Horney v. Westfield Gage Comp

Not for Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
Nos. 02-2383, 02-2384, 02-2465, 02-2546
ANITA J. HORNEY,
Plaintiff-Appellee\Cross-Appellant,
v.
WESTFIELD GAGE COMPANY, INC.; EDWARD WOODIS,
Defendants-Appellants\Cross-Appellees,
and
RICHARD PATTERSON
Defendant\Cross-Appellee.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Kenneth P. Neiman, United States Magistrate Judge]
Before
Selya, Circuit Judge,
Stapleton,* Senior Circuit Judge,
and Baldock,** Senior Circuit Judge.
Thomas E. Shirley, with whom Seth R. Aframe and Laurie A. Drew
were on the brief, for Defendants-Appellants\Cross-Appellees.
Richard B. Klibaner, with whom Donna M. Cuipylo was on the
brief, for Plaintiff-Appellee\Cross-Appellant.
October 9, 2003
* Of the Third Circuit, sitting by designation.
** Of the Tenth Circuit, sitting by designation.
STAPLETON, Circuit Judge.
I. Overview.
A jury trial before the United States District Court for the
District of Massachusetts resulted in a judgment directing
Westfield Gage Co., Inc. (“Westfield”) to pay $582,225 to Anita J.
Horney (“Horney”) in damages and attorney’s fees on account of
various claims under Title VII (42 U.S.C. § 2000e, et seq.), the
Equal Pay Act (26 U.S.C. § 206(d)), and a Massachusetts employment
discrimination statute (Mass. Gen. L. ch. 151B). A co-defendant,
Edward Woodis, was ordered to pay $25,000 in damages for sexually
harassing Horney. Following the jury’s verdict, the district court
reduced the jury’s $750,000 award on the gender discrimination
claim to $187,500 and denied Woodis’s request that his post-verdict
settlement agreement with Horney be invalidated.
Westfield and Woodis, collectively “Appellants,” appeal the
district court’s disposition of their post-verdict motions for
judgment as a matter of law or, alternatively, a new trial. Woodis
also appeals the denial of his motion concerning the settlement
agreement. Horney cross-appeals, requesting that we find error in
the district court’s decision at trial to dismiss her claims for
punitive damages.
We will uphold the jury’s verdict finding that Woodis and
Westfield had sexually harassed Horney by subjecting her to a
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hostile and abusive working environment in violation of Title VII
and Mass. Gen. L. ch. 151B. We will also affirm the district
court’s refusal to invalidate the settlement agreement between
Horney and Woodis. However, we will reverse the judgment against
Westfield to the extent it is based on Horney’s gender
discrimination claim and will remand for a new trial on that claim.
Respecting Horney’s cross-appeal, we conclude that the district
court erred in dismissing Horney’s claims for punitive damages and
will remand the matter to the district court for further
proceedings on those claims consistent with this opinion.
The parties are familiar with the factual setting of this
matter and with the evidence submitted at trial. Since we write
only for them, we do not provide a narrative summary of that
evidence. We will address in turn each of the assigned errors in
the appeals and the cross-appeal and will there refer to the
evidence where necessary to explain the court’s disposition.
II. The Appeals.
1. The liability verdict on the hostile work environment claims is
not supported by the record.
In order to be successful on a hostile work environment claim
under Title VII, a plaintiff must establish:
(1) that she (or he) is a member of a protected class;
(2) that she was subjected to unwelcome sexual
harassment; (3) that the harassment was based upon sex;
(4) that the harassment was sufficiently severe or
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pervasive so as to alter the conditions of plaintiff's
employment and create an abusive work environment; (5)
that sexually objectionable conduct was both objectively
and subjectively offensive, such that a reasonable person
would find it hostile or abusive and the victim in fact
did perceive it to be so; and (6) that some basis for
employer liability has been established.
Crowley v. L.L. Bean, Inc., 303 F.3d 387, 395 (1st Cir.
2002)(quotations omitted).
Pursuant to Mass. Gen. L. ch. 151B § 4(16A), it is unlawful
“[f]or any employer, personally or through its agents, to sexually
harass any employee.” Mass. Gen. L. ch. 151B § 1(18) defines
“sexual harassment” as:
sexual advances, requests for sexual favors, and other
verbal or physical conduct of a sexual nature when (a)
submission to or rejection of such advances, requests or
conduct is made either explicitly or implicitly a term or
condition of employment or as a basis for employment
decisions; (b) such advances, requests or conduct have
the purpose or effect of unreasonably interfering with an
individual's work performance by creating an
intimidating, hostile, humiliating or sexually offensive
work environment. Discrimination on the basis of sex
shall include, but not be limited to, sexual harassment.
To establish a claim based on this statute, a “plaintiff [is]
required to demonstrate that she worked in a sexually hostile
environment that unreasonably interfered with her work
performance.” Muzzy v. Cahillane Motors, Inc., 749 N.E.2d 691, 694
(Mass. 2001). To sustain this burden, the plaintiff needs to
“establish that the conduct alleged was sufficiently severe and
pervasive to interfere with a reasonable person’s work
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performance.” Id. “‘To constitute actionable harassment, the
claimed conduct must be both objectively and subjectively
offensive.’” Id. at 695 n.2 (quoting Messina v. Araserve, Inc.,
906 F. Supp. 34, 36 (D. Mass. 1995)).
Appellants attack the subjective element of the hostile work
environment test. They assert that Horney was a willful
participant in much of the complained of conduct and, therefore,
the conduct at Westfield was not unwelcome. They also assert that
the conduct was not, as a matter of law, sufficiently severe or
pervasive to constitute a hostile environment.
Based on our review of the evidence at trial, and drawing all
reasonable inferences in favor of the jury’s verdict, we find that
there is sufficient evidence to sustain the verdict against
Appellants on the hostile work environment claims. In particular,
we find that there is sufficient evidence for a reasonable jury to
conclude that the complained of conduct was both objectively and
subjectively offensive and that it was severe and pervasive.
Testimony at trial indicated that her supervisor, Woodis,
regularly used such terms as “bitch” and “cunt.” At trial, Horney
testified that Woodis repeatedly asked her, “[w]hose desk are you
under?” He had also asked her “[a]re you fucking him now?,” “[y]ou
blowing him?,” and while she was talking to a co-worker he asked
the co-worker “[w]hat, are you fucking her mother?” On another
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occasion, when she remarked that she was anal retentive, he asked
her “[i]s that what your mother taught you to do, lick ass?”
Evidence indicated that another Westfield employee remarked to her
that “[w]omen are only good at getting fucked up the ass at
Westfield Gage.” Horney testified that on one occasion Woodis
remarked to her that “[t]hey should have never hired women in this
department,” and “[w]omen don’t belong in the work – machine
shops.” The evidence further showed that lewd posters, pictures
and other explicit material were common place at Westfield.
Appellants argue that, because Horney concedes that she
engaged in some salacious conduct, used obscenities, and regarded
some of the provocative pictures as “funny,” she cannot, as a
matter of law, show that the sexually explicit conduct at Westfield
was subjectively offensive or unwelcome. We find this argument
unpersuasive. There was ample evidence that Horney found the
conduct she complained of unwelcome. She testified, repeatedly,
that she felt offended and “humiliated” by the sexual comments
made by her supervisor, Woodis, and other co-workers. Judy Gutt,
the person charged with fielding sexual harassment complaints at
Westfield testified that on several occasions Horney had complained
-- usually informally -- about incidents at Westfield. Gutt
testified that Horney had complained when a co-worker told her that
“[w]omen were only good at getting fucked up the ass at Westfield
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Gage.” She testified that Horney had complained that Woodis had
asked Horney whose desk she was under, and if she “was fucking [a
fellow employee] now.” Gutt also testified that Horney complained
about the off-color comment Woodis made about her mother, and about
Woodis having asked her on a regular basis who she was blowing.
Horney’s expert witness, Dr. Lloyd Price, testified that
Horney’s participation in some of the risque conduct “represented
an adaption to an environment in which the use of profanity was
rife.” Horney’s use of profanity, he indicated, represented both
an attempt to “fit in” and to adjust, e.g. survive her
environment.” Horney’s attorney asked Dr. Price whether “knowing
that . . . she would laugh at a joke that might have sexual
[content], does that change your opinion at all about whether or
not she would be distressed by the workplace?” Dr. Price replied
that it would not.
Horney admits that during her employment at Westfield she used
obscenities and participated in conduct relating to certain sexual
jokes and pictures at Westfield. However, the evidence she
submitted supports a finding of threatening and offensive conduct
by Woodis and other co-workers which is distinguishable from the
conduct in which she engaged. The jury could reasonably have
distinguished between joking references to sexual material made by
Horney, and her supervisor’s screamed obscenities, offensive and
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derogatory comments regarding whether she or her mother were
engaging in sex acts with particular co-workers, and statements
about women’s role at Westfield. See Garcez v. Freightliner Corp.,
72 P.3d 78, 86 (Ore. App. 2003) (finding that a reasonable jury
could conclude that racially motivated conduct and comments
directed at the plaintiff were subjectively unwelcome even though
plaintiff had engaged in some similar conduct as a coping
mechanism). Because a reasonable jury could have found the alleged
conduct at issue to be both subjectively offensive/unwelcome and
severe and pervasive, we will decline to disturb the jury’s verdict
regarding the sexual harassment claim.1
2. The jury’s award of $250,000 for emotional harm was excessive.
1
Appellants also argue that they are entitled to a new trial
on the sexual harassment charge because the district court
improperly excluded evidence. Appellants sought to introduce
testimony that, in 1993, Horney lifted her shirt, exposing her
breasts to the male witness while she was working at the Maple Leaf
Restaurant. The district court excluded the evidence as being only
mildly relevant under Federal Rule of Evidence 401 and unduly
prejudicial under Federal Rule of Evidence 403. This was not an
abuse of its considerable discretion under Rule 403.
Appellants also urge that the court committed reversible error
by failing to instruct the jury that neither Title VII nor its
Massachusetts equivalent mandate clean language. The district
court fully and accurately explained to the jury what was required
by Title VII and the Massachusetts statute in a sexual harassment
case. It was not required to do more. See Poulin v. Greer, 18
F.3d 979, 983 n.3 (1st Cir. 1994) (“In reviewing a court’s decision
not to give a particular instruction, our duty is to determine
whether the instructions as given tend to confuse or mislead the
jury with regard to the applicable principles of law.”).
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“We rarely will override the jury’s judgment on the
appropriate amount of damages awarded. [T]he jury’s otherwise
supportable verdict stands unless [it is] grossly excessive or
shocking to the conscience.” Brown v. Freedman Baking Co., 810
F.2d 6, 11 (1st Cir. 1987) (alterations in original) (internal
quotations omitted). “We will not disturb an award of damages
because it is extremely generous or because we think the damages
are considerably less. . . . We will only reverse an award if it
is so grossly disproportionate to any injury established by the
evidence as to be unconscionable as a matter of law.” Koster v.
Trans World Airlines, Inc., 181 F.3d 24, 34 (1st Cir. 1999).
Here, Horney submitted evidence from an expert psychiatrist
describing Horney’s symptoms of sleep disturbances, withdrawal,
nausea and vomiting. He diagnosed Horney as suffering major
depression resulting from harassment in the workplace. He
testified that she was still significantly symptomatic three-and-
one-half years after her employment ended.
This evidence is similar to other cases where courts have
upheld similar jury awards. See Koster, 181 F.3d at 36 (finding
that $250,000 was the maximum recovery for emotional damages in a
case where the plaintiff had lost his job of 25 years and had
trouble sleeping, was anxious, and his family life had suffered);
Westinghouse Elec. Supply Corp. v. Mass. Comm’n Against
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Discrimination, 9 Mass. L. Rep. 661 (Mass. Super. Ct. Mar. 5, 1999)
(affirming an award of $250,000 for emotional distress where a
plaintiff suffered exacerbated insomnia, constant diarrhea, and
stomach pain (all of which were present to a lesser degree because
of a physical ailment that resulted in his termination)). We
decline to disturb the award of compensatory damages for Horney’s
emotional distress.
3. There is insufficient evidence to support a verdict against
Westfield on the gender discrimination claim.
Westfield argues that Horney failed to provide sufficient
evidence of actionable gender discrimination and, therefore, we
must direct that judgment be entered in Westfield’s favor.
Alternatively, Westfield argues that it is entitled to a new trial
because the district court failed to meaningfully limit what
conduct the jury could consider actionable gender discrimination.
Westfield asserts that the jury’s general verdict of gender
discrimination prevents this court from determining whether the
verdict rests on a proper foundation. We first turn to the
insufficiency of evidence argument.
We find that Horney presented sufficient evidence of
actionable gender discrimination for a jury to reasonably find in
her favor. We will, therefore, reject Westfield’s demand that we
direct the district court to enter judgment in Westfield’s favor.
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Viewing the evidence in the light most favorable to the non-
moving party, a jury could have reasonably concluded that Westfield
engaged in actionable gender discrimination. At the very least,
Horney showed a prima facie case of gender discrimination regarding
her termination from Westfield. Neither party disputes whether
Horney is a member of a protected class. It is undisputed that
Horney offered evidence of at least two adverse employment actions.
Horney argues that she was fired, or, alternatively, that she was
constructively discharged. Either action would constitute a well-
established adverse employment action under Title VII. See Benoit
v. Tech. Mfg. Corp., 331 F.3d 166, 173 n.2 (1st Cir. 2003);
Landrau-Romero v. Banco Popular De Puerto Rico, 212 F.3d 607, 613
(1st Cir. 2000). Additionally, the environment at Westfield,
including specific evidence relating to Woodis’s gender-based
treatment of Horney, shows that there was sufficient evidence for
Horney to show that she was constructively discharged. Westfield
does not challenge the other elements of Horney’s prima facie case.
Westfield also correctly contends that its articulation of a
legitimate, non-discriminatory reason for Horney’s termination,
i.e., insubordination, required Horney to come forward with
evidence from which the jury could find pretext. While we agree,
we conclude that she met this burden.
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Showing that similarly situated males were treated differently
is only one way in which a female plaintiff can prove pretext.
Kosereis v. Rhode Island, 331 F.3d 207, 213 (1st Cir. 2003).
Another “method is to show that discriminatory comments were made
by the key decisionmaker or those in a position to influence the
decisionmaker.” Santiago-Ramos v. Centenial P.R. Wireless Corp.,
217 F.3d 46, 55 (1st Cir. 2000). See Mesnick v. General Elec. Co.,
950 F.2d 816, 824 (1st Cir. 1991) (stating that means to show
pretext and discrimination may include “but are by no means limited
to, statistical evidence showing disparate treatment by the
employer of members of the protected class, [denigrating] comments
by decisionmakers . . . , [and] the incidence of differential
treatment in the workplace”) (citations omitted). The evidence
produced at trial was sufficient to permit a jury to conclude that
Westfield’s proffered explanation for Horney’s discharge –
insubordination – was pretextual and that gender discrimination
motivated Horney’s discharge. As Horney’s immediate supervisor,
Woodis was either the decisionmaker regarding the termination or
one in a position to influence the decisionmaker. Evidence
indicated that Woodis had stated that “[w]omen don’t belong in
machine shops,” and that “[t]hey should never have hired women in
this department.” Evidence also included testimony that Woodis
treated women more harshly than men and would use derogatory terms
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that uniquely refer to the female gender, such as “bitch” and
“cunt.”
Finally, when Horney went home, evidence at trial indicated
that Woodis directed Gutt to “call that drunk and drug crazed bitch
and tell her to get her ass back in here.” (Emphasis added.) See
Thomas v. Eastman Kodak Co., 183 F.3d 38, 58 (1st Cir. 1999)
(stating that a finding that the plaintiff was treated differently
because of membership in a protected class can be made even if the
employer “simply did so because of unthinking stereotypes or
bias”).
4. A retrial of the gender discrimination claim is required
because the verdict rendered by the jury may rest on an improper
foundation.
Westfield insists that some of Horney’s gender discrimination
claims did not involve adverse employment actions that are
independently actionable under Title VII. It asserts that these
non-actionable claims included, inter alia: (1) Horney’s claim that
Westfield failed to adequately train Horney, when such failure did
not result in an adverse consequence to the employee; (2) Horney
being required to work on New Year’s Eve, 1997; and (3) Horney’s
claim that male employees were allowed to get coffee during working
hours, while she was only allowed to get coffee during break-time.
Westfield also argues that Horney failed to provide sufficient
evidence that, as a result of gender discrimination, Horney: (1)
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was denied raises; (2) did not receive adequate training; and (3)
was required to work on New Years Eve, 1997. Westfield correctly
points out that consistent with the court’s charge the jury could
have based its verdict on one or more of these six grounds.
Before us, Horney has not addressed or affirmatively contested
Westfield’s arguments that some of her claims were either: (1) not
independently actionable under Title VII, or (2) were not
adequately supported by evidence produced at trial to sustain the
jury’s verdict of gender discrimination.2
2
Horney does argue that Westfield has waived any objection to
the jury instruction by not specifically requesting special
findings as to each adverse employment action at trial. We do not
agree. Westfield Gage’s counsel argued the following at the close
of evidence:
Westfield Gage’s Counsel: My understanding of the law, Judge,
is you can use this kind of stuff to buttress evidence, but it
can’t standing alone constitute discrimination and so –
The Court: Well, if somebody is denied overtime because
they’re a woman, that would be an adverse action that’s taken,
correct?
Westfield Gage’s Counsel: Then how is the question framed?
Do you find discrimination by reason of termination (A), do
you find discrimination by reason of overtime denied (B), do
you find reason of failure to support (C)?
The Court: I was intending to give instructions which make
clear that it could be one action alone or –any of those
actions standing alone . . .
Westfield Gage’s Counsel: Note my objection, please, your
Honor.
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“It is settled law that, when multiple claims are submitted to
a jury and only a general verdict is returned, a new trial is
required if some of the claims should not have been submitted and
the jury’s consideration of those claims may have affected the
verdict.” Lattimore v. Polaroid Corp., 99 F.3d 456, 468 (1st Cir.
1996).
“Work places are rarely idyllic retreats, and the mere fact
that an employee is displeased by an employer’s act or omission
does not elevate that act or omission to the level of a materially
adverse employment action.” Blackie v. Maine, 75 F.3d 716, 725
(1st Cir. 1996). “Typically, the employer must either . . . take
something of consequence from the employee, say, by discharging or
Mr. Ryan: With respect to gender discrimination, your Honor,
I’d ask for a breakdown by the Court as to whether the
Plaintiff has proven by a preponderance of the evidence that
she was intentionally discriminated against, and then break it
down, A, was it constructive discharge.
The Court: Noted and overruled.
***
Mr. Ryan: I’d ask that there be a second question asking the
jury to determine whether they found discrimination by means
of termination.
The Court: Overruled.
We find that Westfield’s objection at the close of evidence
adequately preserved its argument that the district court failed to
remove from the jury’s consideration certain gender discrimination
claims that were insufficient as a matter of law.
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demoting her, reducing her salary, or divesting her of significant
responsibilities” or “withhold from the employee an accouterment of
the employment relationship, say, by failing to follow a customary
practice of considering her for promotion after a particular period
of service.” Id.At trial, Horney complained that she was denied raises on
account of her gender. It is apparent that this claim fails as a
matter of law. Horney attempted to support this claim by stating
that she was reprimanded by Woodis when she asked the company
president for a raise. Woodis was upset that Horney circumvented
the line of authority in not asking him for the raise first.
Plaintiff also contends that she was not offered a raise when she
was promoted to inspector. However, as Westfield points out,
Plaintiff received and kept the raise offered to her by the company
president despite Woodis’s verbal reprimand. Also, Horney does not
allege that she asked for a raise when she was transferred to
inspections, she does not identify a company policy to give a raise
when moving to inspector, nor does she identify any employee who
received such a raise on transfer. We conclude that the evidence
produced at trial was insufficient to support a claim that gender
discrimination played a part in Horney being denied raises, or that
she was even denied a raise for that matter. See Gorski v. New
Hampshire Dep’t of Corrs., 290 F.3d 466, 475 (1st Cir. 2002)
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(finding that plaintiff’s discrimination claim that she was denied
a job transfer failed as a matter of law, when there was no actual
denial of a job transfer and it was undisputed that the plaintiff
never actually applied for a transfer).
Horney also insisted at trial that, as a result of gender
discrimination, she was denied equal pay when she was hired. This
claim would seem to parallel her successful Federal Equal Pay Act
claim. Horney now concedes that the jury verdict finding Westfield
to have violated the Federal Equal Pay Act is not supported by the
evidence. This concession would appear to be fatal to this aspect
of her gender discrimination claim.
On remand, the district court should require Horney to
identify the adverse employment actions she believes she is
entitled to submit to the jury as independent bases for gender
discrimination liability. To the extent Westfield contests the
legal sufficiency of any one or more of these theories of liability
or the sufficiency of the evidence supporting it, the court should
resolve the dispute and confine the jury’s deliberations to
permissible theories of recovery.
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5. The verdict on Horney’s Equal Pay Act claim is not supported by
the record.
Horney’s brief concedes this point and, on remand, the
district court will vacate this portion of the judgment against
Westfield.
6. The post-verdict settlement agreement between Horney and Woodis
must be rescinded because Woodis entered it based upon a unilateral
mistake of fact.
Woodis asserts that he entered into the settlement agreement
on the mistaken assumption that Westfield would pay the settlement
amount. He argues that enforcing the settlement agreement would be
oppressive and unconscionable because he would be personally liable
for a $25,000 obligation that he never intended to incur. He
insists that his attorney worked diligently to secure the
information necessary to enter the agreement; thus, he should not
be held responsible for the mistake. Finally, he argues that
voiding the agreement would not cause Horney or her attorney
substantial hardship.
The district court found that, pursuant to Restatement
(Second) of Contracts § 154(b), Woodis bore the risk of the mistake
because he entered into the agreement with “only limited knowledge
with respect to the facts to which the mistake relates but
treat[ed] his limited knowledge as sufficient.” Restatement
(Second) of Contracts § 154(b). The court found that Woodis, by
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relying on the statement from Ryan “that the settlement terms were
acceptable,” treated his limited knowledge as sufficient to enter
into the agreement with Horney. The court also concluded that,
pursuant to § 154(c), it was reasonable to allocate the risk of the
mistake to Woodis. We find no error here.
7. The award of attorney’s fees must be revisited on remand.
“[F]ee awards are appropriate only for successful claims;
unsuccessful claims warrant a fee award only if they are connected
to the successful ones.” McMillan v. Mass. Soc. for the Prevention
of Cruelty to Animals, 140 F.3d 288, 311 (1st Cir. 1998). Here,
attorney’s fees must be reviewed by the district court in light of
Horney’s withdrawal of her complaint under the Federal Equal Pay
Act and our decision to remand Horney’s gender discrimination claim
for retrial. The district court should review the award once it
has determined the extent to which Horney is a prevailing party.
See Marrero v. Goya of Puerto Rico, Inc., 304 F.3d 7, 30 (1st Cir.
2002); 42 U.S.C. § 2000e-5(k).
III. The Cross-Appeal
1. The Distsrict Court erred in dismissing Horney’s claims for
punitive damages.
Horney asserts that the district court erred in dismissing her
claims for punitive damages in connection with her hostile work
environment claims under Title VII and Mass. Gen. L. ch. 151B and
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her gender discrimination under Title VII. See 42 U.S.C. §
1981a(b); Mass Gen. L. ch. 151B § 9. All parties agree that the
district court dismissed Horney’s punitive damages claim because
she had failed to tender evidence of the net worth of the
defendant. During the trial, Horney asked the controller of
Westfield what the value of the company’s assets were at the time
of trial. Westfield objected to this question and the objection
was sustained.
Horney argues that it was error for the district court to
dismiss the claim for punitive damages because evidence of the net
worth of the defendant is not a necessary predicate for a punitive
damages award. Rather, it is the defendant’s burden to show its
net worth if it wishes to reduce a potential punitive damages
award.
Under Federal law, the burden of showing net worth is placed
on the defendant. See Provost v. City of Newburgh, 262 F.3d 146,
163 (2d Cir. 2001) (placing the burden on the defendant to show
evidence of financial condition warranting a limitation in a
punitive damages award); Mason v. Oklahoma Turnpike Authority, 182
F.3d 1212, 1214 (10th Cir. 1999); Kemezy v. Peters, 79 F.3d 33, 36
(7th Cir. 1996) (rejecting a claim that the plaintiff is required
to show evidence of net worth and placing the burden of producing
such evidence on the defendant); Fishman v. Clancy, 763 F.2d 485,
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490 (1st Cir. 1985) (placing the burden of making a record of the
defendant’s financial condition on the defendant in order to
challenge a punitive damages award). Placing the burden of showing
evidence of financial condition on the defendant makes sense
because it is the defendant who is in the best position to show his
financial status. Additionally, a rule requiring the plaintiff to
prove net worth “would . . . encourage plaintiffs to seek punitive
damages whether or not justified, in order to be able to put before
the jury evidence that the defendant has a deep pocket and
therefore should be made to pay a large judgment regardless of any
nice calculation of actual culpability.” Kemezy, 79 F.3d at 36.
Appellants cite State Farm Mut. Automobile Ins. Co. v.
Campbell, 123 S.Ct. 1513 (2003), for the proposition that the
plaintiff must prove the defendant’s financial condition in a
punitive damages case or otherwise the jury will be allowed to
award an arbitrary amount that would exceed the amount necessary to
achieve a reasonable level of punishment. Nothing in that case
stands for the proposition that the burden should not be placed on
the defendant to decide whether to submit evidence of its financial
condition so that it may limit the punitive damages award.
The district court erred by placing the burden of showing
Westfield’s financial condition on Horney, and dismissing her
punitive damages claims. Accordingly, Horney is entitled to a jury
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resolution of her punitive damages claims based on sexual
harassment and gender discrimination.
Westfield argues that if the punitive damages claims are
remanded to the district court, the issues relating to sexual
harassment liability and compensatory damages must be retried
because the punitive damages claims are so intertwined with
liability and emotional distress damages that Westfield cannot
receive a fair trial limited to punitive damages. Hardin v.
Catepillar, Inc., 227 F.3d 268, 272 (5th Cir. 2000) (remanding for
a new trial on all issues because the award of punitive damages is
intertwined with the jury’s view of liability and its award of
damages for emotional injury), supports this proposition. As
Westfield stresses, the court there observed:
A jury deciding whether to award punitive damages and
their amount responds to the evidence of intentional acts
essential here to the underlying finding of liability.
But intentional acts span a range of intensity, purpose,
and foreseeability, a range that oscillates with the
perceived level of emotional injury and its appropriate
compensation. Many legal systems reflect this linkage of
actual and punitive damages in locating caps for punitive
awards. It is no answer that liability and damages here
come in distinct legal capsules, because it is equally
true that their expression in a verdict is a meld, a
phenomenon providing essential anchors and focus to the
open-ended character of punitive damages.
Id.However, the Hardin court was explicit in stating that it
reached its decision “without deciding that [the stated
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conclusions] are inseparable as a matter of law across all cases;
and we do not suggest that punitive damages may not walk alone in
other contexts.” Id. at 272-73. Other courts have allowed a
retrial on the issue of punitive damages alone. See Jannotta v.
Subway Sandwich Shops, Inc., 125 F.3d 503, 516-17 (7th Cir. 1997)
(vacating an award of punitive damages because of a faulty jury
instruction and remanding for a retrial on that issue only, despite
the fact that the jury had also awarded the plaintiff compensatory
damages); Defender Industries, Inc. v. Northwestern Mut. Life Ins.
Co., 938 F.2d 502, 507 (4th Cir. 1991) (affirming a district court
decision to remand for a new trial on punitive damages if his
decision to grant a J.N.O.V. was reversed).
We conclude that the district court is in the best position to
determine whether the question of punitive damages is so
intertwined with the finding of sexual harassment liability and the
subsequent award for damages based on emotional harm such that the
entire sexual harassment claim must be retried. Accordingly, we
will leave this determination to the district court. If the
district court decides that the punitive damages issue on the
sexual harassment claim should not be retried alone, the district
court should so indicate to Horney and afford her an opportunity
to leave the jury’s verdict of $250,000 intact by not pressing her
request for punitive damages on that claim.
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IV. Conclusion.
The judgment of the district court is reversed and this matter
is remanded to the district court for further proceedings
consistent with this opinion. All parties shall bear their own
costs.
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