Free Order on Motion for Miscellaneous Relief - District Court of Arizona - Arizona

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WO

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

) ) ) Plaintiff, ) ) vs. ) ) City of Phoenix, Frank Favela and Frank) ) Peralta, ) ) Defendants. ) ) Monica Ortega-Guerin,

No. CV 04-0289 -PHX-MHM ORDER

This case was tried to a jury who returned verdicts favorable to Plaintiff on her claim 18 based on sexual harassment under Title VII, 42 U.S.C. §§ 2000e et seq., against Defendant 19 City of Phoenix, and on Plaintiff's claims based on civil rights violation under 42 U.S.C. § 20 1983 against Defendants Frank Favela and Frank Peralta. Judgment has been entered. (Doc. 21 80). Defendant City of Phoenix has filed a motion to conform the Judgment to the statutory 22 cap. (Doc. 81). Defendant Frank Favela has filed a motion to amend or correct the Judgment. 23 (Doc. 93). All Defendants have filed a motion for new trial on damages or alternatively, 24 request for remittitur of the verdict. In this motion, Defendant Favela and Peralta seek to 25 void the punitive damages awarded against them. (Doc. 82). Plaintiff has filed responses 26 in opposition to these motions (Doc. 87, 88 & 98) and Defendants have filed replies. (Doc. 27 91, 96 & 104). 28
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I. Motion of Defendant City of Phoenix to Conform Judgment to Statutory Cap. The jury returned a verdict awarding Plaintiff the sum of $850,000.00 against the Defendant City of Phoenix on her Title VII claim. Defendant City contends that the Judgment should be conformed to reflect an award of $300,000.00 in damages based on the statutory cap at 42 U.S.C. § 1981a(b)(3)(D). Plaintiff opposes Defendant's motion,

contending that Defendant City of Phoenix has waived the issue because it failed to plead the statutory cap as an affirmative defense in its answer and failed to preserve the issue in the Final Pretrial Order. Defendant City has filed a reply arguing that it has not waived the issue and is requesting conformity of the Judgment as mandated by the statute. A person who has been the victim of intentional discrimination in employment may recover compensatory damages but there is a limit on the damages that can be awarded. Under 42 U.S.C. § 1981a(b)(3)(D), a maximum of $300,000.00 may be recovered where an employer has "more than 500 employees in each of 20 or more calendar weeks in the current or preceding calendar year ... ." The parties do not dispute that the Defendant City of

Phoenix is an employer meeting this description. Plaintiff in her response has not cited any cases specifically on point in support of her argument that Defendant City waived application of Title VII's statutory cap by failing to plead it as an affirmative defense or preserve the issue in the Final Pretrial Order. In Oliver v. Cole Gift Centers, Inc., 85 F. Supp. 2d 109 (D. Conn. 2000), the district court held that the statutory cap set out in § 1981a(b)(3) is not an affirmative defense and is not waivable. Id., at 112. In reaching this conclusion, the district court first noted that no plaintiff claiming damages under Title VII could complain of unfair surprise, prejudice or lack of opportunity to respond when confronted with the limitation on damages because the limitation is part of the statutory scheme under which the plaintiff was proceeding. The district court further observed that the Supreme Court had never referred to a requirement that the cap be pleaded as an affirmative defense. The Second Circuit also had not referred to Title VII's statutory -2-

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cap as an affirmative defense. Id. In Giles v. General Electric Co., 245 F.3d 474, 491-92 (5th Cir. 2001), the Fifth Circuit found that it did not need to reach the issue but mentioned the holding in Oliver that the § 1981a cap is an integral part of the statutory scheme under which the plaintiff sought damages and thus the plaintiff could not have suffered unfair surprise in the invocation of the cap. Id., 492 & n. 32. Similarly, neither party has cited any Ninth Circuit authority that the statutory cap must be pleaded as an affirmative defense. The cap is part of the statutory scheme under which Plaintiff sought damages with respect to her Title VII claim and thus she could not have suffered unfair surprise by its invocation. The motion of Defendant City of Phoenix to conform the Judgment based on § 1981a's statutory cap is granted. Plaintiff's jury award under Title VII must be reduced to $300,000.00 for the total sum of compensatory damages against Defendant City of Phoenix. II. Defendant Favela's Motion to Correct the Judgment. Defendant Favela contends that the Judgment entered in this case awarding $350,000.00 in punitive damages against him is in error. Defendant Favela contends that the jury returned a verdict awarding $35,000.00 in punitive damages based on Plaintiff's § 1983 civil rights claim. The jury verdicts in this case have been sealed. Defendant Favela is correct, however, that the jury verdict against him reflects an award of $35,000.00 in punitive damages as to Plaintiff's civil rights claim. Pursuant to Fed.R.Civ.P. 60(a), "clerical mistakes in judgments" and "errors arising through oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party and after such notice, if any, as the court orders." Defendant Favela's motion to correct the Judgment is granted. The Clerk will be directed to correct the Judgment to reflect punitive damages in the amount of $35,000.00 against Defendant Favela on Plaintiff's civil rights claim as to that defendant.

III. Defendants' Motion under Fed.R.Civ.P. 59; -3-

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Motion for New Trial on Damages or Alternatively Request for Remittitur as to Defendant City of Phoenix; Motion to Void Punitive Damages as to Defendants Peralta and Favela. A motion for new trial under Fed.R.Civ.P. 59(a) shall be filed no later than ten days after entry of the judgment. Defendants filed their motion for new trial on damages or request for remittitur, and to void the punitive damages verdicts, within ten days of entry of the Judgment. Under the present circumstances, the court may grant a new trial only if the verdict is contrary to the clear weight of the evidence or to prevent a miscarriage of justice. Ace v. Aetna Life Ins. Co., 139 F.3d 1241, 1248 (9th Cir. 1998). The jury's findings as to the appropriate amount of damages is to be afforded "substantial deference." Passantino v. Johnson & Johnson Consumer Products, Inc., 212 F.3d 493, 511 n.16 (9th Cir. 2000) (citing Del Monte v. Monterey, 95 F.3d 1422, 1435 (9th Cir. 1996)). A jury's finding on the amount of damages should be set aside only if the amount is clearly unsupported by the evidence. Id. (citing Chalmers v. City of Los Angeles, 762 F.2d 753, 760 (9th Cir. 1985)). See also, Velez v. Roche, 335 F. Supp. 2d 1022, 1038 (N.D.Cal. 2004)(citing Zhang v. American Gem Seafoods, Inc., 339 F.3d 1020, 1040 (9th Cir. 2003)(jury's findings on amount of damages should be reversed only if the amount is "grossly excessive or monstrous"); and, Brady v. Gebbie, 859 F.2d 1543, 1557 (9th Cir. 1988)(jury's damages determination may be reversed if the amount is "clearly unsupported by the evidence" or "shocking to the conscience")). The federal court has no general authority to reduce the amount of a jury's verdict because the Seventh Amendment prohibits re-examination of a jury's determination of the facts, which includes its assessment of the extent of the plaintiff's injury. Johansen v. Combustion Eng'g., Inc., 170 F.3d 1320, 1328-29 (11th Cir. 1999). If, after viewing the evidence concerning damages in a light most favorable to the prevailing party, the court determines that a jury's award is excessive, the court has two options. Casumpang v. International Longshore & Warehouse Union, Local 142, 411 F. Supp. 2d 1201, 1214 (D. Hawaii 2005). The court may grant a defendant's motion for a new trial or deny the motion conditional upon the prevailing party accepting a remittitur. Id. -4-

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Defendant City of Phoenix contends that the jury's Title VII verdict was not supported by the evidence where Plaintiff presented no economic damages, she suffered no tangible employment action and she had no more than five visits to her primary care physician. In addition, Plaintiff never sought any form of professional counseling or mental health treatment. Given the reduction of the jury award to $300,000.00 to reflect the statutory cap, the issue is whether an award of $300,000.00 is excessive. Under § 1981a(b)(3), a plaintiff may be awarded a sum of compensatory damages for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses. The Court must view the evidence concerning damages in the light most favorable to the prevailing party. The Court must focus on evidence of the qualitative harm suffered by the Plaintiff and not simply on the severity of the conduct constituting the harassment. Velez v. Roche, 335 F. Supp. 2d at 1038 (citing, inter alia, Passantino, 212 F.3d at 513-14). "The severity or pervasiveness of the conduct is relevant insofar as it provides probative evidence from which a jury may infer the nature and degree of emotional injury suffered, but direct evidence of the injury is still the primary proof." Id. Emotional damages awards need not be supported by "objective" evidence. Passantino, 212 F.3d at 513. "'In determining whether a jury award for compensatory damages is excessive, a court may review awards made in similar cases to determine whether or not an award is excessive and calls for an order of remittitur.'" Velez, 335 F. Supp. 2d at 1039 (quoting Thornton v. Kaplan, 958 F. Supp. 502, 505 (D. Colo. 1996)). In this case, Plaintiff and Defendant Peralta were co-workers at the City of Phoenix water distribution department. Plaintiff's supervisor in April 2001 was Defendant Favela. Defendant Peralta occasionally served as backup foreman and Plaintiff's supervisor. Plaintiff testified that the difficult interactions or problems with Defendant Peralta began in April 2001, describing an incident in which Mr. Peralta called her "knucklehead" over the company radio. Plaintiff described several additional incidents that occurred between April 2001 and October 2002. As to these incidents, Defendant Peralta touched Plaintiff or had physical -5-

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contact with her in a manner that was not welcome. Plaintiff testified that Defendant Peralta grabbed her in a headlock and rubbed her hair, gave her a bear hug on more than one occasion, came up behind her and placed his hands on her shoulders, massaged her shoulders, and grabbed her thighs and attempted to pull her toward his lap. Plaintiff described these incidents as occurring numerous times or "constant." Plaintiff testified that Defendant Peralta told her she was pretty and referred to her as "Reyna", which means "Queen." Plaintiff testified that Mr. Peralta told her he thought she was beautiful and wanted to meet her after hours. Plaintiff thought Mr. Peralta had a crush on her. In approximately August 2002, when Plaintiff was on the phone with a customer, Mr. Peralta grabbed her from behind and put her in a choke hold. Plaintiff dropped the phone, stood up and punched Mr. Peralta in the stomach. Plaintiff immediately went to Defendant Favela's office and reported the incident. Defendant Peralta's supervisor was present in Mr. Favela's office. According to Plaintiff, Defendant Favela "chuckled" but did not say he would take any action regarding the incident. Plaintiff testified that prior to this incident, Mr. Peralta put her in a choke hold when Mr. Favela was present in her office making copies and Plaintiff yelled for Peralta to stop. Mr. Favela who witnessed the incident shook his head and walked out. On another occasion, Defendant Favela witnessed Mr. Peralta grab Plaintiff's legs and pull her towards him. Plaintiff testified that Defendant Peralta embraced Plaintiff in a bear hug and this activity occurred or was witnessed by Defendant Favela who covered his eyes. Plaintiff testified that she cried silently as she walked out of Mr. Favela's office where the incident had occurred because she wanted Mr. Favela to make Mr. Peralta stop. She then went back into Defendant Favela's office, shut the door and said he needed to do something about what had happened. When Mr. Favela asked her what she wanted done, Plaintiff told him he needed to do his job. Plaintiff testified that on one occasion when she was walking in the hallway with friend and co-worker Cathy White, Defendant Peralta grabbed her from behind and she screamed. When she complained to Defendant Favela who was walking in front of them, -6-

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Mr. Favela covered his eyes. Cathy White testified that she did not actually see what Mr. Peralta had done but confirmed that Mr. Favela was present at the time of this incident and that he told Plaintiff he had not seen anything. City employee Robert Nandin testified that he saw Defendant Peralta come up from behind Plaintiff when she was in her office and "hug" her around the neck. Mr. Nandin testified that Plaintiff was hitting Mr. Peralta and obviously wanted him to stop and that Defendant Favela was present and observed this conduct. When Plaintiff told Mr. Peralta to stop, he laughed and did not apologize. Coemployee Larry Tellez testified that he saw Defendant Peralta grab Plaintiff on the inside of her right leg and pull her toward him. Plaintiff pushed Mr. Peralta away and told him to let her go. Mr. Tellez also told Peralta to let go of the Plaintiff and noticed that Plaintiff was angry and upset. Plaintiff testified about an incident in October 2002 that occurred in the office and presence of Albert Bivens, a swing shift supervisor, when Defendant Peralta came up behind her, grabbed her at the neck and shoulder and started shaking her. Plaintiff yelled at Peralta to stop but he would not let go. Mr. Bivens testified that he tried to assist Plaintiff and yelled at Peralta to stop. Mr. Bivens also thought about calling the police. Mr. Peralta, however, was laughing and giggling and then let go of the Plaintiff. Plaintiff testified that she was physically "hurt" by Peralta's impermissible touching. Mr. Bivens reported the incident to Defendant Favela and filed a report. Mr. Peralta apologized to Plaintiff after this incident. Mr. Favela also apologized to Plaintiff and her husband. At the time of these incidents, Plaintiff was approximately 40 years of age, was married, and had been working for the City of Phoenix since 1989 without any kind of reprimand or disciplinary action. Plaintiff had worked with Defendant Peralta for approximately nine years. Plaintiff testified that Mr. Peralta would pull at her so forcefully as to leave bruises on her arms and inner thighs which Plaintiff would have to explain to her husband. Cathy White confirmed that Plaintiff had shown her some bruising. Plaintiff testified that just before the incidents in August or September 2002, she was "stressing out". Plaintiff's hair was falling out in "chunks" as noticed by her hair dresser. -7-

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Plaintiff noticed hair loss on her brush and when she took a shower. Plaintiff testified that she felt anxiety, could not sleep or be close to her husband and had a suffocating feeling. Plaintiff went to see her doctor who suggested various causes such as caffeine. On the third visit, Plaintiff's doctor told her that hair loss like Plaintiff was experiencing indicated she was under tremendous stress and prescribed medication for anxiety which Plaintiff took for approximately two years. Plaintiff testified that she had a difficult time finding the proper dosage of this medication. Plaintiff testified that by the time the incident occurred in Mr. Bivens' office, she was stressed and depressed and her doctor prescribed an antidepressant. Plaintiff took the antidepressant medication for three months. The medication helped the depression but caused low sex drive as a side effect. Plaintiff testified that as a result of the harassing incidents, she had less patience with her children and did not want to have sex with her husband. She and her husband began to quarrel. Plaintiff took two weeks of

administrative leave after the October 2002 incident involving Peralta that occurred in Bivens' office. Plaintiff provided testimony which the jury found credible about the emotional pain, suffering, inconvenience, mental anguish and loss of enjoyment of life she suffered as a result of the harassing conduct. The conduct occurred over a period of approximately eighteen months and Plaintiff described it as "constant." How the conduct would affect someone would vary from person to person. Plaintiff did in fact seek medical treatment after the October 2002 incident. The parties have cited several cases on which to base a comparison of awards to determine whether the award in ths case is excessive. Plaintiff cites Zhang v. American Gem Seafoods, Inc., 339 F.3d 1020 (9th Cir. 2003), an employment discrimination case in which the plaintiff had been sidelined in management to the point that the employment action appeared to be a demotion. In Zhang, the plaintiff's employment was ultimately terminated. The jury awarded the plaintiff $360,000.00 in compensatory damages but of that amount between $136,845.00 and $236,845.00 could have been attributed to economic damages. Id., at 1039. The Ninth Circuit held that, regardless of whether the figure for emotional distress -8-

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damages should be $223,155.00 or $123,155.00, it would not disturb the award, holding that the plaintiff's testimony alone was enough to substantiate the jury's award of emotional damages. Id., at 1040. As discussed in the opinion, the jury obviously could have gleaned that the plaintiff was hurt and humiliated by his termination and the manner in which it was carried out. Id., at 1041. Defendant City of Phoenix attempts to distinguish Zhang from the instant case by noting that the plaintiff's discrimination claims in Zhang were based on 42 U.S.C. § 1981, not Title VII. However, in the lengthy list of allegedly comparable cases cited by Defendant City in its motion for new trial, etc., at note 1, the first case listed, Carter v. Duncan-Higgins, Ltd., 727 F.2d 1225, 1238 n. 1(D.C. Cir. 1984), involves a plaintiff's race discrimination claims based on § 1981. In Arevalo v. Oregon Department of Motor Vehicles, 208 F. Supp. 2d 1160 (D. Or. 2002), aff'd, 72 Fed. Appx. 548 (9th Cir. 2003), the jury returned a verdict of $300,000.00 in damages for emotional distress in favor of the plaintiff on his Title VII claims based on sex and national origin discrimination. At the plaintiff's request, the amount was reduced to $250,000.00, the amount of the prayer in the complaint. The plaintiff had worked for the Department of Motor Vehicles ("DMV") for 17 years and was the lead worker and only male in his particular office. Id., at 1161. The jury could have found from the evidence, inter alia, that the plaintiff, as a result of his status as an Hispanic male, had been singled out and subjected to disciplinary process that extended over months and that included unwelcome newspaper coverage of unfounded criminal charges, threats to terminate and to demote him, and a variety of uncomfortable working conditions after his transfer. Id., at 1163. In rejecting the defendants' motion for remittitur, the district court observed that the jury could have found that the plaintiff had experienced significant distress and humiliation for more than a year as a result of DMV's discriminatory conduct and that "[d]amages for emotional distress arising from an employer's unlawful discrimination necessarily are subjective and difficult to quantify." Id., at 1165-66. In Ramseur v. Barreto, 213 F.R.D. 79 (D.D.C. 2003), the jury returned a verdict in favor of the plaintiff on her retaliation claims under Title VII. The jury's total damages -9-

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award of $420,000.00 was reduced to $300,000.00 under § 1981a. Id., at 80. Defendant moved for a reduction of the damages award as "excessive" and "against the weight of the evidence." Defendant contended that the plaintiff had not indicated that she was claiming to have suffered health problems and that her trial testimony regarding such problems was not supported by any credible evidence from the medical profession. Defendant's argument was rejected. Id., at 81, 84. In the instant case, the jury verdict of $850,000.00 has been reduced to $300,000.00 as a result of the statutory cap. The award is generous but not so grossly excessive as to shock the conscious of the court. The evidence does not warrant a new trial or a reduction in damages. Defendant City's motion for a new trial or for remittitur is denied. Turning now to the contention of Defendants Peralta and Favela that the punitive damages awards should be voided, in § 1983 cases punitive damages can be awarded in the absence of compensatory or nominal damages as long as the plaintiff has shown that the defendant violated a federally protected right. Passantino, 212 F.3d at 514. In this case, the jury awarded only $1.00 in nominal damages as to Defendants Favela and Peralta on Plaintiff's civil rights claims against them. The jury awarded punitive damages amounts of $25,000.00 against Defendant Peralta and $35,000.00 against Defendant Favela. A punitive damages award may be reduced if it is so high that it violates due process. In its determination of the issue, the court may consider the three factors set out in BMW of North America, Inc., v. Gore, 517 U.S. 559, 574-75 (1996): (1) the reprehensibility of defendant's conduct; (2) the ratio between any compensatory award and the punitive award; and (3) a comparison of the damage award and any potential statutory penalty for the same act. Based on the evidence, a reasonable jury would have been justified in finding that the actions of Defendants Peralta and Favela met the first factor. Mr. Peralta's alleged harassing conduct occurred over an 18-month period of time, was pervasive, and persisted despite Plaintiff's pleas for him to stop. Mr. Peralta admitted putting his hands around Plaintiff's neck and rubbing her head, describing his conduct with Plaintiff as "playing around." He also admitted giving Plaintiff a bear hug. Mr. Peralta testified that his supervisor Mr. Sterne told - 10 -

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him to stop "playing around" with Plaintiff and that he stopped for a while. This occurred in approximately January 2002 when Mr. Sterne witnessed Mr. Peralta grab Plaintiff in a headlock and mess up her hair. Mr. Peralta admitted the August 2002 incident in which Plaintiff punched him and told him to stop. Even though Plaintiff punched Mr. Peralta in the stomach when he grabbed her from behind while she was talking on the phone with a customer, Mr. Peralta did not cease his behavior or apologize until the shaking incident that occurred in Mr. Bivens' office in October 2002. Mr. Peralta denied that Mr. Bivens told him to take his hands off Plaintiff. Mr. Peralta testified that he treated Plaintiff "like a gentleman" should. He also testified that he understood from the discipline he received that he had "played around too much." Based on Plaintiff's testimony, Mr. Peralta's inappropriate touching of the Plaintiff occurred in the presence of Mr. Favela who on more than one occasion "covered his eyes" to the harassing conduct. Cathy White testified that Plaintiff complained about Mr. Peralta to Mr. Favela but Favela took no action. Robert Nandin confirmed an instance of Mr. Peralta's harassing conduct in Mr. Favela's presence and that Favela took no action. The City's investigation report also related that Mr. Favela had covered his eyes when Mr. Peralta grabbed Plaintiff and tried to place her on his lap. It does not appear that Mr. Favela counseled Mr. Peralta until the August 2002 incident. Mr. Favela did not inquire of Plaintiff's co-workers regarding the August 2002 incident and did not report the incident through the chain of command. Mr. Favela was Plaintiff's supervisor for approximately two years. The Court has already discussed Plaintiff's testimony as to the emotional toll the harassing conduct had on her, her family and her quality of life. As to the second factor, where only nominal damages have been awarded in conjunction with a punitive damages award, the use of the multiplier is not the best tool because of the possible high ratio of comparison. See Lee v. Edwards, 101 F.3d 805, 811 (2d Cir. 1996). As discussed in Gore, violations of civil rights may very well be "particularly egregious" acts that result in only "a small amount of economic damages" or injuries whose monetary value is "difficult to determine." Gore, 517 U.S., at 582. - 11 -

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Regarding the third factor, the parties have not directed the Court to any potential statutory penalty or to any case comparisons. In Phillips v. State of Missouri, 2000 WL 33912312 (W.D. Mo. March 29, 2000), the plaintiff was awarded $1,500.00 in compensatory damages and $25,000.00 in punitive damages on his claim based on religious discrimination under § 1983. The district court found that the punitive damages award was not unconstitutionally excessive. Id., at * 9. The Court permitted both Defendants Favela and Peralta to testify as to their financial commitments. Defendant Favela additionally testified that he was denied productivity enhancement pay as a result of the disciplinary action he received. Defendant Peralta testified that he received as disciplinary action a thirty day suspension without pay and that when he was reassigned to duties requiring physical labor he took medical retirement. The Court must assume that the jury considered this evidence along with all the evidence in arriving at its verdict on punitive damages. A jury's award of punitive damages, if supportable, is not to be lightly disturbed. See Kennedy v. Los Angeles Police Dep't., 901 F.2d 702, 707 n. 3 (9th Cir. 1989). In addition, the issue of whether Defendants Peralta and Favela would be entitled to indemnification from the City as to any award of punitive damages was not put before the jury. Whether such indemnification was possible was not ruled out during the Court's discussions with counsel. (Doc. 101, Transcript at 3-7, 49-54). See Bell v. Clackamas County, 341 F.3d 858, 868 (9th Cir. 2003)("to the degree that the defendants seek reduction of punitive damages because of their ability to pay, any indemnification by the County for the payment of such damages may be taken into account"). The motion of Defendants Peralta and Favela to void the punitive damages awarded by the jury is denied. Accordingly, IT IS ORDERED that Defendant City of Phoenix's motion to conform the Judgment to the statutory cap (Doc. 81) is granted; Plaintiff's compensatory damages award on her Title VII claim against Defendant City of Phoenix shall be reduced from $850,000.00 to $300,000.00 pursuant to 42 U.S.C. § 1981a(b)(3). - 12 -

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IT IS FURTHER ORDERED that Defendant Favela's motion to amend or correct the Judgment (Doc. 93) is granted; the correct amount of punitive damages to be awarded Plaintiff on her civil rights claim against Defendant Favela is $35,000.00, not $350,000.00. IT IS FURTHER ORDERED that Defendants' motion for new trial on damages or alternatively, request for remittitur of the verdict (Doc. 82) is denied. IT IS FURTHER ORDERED that the Clerk of Court shall enter Judgment which reduces Plaintiff's damages award from $850,000.00 to $300,000.00 on Plaintiff's Title VII claim against Defendant City of Phoenix. IT IS FURTHER ORDERED that the Clerk of Court shall correct the Judgment to show that Plaintiff's punitive damages award against Defendant Favela is $35,000.00 based on the verdict returned by the jury. DATED this 14th day of August, 2006.

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