George v. Foster ( 1997 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________________________
No. 96-31019
____________________________________
BARBARA GEORGE and TASHA WILLIAMS,
Plaintiffs-Appellees-
Cross-Appellants,
v.
DALE FOSTER, et al.,
Defendants,
RACETRAC PETROLEUM, INC.,
Defendant-Appellant-
Cross-Appellees.
_______________________________________________
Appeal from the United States District Court
for the Western District of Louisiana
(94-CV-1778)
_______________________________________________
October 15, 1997
Before KING, DUHÉ, and WIENER, Circuit Judges.
PER CURIAM:*
In this hostile work environment sexual harassment case,
Defendant-Appellant-Cross-Appellee Racetrac Petroleum, Inc.
(Racetrac) appeals the district court’s denial of its motion for a
new trial on the grounds that (1) the evidence did not support the
*
Pursuant to 5TH CIRCUIT RULE 47.5, the Court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIRCUIT RULE
47.5.4.
award of punitive damages to Plaintiffs-Appellees-Cross-Appellants
Barbara George and Tasha Williams (collectively, plaintiffs) and
(2) alternatively, the punitive damages award was excessive and
should have been remitted. Racetrac also asserts that the district
court erred in denying its motion to set aside the jury’s verdict
awarding mental anguish damages to plaintiff George. On cross-
appeal, plaintiffs seek to have the amount of compensatory damages
increased.
Having thoroughly reviewed the briefs and the record in this
case, we conclude that the district court did not abuse its
discretion in denying Racetrac’s motion to set aside the verdict
and motion for a new trial and remittitur, and we therefore affirm
the judgment in those respects. Additionally, we dismiss
plaintiffs’ cross-appeal because plaintiffs failed to make a motion
for a new trial in the district court. Finding that prejudgment
interest does not further the purpose of punitive damages, however,
we reverse the district court’s award of prejudgment interest on
plaintiffs’ punitive damages award.
We set forth our reasons for the reversal of the district
court’s assessment of prejudgment interest on plaintiffs’ punitive
damages award. We have established a two-step analysis for
determining whether prejudgment interest should be awarded under
federal statutes. Employing this analysis, the court must ask:
“[D]oes the federal act creating the cause of action preclude an
award of prejudgment interest, and if not, does an award of
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prejudgment interest further the congressional policies of the
federal act.”1 If prejudgment interest can be awarded under this
test, the award of such interest is within the discretion of the
trial court.2 As Title VII is silent on the question of
prejudgment interest in general, the crucial question here is
whether an award of prejudgment interest on punitive damages would
advance the policy goals of § 1981a(b)(1) of the Civil Rights Act
of 1991 (the Act) by punishing an employer who discriminates “with
malice or with reckless indifference to the federally protected
rights” of an employee. Plaintiffs argue that prejudgment interest
would advance this punitive goal by (1) further punishing those who
violate the Act and (2) encouraging employers to settle meritorious
claims.
In West Virginia v. United States,3 the Supreme Court
explained the purpose of prejudgment interest: “Prejudgment
interest serves to compensate for the loss of use of money due as
damages from the time the claim accrues until judgment is entered,
thereby achieving full compensation for the injury those damages
are intended to redress.”4 We have not specifically addressed the
1
Carpenters Dist. Council of New Orleans and Vicinity v.
Dillard Dep’t Stores, 15 F.3d 1275, 1288 (5th Cir. 1994), cert.
denied, 513 U.S. 1126, 115 S. Ct. 933, 130 L. Ed. 2d 879 (1995).
2
Id.3
479 U.S. 305, 107 S. Ct. 702, 93 L. Ed. 2d 639 (1987).
4
Id. at 310 n. 2, 107 S. Ct. at 706 n. 2.
3
issue of prejudgment interest on punitive damages under Title VII,
but we have held that awards that are penal in nature do not draw
interest.5 As we noted in Illinois Central Railroad Co. v. Texas
Eastern Transmission Corp.:
The rationale of the rule that penalties do not draw
prejudgment interest is that a penalty does not reflect
damages to the plaintiff but is assessed to encourage
certain conduct on the part of the party penalized.
Interest on a penalty does not further the purpose of
making an injured party whole.6
Most other courts that have addressed the issue agree that
prejudgment interest is basically compensatory and generally should
not be granted on punitive damages.7 We adopt the view of these
5
Illinois Central R.R. Co. v. Texas E. Transmission Corp.,
551 F.2d 943, 944 (5th Cir. 1977) (citing Rodgers v. United States,
332 U.S. 371, 373, 68 S. Ct. 5, 7, 92 L. Ed. 3 (1947) and United
States v. West Texas Cottonoil Co., 155 F.2d 463, 466 (5th Cir.
1946)).
6
Id.7
See United States v. Reul, 959 F.2d 1572, 1578 (Fed. Cir.
1992); Wickham Contracting Co. v. Local Union No. 3, Int’l
Brotherhood of Elec. Workers, AFL-CIO, 955 F.2d 831, 834-35 (2d
Cir. 1992), cert. denied, 506 U.S. 946, 113 S. Ct. 394, 121 L. Ed.
2d 302 (1992) (“prejudgment interest should not be awarded if the
statutory obligation on which interest is sought is punitive in
nature” or the “statute itself already provides for . . . punitive
damages”) (citing Rodgers v. United States, 332 U.S. 371, 374-76,
68 S. Ct. 5, 7, 92 L. Ed. 3 (1947)); Fortino v. Quasar Co., 950
F.2d 389, 397-98 (7th Cir. 1991) (prejudgment interest not
available for punitive damages in age discrimination case); Emmel
v. Coca-Cola Bottling Co. of Chicago, Inc., 904 F. Supp. 723, 734
(N.D. Ill. 1995), aff’d, 95 F.3d 627 (7th Cir. 1996) (prejudgment
interest not available for punitive damages in Title VII sexual
harassment case); Nu-Life Constr. Corp. v. Board of Educ. of City
of New York, 789 F. Supp. 103, 104 (E.D.N.Y. 1992); In re Marshall,
132 B.R. 904, 906 (C.D. Ill. 1991), aff’d, 970 F.2d 383 (7th Cir.
1992).
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courts and hold that the district court erred in awarding
prejudgment interest on plaintiffs’ punitive damages award.
Accordingly, we reverse the district court’s award of
prejudgment interest on plaintiffs’ punitive damages award. We
dismiss plaintiffs’ cross-appeal, and in all other respects we
affirm the judgment of the district court. AFFIRMED in part;
REVERSED in part; cross-appeal DISMISSED.
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