Austin v. Norfolk S Corp , 158 F. App'x 374 ( 2005 )

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
12-14-2005
Austin v. Norfolk S Corp
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-1568
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No: 04-1568
MELANIE AUSTIN
v.
NORFOLK SOUTHERN CORPORATION;
CONSOLIDATED RAIL CORPORATION,
Appellants
Appeal from the United States District Court
for the Western District of Pennsylvania
(Civ. No. 00-cv-01713)
District Judge: Hon. Robert J. Cindrich
Argued: March 8, 2005
Before: McKEE, RENDELL and NYGAARD, Circuit Judges
(Opinion filed: December 14, 2005)
JAMES S. WHITEHEAD, ESQ. (Argued)
Sidley Austin Brown & Wood LLP
Bank One Plaza
10 S. Dearborn Street
Chicago, IL 60603
THOMAS H. MAY, ESQ.
Dickie, McCamey & Chilcote
Two PPG Place
Suite 400
Pittsburgh, PA 15222
Attorneys for Appellants
1
ZAN IVAN HODZIC, ESQ. (Argued)
Hodzic & Porach LLC
Suite 308
1100 Washington Avenue
Carnegie, PA 15106
Attorney for Appellee
_______________
OPINION
_______________
McKEE, Circuit Judge.
Norfolk Southern Corporation and Consolidated Rail Corporation (“Conrail”)
appeal the district court’s denial of their motions for judgment as a matter of law pursuant
to Fed.R.Civ.P. 50(b), or, in the alternative, for a new trial pursuant to Fed.R.Civ.P. 59
following a jury verdict in favor of Melanie Austin on her claims of sexual harassment,
negligent supervision and retaliation. For the reasons that follow, we hold that the
district court erred in denying the motions for judgment as a matter of law on all of
Austin’s claims. Therefore, we will reverse, and direct the district court to enter judgment
in favor of Norfolk Southern and Conrail, and against Austin on each of her claims.
I. FACTS
Inasmuch as we are writing primarily for the parties, we need not set forth the
factual or procedural background of this case in detail. Accordingly, we will only briefly
summarize the background of this dispute.
Austin began working for Conrail’s predecessor in August, 1991, and became a
2
Conrail employee in May, 1993. She worked for Conrail until June 1, 1999, when she
became an employee of Norfolk Southern Railway Company, a subsidiary of Norfolk
Southern Corporation, following Norfolk Southern’s acquisition of certain Conrail
properties. When this case was argued, she was still employed by Norfolk Southern as a
locomotive engineer.
Austin claimed that, beginning on October 8, 1998 and continuing to May 31,
1999, she was subjected to sexually harassing conduct on the part of several of her fellow
Conrail employees. The conduct included offensive graffiti and offensive comments she
overheard on the company radio. She reported the incidents to her Conrail superiors, and
they took various steps in response including, inter alia, interviewing the employees
Austin believed were responsible for the offensive conduct, posting and re-issuing
Conrail’s sexual harassment policy, and inspecting company property (i.e., the
locomotives) for graffiti. Conrail claimed that it was unable to identify the employees
responsible for the offensive conduct.
Austin further claimed that she was subjected to displays of photographs of nude
women as well as instances of offensive graffiti while an employee of Norfolk Southern.
Finally, she claimed that her 30 day suspension by Norfolk Southern without pay
purportedly because she referred to another employee as a “pervert” in violation of
Norfolk Southern’s sexual harassment policy, was actually illegal retaliation for her
attempts to end the sexual harassment.
II. PROCEDURAL HISTORY
3
Austin filed a complaint against Conrail and Norfolk Southern asserting a claim of
sexual harassment pursuant to Title VII of the Civil Rights Act of 1964, as amended; a
claim of retaliation pursuant to Title VII; and a state law claim of negligent supervision.
After a three day trial, a jury found in favor of Austin and against Norfolk Southern on
her sexual harassment, retaliation and negligent supervision claims; in favor of Austin
and against Conrail on her sexual harassment and negligent supervision claims; and in
favor of Norfolk Southern on her retaliation claim. The jury awarded compensatory
damages of $50 against both Conrail and Norfolk Southern for sexual harassment; $0
against Norfolk Southern for retaliation; and $100,000 against both Conrail and Norfolk
for negligent supervision. Finally, the jury awarded $250,000 in punitive damages
against Norfolk Southern on the retaliation claim. The district court subsequently
remitted the latter award to $175,000, and awarded Austin attorneys’ fees, costs and
interest.
This appeal followed.
III. STANDARD OF REVIEW
We exercise plenary review of an order granting or denying a motion for judgment
as a matter of law. Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993)
(citation omitted).
Such a motion should be granted only if, viewing the evidence in the light
most favorable to the nonmovant and giving it the advantage of every fair
and reasonable inference, there is insufficient evidence from which a jury
could find liability. In determining whether the evidence is sufficient to
sustain liability, the court may not weigh the evidence, determine the
4
credibility of witnesses, or substitute its version of the facts for the jury’s
version. Although judgment as a matter of law should be granted sparingly,
a scintilla of evidence is not enough to sustain a verdict of liability. The
question is not whether there is literally no evidence supporting the party
against whom the motion is directed but whether there is evidence upon
which the jury could properly find a verdict for that party.
Id. (citations and internal quotations omitted).
IV. DISCUSSION
A. Sexual Harassment under Title VII.
29 C.F.R. § 1604.11, provides, in relevant part, as follows:
(a) Harassment on the basis of sex is a violation of Sec. 703 of Title VII.
Unwelcome sexual advances, requests for sexual favors, and other verbal or
physical conduct of a sexual nature constitute sexual harassment when . . .
(3) such conduct has the purpose or effect of unreasonably interfering with
an individual's work performance or creating an intimidating, hostile, or
offensive working environment.
...
(d) With respect to conduct between fellow employees, an employer is
responsible for acts of sexual harassment in the workplace where the
employer (or its agents or supervisory employees) knows or should have
known of the conduct, unless it can show that it took immediate and
appropriate corrective action.
29 C.F.R. § 1604.11 (2005).
(I). Conrail.
In reviewing the denial of Conrail’s motion for judgment as a matter of law, we
must determine whether a reasonable jury could have found that Conrail failed to take
“immediate and appropriate corrective action” to stop Austin’s fellow employees from
sexually harassing her. We do not believe that a jury could reasonably conclude that
Conrail failed to take corrective action given the evidence here. Admittedly, Conrail was
5
never able to determine who wrote the offensive graffiti or who made the offensive
comments over the radio. However, Conrail’s supervisors met frequently with Austin,
posted notices of Conrail’s sexual harassment policy, interviewed the employees Austin
identified as suspects, included sexual harassment training in its safety meetings,
inspected locomotives for graffiti, and removed graffiti. Conrail even went so far as to
contact Austin’s local union representative and ask him to address the subject of graffiti
with the union’s members.
Moreover, Conrail’s corrective response was effective. Austin took photographs
of the offensive graffiti. She photographed eleven instances of graffiti in September,
October and November. However, she photographed no graffiti during December, 1998.
She saw only four instances of graffiti in January, 1999 and only two in February, 1999.
Austin did not testify that she saw any graffiti at Conrail after February, 1999, or that she
heard any inappropriate radio comments after December 6, 1998.1
Accordingly, we believe that the district court erred in denying Conrail’s motion
for judgment as a matter of law on Austin’s sexual harassment claim.
(ii). Norfolk Southern.
1
Austin attempts to use the fact that Meese gave her a bottle of acetone to use to
erase any offensive graffiti she found on locomotives as evidence that there was an
environment of sexual harassment and a failure by Conrail to take effective corrective
action. However, her attempt is misleading. Conrail inspected the locomotives Austin
was scheduled to operate for offensive graffiti and had any such graffiti removed. Meese
gave the acetone to Austin to remove graffiti she found offensive only in those instances
were she worked alone and there was no one else present who could remove it.
6
Austin testified about three instances of sexual harassment after she became a
Norfolk Southern employee on June 1, 1999. They included one instance of vulgar
graffiti on a locomotive in September, 1999; the phrase “Psycho B-C-H” painted on a
tower owned by Boswell Oil Company; and a Playboy magazine pin-up posted in a mine
shed owned by a Norfolk Southern customer in February 2000.
However, these three instances are insufficient to allow a reasonable jury to find
Norfolk Southern liable for failing to take corrective action to prevent the creation of an
“intimidating, hostile, or offensive working environment.” Although Austin saw one
instance of vulgar graffiti on a Norfolk Southern locomotive, she never described the
graffiti or said why she considered it vulgar. A Title VII hostile environment claim
requires proof of pervasive or severe intentional discrimination that affected the plaintiff
and would also affect a reasonable person. Bouton v. BMW of North America, Inc., 29
F.3d 103, 107 (3d Cir. 1994). Absent evidence of the nature of the graffiti, the jury could
not properly conclude that it was sufficiently pervasive or offensive to support a cause of
action.
The remaining two instances of graffiti did not occur on property owned by
Norfolk Southern. Austin did not produce evidence that the property was under Norfolk
Southern’s control, nor did she produce evidence linking those instances to fellow
Norfolk Southern employees. Although it is arguable that the jury might infer that
Norfolk Southern employees were responsible for the graffiti, and even that “psycho B C
H” referred to Austin, those two instances do not constitute an environment of harassment
7
sufficiently severe to support a cause of action for sexual harassment. Moreover, we do
not understand what more Norfolk Southern could have done to learn the identity of the
perpetrator(s), or stop the graffiti sooner.
Thus, the district court should have granted Norfolk Southern’s motion for
judgment as a matter of law on Austin’s sexual harassment claim.
B. Negligent Supervision.
As noted above, Austin asserted state law negligent supervision claims against
Conrail and Norfolk Southern. All parties agree that Pennsylvania law governs this claim
and that Pennsylvania courts look to the Restatement (Second) of Torts, § 317 to
determine an employer’s liability for the negligent supervision of its employees. See,
e.g., Hutchinson by Hutchinson v. Liddy, 742 A.2d 1052, 1062 (Pa. 1999). Austin’s
negligent supervision claim was sent to the jury without objection to the following
instruction:
\ [Austin’s] third claim, negligent supervision is asserted under Pennsylvania
law. Under Pennsylvania law, an employer has a duty to exercise
reasonable supervision over its employees to prevent sexual harassment in
the workplace.
**************
Last, we’ll discuss negligent supervision. In order to prevail on her
negligent supervision claim, [Austin] must prove each of the following
essential elements by a preponderance of the evidence.
First, that [Conrail and Norfolk Southern] had the ability to control their
employees. Second, that [Conrail and Norfolk Southern] knew or should
have known of the necessity and opportunity for exercising such control of
their employees. Third, that [Conrail and Norfolk Southern] negligently
8
failed to control their employees. And, fourth, that [Austin] was injured as
a result of [Conrail’s and Norfolk Southern’s] failures.
Therefore, you can only find for [Austin] if you find that [Austin] has
proved by a preponderance of the evidence that [Conrail and Norfolk
Southern] knew or in the exercise of ordinary care should have known of
the improper activities or their employees and then failed to take
appropriate supervisory action. Even if you find the behavior of [Austin’s]
co-workers to have been improper, you must find for [Conrail and Norfolk
Southern] if you find that [Conrail and Norfolk Southern] exercised
reasonable care in responding to [Austin’s] complaints and in taking
appropriate action.
App. 459, 467 (emphasis added).
Given the controlling legal principles, Austin’s state law negligent supervision
claim is little more than a restatement of her Title VII sexual harassment claim, and our
discussion of her title VII claim applies with equal force to her negligent supervision
claim. Accordingly, for the reasons set forth above, we believe the district court erred in
denying Conrail and Norfolk Southern’s motions for judgment as a matter of law on that
claim as well.2
C. Retaliation.
On May 27, while employed by Conrail, Austin had a radio conversation with a
Conrail dispatcher. After Austin and the dispatcher became Norfolk Southern employees,
2
Conrail and Norfolk Southern argue, inter alia, that the district court erred in
denying their motions for judgment as a matter of law because § 317 of the Restatement
requires proof of bodily injury and that Austin produced no evidence of any bodily injury.
Appellants’ Br. at 27-30. However, since Austin has not demonstrated the required
negligence, we need not respond to the assertion that that Restatement requires proof of
bodily injury.
9
the dispatcher, an acknowledged homosexual, complained that Austin had called him a
pervert during the course of that radio conversation. Norfolk Southern reviewed a tape
recording of that conversation and determined that Austin did in fact call the dispatcher a
pervert. Following a disciplinary hearing, Norfolk Southern suspended Austin for thirty
days without pay for violating Norfolk Southern’s sexual harassment policy. Austin
appealed the suspension and an arbitration board reversed it and awarded back pay for the
period of the suspension.3
Austin asserted that Norfolk Southern’s proffered reason for suspending her was a
pretext and that she was really suspended for complaining about sexual harassment while
a Conrail employee. The jury agreed, and the district court denied Norfolk Southern’s
motion for judgment as a matter of law on that claim.
However, we believe that there is insufficient evidence to support the jury’s
conclusion that Norfolk Southern’s reason for suspending Austin was a pretext for illegal
retaliation. Admittedly, there is evidence, which at first blush, could support a finding of
pretext. Austin testified to an incident which occurred in October 1989, when she
overheard two Conrail employees joking about graffiti. She reported the incident to
Conrail’s Road Foreman of Engines, Curtis Meese, who met with the two employees.
3
Norfolk Southern gave a copy of the tape to Austin’s union which sent the tape to
an outside expert for analysis. The expert concluded that the word “pervert” was spoken
on the tape. After listening to the tape several times, the arbitration board reversed the
suspension because it could not make a clear and unequivocal finding that Austin had
actually used the term.
10
They told Meese that they were joking, that they understood Conrail’s policy on sexual
harassment and that they would not joke about the graffiti again. They were not
disciplined, yet Austin was suspended for violating the sexual harassment policy.
However, the problem with Austin’s claim of pretext arises from the fact that she
worked for two companies – Conrail and then Norfolk. Conrail did not suspend her;
Norfolk did. Austin offered no evidence that any other Norfolk employee had violated
the company’s sexual harassment policy without being suspended. Therefore, we can not
find pretext based on the Meese incident without imputing Conrail’s failure to discipline
to Norfolk. However, Austin offers no authority for the proposition that a former
employer’s conduct can be imputed to a subsequent employer to show retaliation by the
latter.
Austin appears to argue that Conrail’s failure to discipline the employees Meese
spoke with can be imputed to Norfolk because of the “seamless” integration of the
operations of the two companies. For example, she writes: “It should be noted the
evidence was undisputed there was no interruption in operations and procedures as a
result of acquisition. (As a matter of fact, the same relevant personnel retained their
positions and became the respective employees of Norfolk Southern.)” Austin’s Br. at 4-
5 (emphasis in original). However, she offers no record citation to support these
statements, and there is testimony to the contrary. O’Donnell, Conrail’s director of equal
employment, testified that on June 1, 1999, Conrail’s multi-state operations were divided
11
between Norfolk and CSX, but that Conrail did not go out of business. It retained small
railroad freight operations in Detroit, northern New Jersey and the Philadelphia area.
App. 329. O’Donnell also testified that he remained with Conrail but had nothing to do
with either Norfolk or CSX. Id.
The district court based Norfolk’s liability for sexual harassment on the theory of
successor liability. App. 9. That might be the source of Austin’s seamless integration
argument on her retaliation claim. However, the district court erred in relying upon
successor liability.
“In general, in the context of employment discrimination, the doctrine of successor
liability applies where the assets of the defendant employer are transferred to another
entity.” Rego v. ARC Water Treatment Co. of Pa., 181 F.3d 396, 401 (3d Cir. 1999).
“The doctrine allows an aggrieved employee to enforce against a successor employer a
claim or judgment he could not have enforced against the predecessor.” Id. There are
“three principal factors” applicable to finding successor liability in employment
discrimination cases: “(1) continuity in operations and work force of the successor and
predecessor employers; (2) notice to the successor employer of its predecessor’s legal
obligations; and (3) ability of the predecessor to provide adequate relief directly.” Id. at
402. At most, the district court addressed only the first factor.4
4
In its opinion, the district court wrote that there was never a distinction drawn
between Norfolk and Conrail and it observed that the same counsel represented both
entities. Yet, the district court charged the jury that it had to consider the evidence
(continued...)
12
Moreover, even if it is assumed for argument’s sake that successor liability
existed, it would still not support Austin’s claim against Norfolk. Under that doctrine,
Norfolk would be liable as Conrail’s successor for discriminatory acts suffered by Austin
while a Conrail employee if she was unable to satisfy a judgment or claim against
Conrail. However, we have been unable to find any successor liability case that would
permit a jury to impute Conrail’s failure to discharge employees who violated its sexual
harassment policy to Norfolk and thus find that Norfolk retaliated against Austin when
she was disciplined for violating its own sexual harassment policy.5
Accordingly, the district court erred by denying Norfolk Southern’s motion for
judgment as a matter of law on the retaliation claim.6
4
(...continued)
against each entity separately.
5
The water is even muddier here because Austin purportedly called the dispatcher
a pervert while both were Conrail employees. However, he did not report it until both had
become Norfolk employees. As Norfolk argues: it “was presented with a complaint by [a
Norfolk] employee about conduct that potentially poisoned the working relationship at
[Conrail].” Reply Br. at 27.
6
We also note that there are serious flaws in the district court’s disposition of
Norfolk Southern’s motion for a judgment of law on the retaliation claim. In denying that
motion, the district court wrote, inter alia:
Viewing the evidence in a light most favorable to Austin, and giving her
the advantage of every fair and reasonable inference, a jury reasonably
could find that this proffered reason for the suspension was a pretext. For
example, the company went to the effort of obtaining a voice analysis of
the radio broadcast to determine whether Austin uttered the work “pervert.”
Although Austin had previously complained of harassment on numerous
(continued...)
13
V. CONCLUSION
For all of the above reasons, we will reverse the district court’s denial of Conrail’s
and Norfolk Southern’s motions for judgment as a matter of law on each of the claims
6
(...continued)
occasions, including over the radio, the company never went to such
extreme lengths to identify those offending individuals. Indeed, this
glaring inconsistency in and of itself would support a finding of pretext.
App. 10. However, this is inaccurate. Norfolk did not send the tape for voice analysis to
identify Austin or to determine if she used word “pervert” on its own. Rather, Norfolk
provided a copy of the tape to Austin’s union. It did so because of a grievance that was
properly filed. The union then sent the tape for an independent analysis. See n.2, supra.
Therefore, we do not see any “glaring inconsistency.”
Furthermore, in finding pretext based upon Norfolk Southern’s sexual harassment
policy, the district court wrote:
There were also weaknesses in the company’s claim that uttering the word
pervert violated the sexual harassment policy. The company claimed that it
was concerned that an openly gay employee may have perceived such
comment as being directed at him. There is nothing inherently gender
related, however, in the word pervert. Moreover, even if a gay employee
had been offended by such comment, sexual preference is not a protected
category under Title VII and therefore would not have been a violation of
the sexual harassment policy.
App. 10. However, as Norfolk correctly notes, an employer can certainly adopt a
harassment policy that gives greater protection against sexual harassment than Title VII.
Moreover, Norfolk has operations in states where sexual preference discrimination is
prohibited under state law, and it is therefore not evidence of pretext that it had adopted a
policy that complies with the more generous law of those states.
14
discussed above.7
NYGAARD, Circuit Judge, Dissenting in part.
I join those sections of the Majority opinion that reverse the District Court's denial
of Conrail and Norfolk’s motions for judgment as a matter of law on Austin’s claims of
hostile work environment, negligent supervision. I disagree with the Majority's treatment
of Austin’s retaliation claim and would affirm the District Court on that issue.
I. The Retaliation Claim
To analyze a claim of illegal retaliation, we must follow a modified version of the
burden shifting framework established in McDonnell Douglas Corp v. Green, 411 U.S.
792 (1973). See Woodson v. Scott Paper Co., 109 F.3d 913, 920 (3d Cir. 1997). First, a
plaintiff must establish a prima facie case of retaliation by showing: (1) that she engaged
in a protected activity; (2) that she suffered an adverse employment action either after or
contemporaneous with the protected activity; and (3) the existence of a causal connection
between the protected activity and the adverse employment action. Id. If a plaintiff
establishes the prima facie case, the burden of production shifts to the employer to
“articulate some legitimate, nondiscriminatory reason” for its adverse employment action.
7
Our reversal of the denials of the motions for judgment as a matter of law
“implicates the decision not only of the trial court, but also the verdict of the jury.”
Andrews v. City of Philadelphia, 895 F.2d 1469, 1478 (3d Cir. 1990). Accordingly, our
decision negates the award of punitive damages as well as of the awards of attorneys’
fees, costs and interest to Austin.
15
Id. At that point, a plaintiff must prove that the proffered reason was merely a pretext and
that in actuality, a retaliatory animus played a determinative or at least a motivating role in
the employer’s decisionmaking process. Shellenberger v. Summit Bancorp, Inc., 318 F.3d
183 (3d Cir. 2003). To do this, a plaintiff must “demonstrate such weaknesses,
implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s
proffered legitimate reasons for its action that a reasonable factfinder could rationally find
them unworthy of credence.” Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir. 1994) (citation
and quotation omitted).
Austin’s claim of retaliation stems from her thirty-day suspension for allegedly
calling her co-worker a pervert. She claims that the suspension was actually in retaliation
for her complaints of sexual harassment. Norfolk Southern counters that Austin was
suspended because she violated the company sexual harassment policy. The jury returned
a verdict in favor of Austin on this claim and Norfolk Southern filed motions for judgment
as a matter of law and a new trial, both of which the District Court denied. Although not
entirely clear from its brief, on appeal, it seems Norfolk Southern contends that Austin
failed to demonstrate either the causal connection prong of the prima facie case or that its
proffered legitimate, nondiscriminatory reason was a pretext for retaliatory animus. I
reject this argument.
When viewed in the light most favorable to Austin, a jury could have reasonably
found both the existence of a causal connection between her complaint and her suspension
and that retaliatory animus played a role in Norfolk Southern’s decision to suspend her.
16
This conclusion is supported by the fact that Norfolk Southern sent out the tape of Austin
allegedly calling a co-worker a pervert for expert analysis and yet the same was not done
for the radio comments others made about her. It is true, as Norfolk Southern points out,
that Conrail was Austin’s employer at the time of the offensive radio comments about her.
Nevertheless, much as Austin did, nearly all of the relevant decisionmakers at Conrail took
similar positions with Norfolk Southern. Armed with this piece of evidence, a jury could
reasonably have concluded that Norfolk Southern’s articulated reason for suspending
Austin—that she violated the sexual harassment policy—was at least partially motivated
by a desire to retaliate against her for complaining about sexual harassment a few months
earlier. Cf. Farrell v. Planters Lifesavers Co., 206 F.3d 271, 280–81 (3d Cir. 2000)
(noting that suspect timing, ongoing antagonism between employee and employer, and
other circumstantial evidence may suffice to establish the causal connection prong of a
prima facie retaliation claim). Thus, Norfolk Southern’s request for judgment as a matter
of law must fail and, in my view, the District Court correctly denied the motion.
Norfolk Southern’s motion for a new trial fails for the same reason. When a jury
verdict against the weight of the evidence results in a miscarriage of justice or shocks the
conscience, a new trial should be ordered. Greenleaf, 174 F.3d at 365. However, we
review a district court’s determination on that question for abuse of discretion. Id.
Although the evidence in this case suggests that Austin did in fact violate the company
sexual harassment policy, and that Norfolk Southern’s suspension of Austin was done for
a legitimate reason, the differing treatment of the radio comments supports a contrary
17
conclusion. Because there is some evidence supporting the jury’s verdict, I cannot say the
District Court abused its discretion by holding that the verdict was not so against the
weight of the evidence that it shocks the conscience or resulted in a miscarriage of justice.
I would affirm the District Court’s denial of Norfolk Southern’s motions for judgment as a
matter of law and for a new trial on Austin’s retaliation claim.
II. Punitive Damages
Although I would hold that Austin prevailed on her retaliation claim against
Norfolk Southern, it is important to note that the jury awarded her no compensatory
damages because her suspension was overturned by an arbitration panel and she received
full back pay for the days of work she missed. The jury did award her $250,000 in
punitive damages, which the District Court remitted to $175,000. Inasmuch as the
Majority reverses the District Court on Austin’s retaliation claim, it does not discuss
Norfolk Southern’s argument that the award of punitive damages was excessive and a
violation of due process.
Due process prohibits grossly excessive or arbitrary punitive damage awards.
Campbell, 538 U.S. at 416.8 In determining whether a punitive damages award is grossly
8
More accurately, the Supreme Court has held that the Due Process Clause of the
Fourteenth Amendment prohibits state courts from imposing grossly excessive punitive
damages against tortfeasors. Campbell, 538 U.S. at 416. The Court has not determined
whether this prohibition applies equally to the imposition of punitive damages in federal
court for a violation of Title VII through the Due Process Clause of the Fifth Amendment
or otherwise. This Court has not addressed the issue either; nor did the District Court or
either party. Several Courts of Appeal, however, have applied the standard enunciated by
the Supreme Court for grossly excessive punitive damage awards in state courts to Title
(continued...)
18
excessive, courts must consider three guideposts: “(1) the degree of reprehensibility of the
defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by
the plaintiff and the punitive damages award; and (3) the difference between the punitive
damages awarded by the jury and the civil penalties authorized or imposed in comparable
cases.” Id. (citing BMW of North America v. Gore, 517 U.S. 559, 575 (1996)). Each of
these guideposts demonstrates that the punitive damages awarded in the present case
cannot stand consistent with due process. I would reverse the District Court on this claim.
A. Reprehensibility
The Court has held that the degree of reprehensibility of the defendant’s conduct is
the “most important indicium” of the constitutionality of a punitive damages award.
Campbell, 538 U.S. at 419. In measuring the degree of reprehensibility, we are to
consider: whether the harm caused was physical as opposed to economic; whether the
defendant’s actions evinced indifference to or reckless disregard for the health and safety
or others; the financial vulnerability of the victim; whether the conduct was repetitive or
isolated; and whether the harm was the result of intentional malice, trickery, deceit, or
mere accident. Id. The absence of all of these factors renders suspect a punitive damages
award, but the existence of any one is not necessarily sufficient. Id.
8
(...continued)
VII cases. See, e.g. MacGregor v. Mallincrodkt, Inc., 373 F.3d 923, 932–33 (8th Cir.
2004); E.E.O.C. v. Harbert-Yeargin, Inc., 266 F.3d 498, 514 (6th Cir. 2001); E.E.O.C. v.
W&O, Inc., 213 F.3d 600, 614–17 (11th Cir. 2000); Romano v. U-Haul, Int’l, 233 F.3d
655, 672–74 (1st Cir. 2000); Deters v. Equifax Credit Info. Sys., Inc., 202 F.3d 1262,
1272–73 (10th Cir. 2000).
19
The only factor in the reprehensibility analysis that is even arguably present here is
the existence of intentional malice in the suspension of Austin, and that factor is
questionable. It appears from the record that Norfolk Southern reasonably believed Austin
violated the company sexual harassment policy. It got independent expert confirmation
that she referred to a homosexual co-worker as a pervert. Because its sexual harassment
policy prohibited offensive comments on the basis of sexual orientation, Norfolk Southern
deemed this comment to be a violation of company policy. Its suspension of Austin,
therefore, appears to be in good faith.9
Moreover, no other factor in the analysis is present. To the extent Austin suffered
any harm from her suspension, see Part II, B., infra, it was economic not physical. There
is no evidence Norfolk Southern was indifferent to her health or safety. Nor is there
evidence that the suspension put her in a financially vulnerable position. And, finally, the
suspension was an isolated, not a repeated, incident. For these reasons, the degree of
reprehensibility of Norfolk Southern’s conduct—the most important indicium of the
constitutionality of a punitive damages award—is at most, rather slight.
B. Disparity Between the Actual or Potential Harm Suffered
9
This holding may seem inconsistent with the holding in Part III, supra, that the
jury could have reasonably found Austin’s suspension to be retaliatory, but it is not. Our
ability to weigh the evidence is far greater when reviewing the award of punitive damages
for excessiveness than it is when reviewing a jury verdict on a motion for judgment as a
matter of law or for a new trial. See Campbell, 538 U.S. at 418 (noting that appellate
courts must conduct de novo review for claims regarding the excessiveness of punitive
damages awards). Thus, we may import our own opinion as to the motivations behind
Norfolk Southern’s conduct more freely on the question of punitive damages than we may
when reviewing the verdict on the retaliation claim itself.
20
and the Punitive Damages Awarded
The Court has not set “concrete constitutional limits” on the permissible ratio
between the actual or potential harm suffered by the plaintiff and the punitive damages
awarded. Id. at 424. It has cautioned, however, that “in practice, few awards exceeding a
single-digit ratio between punitive and compensatory damages, to a significant degree, will
satisfy due process. Id. at 425. A larger ratio may comport with due process where “a
particularly egregious act has resulted in only a small amount of economic damages.”
Gore, 517 U.S. at 582. In essence, a reviewing court must determine whether the amount
of punitive damages awarded is “both reasonable and proportionate to the amount of harm
to the plaintiff and to the general damages recovered.” Campbell, 538 U.S. at 426.
The amount of punitive damages awarded to Austin for her retaliatory suspension
was neither reasonable nor proportionate when compared to the actual or potential harm to
her from that suspension. According to the jury, Austin suffered no actual harm; it
awarded her nothing in compensatory damages. That award indeed appears correct.
Austin lost no wages from her suspension because she was reinstated with full back pay by
the arbitration panel. Had she not been reinstated, her potential harm would have been
realized as the loss of thirty days’ pay. Unless Austin’s salary as an engineer was
$14,583.33 a month—an almost unbelievable figure—the $175,000 in punitive damages
exceeded the 10:1 ratio set forth by the Court as a benchmark. See Campbell, 538 U.S. at
425. In all probability, the ratio went well beyond 10:1.
While a “particularly egregious act” by a defendant causing only a small amount of
21
economic damages can support a larger ratio, there does not appear to be any such
egregious conduct by Norfolk Southern here. As discussed more fully in Part IV.A.,
supra, Norfolk Southern did not appear to have physically harmed Austin or have taken
advantage of her financial vulnerability. Nor did it act in bad faith. On the contrary, it
participated in the arbitration proceedings concerning Austin’s suspension and abided by
the arbitration panel’s decision reinstating Austin with full back pay.
Austin suffered no actual harm from her suspension. At most her potential harm
was the loss of thirty days’ salary. By contrast, Austin received $175,000 in punitive
damages, a figure that dwarfs even her potential harm.
C. Difference Between the Punitive Damages and the Civil Penalties Authorized or
Imposed in Comparable Cases
Pursuant to statute, the maximum allowable award of non-economic damages for a
violation of Title VII by an employer with over 500 employees is $300,000.10 42 U.S.C. §
1981a(b)(3)(C). Because the punitive damage award was well under the statutory cap, this
factor weighs in Austin’s favor.
D. Synthesis of the Three Guideposts
A comparison of the three guideposts set forth by the Supreme Court to determine
whether a punitive damage award is grossly excessive reveals that the $175,000 in
punitive damages does not comport with due process. The most important factor, the
degree of reprehensibility of the defendant’s conduct, or lack thereof, weighs heavily in
10
As of December 31, 2003, Norfolk Southern had over 28,000 employees.
22
favor of Norfolk Southern. The same can be said for the vast ratio between the punitive
damages and the actual or potential harm to Austin. Only the final factor, a comparison of
the punitive damages she received with the statutory cap favors her. Accordingly, the
award of $175,000 in punitive damages for Austin’s thirty day suspension is grossly
excessive within the meaning of due process. I would, therefore, vacate the award and
remand with instructions to hold a new trial on punitive damages.
23
Austin v. Norfolk Southern, No. 04-1568
NYGAARD, Circuit Judge, Dissenting in part.
I join those sections of the Majority opinion that reverse the District Court's denial
of Conrail and Norfolk’s motions for judgment as a matter of law on Austin’s claims of
hostile work environment, negligent supervision. I disagree with the Majority's treatment
of Austin’s retaliation claim and would affirm the District Court on that issue.
I. The Retaliation Claim
To analyze a claim of illegal retaliation, we must follow a modified version of the
burden shifting framework established in McDonnell Douglas Corp v. Green, 411 U.S.
792 (1973). See Woodson v. Scott Paper Co., 109 F.3d 913, 920 (3d Cir. 1997). First, a
plaintiff must establish a prima facie case of retaliation by showing: (1) that she engaged
in a protected activity; (2) that she suffered an adverse employment action either after or
contemporaneous with the protected activity; and (3) the existence of a causal connection
between the protected activity and the adverse employment action. Id. If a plaintiff
establishes the prima facie case, the burden of production shifts to the employer to
“articulate some legitimate, nondiscriminatory reason” for its adverse employment action.
Id. At that point, a plaintiff must prove that the proffered reason was merely a pretext and
that in actuality, a retaliatory animus played a determinative or at least a motivating role in
the employer’s decisionmaking process. Shellenberger v. Summit Bancorp, Inc., 318 F.3d
24183 (3d Cir. 2003). To do this, a plaintiff must “demonstrate such weaknesses,
implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s
proffered legitimate reasons for its action that a reasonable factfinder could rationally find
them unworthy of credence.” Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir. 1994) (citation
and quotation omitted).
Austin’s claim of retaliation stems from her thirty-day suspension for allegedly
calling her co-worker a pervert. She claims that the suspension was actually in retaliation
for her complaints of sexual harassment. Norfolk Southern counters that Austin was
suspended because she violated the company sexual harassment policy. The jury returned
a verdict in favor of Austin on this claim and Norfolk Southern filed motions for judgment
as a matter of law and a new trial, both of which the District Court denied. Although not
entirely clear from its brief, on appeal, it seems Norfolk Southern contends that Austin
failed to demonstrate either the causal connection prong of the prima facie case or that its
proffered legitimate, nondiscriminatory reason was a pretext for retaliatory animus. I
reject this argument.
When viewed in the light most favorable to Austin, a jury could have reasonably
found both the existence of a causal connection between her complaint and her suspension
and that retaliatory animus played a role in Norfolk Southern’s decision to suspend her.
This conclusion is supported by the fact that Norfolk Southern sent out the tape of Austin
allegedly calling a co-worker a pervert for expert analysis and yet the same was not done
for the radio comments others made about her. It is true, as Norfolk Southern points out,
25
that Conrail was Austin’s employer at the time of the offensive radio comments about her.
Nevertheless, much as Austin did, nearly all of the relevant decisionmakers at Conrail took
similar positions with Norfolk Southern. Armed with this piece of evidence, a jury could
reasonably have concluded that Norfolk Southern’s articulated reason for suspending
Austin—that she violated the sexual harassment policy—was at least partially motivated
by a desire to retaliate against her for complaining about sexual harassment a few months
earlier. Cf. Farrell v. Planters Lifesavers Co., 206 F.3d 271, 280–81 (3d Cir. 2000)
(noting that suspect timing, ongoing antagonism between employee and employer, and
other circumstantial evidence may suffice to establish the causal connection prong of a
prima facie retaliation claim). Thus, Norfolk Southern’s request for judgment as a matter
of law must fail and, in my view, the District Court correctly denied the motion.
Norfolk Southern’s motion for a new trial fails for the same reason. When a jury
verdict against the weight of the evidence results in a miscarriage of justice or shocks the
conscience, a new trial should be ordered. Greenleaf, 174 F.3d at 365. However, we
review a district court’s determination on that question for abuse of discretion. Id.
Although the evidence in this case suggests that Austin did in fact violate the company
sexual harassment policy, and that Norfolk Southern’s suspension of Austin was done for
a legitimate reason, the differing treatment of the radio comments supports a contrary
conclusion. Because there is some evidence supporting the jury’s verdict, I cannot say the
District Court abused its discretion by holding that the verdict was not so against the
weight of the evidence that it shocks the conscience or resulted in a miscarriage of justice.
26
I would affirm the District Court’s denial of Norfolk Southern’s motions for judgment as a
matter of law and for a new trial on Austin’s retaliation claim.
II. Punitive Damages
Although I would hold that Austin prevailed on her retaliation claim against
Norfolk Southern, it is important to note that the jury awarded her no compensatory
damages because her suspension was overturned by an arbitration panel and she received
full back pay for the days of work she missed. The jury did award her $250,000 in
punitive damages, which the District Court remitted to $175,000. Inasmuch as the
Majority reverses the District Court on Austin’s retaliation claim, it does not discuss
Norfolk Southern’s argument that the award of punitive damages was excessive and a
violation of due process.
Due process prohibits grossly excessive or arbitrary punitive damage awards.
Campbell, 538 U.S. at 416.11 In determining whether a punitive damages award is grossly
excessive, courts must consider three guideposts: “(1) the degree of reprehensibility of the
11
More accurately, the Supreme Court has held that the Due Process Clause of the
Fourteenth Amendment prohibits state courts from imposing grossly excessive punitive
damages against tortfeasors. Campbell, 538 U.S. at 416. The Court has not determined
whether this prohibition applies equally to the imposition of punitive damages in federal
court for a violation of Title VII through the Due Process Clause of the Fifth Amendment
or otherwise. This Court has not addressed the issue either; nor did the District Court or
either party. Several Courts of Appeal, however, have applied the standard enunciated by
the Supreme Court for grossly excessive punitive damage awards in state courts to Title
VII cases. See, e.g. MacGregor v. Mallincrodkt, Inc., 373 F.3d 923, 932–33 (8th Cir.
2004); E.E.O.C. v. Harbert-Yeargin, Inc., 266 F.3d 498, 514 (6th Cir. 2001); E.E.O.C. v.
W&O, Inc., 213 F.3d 600, 614–17 (11th Cir. 2000); Romano v. U-Haul, Int’l, 233 F.3d
655, 672–74 (1st Cir. 2000); Deters v. Equifax Credit Info. Sys., Inc., 202 F.3d 1262,
1272–73 (10th Cir. 2000).
27
defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by
the plaintiff and the punitive damages award; and (3) the difference between the punitive
damages awarded by the jury and the civil penalties authorized or imposed in comparable
cases.” Id. (citing BMW of North America v. Gore, 517 U.S. 559, 575 (1996)). Each of
these guideposts demonstrates that the punitive damages awarded in the present case
cannot stand consistent with due process. I would reverse the District Court on this claim.
A. Reprehensibility
The Court has held that the degree of reprehensibility of the defendant’s conduct is
the “most important indicium” of the constitutionality of a punitive damages award.
Campbell, 538 U.S. at 419. In measuring the degree of reprehensibility, we are to
consider: whether the harm caused was physical as opposed to economic; whether the
defendant’s actions evinced indifference to or reckless disregard for the health and safety
or others; the financial vulnerability of the victim; whether the conduct was repetitive or
isolated; and whether the harm was the result of intentional malice, trickery, deceit, or
mere accident. Id. The absence of all of these factors renders suspect a punitive damages
award, but the existence of any one is not necessarily sufficient. Id.
The only factor in the reprehensibility analysis that is even arguably present here is
the existence of intentional malice in the suspension of Austin, and that factor is
questionable. It appears from the record that Norfolk Southern reasonably believed Austin
violated the company sexual harassment policy. It got independent expert confirmation
that she referred to a homosexual co-worker as a pervert. Because its sexual harassment
28
policy prohibited offensive comments on the basis of sexual orientation, Norfolk Southern
deemed this comment to be a violation of company policy. Its suspension of Austin,
therefore, appears to be in good faith.12
Moreover, no other factor in the analysis is present. To the extent Austin suffered
any harm from her suspension, see Part II, B., infra, it was economic not physical. There
is no evidence Norfolk Southern was indifferent to her health or safety. Nor is there
evidence that the suspension put her in a financially vulnerable position. And, finally, the
suspension was an isolated, not a repeated, incident. For these reasons, the degree of
reprehensibility of Norfolk Southern’s conduct—the most important indicium of the
constitutionality of a punitive damages award—is at most, rather slight.
B. Disparity Between the Actual or Potential Harm Suffered
and the Punitive Damages Awarded
The Court has not set “concrete constitutional limits” on the permissible ratio
between the actual or potential harm suffered by the plaintiff and the punitive damages
awarded. Id. at 424. It has cautioned, however, that “in practice, few awards exceeding a
single-digit ratio between punitive and compensatory damages, to a significant degree, will
12
This holding may seem inconsistent with the holding in Part III, supra, that the
jury could have reasonably found Austin’s suspension to be retaliatory, but it is not. Our
ability to weigh the evidence is far greater when reviewing the award of punitive damages
for excessiveness than it is when reviewing a jury verdict on a motion for judgment as a
matter of law or for a new trial. See Campbell, 538 U.S. at 418 (noting that appellate
courts must conduct de novo review for claims regarding the excessiveness of punitive
damages awards). Thus, we may import our own opinion as to the motivations behind
Norfolk Southern’s conduct more freely on the question of punitive damages than we may
when reviewing the verdict on the retaliation claim itself.
29
satisfy due process. Id. at 425. A larger ratio may comport with due process where “a
particularly egregious act has resulted in only a small amount of economic damages.”
Gore, 517 U.S. at 582. In essence, a reviewing court must determine whether the amount
of punitive damages awarded is “both reasonable and proportionate to the amount of harm
to the plaintiff and to the general damages recovered.” Campbell, 538 U.S. at 426.
The amount of punitive damages awarded to Austin for her retaliatory suspension
was neither reasonable nor proportionate when compared to the actual or potential harm to
her from that suspension. According to the jury, Austin suffered no actual harm; it
awarded her nothing in compensatory damages. That award indeed appears correct.
Austin lost no wages from her suspension because she was reinstated with full back pay by
the arbitration panel. Had she not been reinstated, her potential harm would have been
realized as the loss of thirty days’ pay. Unless Austin’s salary as an engineer was
$14,583.33 a month—an almost unbelievable figure—the $175,000 in punitive damages
exceeded the 10:1 ratio set forth by the Court as a benchmark. See Campbell, 538 U.S. at
425. In all probability, the ratio went well beyond 10:1.
While a “particularly egregious act” by a defendant causing only a small amount of
economic damages can support a larger ratio, there does not appear to be any such
egregious conduct by Norfolk Southern here. As discussed more fully in Part IV.A.,
supra, Norfolk Southern did not appear to have physically harmed Austin or have taken
advantage of her financial vulnerability. Nor did it act in bad faith. On the contrary, it
participated in the arbitration proceedings concerning Austin’s suspension and abided by
30
the arbitration panel’s decision reinstating Austin with full back pay.
Austin suffered no actual harm from her suspension. At most her potential harm
was the loss of thirty days’ salary. By contrast, Austin received $175,000 in punitive
damages, a figure that dwarfs even her potential harm.
C. Difference Between the Punitive Damages and the Civil Penalties Authorized or
Imposed in Comparable Cases
Pursuant to statute, the maximum allowable award of non-economic damages for a
violation of Title VII by an employer with over 500 employees is $300,000.13 42 U.S.C. §
1981a(b)(3)(C). Because the punitive damage award was well under the statutory cap, this
factor weighs in Austin’s favor.
D. Synthesis of the Three Guideposts
A comparison of the three guideposts set forth by the Supreme Court to determine
whether a punitive damage award is grossly excessive reveals that the $175,000 in
punitive damages does not comport with due process. The most important factor, the
degree of reprehensibility of the defendant’s conduct, or lack thereof, weighs heavily in
favor of Norfolk Southern. The same can be said for the vast ratio between the punitive
damages and the actual or potential harm to Austin. Only the final factor, a comparison of
the punitive damages she received with the statutory cap favors her. Accordingly, the
award of $175,000 in punitive damages for Austin’s thirty day suspension is grossly
excessive within the meaning of due process. I would, therefore, vacate the award and
13
As of December 31, 2003, Norfolk Southern had over 28,000 employees.
31
remand with instructions to hold a new trial on punitive damages.
32