Free Motion for New Trial - District Court of Arizona - Arizona

1 Jay A. Zweig (011153) Mark A. Fuller (012149) 2 Melissa R. Berren (020993) GALLAGHER & KENNEDY, P.A. 2575 E. Camelback Road, Suite 1100 3 Phoenix, Arizona 85016-9225 4 (602) 530-8407 Attorneys for Defendants 5 6 7 8
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UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Matthew Shaffer, Plaintiff, vs. No. CIV-03-2344-PHX-FJM

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State of Arizona Citizens Clean Election 12 Commission; Colleen Connor and Chad Jacobs, 13 Defendants. 14 15 16 17 18 19 20 21 22
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DEFENDANTS' MOTION FOR ENTRY OF JUDGMENT AS A MATTER OF LAW ON THE DEFAMATION CLAIM - AND MOTION FOR REMITTITUR, OR ALTERNATIVELY FOR A NEW TRIAL ON DAMAGES

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Having been fired from a high-level public job under circumstances that raised

2 serious questions about his competency and honesty, Matt Shaffer suffered various 3 detrimental effects: he had to find a new job, he had to deal with the emotional and 4 financial stress of unemployment, and so forth. But at the end of the day, the jury found 5 that his termination was lawful. Accordingly, the only damages that Shaffer was entitled 6 to recover were those additional damages that were specifically caused by (1) a single 7 allegedly defamatory statement, or (2) the absence of more procedural due process. The 8 jury ignored this. There was no evidence that Shaffer suffered any incremental harm 9 from these two sources at all, let alone damages to sustain a $1.1 million verdict. What 10 happened here is plain to see: the jury awarded Shaffer all of his claimed damages, 11 disregarding the fact that those damages resulted from his lawful termination. 12 Other courts faced with this precise situation have not hesitated to order a

13 remittitur or, alternatively, a new trial on damages. This Court should do the same. At 14 the same time, defendants ask the Court to perform an independent review of the record 15 concerning actual malice, to find that Shaffer did not meet his constitutional burden on 16 that issue, and to enter judgment as a matter of law on the defamation claim. This motion 17 is supported by the following memorandum. 18 I. 19 THE JURY'S FINDINGS: WHAT WAS LAWFUL AND WHAT WAS NOT On August 27, 2002, Shaffer informed the CCEC that the Salmon Campaign's

20 latest "trigger report" showed roughly $31,000 in expenditures that had been reported a 21 few days late ­ a minor infraction, for which Shaffer recommended no sanction. Trial 22
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1 1 Exh. 15. But almost immediately, questions were raised about whether Shaffer had

2 given the CCEC complete and accurate information. Connor placed Shaffer on 3 administrative leave, and retained Deborah Tobin, an independent accountant, to take a 4 second look. On September 30, Tobin informed Connor that in addition to the $31,000 5 reported by Shaffer, another $67,000 of the Salmon campaign's expenditures had been 6 reported more than ten days late. Trial Exh. 11; Trial Transcript ("Tr.") 369. 7 Commissioner Detrick testified that she and her fellow CCEC members lost trust

8 in Shaffer as a result of these findings. Tr. 612. In fact, she said she was "appalled" by 9 Shaffer's errors, thought "perhaps there was some collusion with the [Salmon] 10 campaign," and "would have terminated him right away." Tr. 606, 610-11, 613. Connor 11 fired Shaffer with the CCEC's blessing, Tr. 611-12, and a penalty was later assessed 12 against the Salmon campaign for the violations Shaffer had "overlooked." Tr. 654. 13 After a two-week trial, the jury found that none of these events were unlawful. In

14 other words, Connor did not act improperly in placing Shaffer on administrative leave, or 15 in questioning his reporting to the CCEC, or in relying on Tobin's report to conclude that 16 Shaffer had not done his job properly, or in questioning whether his relationship to the 17 Salmon campaign had influenced him, or even in firing him. Moreover, as Shaffer 18 himself emphasized at trial, all of these events were very much in the public eye. 19 Specifically, the press reported the concerns about Shaffer's conduct, the results of the 20 Trial exhibits cited in this motion are collectively attached as Exhibit A. Defendants 21 understand that the Court has a copy of the trial transcript, and therefore have not reproduced and attached the cited pages. 22 Case 2:03-cv-02344-FJM Document 145 2Filed 10/20/2005 Page 3 of 18
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1 independent inquiry, and, of course, his termination. As just one example, an Associated 2 Press article (disseminated throughout Arizona) reported that contrary to what Shaffer 3 had told the CCEC, "[d]ocuments reviewed by the AP indicate that accountants for the 4 commission since then have concluded that Salmon's campaign was late in reporting 5 more than 200 expenditures for periods of at least 10 days," and emphasized that Shaffer
2 6 had been fired for his conduct. Trial Exh. 69B.

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During this process, only two discrete things occurred that the jury found

8 unlawful. 9 First, Connor wrote a five-page memorandum to DPS which included a single

3 10 sentence that she believed Shaffer had violated certain criminal statutes. Trial Exh. 2. 4 11 Although Shaffer did not argue that the rest of the memorandum was defamatory, the

12 jury agreed with Shaffer that the reference to certain criminal statutes "went too far." 13 14 15 Other articles reported the same events. See Trial Exh. 69A. Shaffer introduced these articles over the defendants' objection.
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Defendants do not believe that this sentence was defamatory or otherwise actionable, for all the reasons previously argued to the Court. Having preserved their legal 16 arguments for appeal, however, defendants do not repeat those arguments here. 17 In the remainder, Connor explained the underlying facts and expressly questioned Shaffer's competence and honesty. Id. at 1 ("Shaffer failed to present the analysis he was 18 supposed to regarding the $136,000 in expenditures"); 1-2 ("Shaffer contacted me to tell me that he had reviewed all of the data," but "Shaffer's working document shows that he 19 did not analyze all of the transactions"); 2 ("Shaffer deliberately failed to identify campaign finance reporting violations totaling more than $147,000"); 3 (twice stating that 20 Shaffer "misled the Commission to believe that these expenditures . . . had been reported in a timely manner"); 5 ("Shaffer had the duty to check all of the transactions, up to 21 $147,000, that appeared to have been reported late. Shaffer, however, admitted to have only checked 15 transactions that totaled $76,155.99. Of the amount that Shaffer 22 purportedly checked, the figures referred to above show that $49,303.51 was not reported Case 2:03-cv-02344-FJM Document 145 3Filed 10/20/2005 Page 4 of 18
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Second, Shaffer persuaded the jury that he had not received a "name-clearing

2 hearing." At the same time, however, he acknowledged that he had presented his case 3 not just to the CCEC, but also to the court of public opinion, telling his side of the story 4 to the press at every opportunity. For example, the articles he introduced quoted him as 5 saying that the allegations against him were "insane"; that "he has been made `a 6 scapegoat' to disguise the fact that Connor allowed politics to enter into her decision to 7 investigate the Salmon campaign"; and that Connor had been "improperly influenced by 8 an aide to Secretary of State Betsey Bayless, one of Salmon's Republican primary foes." 9 Trial Exhs. 69A and 69B. Shaffer also readily acknowledged that this tactic of using the 10 media may well have made it more difficult for him to gain new employment. Tr. 326. 11 II. 12 THE EVIDENCE ON DAMAGES Even under the best of circumstances, being fired from a job results in a number of

13 adverse effects. There is the economic loss associated with being out of work, and the 14 next job may pay less. Even getting a job may be difficult, because employers will 15 naturally be reluctant to hire someone who has recently been fired. And there are 16 intangible effects such as the stress of having no income and having to look for work, and 17 the emotional toll associated with being fired. For Matt Shaffer ­ a high-level public 18 employee whose termination was reported in the newspapers, under circumstances that 19 raised questions about his conduct ­ all of those effects may have been amplified. But 20 given the jury's finding that the defendants did nothing wrong in firing him, the only 21 timely. Therefore, Shaffer failed to verify all of the late filings, and the ones that he 22 checked, he inaccurately assess that those transactions had been reported timely.") Case 2:03-cv-02344-FJM Document 145 4Filed 10/20/2005 Page 5 of 18

1 damages he could legitimately recover were to compensate for effects above and beyond 2 the harm that accompanied Shaffer's termination ­ i.e., harm specifically attributable to 3 either (a) the one defamatory sentence in Connor's memo ; or (b) the denial of a clearing 4 hearing. There was no proof of any such damages, let alone proof that would support a 5 $1.1 million verdict. 6 7 A. Economic Damages

When Shaffer found a new job, his annual pay was roughly $9,000 less than what

8 he had been earning as Deputy Director of the CCEC. Tr. 153, 327. Shaffer called Larry 9 Stokes, Ph.D., to testify that this differential, projected over Shaffer's expected career, 10 would amount to $441,646, and would be "significantly greater" if one considered the 11 fact that the Deputy Director's salary had since risen. Id. at 675, 677-78, 688. The Court 12 also permitted Shaffer (over defendants' objection) to tell the jury that due to his 13 termination, he liquidated his deferred compensation and his retirement accounts, cashed 14 in an insurance policy, and sold his house. Tr. 306-14. But Shaffer presented no 15 evidence that his alleged damages were caused by anything other than the fact that 16 Shaffer had been fired and was unable to find a new job "commensurate with his 17 abilities" for a period of time. Tr. 314. In other words, there was no evidence that 18 Shaffer would have been able to find a higher-paying job, or would have found 19 employment sooner, without the one allegedly defamatory sentence in Connor's memo, 20 or if had Shaffer received a "name clearing" hearing after his firing. 21 22
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B.

Non-Economic Damages

Shaffer sought to prove damage to his reputation by testifying in very general

3 terms that he believed the events in question affected his reputation. Tr. 317 ("Q: Do 4 you have any reason to believe that you have been denied opportunities for employment 5 because of the effect that your termination from the CCEC has had on your reputation? 6 A: Yes."). But he provided no evidence to support his opinion, and did not call anyone 7 who claimed to think less of him because of Connor's allegedly defamatory sentence in 8 her memo. In fact, the only potential employer Shaffer called was Matt Salmon, the 9 former Congressman, who testified that he still thought so highly of Shaffer that he tried 10 to find him a job! Tr. 720. For his part, the current Director of CCEC, Todd Lang, 11 acknowledged that he would "love to hire Matt Shaffer" but "couldn't trust him" because
5 12 Shaffer had "allowed himself to be intimidated" by the Salmon campaign. Tr. 1049.

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Shaffer also claimed "emotional distress" damages. For example, he testified that

14 after being fired from a State job, he felt uncomfortable around State employees he had 15 known. Tr. 307. He also testified in general terms that he felt "depressed," and that it 16 was difficult being a single father without work. Tr. 322. But again, Shaffer never 17 associated any testimony, merely described the impact of being fired. Tr. 322 ("Q: What 18 Shaffer also called his "good friend" Charlotte Hosseini, who said that Shaffer was not 19 hired for two jobs despite her favorable references. But Ms. Hosseini never linked these regulations to any defamatory statement. Tr. 404-06, 409-12. Rather, according to Ms. 20 Hosseini, the person hiring for one of the positions interviewed Shaffer "but said he wasn't really sure that he would be able to hire him, "Tr. 409, and the other person said 21 that he had called Connor and "she did not give him a good reference," which is why he wanted to speak with Hosseini. (Tr. 414.) This hearsay was the extent of Ms. Hosseini's 22 testimony on this issue. Case 2:03-cv-02344-FJM Document 145 6Filed 10/20/2005 Page 7 of 18
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1 did it feel like on month three when you were unemployed from the CCEC? A: It was 2 getting very depressing. And I just was not ­ I started to doubt myself and doubt my 3 abilities. . . [I]t was kind of tough to come home and explain to your daughter why 4 daddy's not going to work again."); see also Tr. 416-18 (Hosseini's testimony that "after 5 his termination," Shaffer "lost a lot of confidence," that "[h]e did not reach out to as many 6 people," that he was "fragile" and "close to breaking down, emotionally"). Shaffer never 7 presented evidence of any incremental harm or damages associated with the one allegedly 8 defamatory sentence or the alleged lack of a name clearing hearing. 9 III. 10 11 12 13 14 15 16 17 18 19 20 21 22
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BASED ON AN INDEPENDENT REVIEW OF THE EVIDENCE, THE COURT SHOULD ENTER JUDGMENT AS A MATTER OF LAW ON THE DEFAMATION CLAIM Because of the heightened First Amendment standards implicated by this case,

defendants invoke their right to request that the Court undertake an independent post-trial examination of the record for clear and convincing evidence of actual malice. Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 511 (1984) ("Judges, as expositors of the Constitution, must independently decide whether the evidence in the record is sufficient to cross the constitutional threshold that bars the entry of any judgment that is not supported by clear and convincing proof of `actual malice'."). The Court last considered this issue after hearing plaintiff's evidence, noting that its ruling might have to be reconsidered later. Tr. 831. Later, critical testimony bearing on the issue came in during the defendants' case, not only from Connor herself, but also from Todd Lang and Commissioner Detrick. For example, Lang, the CCEC's former counsel and current Director, testified that Connor could "absolutely" have formed a reasonable belief that 7Filed 10/20/2005
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1 Shaffer violated the statutes she cited in her memo. Tr. 1058. And Detrick was even 2 more emphatic, saying that she agreed with everything in the memo, it was "totally 3 appropriate," and that in her view, "Connor had to send this memo." Tr. 612-14. 4 Given this totality of the evidence, defendants believe that Shaffer did not meet his

5 constitutional burden of proving actual malice with "convincing clarity." Bose Corp., 6 supra, 466 U.S. at 526. If the Court agrees after performing its own independent review, 7 it should enter judgment as a matter of law in defendants' favor on the defamation claim. 8 III. 9 THE COURT SHOULD ORDER A REMITTITUR OR A NEW TRIAL ON DAMAGES Notwithstanding the absence of any evidence that Shaffer suffered additional harm

10 above and beyond his "termination damages," the jury awarded him a whopping 11 $1.1 million after finding that his termination was perfectly lawful. Applying settled law, 12 the Court must set things right. 13 14 A. The Defamation Claim

Recognizing that juries have a "propensity . . . to award excessive damages for

15 defamation," the Supreme Court has emphasized that "it is the duty of the trial judge to 16 require a remittitur or a new trial" when this happens. Old Dominion Branch No. 496 v. 17 Austin, 418 U.S. 264, 287 (1974). Moreover, because any defamation award necessarily 18 implicates constitutional free speech issues, Gertz v. Robert Welch, Inc., 418 U.S. 323, 19 349-50 (1974), the courts do not afford the deference to jury verdicts that is common in 20 other settings. "In defamation cases, `[b]ecause of constitutional considerations, and the 21 potential difficulties in assessing fair compensation . . . both trial and appellate judges 22 have a special duty of vigilance in charging juries and reviewing verdicts to see that Case 2:03-cv-02344-FJM Document 145 8Filed 10/20/2005 Page 9 of 18

1 damages are no more than compensatory'." Tosti v. Ayik, 476 N.E.2d 928, 937 (Mass. 2 1985) (citing Gertz,, 418 U.S. 264). "Because First Amendment rights are at stake, we 3 are not slow to pronounce a verdict excessive in defamation cases, even though by doing 4 so we must necessarily substitute our assessment of reasonable damages for that of the 5 jury." Id. at 938. See also Curtis Publishing Co. v. Butts, 388 U.S. 130, 160 (1967) 6 (constitutional guarantee of free speech is "served by judicial control over excessive jury 7 verdicts, manifested in this instance by the trial court's remittitur"); Bentley v. Bunton, 94 8 S.W.3d 561, 605 (Tex. 2002) ("the necessity that a jury have some latitude in awarding 9 [noneconomic] damages does not, of course, give it carte blanche to do whatever it will, 10 and this is especially true in defamation actions brought by public officials"). 11 Applying these principles, courts have routinely ordered remittiturs in defamation

6 12 cases where the dollar amount of the damage award, standing alone, seemed excessive.

13 And given the facts of this case, $1.1 million is so excessive as to justify a remittitur on 14 15 16 17 18 19 20 21 22
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Space limitations preclude a separate discussion of this large body of caselaw. Key Arizona decisions are Schmitz v. Aston, 197 Ariz. 264, 3 P.3d 1184 (App. 2000) (defamation claim based on statement to police and neighbors that plaintiff was a child molester; ordering remittitur of $900,000 verdict for emotional distress damages as being plainly excessive); and Horn v. Ruess, 72 Ariz. 132, 231 P.2d 756, 760-61 (1951) (defamation per se; ordering remittitur from $25,000 to $2,000). For a few illustrative decisions from other jurisdictions, see Simon v. Shearson Lehman Bros., Inc., 895 F.2d 1304 (11th Cir. 1990) (defamation per se; $1 million general damage award reduced to $250,000); Lewis v. Elliott, 628 F.Supp. 512 (D.D.C. 1986) (defamation action brought by government employee who was accused of having violated Ethics in Government Act; award reduced from $470,000 to $54,060, which included "reasonable maximum for mental anguish and physical pain actually suffered"); United Ins. Co. of America v. Murphy, 961 S.W.2d 752 (Ark. 1998) (defamation action based on statements that plaintiff stole clients' insurance premiums; affirming reduction of $3 million award to $600,000); Angel v. Levittown Union Free Sch. Dist., 567 N.Y.S.2d 490 (App. 1991)

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1 this basis alone. But the dollar amount is not the only issue. The other piece of the 2 analysis is the question of causation: did the evidence really prove that the damages 3 awarded were caused by the allegedly defamatory statement? In defamation cases where 4 a plaintiff has been awarded substantial damages for lost earnings, the courts have 5 insisted that the plaintiff actually prove, through competent evidence, that he was unable 6 to get a job because of the allegedly defamatory statement. See Lawlor v. Gallagher 7 Presidents' Report, Inc., 394 F.Supp. 721 (S.D.N.Y. 1975) (no claim for lost earnings 8 because plaintiff failed to prove that "the publication of the falsehood was a material 9 element or substantial cause of his inability to get a job"); Lopez v. Kline, 953 P.2d 304, 10 308 (N.M. App. 1997) (plaintiff not entitled to damages for difficulty in finding new job 11 where "[p]laintiff . . . failed to show that her failure in being hired by [the prospective s 12 employer] was proximately caused by the statements made by [defendant' officer] to 13 [prospective employer] by telephone. Proximate cause is an element of defamation"); 14 Benassi v. Georgia-Pacific, 662 P.2d 760 (Ore. App. 1983) ("it would be mere 15 speculation to permit the jury to infer that the plaintiff was unable to obtain a new job for 16 five months because of the defamation"); Lawrence v. Jewell Cos., 193 N.W.2d 695 17 (Wisc. 1972) (ordering remittitur of award to $12,000 where there was no direct evidence 18 that plaintiff's difficulty in finding new job was attributable to slanderous statement). 19 The excessive jury award and the lack of evidence to support that award are the

20 crux of the problem in this case. Although Shaffer succeeded in persuading the jury that 21 (defamation per se; no evidence other than plaintiff's own testimony to establish injury or 22 emotional distress caused by false statement; award reduced to $5,000). Case 2:03-cv-02344-FJM Document 145 10 Filed 10/20/2005 Page 11 of 18

1 he suffered $1.1 million in damages as a result of his termination, what he did not prove ­ 2 and what the evidence did not support ­ is the utterly implausible idea that such 3 enormous damages were somehow caused by a single sentence in the DPS memorandum, 4 as opposed to all the non-defamatory aspects of the case. 5 Bippes v. Hershey Chocolate U.S.A., 180 F.R.D. 386 (D. Ore. 1998), is on point.

6 There, a Hershey employee was terminated because she had allegedly falsified expense 7 reports. She sued, alleging that Hershey had defamed her and that it had wrongfully 8 terminated her in violation of the implied covenant of good faith and fair dealing. Before 9 trial, the district court dismissed the termination claim, but allowed the plaintiff to go to 10 the jury on a narrow defamation claim limited to Hershey's specific statements. The jury 11 found in favor of the plaintiff and awarded $405,000 in economic damages and 12 $1,275,000 in non-economic damages. Recognizing that such damages could not 13 possibly have been attributable to the defamatory statements, but instead included 14 termination damages, the court granted a motion for remittitur or new trial. 15 The Hershey court noted that the statements in question were arguably defamatory

16 because they implied that plaintiff had "embezzled large amounts of money." But the 17 determinative question was whether the defamatory statements could reasonably be 18 viewed as causing the huge damages awarded by the jury. Even giving the plaintiff the
7 19 benefit of the doubt, the court held that the evidence did not establish that essential

20 Where heightened First Amendment protections are not involved, trial courts consider 21 motions for remittitur by reviewing the evidence "in a light most favorable to the prevailing party." D & S Redi-Mix v. Sierra Redi-Mix & Contracting Co., 692 F.2d 22 1245, 1249 (9th Cir. 1982). This was the standard applied in Bippes. Case 2:03-cv-02344-FJM Document 145 11 Filed 10/20/2005 Page 12 of 18
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1 causal link. Although the plaintiff encountered difficulties finding a new job, "there was 2 insufficient evidence for a reasonable jury to find that the defamation was a substantial 3 factor in causing Bippes economic damages in light of her lawful termination." Id. at 4 390. Likewise, the plaintiff had suffered considerable distress as a result of being 5 terminated from her job and being out of work. Therefore, although she apparently 6 introduced some evidence that the defamation "caused additional distress over and above 7 the termination," that evidence was not sufficient to support a seven-figure verdict. "The 8 court concludes that the jury confused noneconomic damages caused by Bippes' 9 termination with noneconomic damages cause by Bippes' defamation." Id. at 390 10 (emphasis added). The court also noted that the large damage figure awarded by the jury 11 suggested the jury's improper intent to punish the defendant. Id. 12 In Bippes, the district court eliminated the economic damage portion of the verdict

13 (granting judgment as a matter of law) and ordered a remittitur of the noneconomic 14 damages by approximately 62%, to $475,000. A similar analysis in this case would 15 require remittitur of the entire verdict on the defamation claim to nominal damages. 16 Unlike the plaintiff in Bippes, Shaffer did not even introduce "some" evidence proving 17 that the single defamatory sentence in question "caused additional distress over and 18 above the termination." Moreover, such a theory would be inherently implausible, 19 because Shaffer's termination, and the legitimate questions being raised about his 20 conduct, were widely reported by the media. Given the damages that would obviously 21 flow from those events ­ to Shaffer's ability to get a new job, to his reputation, to his 22
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1 mental state ­ the idea that some meaningful measure of additional damages was caused 2 by the one sentence in question belies common sense. 3 4 B. The §1983 "Name-Clearing Hearing" Claim

The same analysis requires correction of the jury's incredible decision to award

5 $1.1 million to Shaffer on his procedural due process claim. Again, the excessive size of 6 this verdict is enough, by itself, to require setting it aside, and the fact that this figure is 7 identical to the damages awarded for defamation shows the jury's utter confusion. After 8 all, it makes no sense to even suggest that all of Shaffer's claimed damages would 9 somehow have disappeared had he been given more opportunity to clear his name after 10 his lawful termination. But in addition to these defects, there is also the same problem 11 with causation, because the evidence did not show that any of Shaffer's claimed damages 12 were caused by the denial of procedural due process, as opposed to his termination. 13 The starting point here is Carey v. Piphus, 435 U.S. 247 (1978). Carey was a

14 §1983 case brought by students who were terminated from public schools without 15 procedural due process. Although the students "put no evidence in the record to quantify 16 their damages [resulting from the lack of a hearing], and the record is completely devoid 17 of any evidence which could even form the basis of a speculative inference measuring the 18 extent of their injuries," the Seventh Circuit held that they could nonetheless recover 19 what it called "substantial nonpunitive damages." Id. at 251-52. The Supreme Court 20 reversed, holding that "in the absence of proof of actual injury, the students are entitled to 21 recover only nominal damages." Section 1983, the Court explained, does not depart from 22 "[t]he cardinal principle of damages in Anglo-American law" that one can only recover Case 2:03-cv-02344-FJM Document 145 13 Filed 10/20/2005 Page 14 of 18

1 compensation for injury caused by the particular unlawful conduct in question. Unless a 2 plaintiff proves that more due process would have prevented his or her termination, 3 recovery for termination damages would be an improper "windfall." Id. at 263. 4 The Supreme Court acknowledged that "in a proper case," one could conceivably

5 recover damages "for mental and emotional distress caused by the denial of procedural 6 due process." But such damages "cannot be presumed to occur" ­ in fact, the Court 7 noted, "a person may not even know that procedures were deficient until he enlists the aid 8 of counsel to challenge a perceived substantive deprivation." Id. at 264 (emphasis in 9 original). Moreover, "where a deprivation is justified but procedures are deficient, 10 whatever distress a person feels may be attributable to the justified deprivation rather 11 than to deficiencies in procedure." Id. at 264-65. The bottom line is that plaintiffs must 12 "be put to their proof on the issue, as plaintiffs are in most tort actions." Id. at 264. 13 Although the difficulty of proving incremental harm may be "great," that does not 14 diminish the plaintiff's burden. Absent such proof, the only damages available under 15 §1983 are nominal. Id. at 1053-54. 16 Courts have since applied Carey in many cases involving terminated employees.

17 A good example is a recent case where the jury awarded the plaintiff approximately 18 $40,000 on a termination claim for breach of contract, and an additional $92,500 on a 19 separate claim of having been terminated without appropriate procedural due process.
th 20 Alston v. King, 157 F.3d 1113 (7 Cir. 1998). The Seventh Circuit reversed and

21 remanded, noting that "[t]his award suggests strongly that the jury did not understand that 22 its award under this count had to be limited to any additional damages that Mr. Alston Case 2:03-cv-02344-FJM Document 145 14 Filed 10/20/2005 Page 15 of 18

1 might have incurred" by virtue of the lack of procedural due process. Id. at 1118 (citing 2 Carey, 435 U.S. 247) (emphasis added). "In the absence of such additional damages, any 3 due process violation would result in only nominal damages." Id. 4 After a partial retrial limited to damages on the due process claim, the district

5 court concluded that the plaintiff had not proved any additional damages. A second 6 appeal followed, providing an opportunity for the Seventh Circuit to clarify what would, 7 and would not, qualify as sufficient evidence of "additional" damages to get to the jury.
th 8 Alston v. King, 231 F.3d 383 (7 Cir. 2000) ("Alston II").

9

In Alston II, the court affirmed the district court's exclusion of evidence

10 concerning "termination" damages; "[b]ecause the undisputed evidence establishes cause 11 for his termination, damages from that termination could not be attributed to the failure to 12 provide a hearing." It then analyzed the evidence of "emotional distress" damages. Such 13 evidence, the court noted, was "sparse," and consisted primarily of the plaintiff's 14 testimony that as a result of being denied a hearing, he suffered `humiliation, 15 embarrassment, stress [and] rejection,'" and that "the deprivation of a hearing caused him 16 to become depressed." These kinds of statements, the court held, were too conclusory, 17 because "[t]he act that allegedly caused the distress in this case is the denial of the 18 hearing, not the termination itself," and "[t]hat is not the type of inherently degrading 19 conduct that would portend emotional distress." 231 F.3d at 388. In fact, the court held, 20 the only evidence that the plaintiff had presented that could be considered relevant was a 21 particular incident occurring immediately after his termination, where other employees 22 "gathered around" him while he removed his personal effects and "were mocking or Case 2:03-cv-02344-FJM Document 145 15 Filed 10/20/2005 Page 16 of 18

1 laughing at him." Id. at 389. Because "a reasonable juror could conclude that the 2 humiliating office scene would not have occurred if [the plaintiff] had not been 3 summarily terminated," the case was remanded again for a trial in which the jury would 4 award damages only for that one incident. Id. See also Denius v. Dunlap, 330 F.3d 919,
th 5 929 (7 Cir. 2003) (similar case; distinguishing Alston II because plaintiff introduced no

6 evidence of any "inherently degrading conduct," and "bare allegations that he was
8 7 `embarrassed' and `humiliated' were insufficient").

8 V. 9

CONCLUSION In his closing, Shaffer's counsel told the members of the jury to "send a message"

10 to the defendants, and invited them to enter what he called "the full damages" amount "on 11 the line of each claim," "even if that would be duplicated in another count." (Tr. 1275). 12 Whether to try and punish the defendants or otherwise, that is exactly what the jury did. 13 For all the reasons explained above, the verdict must now be corrected. Upon an 14 Other recent decisions illustrating the same point include Montgomery v. City of 15 Ardmore, 365 F.3d 926 (10th Cir. 2004) (if employee's termination was justified, failure to provide a hearing does not entitle employee to damages flowing from termination; 16 further, any claim for emotional distress must be attributable to the denial of procedural due process itself rather than to the justified termination); Sutton v. Cleveland Bd. of 17 Educ., 958 F.2d 1339 (6th Cir. 1992) (damages are not presumed to flow from denial of procedural due process, and whatever distress a person feels may be attributable to the 18 justified termination rather than to the deficiencies in procedures; accordingly, plaintiff must introduce evidence sufficient to prove that he actually suffered distress because of 19 the denial of procedural due process); Wilson v. Taylor, 733 F.2d 1539 (11th Cir. 1984) (absent proof of actual injury caused by procedural due process violations, plaintiffs may 20 only recover nominal damages; verdict in favor of police officer who was fired was grossly excessive and required remittitur on remand); Clark v. St. Joseph Pub. Sch. Dist., 21 130 F.Supp. 2d 899 (D. Mich. 2000) (school employee entitled only to nominal damages for denial of procedural due process in termination; proper remedy is defined by the 22 extent of the injury that resulted from the denial of constitutionally required process). Case 2:03-cv-02344-FJM Document 145 16 Filed 10/20/2005 Page 17 of 18
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1 independent review of the record, the Court should find that there was no clear and 2 convincing proof of actual malice, and should enter judgment as a matter of law on the 3 defamation claim. In addition, and regardless of its conclusion regarding actual malice, 4 the Court should order a remittitur of both claims to nominal damages, or alternatively 5 hold a new trial limited to the question of damages on the claims for defamation and lack 6 of a name clearing hearing. 7 8 9 10 11 12 13 COPY of the foregoing electronically transmitted via the U.S. District Court 14 Electronic Case Filing system and hand-delivered 15 this 20th day of October, 2005 to: Richard J. Harris, Esq. Richard J. Harris Law Offices, P.C. 4445 E. Holmes Avenue, Suite 106 17 Mesa, Arizona 85206-3398 Co-Counsel for Plaintiff 18 David C. Larkin, Esq. 19 David C. Larkin, P.C. 4645 S. Lakeshore Drive, Suite 6 20 Tempe, Arizona 85282-3747 Co-Counsel for Plaintiff 21 s/Dawn Sylvester 568-0140/1305630v2 22 16
Case 2:03-cv-02344-FJM Document 145 Filed 10/20/2005 17 Page 18 of 18

RESPECTFULLY SUBMITTED this 20th day of October, 2005. GALLAGHER & KENNEDY, P.A. By: s/Jay A. Zweig______________ Jay A. Zweig Mark A. Fuller Melissa R. Berren 2575 E. Camelback Road, Suite 1100 Phoenix, Arizona 85016-9225 Attorneys for Defendants