once he learned Sondesky had paid herself
    overtime, he pursued action in small claims court. This is sufficient for a jury to find a
    causal connection between Sondesky’s protected activity—a complaint for overtime
    pay—and the small claims action against her.
    Therefore, Appellants’ argument fails.
    ii. 2nd Retaliation Claim
    Appellants also argue that the trial evidence was insufficient for a jury to conclude
    that Ellis retaliated against Sondesky in violation of the FLSA when he sent an email to
    her former employer. In that email, Ellis wrote that Sondesky stole money from Cherry
    Scaffolding, as a result of Sondesky’s protected activity under the FLSA.
    Appellants make this argument only in the heading of a section of the brief. We
    are not clear on the substance of this argument as they make no other reference to it, and
    it is therefore forfeited. See Ethypharm S.A. France v. Abbott Labs., 
    707 F.3d 223
    , 231
    n.13 (3d Cir. 2013) (noting this Court has “consistently held that ‘[a]n issue is waived
    unless a party raises it in its opening brief, and for those purposes a passing reference to
    an issue . . . will not suffice to bring that issue before this court’”) (alterations in original)
    (quoting Laborers’ Int’l Union of N. Am. v. Foster Wheeler Energy Corp., 
    26 F.3d 375
    ,
    398 (3d Cir. 1994)). Therefore, we need not address this scarcely mentioned argument.
    C. Punitive Damages were Permissible
    Appellants contend that the recovery of punitive damages for defamation is not
    permitted under Pennsylvania law when the jury does not award compensatory damages
    if the jury does not also find actual malice.8 Sondesky argues that the jury did find actual
    malice, but even if they did not, punitive damages are permissible when there is a finding
    that the party acted intentionally, recklessly, or with reckless indifference.
    As the District Court noted, under Pennsylvania law, punitive damages may be
    awarded absent compensatory damages as long as there is a cause of action that supports
    the imposition of punitive damages. In fact, Pennsylvania law permits punitive damages
    when there is “conduct that is outrageous, because of the defendant’s evil motive or his
    reckless indifference to the rights of others.” Hutchison ex. rel. Hutchinson v. Luddy, 
    870 A.2d 766
    , 770 (Pa. 2005) (quoting Feld v. Merriam, 
    485 A.2d 742
    , 747 (Pa. 1984)).
    Here, the verdict sheet shows the jury answered in the affirmative as to whether
    “Steven Ellis both act[ed] intentionally or recklessly in sending the email, and act[ed]
    with malice or reckless indifference to the rights of Linda Sondesky[.]” App. 15
    (emphasis added). Thus, the jury actually determined that Ellis acted with actual malice
    or reckless indifference to Sondesky’s rights. Therefore, Appellants’ argument fails.
    8
    To the extent Appellants make a constitutional argument as to the punitive
    damages, this argument has been forfeited as it was not raised in post-trial motions before
    the District Court. Barna, 877 F.3d at 147 (stating that forfeiture is the failure to timely
    raise an argument before the lower court).
    III. CONCLUSION
    For the reasons set forth above, we will affirm the District Court’s order denying
    Appellants’ motion for judgment notwithstanding the verdict, or, in the alternative, a new
    trial.