Keeshan v. Eau Claire Cooperative Health Centers, Inc.

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1270
SUSAN J. KEESHAN, MD,
Plaintiff - Appellant,
v.
EAU CLAIRE COOPERATIVE HEALTH CENTERS, INC; STUART A.
HAMILTON, MD; DEBORAH DAVIS, MD,
Defendants - Appellees.
Appeal from the United States District Court for the District of
South Carolina, at Columbia. Margaret B. Seymour, District
Judge. (3:05-cv-03601-MBS)
Argued: January 26, 2010 Decided: September 14, 2010
Before WILKINSON, NIEMEYER, and MICHAEL, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Aaron J. Kozloski, CAPITOL COUNSEL, LLC, Columbia, South
Carolina, for Appellant. Kathryn Thomas, GIGNILLIAT, SAVITZ &
BETTIS, Columbia, South Carolina, for Appellees. ON BRIEF:
Christina M. Summer, GIGNILLIAT, SAVITZ & BETTIS, Columbia,
South Carolina, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Dr. Susan Keeshan, a physician who is Jewish and of
Hispanic descent, sued her former employer, Eau Claire
Cooperative Health Centers, Inc. (the Cooperative), alleging
under Title VII that she was terminated in retaliation for
filing a complaint claiming that her supervisors discriminated
against her because she is not black. Keeshan also brought
claims under state law for wrongful discharge and nonpayment of
wages. The district court granted summary judgment to the
Cooperative on the wrongful discharge claim. After a trial the
jury found for the Cooperative on the Title VII retaliation and
South Carolina Payment of Wages Act claims. Keeshan appeals,
challenging the district court’s (1) grant of summary judgment
on the wrongful discharge claim, (2) ruling that required
Keeshan to disclose her post-termination income on cross-
examination, (3) denial of Keeshan’s motion for a new trial, and
(4) imposition of costs on Keeshan as the losing party. We
affirm.
I.
A.
Keeshan is an obstetrician/gynecologist (OB-GYN) who
was employed by the Cooperative in Columbia, South Carolina,
from July 2000 until July 2004. Her employment with the
Cooperative was part of a medical school scholarship she
2
received from the National Health Service Corps (NHSC). The
scholarship required Keeshan to spend four years after her
residency at an NHSC-approved site that provides medical
services to traditionally underserved populations. The
Cooperative’s director, Dr. Stuart Hamilton, also an NHSC
scholar, started the Cooperative in 1981 to treat low-income
residents of the Eau Claire community in Columbia, South
Carolina. With the help of charitable donations and federal
funding, the Cooperative expanded over the next twenty years to
include nine facilities, including an OB-GYN practice that
opened in 1997. Hamilton interviewed Keeshan in early 2000 and
hired her as a physician in the Cooperative’s OB-GYN practice.
The Cooperative was the only NHSC-approved site in Columbia,
where Keeshan hoped to work so she could be with her husband.
Although aware that Keeshan was at the Cooperative under her
scholarship obligation, Hamilton considered it a possibility
that she would remain after completing the four-year NHSC
requirement. Soon after Keeshan started, the only other OB-GYN
left the Cooperative, making Keeshan the sole physician and
leader of the OB-GYN practice. The Cooperative eventually hired
two other OB-GYNs during Keeshan’s four-year period of
employment.
While negotiating the terms of her employment
contract, Keeshan informed Hamilton that she was Jewish.
3
Hamilton responded that the Cooperative would give her Yom
Kippur, Rosh Hashanah, and the first day of Passover as
holidays. As for delineating the duration of her employment,
Keeshan’s contract provided that the “term of this Agreement
shall be for one year from the date [Keeshan] begins employment
and shall be automatically renewed for successive one-year terms
unless terminated as hereinafter provided.” S.A. 97. The
occurrences that could trigger termination of the contract
included: (1) “By notice in writing to the other party given one
hundred and twenty (120) days prior to the date of termination”;
(2) “Material breach of contract by [Keeshan] or [the
Cooperative]”; (3) “Death or total disability of [Keeshan]”; (4)
“[Keeshan] conducting [herself] in an unprofessional, unethical
or fraudulent manner”; and (5) “Financial exigency as verified
by an independent party or financial review.” S.A. 98. If any
of these occurrences transpired, Keeshan was entitled to unpaid
compensation and benefits accrued as of the termination date.
Keeshan’s annual salary started at $150,000 and increased to
$160,000, $165,000, and $175,000 during her last three years at
the Cooperative.
Keeshan’s employment with the Cooperative proceeded
fairly smoothly for the first couple of years. Hamilton
recalled at trial that conflict first arose between Keeshan and
the Cooperative over her appointment scheduling and billing
4
documentation. The Cooperative could not discern which
appointments and bills were Keeshan’s. Additionally, Hamilton
learned that Keeshan was performing artificial inseminations for
homosexual couples, which Hamilton considered inappropriate in
light of the Cooperative’s federal funding. Nonetheless,
Hamilton gave Keeshan favorable evaluations from 2000 to 2003.
Keeshan’s tension with Hamilton escalated in 2003. In
May 2003 Keeshan requested time off for elective surgery.
Following a meeting in which Hamilton asked Keeshan to
reschedule her surgery due to another physician’s absence,
Keeshan sent Hamilton an email saying that she found his request
insensitive and inappropriately presented in front of other
staff. Hamilton found Keeshan’s email inappropriate, primarily
due to Keeshan’s use of the phrase “rip me a new one” to
describe Hamilton’s behavior during the meeting. J.A. 136, S.A.
101. Hamilton deemed the email “sexually explicit,” sarcastic,
and insulting. J.A. 136. He testified that he decided at that
moment that he would allow Keeshan to serve the time remaining
on the four years required by her scholarship, but that he would
not keep her on after July 2004. Keeshan apologized for the
email and thought that her professional relationship with
Hamilton was partially restored. Hamilton, however, filed a
corrective action form regarding the email.
5
Conflict resumed when the Cooperative hired another
OB-GYN, Dr. Deborah Davis, with whom Keeshan did not get along.
Davis, who is African American, became the Interim Director of
Women’s Health and assumed Keeshan’s administrative
responsibilities. This did not cause Keeshan’s salary or
benefits to decrease. Keeshan felt that Davis took every
opportunity to blame and demean her. In particular, Keeshan
took offense to Davis’s omission of the title “Doctor” when
referring to Keeshan and to Davis’s practice of calling other
African Americans “brothers” and “sisters.” J.A. 40.
In February 2004 Hamilton gave Keeshan two written
warnings within three days of each other. One was for an
unauthorized on-call arrangement that Keeshan entered into with
another physician without Davis’s approval. The other was for
Keeshan’s name appearing at the bottom of an open letter to
patients urging them to contact their legislators to support
tort reform. The letter appeared in South Carolina’s State
newspaper and declared that OB-GYNs were faced with the prospect
of being unable “to continue to deliver babies” due to increased
liability premiums. S.A. 104. The Cooperative’s written
warning to Keeshan called the letter “needlessly misleading,”
alarming to patients, and “in stark contrast to the
Cooperative’s stated mission of providing care to all patients,
regardless of their economic status.” S.A. 108. The
6
Cooperative reprimanded its other OB-GYNs who signed this
letter, including Davis. Before issuing the warning to Keeshan,
Hamilton tried to call her at home to persuade her to call the
newspaper and request removal of her name. Hamilton was unable
to reach Keeshan, but he received an email containing
unsolicited legal advice from Keeshan’s husband, Aaron Kozloski,
a lawyer. Hamilton testified that Kozloski sent him unsolicited
legal advice on multiple occasions.
Keeshan filed formal grievances with the Cooperative
after receiving these two warnings. The grievances protested
the warnings and Davis’s unprofessional conduct generally. The
Cooperative’s grievance committee set a grievance hearing for
February 20, 2004, but Keeshan did not receive notice of the
hearing because it was placed in her mailbox on her day off.
She received a call from a committee member on the day of the
hearing, but she was in a meeting that she could not leave. No
mention was made of rescheduling the hearing, which took place
without Keeshan. The grievance committee concluded that
Keeshan’s complaints regarding her written warnings lacked
merit. The committee did, however, in response to Keeshan’s
complaints about Davis, decide that the Cooperative should
circulate a memorandum to its employees on professional conduct
and courtesy.
7
On February 23, 2004, Keeshan wrote Hamilton a
memorandum requesting $127,500 in productivity bonuses that she
claimed to be owed under her contract. On the same day, Keeshan
also filed a discrimination complaint with the Cooperative’s
human resources department, alleging that the Cooperative and
Davis subjected her to a hostile work environment on account of
her religion and race. Although she mentioned both racial and
religious discrimination, the bulk of her complaint alleged that
Davis, with Hamilton’s consent, subjected Keeshan to unfair
treatment solely because Keeshan is not black. 1 Her complaint
requested that Davis be immediately terminated and that Keeshan
be restored to her original position as Director of Women’s
Health. Hamilton testified that this complaint was the first
time he learned of Keeshan’s Hispanic descent.
Two days after receiving Keeshan’s request for
productivity bonuses and her discrimination complaint, Hamilton
1
During a colloquy with court at the close of trial,
Keeshan’s counsel maintained that Keeshan never pursued a
religious discrimination complaint in her pleadings and that the
issue of her religion was “water under the bridge.” J.A. 303.
The Title VII heading of Keeshan’s supplemental complaint refers
only to racial discrimination. But in the factual allegations
she refers to the “racial and religious discrimination
grievance” that she submitted to the Cooperative. J.A. 29.
Because her Title VII retaliation claim was based on this
grievance that alleged discrimination on both grounds, the court
instructed the jury that it could find unlawful retaliation
based on Keeshan’s complaint of “race and/or religious
discrimination.” J.A. 363.
8
talked with her at a board meeting. He inquired about her plans
to attend law school and discussed whether they could agree on
some changes that would make her happy. The next day Hamilton
gave Keeshan a proposed agreement. Noting that Keeshan’s
“service obligation to [NHSC] ends in four short months” and
that it “is important to finish any task well,” Hamilton offered
to (1) meet personally with the staff in the OB-GYN division to
“reduce the level of tension that has arisen there;” (2)
reassign Keeshan to a different Cooperative office as the sole
OB-GYN for the remainder of her NHSC term; (3) remove the
warning letter regarding Keeshan’s unauthorized on-call
arrangement from her personnel file; (4) allow a family practice
resident to rotate through Keeshan’s new office; and (5)
“discuss[] in good faith” the prospect of Keeshan’s employment
with the Cooperative beyond her NHSC obligation, “assuming all
aspects of this agreement are in effect.” S.A. 167-68.
Hamilton proposed that, in return, Keeshan rescind her
grievances against the Cooperative, demonstrate a willingness to
engage in “constructive personal dialogue” on her various areas
of conflict with the Cooperative, and that Keeshan’s husband
cease communication with the Cooperative. S.A. 168. Keeshan
objected to the proposed relocation and did not accept the
agreement. Hamilton gave Keeshan a revised agreement without the
relocation proposal. Unsatisfied with the proposed term that
9
her husband cease communication with the Cooperative, Keeshan
rejected the revised agreement. The Cooperative then gave
Keeshan 120 days’ notice that her contract would not be renewed
after July 2004.
In May 2004 Keeshan filed a discrimination and
retaliation complaint with the EEOC. The complaint was
transferred to the South Carolina Human Affairs Commission, and
Keeshan received a right to sue letter in October 2004. Keeshan
sued the Cooperative in South Carolina state court. After she
amended her complaint to include federal claims, the case was
removed to federal court in the District of South Carolina.
Keeshan’s claims included a racial discrimination claim under
Title VI and Title VII, a retaliation claim under Title VI and
VII, and claims under state law for wrongful discharge and
unpaid wages. The district court granted summary judgment to
the Cooperative on Keeshan’s Title VI claims, Title VII
discrimination claim, and wrongful discharge claim. Keeshan’s
Title VII retaliation claim and her unpaid wages claim proceeded
to a jury trial in February 2008.
B.
Over objection from Keeshan’s counsel, the jury heard
Keeshan testify on cross-examination about her income after
leaving the Cooperative. Keeshan said that her yearly income in
2007 was $300,000. Keeshan’s counsel argued that her income
10
after 2005 was irrelevant because she was not seeking back pay
for any period after that year. The Cooperative’s counsel
responded that her current income was relevant in that it
“show[ed] that she is much better off today than if she had
stayed where she was.” J.A. 276. Moreover, the Cooperative’s
counsel maintained that Keeshan’s current salary was relevant to
her request for punitive damages. The court was persuaded by
the last point and ruled that the 2007 salary testimony was
admissible if Keeshan sought punitive damages. At the close of
trial, the court ultimately found insufficient evidence of
malicious or reckless conduct by the Cooperative to warrant a
punitive damages instruction to the jury. The jury found for
the Cooperative on both the retaliation and unpaid wages claims.
Keeshan moved for a new trial on the grounds that the
jury was unduly prejudiced after learning of her $300,000
salary. In support of her motion, she submitted an affidavit
swearing that she heard “gasps from the jury box” and that she
could tell from the astonished looks on jurors’ faces that they
had already decided against her. J.A. 373-74. The court denied
Keeshan’s motion and taxed Keeshan with costs as the losing
party. Keeshan appeals, asking this court to (1) reverse the
grant of summary judgment to the Cooperative on her wrongful
discharge claim, (2) hold that she is entitled to a new trial on
the grounds that her post-termination income was erroneously
11
admitted into evidence, and (3) hold that even if she remains
the losing party, she should not be taxed with the Cooperative’s
costs.
II.
A.
We first address the district court’s grant of summary
judgment to the Cooperative on Keeshan’s state law wrongful
discharge claim. Keeshan maintains that she was wrongfully
discharged in retaliation for asserting her right to unpaid
wages under South Carolina’s Payment of Wages Act, for
exercising her civil rights, and for refusing to aid the
unlicensed practice of medicine and insurance fraud. This
wrongful discharge claim is based on South Carolina’s public
policy exception to the employment at-will doctrine. The
exception permits a cause of action “where the retaliatory
discharge of an at-will employee constitutes violation of a
clear mandate of public policy.” Ludwick v. This Minute of
Carolina, Inc., 337 S.E.2d 213, 225 (S.C. 1985). The exception
applies to at-will employees’ claims of retaliatory termination
for invoking their rights under the Payment of Wages Act. Evans
v. Taylor Made Sandwich Co., 522 S.E.2d 350, 354 (S.C. Ct. App.
1999).
The district court held that Keeshan could not avail
herself of the public policy exception because she was not an
12
at-will employee of the Cooperative. The court rejected
Keeshan’s comparison of her contract to that in Stiles v.
American General Life Insurance Co., 516 S.E.2d 449, 451 (S.C.
1999), in which the South Carolina Supreme Court found the
durational terms of an employment contract so indefinite that
the employee was essentially at-will. The contract allowed
either party to terminate the employment relationship “for any
reason” upon thirty days’ written notice. Id. at 450. The
supreme court reasoned that the notice provision was so
unrestricted that it left the employee “in the same position as
an at-will employee with the only difference being that the
employer is required to give the employee notice prior to
terminating employment.” Id. at 451.
We agree with the district court that Keeshan failed
to raise a material factual dispute over whether she was an at-
will employee. The automatic renewal provision indicates that
the contract would continue from year to year absent one of the
specified termination-triggering occurrences. The notice
provision, if invoked, had to be invoked at least 120 days prior
to the end of a one-year term. This durational restriction
distinguishes Keeshan’s contract from the completely unfettered
contract in Stiles. The contract in Stiles contained no
definite durational term, whereas Keeshan’s contract provided
that it would remain in effect “for one year from the date
13
[Keeshan] begins employment and shall be automatically renewed
for successive one year terms.” S.A. 97 (emphases added).
Although Keeshan’s contract contained a 120-day notice
provision that could be invoked by either party, her contract
had more constraints than the contract in Stiles. Because
Keeshan started at the Cooperative on July 17, 2000, the one-
year terms ran from July 17 of one year to July 17 of the next.
When Keeshan refused to accept Hamilton’s revised agreement by
March 5, 2004, the Cooperative gave her 120 days’ notice that
her employment would not continue after she completed the last
one-year term of her four-year scholarship requirement. March 5
was the first day of the 120-day notice period. Keeshan’s
employment with the Cooperative ended on July 17, 2004, 132 days
later. If the Cooperative had tried to give Keeshan 120 days’
notice on, say, March 30 instead of March 5, this would have
violated the contract because there would be fewer than 120 days
remaining on the term. Keeshan’s contract was therefore unlike
the contract in Stiles, which did not have a durational term
constraining the parties’ ability to invoke the notice
provision. Indeed, Keeshan herself interpreted the notice
provision as protecting her from having at-will status. She
testified that during her discussion with Hamilton over his
proposed resolution of her complaints, she explained that she
14
was “not going to waive [her] 120 day notification. Otherwise
[she] would be an at-will employee.” S.A. 74.
Further, the other termination-triggering events
listed in the contract (death, total disability, material
breach, unprofessional conduct, and financial exigency) suggest
that unlike the parties in Stiles, neither Keeshan nor the
Cooperative had unbounded discretion to end the employment
relationship. Keeshan was not an “otherwise at-will employee,”
with the “only difference” being that the Cooperative had to
give her 120 days’ notice of termination. Stiles, 516 S.E.2d at
450-51 (emphasis added). Her contract contained a durational
term of one year and limited the time period during which the
parties could invoke the notice provision.
B.
We now turn to Keeshan’s argument that her compelled
cross-examination testimony on her income after leaving the
Cooperative was irrelevant and prejudiced the jury to decide
against her. “A trial court possesses broad discretion in
ruling on the admissibility of evidence, and we will not
overturn an evidentiary ruling absent an abuse of discretion.”
United States v. Hedgepeth, 418 F.3d 411, 418-19 (4th Cir.
2005). An “abuse of discretion occurs only when a trial court
has acted arbitrarily or irrationally in admitting evidence,
when a court has failed to consider judicially recognized facts
15
constraining its exercise of discretion, or when it has relied
on erroneous factual or legal premises.” Id. at 419 (internal
citations and quotations omitted). “If an evidentiary ruling is
found to be erroneous, we then review the error for
harmlessness.” Id. (internal citations and quotations omitted).
To conclude that the district court’s evidentiary errors were
harmless, “we need only be able to say with fair assurance,
after pondering all that happened without stripping the
erroneous action from the whole, that the judgment was not
substantially swayed by the error.” United States v. Heater, 63
F.3d 311, 325 (4th Cir. 1995) (internal citations and quotations
omitted).
We agree with Keeshan that the district court’s
admission of her testimony on her post-termination income was
based on an erroneous legal premise and was therefore an abuse
of discretion. The court found the testimony relevant to
Keeshan’s request for punitive damages, which she sought under
her Title VII retaliation claim. Title VII permits recovery of
punitive damages from private employers “if the complaining
party demonstrates that the respondent engaged in a
discriminatory practice or discriminatory practices with malice
or with reckless indifference to the federally protected rights
of an aggrieved individual.” 42 U.S.C. 1981a(b)(1). This
standard requires the plaintiff to show that the employer
16
“discriminate[d] in the face of a perceived risk that its
actions will violate federal law.” Kolstad v. Am. Dental Ass’n,
527 U.S. 526, 536 (1999). It is axiomatic that the purpose of
punitive damages is to punish and deter defendants. “Most often
. . . eligibility for punitive awards is characterized in terms
of a defendant’s motive or intent.” Id. at 538 (emphasis
added). That Keeshan’s salary nearly doubled after leaving the
Cooperative may indicate that Keeshan was better off in another
job. But her improved financial status is irrelevant to her
contention that the Cooperative terminated her with malice or
reckless indifference to her right under Title VII to bring a
racial and religious discrimination complaint.
Yet we are satisfied that this error was harmless.
After reviewing the record, we can say with more than “fair
assurance” that the jury was not “substantially swayed” by the
revelation of Keeshan’s higher salary to render a verdict for
the Cooperative. Heater, 63 F.3d at 325. After the court
declined to send a punitive damages instruction to the jury,
Keeshan’s counsel did not proffer a limiting instruction that
Keeshan’s subsequent income was irrelevant to her claims. The
district court correctly instructed the jury on what Keeshan had
to show to prevail on her Title VII retaliation claim, and her
Wages Act claim. The court also instructed the jury to follow
17
the law as stated by the court and not to decide based on
personal dislikes or prejudices.
Without “stripping the erroneous action from the
whole,” Heater, 63 F.3d at 325, the record supports the jury’s
findings for the Cooperative. A Title VII retaliation claim
requires a plaintiff to prove that (1) she engaged in protected
activity, (2) an adverse employment action was taken against
her, and (3) a causal connection between the protected activity
and the adverse action. Holland v. Wash. Homes, Inc., 487 F.3d
208, 218 (4th Cir. 2007). Keeshan would have to show that the
Cooperative did not renew her contract “because [she] engaged in
a protected activity” by complaining about discrimination. Id.(emphasis in original) (internal citations and quotations
omitted). If a plaintiff establishes a prima facie case, the
burden shifts to the defendant to articulate a “legitimate
nonretaliatory reason for its actions.” Id. (internal citations
and quotations omitted).
The record comes up far short for Keeshan on the third
element of a prima facie retaliation claim: the causal
connection between the adverse action and the protected
activity. Keeshan’s problems at the Cooperative started long
before she filed her discrimination complaint. Hamilton
testified that problems started as early as 2002 over Keeshan’s
billing and appointment scheduling discrepancies. And Keeshan
18
sent the email to which Hamilton took offense in May 2003,
nearly a year before she filed her discrimination complaint.
Keeshan even referred to her “widening rift” with Hamilton in
the email. S.A. 102. The jury could therefore find that
Keeshan showed no causal connection between the complaint and
the nonrenewal of her contract.
Even if Keeshan could establish a prima facie case,
the record supports the conclusion that the Cooperative
terminated her for a legitimate, nonretaliatory reason: her
interpersonal conflicts with Davis and Hamilton and her
contribution to a friction-laden atmosphere in the OB-GYN
division starting in 2003. It is clear that there was seldom a
meeting of the minds between Keeshan, Hamilton, and Davis when
it came to professional matters. It was up to the jury to
determine whether the Cooperative terminated Keeshan in
retaliation for her discrimination complaint. The record gives
us “fair assurance” that the disclosure of Keeshan’s higher
salary upon leaving the Cooperative did not prejudice the jury
to ignore or discount a causal connection between the
discrimination complaint and the termination, or to find a
legitimate nonretaliatory reason where none existed. Heater, 63
F.3d at 325. The abundant evidence of Keeshan’s tension-fraught
relationship with Hamilton and Davis persuades us that the jury
decided against her based on the law, not her subsequent higher
19
salary. We note that Keeshan’s salary at the Cooperative was
not paltry, so we are not convinced that after learning that she
continued to earn more than most Americans, 2 the jury decided to
ignore Title VII law.
There is more room for prejudicial effect on Keeshan’s
Payment of Wages Act claim. This claim was based on Keeshan’s
contention that the Cooperative unlawfully withheld
“productivity bonuses” that she was owed under her contract.
Her contract provided that if her base salary was less than
forty percent of her “net production (collected fees)” she would
“receive a settlement in an amount equal to the difference
between the base salary and such sum.” S.A. 95. Keeshan’s
testimony on her subsequent salary put her in the position of
arguing that although she enjoyed a considerable income, she was
entitled to an additional $127,500 in productivity bonuses.
However, we are satisfied that the jury based its finding for
the Cooperative on both sides’ presentation of the numbers
during the period of Keeshan’s employment with the Cooperative,
not on her later income.
2
The medium household income for the United States in 2002-
2004 was $44,473. The medium household income for South
Carolinians during this period was $39,326. U.S. Census Bureau,
Three-Year Medium Household Income by State, 2002-2004,
available at
http://www.census.gov/hhes/www/income/income04/statemhi.html.
20
Keeshan testified to her base salary during each year
of her employment with the Cooperative. At the request of the
Cooperative’s counsel during cross-examination and with the aid
of a calculator, Keeshan multiplied her collected fees by 0.4.
The numbers that Keeshan plugged in for her collected fees came
from the Cooperative’s answers to her interrogatory requests for
the “sum of all amounts actually paid to [the Cooperative] by
any person or payor for care or services rendered by Dr.
Keeshan” for each year from 2000 to 2004. S.A. 200-01. When
Keeshan multiplied these yearly fees by 0.4 and then compared
the result to her corresponding base salary for those years, it
was clear that her base salary always exceeded 40 percent of
these collected fees.
Keeshan disputed the accuracy of the Cooperative’s
calculation of her collected fees, but she did not offer
anything more accurate from which we can conclude that the
jury’s verdict for the Cooperative was so off-base as to
indicate that it was “substantially swayed” by some resentment
towards Keeshan’s financial status at the time of trial.
Heater, 63 F.3d at 325. Hamilton testified to how Keeshan’s
collected sums were calculated and explained how insurance
adjustments factored in. He said that part of the difficulty in
calculating Keeshan’s collected sums, at least for the years
2000-2002, was because Keeshan billed nurse practitioner
21
services under Keeshan’s provider number and Keeshan “set the
appointment schedule such that it looked like she was seeing a
large number of patients . . . but in reality, the nurse
practitioner was hidden in the appointment schedule under Dr.
Keeshan’s name.” J.A. 108. He explained that the Cooperative
then had to “go and do a manual count by hand employing extra
people to go through 13,000 records to sort out who was actually
doing what.” J.A. 109. After receiving Keeshan’s memorandum
requesting productivity bonuses, the Cooperative rehired a
previous employee from the billing office who had assisted in
separating Keeshan’s billings from 2000 to 2002. We find
nothing in the record to indicate that the jury accepted
calculations so blatantly inaccurate that we can infer that its
Wages Act verdict was tainted by Keeshan’s subsequent income.
Keeshan’s testimony on the numbers was not overflowing with
conviction. She explained that some of her figures came from
“extrapolation” based on “other physicians in the community who
had a similar pay mix and [were] doing similar work.” J.A. 200.
She kept “handwritten post-its” of the procedures she performed,
which she later threw out. J.A. 266-67. The record leaves us
more than fairly assured that the jury’s verdict on the Wages
Act claim was not substantially swayed by the erroneously
admitted testimony on Keeshan’s subsequent income.
22
Because there was ample evidence indicating that the
verdicts were not substantially swayed by the erroneously
admitted testimony, we readily conclude that the district court
did not abuse its discretion by denying Keeshan’s motion for a
new trial. “In considering a motion for a new trial, a trial
judge may weigh the evidence and consider the credibility of
witnesses, and if he finds the verdict is against the clear
weight of the evidence, is based on false evidence or will
result in a miscarriage of justice, he must set aside the
verdict, even if supported by substantial evidence, and grant a
new trial.” Chesapeake Paper Prods. Co. v. Stone & Webster
Eng’g Corp., 51 F.3d 1229, 1237 (4th Cir. 1995) (internal
citations and quotations omitted). This court will not reverse
the decision “save in the most exceptional circumstances”
evincing a “clear abuse of discretion.” Bristol Steel & Iron
Works v. Bethlehem Steel Corp., 41 F.3d 182, 186 (4th Cir. 1994)
(internal citations and quotations omitted).
In support of her motion for a new trial, Keeshan
submitted an affidavit swearing that she heard “gasps from the
jury box” when she revealed her subsequent income, and that some
jurors looked at her with open mouths and astonished eyes. J.A.
373. The Cooperative contends that this affidavit is
inadmissible under Fed. R. Evid. 606(b), which provides that
“evidence of any statement by the juror may not be received on a
23
matter about which the juror would be precluded from
testifying,” including matters “concerning the juror’s mental
processes in connection with” the verdict. Id. Keeshan’s
affidavit is more accurately characterized as Keeshan’s
impression of the effect of her testimony on the jury, not
evidence of a juror statement. Regardless, even if the district
court credited Keeshan’s recollection, the court did not abuse
its discretion in concluding that the clear weight of the
evidence outweighed any possible prejudice from Keeshan’s
testimony. As explained above, the record leaves us assured
that the jury correctly applied the law.
C.
Finally, we take up Keeshan’s argument that the
district court should not have imposed costs on her as the
losing party. As an initial matter, we reject the Cooperative’s
contention that this argument was not preserved for appeal
because Keeshan’s notice of appeal did not explicitly indicate
that she was challenging the district court’s imposition of
costs. Federal Rule of Appellate Procedure 3(c)(1)(B) requires
appellants to “designate the judgment, order, or part thereof
being appealed.” “We liberally construe Rule 3(c)’s
requirements concerning the sufficiency of the notice of appeal
to avoid technical impediments to appellate review.” Spence v.
Educ. Credit Mgmt. Corp. (In re Spence), 541 F.3d 538, 543 (4th
24
Cir. 2008). “[E]ven when a party files a notice of appeal that
is technically at variance with the letter of a procedural rule,
a court may nonetheless find that a litigant has complied with
the rule if the litigant’s action is the functional equivalent
of what the rule requires.” United States v. Little, 392 F.3d
671, 681 (4th Cir. 2004) (internal quotations omitted). “[A]n
error in designating the issue appealed will not result in a
loss of appeal as long as the intent to appeal a specific
judgment can be fairly inferred and the appellee is not
prejudiced by the mistake.” Bogart v. Chapell, 396 F.3d 548,
555 (4th Cir. 2005) (internal citations and quotations omitted).
“The appellant simply needs to address the merits of a
particular issue in her opening brief in order to demonstrate
that she had intent to appeal that issue and the appellees were
not prejudiced by her mistake, inasmuch as they had notice of
the issue and the opportunity to fully brief it.” Id.Keeshan’s notice of appeal says that she appeals “from
the final judgments and orders granting summary judgment and
denying Plaintiff’s Motion for New Trial.” J.A. 378. The
district court’s imposition of costs is a final judgment and
although Keeshan did not specifically designate the cost issue
in her notice of appeal, she addressed the merits in her opening
brief and the Cooperative responded in its brief. The
Cooperative has not shown prejudice from Keeshan’s lack of
25
specificity in the notice. Keeshan’s costs challenge is
therefore properly before this court.
As Keeshan acknowledges, her contention that costs
should be awarded to prevailing Title VII defendants only in
rare circumstances is contrary to the plain language of Federal
Rule of Civil Procedure 54(d)(1) and the law of this circuit.
Rule 54(d)(1) presumes that costs are awarded to the prevailing
party: “Unless a federal statute, these rules, or a court order
provides otherwise, costs – other than attorney’s fees – should
be allowed to the prevailing party.” A district court’s award
of costs is reviewed for abuse of discretion. Cherry v.
Champion Int’l Corp., 186 F.3d 442, 446 (4th Cir. 1999).
However, Rule 54(d)(1) places some restraint on this discretion
by indicating when costs should not be awarded to prevailing
parties as a matter of course, such as when a statute or a court
order provides otherwise. In Cherry we held that when a statute
or federal rule of civil procedure does not shift costs to the
prevailing party, a court may not do so except in rare
circumstances including: “misconduct by the prevailing party
worthy of a penalty”; “the losing party’s inability to pay”; the
“excessiveness [of the costs] in a particular case”; “the
“limited value of the prevailing party’s victory”; or “the
closeness and difficulty of the issues decided.” Id.26
The Supreme Court has held that Title VII cabins
courts’ discretion to award attorneys’ fees to prevailing
defendants, but the Court has not held the same with regard to
costs. A prevailing Title VII defendant should not be awarded
attorneys’ fees from the losing plaintiff unless the court finds
that the plaintiff’s claim was “frivolous, unreasonable, or
groundless, or that the plaintiff continued to litigate it after
it clearly became so.” Christiansburg Garment Co. v. Equal
Employment Opportunity Comm’n, 434 U.S. 412, 422 (1978).
Most circuits, including this one, have rejected the
argument that an unsuccessful Title VII plaintiff’s good faith
in bringing the suit will likewise shield her from being taxed
with her opponent’s costs. “[G]ood faith, standing alone, is an
insufficient basis for refusing to assess costs against [the
losing] party.” Cherry, 186 F.3d at 446; see also Pacheco v.
Mineta, 448 F.3d 783, 794 (5th Cir. 2006) (“Every circuit to
expressly address the question in a published opinion – the
Fourth, Sixth, Seventh, Ninth and Tenth – has ruled that good
faith, by itself, cannot defeat the operation of Rule
54(d)(1).”); Cosgrove v. Sears, Roebuck, & Co., 191 F.3d 98, 101
(2d Cir. 1999) (“We see no reason . . . to apply the same type
of heightened [Christiansburg] standard to the assessment of
costs.”).
27
Keeshan contends that there is no reason to
distinguish between costs and attorneys’ fees under Title VII.
She therefore urges us to reverse Cherry and extend
Christiansburg’s bad faith standard to costs. This panel cannot
overrule the decision of a prior panel. United States v.
Collins, 415 F.3d 304, 311 (4th Cir. 2005). Moreover, we
disagree that there is no reason to distinguish between costs
and attorneys’ fees for unsuccessful Title VII plaintiffs who
litigated in good faith. Christiansburg’s bad-faith standard
was grounded in the rationale that if unsuccessful Title VII
plaintiffs were taxed with defendants’ attorneys’ fees, this
“would undercut the efforts of Congress to promote the vigorous
enforcement of the provisions of Title VII.” 434 U.S. at 422.
The same deterrent rationale does not necessarily hold true for
costs, which are typically much less than attorneys’ fees. 3 See
Poe v. John Deere Co., 695 F.2d 1103, 1108 (8th Cir. 1982)
(“Congress has not . . . carved out an exception to Rule 54(d)
relieving a losing civil rights litigant of the burden of
bearing the costs of litigation. The rationale for this
distinction is clear. Whereas the magnitude and
unpredictability of attorney’s fees would deter parties with
3
The district court taxed Keeshan with costs in the amount
of $ 2823.05. It is safe to assume that this sum is far less
than the Cooperative’s attorneys’ fees.
28
meritorious claims from litigation, the costs of suit in the
traditional sense are predictable and, compared to the costs of
attorneys’ fees, small.”). And, as the Seventh Circuit has
observed, “[i]f the awarding of costs could be thwarted every
time the unsuccessful party is a normal, average party and not a
knave, Rule 54(d) would have little substance remaining.”
Popeil Bros. v. Schick Elec., Inc., 516 F.2d 772, 776 (7th Cir.
1975). The district court thus acted well within its discretion
by taxing Keeshan with the Cooperative’s costs.
The district court also properly taxed Keeshan with
costs on her Payment of Wages Act claim because the Cooperative
was the prevailing party. If an employer is found liable under
the Wages Act, “the employee may recover in a civil action an
amount equal to three times the full amount of the unpaid wages,
plus costs and reasonable attorney’s fees.” S.C. Code Ann.
§ 41-10-80(C). The statute allows prevailing plaintiffs to
recover treble damages, costs, and attorneys fees, but it is
silent on when losing plaintiffs may avoid the attorneys’ fees
and costs of their successful opponents. Therefore, Rule
54(d)(1)’s presumption of awarding costs to the prevailing party
applies.
29
III.
For the foregoing reasons, the judgment of the
district court is
AFFIRMED.
30