Punitive damages, due process, and employment discrimination

Iowa Law Review

Volumn 97, Issue 2, 2012, Pages 473-519

  Seiner, Joseph A ^a  

^a UNIVERSITY OF SOUTH CAROLINA   (United States)

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EID: 84856176734     PISSN: 00210552     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (244)

1. Pac. Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 42(1991) (O'Connor, J., dissenting).
2. See generally Developments in the Law: The Paths of Civil Litigation, 113 HARV. L. REV. 1752, 1784-85(2000) (comparing the criticisms of punitive damages);
3. Richard W. Murphy, Superbifurcation: Making Room for State Prosecution in the Punitive Damages Process, 76 N. C. L. REV. 463, 467(1998) (same).
4. Developments in the Law: The Paths of Civil Litigation, supra note 1, at 1783-88 (same).
5. Civil Rights Act of 1991, Pub. L. No. 102-166, § 102, 105 Stat. 1071, 1072-74
6. (codified at 42 U. S. C. § 1981a (2006)). This Article uses the terms punitive damages and exemplary damages interchangeably.
7. See generally Joseph A. Seiner, The Failure of Punitive Damages in Employment Discrimination Cases: A Call for Change, 50 WM. & MARY L. REV. 735(2008) (discussing punitive damages in employment discrimination cases).
8. Kolstad v. Am. Dental Ass'n, 527 U. S. 526, 545(1999).
9. 42 U. S. C. § 1981a (b) (1).
10. Exxon Shipping Co. v. Baker, 554 U. S. 471(2008).
11. Philip Morris USA v. Williams, 549 U. S. 346(2007).
12. Exxon, 554 U. S. 471.
13. Cf. Paul Edgar Harold & Tracy L. Cole, Darned if You Due Process, Darned if You Don't! Understanding the Due Process Dilemma for Punitive Damages in Title VII Class Actions, 30 U. ARK. LITTLE ROCK L. REV. 453(2008) (discussing punitive damages in Title VII class-action cases and addressing the impact of the Philip Morris decision).
14. See, for example, the following articles, all of which discuss punitive damages in employment discrimination cases: Michael C. Harper, Eliminating the Need for Caps on Title VII Damage Awards: The Shield of Kolstad v. American Dental Association, 14 N. Y. U. J. LEGIS. & PUB. POL'Y 477(2011);
15. Sandra Sperino, The New Calculus of Punitive Damages for Employment Discrimination Cases, 62 OKLA. L. REV. 701(2010);
16. Sandra Sperino, Judicial Preemption of Punitive Damages, 78 U. CIN. L. REV. 227(2009);
17. Kelly Koenig Levi, Allowing a Title VII Punitive Damage Award Without an Accompanying Compensatory or Nominal Award: Further Unifying the Federal Civil Rights Laws, 89 KY. L. J. 581(2001);
18. Judith J. Johnson, A Uniform Standard for Exemplary Damages in Employment Discrimination Cases, 33 U. RICH. L. REV. 41(1999);
19. Judith J. Johnson, A Standard for Punitive Damages Under Title VII, 46 FLA. L. REV. 521(1994).
20. Kolstad v. Am. Dental Ass'n, 527 U. S. 526, 531(1999).
21. Kolstad, 527 U. S. at 530-31.
22. (quoting Kolstad v. Am. Dental Ass'n, 108 F.3d 1431, 1438 (D. C. Cir. 1997)) (internal quotation marks omitted).
23. (quoting Kolstad v. Am. Dental Ass'n, 139 F.3d 958, 965 (D. C. Cir. 1998)) (internal quotation marks omitted).
24. (quoting RESTATEMENT (SECOND) OF AGENCY § 217C (1957)) (internal quotation marks omitted).
25. (quoting 1 LINDA L. SCHLUETER & KENNETH R. REDDEN, PUNITIVE DAMAGES § 4.4 (B) (2) (a), at 181 (3d ed. 1995)).
26. Philip Morris USA v. Williams, 549 U. S. 346, 349(2007).
27. Kolstad v. Am. Dental Ass'n, 527 U. S. 526, 538(1999).
28. Philip Morris, 549 U. S. at 357-58. The Court was also clear that state courts must provide some procedures to make certain that a jury is only considering harm to strangers for purposes of reprehensibility, rather than punishment, where there is a risk of confusion.
29. Exxon Shipping Co. v. Baker, 554 U. S. 471(2008).
30. (discussing the history and purpose of exemplary relief); Dan Markel, Retributive Damages: A Theory of Punitive Damages as Intermediate Sanction, 94 CORNELL L. REV. 239, 249-53(2009) (same).
31. Thomas B. Colby, Clearing the Smoke from Philip Morris v. Williams: The Past, Present, and Future of Punitive Damages, 118 YALE L. J. 392, 414-15(2008) (noting that historically punitive damages "were used as a form of genuine punishment... for private, rather than public, wrongs").
32. Philip Morris USA v. Williams, 549 U. S. 346(2007).
33. Jim Gash, Solving the Multiple Punishments Problem: A Call for a National Punitive Damages Registry, 99 NW. U. L. REV. 1613, 1669(2005) ("The retribution function is what is commonly referred to as punishment and is a core function of punitive damages." (footnote omitted)).
34. See A. Mitchell Polinsky & Steven Shavell, Punitive Damages: An Economic Analysis, 111 HARV. L. REV. 869, 896(1998) ("[O]ne of the two main purposes of punitive damages is deterrence.... [P]unitive damages are intended 'to deter the wrongdoer and others from committing similar wrongs in the future.'"
35. (quoting Green Oil Co. v. Hornsby, 539 So. 2d 218, 222 (Ala. 1989)));
36. James B. Sales & Kenneth B. Cole, Jr., Punitive Damages: A Relic That Has Outlived Its Origins, 37 VAND. L. REV. 1117, 1124(1984) ("Whatever justification may be advanced to support the punitive damage concept, however, most commentators today acknowledge that the modern bases undergirding the theory in the United States are punishment and deterrence.");
37. Catherine M. Sharkey, Punitive Damages as Societal Damages, 113 YALE L. J. 347, 364(2003) ("[D]eterrence is nonetheless a very significant justification for punitive damages, at least in certain types of torts.").
38. W. Kip Viscusi, The Social Costs of Punitive Damages Against Corporations in Environmental and Safety Torts, 87 GEO. L. J. 285, 288(1998). Professor Viscusi questions the deterrent effect of punitive relief.
39. (discussing the role of deterrence in punitive damages awards); Kimberly A. Pace, Recalibrating the Scales of Justice Through National Punitive Damage Reform, 46 AM. U. L. REV. 1573, 1580(1997) ("Punitive damages are intended as both a specific deterrent, so that the offending defendant will not repeat her misconduct, as well as a general deterrent, so that others will be dissuaded from engaging in similar misconduct.").
40. See David G. Owen, A Punitive Damages Overview: Functions, Problems and Reform, 39 VILL. L. REV. 363, 374-75(1994) ("Punitive damages serve a strong educative function for both the individual offender and society in general....").
41. See Marc Galanter & David Luban, Poetic Justice: Punitive Damages and Legal Pluralism, 42 AM. U. L. REV. 1393, 1451(1993) ("A crucial function of punitive damages is to provide financial incentives for private parties to enforce the law-the bounty system.");
42. Richard A. Seltzer, Punitive Damages in Mass Tort Litigation: Addressing the Problems of Fairness, Efficiency and Control, 52 FORDHAM L. REV. 37, 43 n. 32(1983) ("[P]unitive damages encourage plaintiffs to press their claims and enforce the law by providing an incentive for bringing wrongdoers to justice.").
43. (quoting David G. Owen, Punitive Damages in Products Liability Litigation, 74 MICH. L. REV. 1257, 1287-88(1976)).
44. 42 U. S. C. § 1981a (b) (1) (2006).
45. 42 U. S. C. § 1981a.
46. Johnson, A Standard for Punitive Damages Under Title VII, supra note 13, at 527-28 ("The Civil Rights Act of 1991... changed the remedial provisions of Title VII, allowing plaintiffs who proved intentional discrimination to recover compensatory and punitive damages.");
47. Charles A. Sullivan, The Phoenix from the Ash: Proving Discrimination by Comparators, 60 ALA. L. REV. 191, 216 n. 94(2009) ("The Civil Rights Act of 1991 instituted both compensatory and punitive damages, and the concomitant right to backpay.").
48. H. R. REP. NO. 102-40, pt. 2, at 1(1991)
49. reprinted in 1991 U. S. C. C. A. N. 694, 694.
50. (quoting H. R. REP. NO. 102-40, pt. 1, at 70)).
51. H. R. REP. NO. 102-40, pt. 2, at 1.
52. Exxon Shipping Co. v. Baker, 554 U. S. 471, 492(2008).
53. See generally Cynthia L. Alexander, The Defeat of the Civil Rights Act of 1990: Wading Through the Rhetoric in Search of Compromise, 44 VAND. L. REV. 595, 617-18(1991) (noting that one court "analyzed the legislative history of Title VII and concluded that the congressional objective in enacting Title VII was not to punish employers with huge damage awards");
54. D. Don Welch, Removing Discriminatory Barriers: Basing Disparate Treatment Analysis on Motive Rather than Intent, 60 S. CAL. L. REV. 733, 751(1987) ("Title VII is a statute concerned not only with punishing individuals who intentionally engage in discriminatory acts... but also with the broad sweep of societal employment practices which produce decisions based on impermissible criteria.").
55. H. R. REP. NO. 102-40, pt. 2, at 1;
56. see also Rivera v. NIBCO, Inc., 364 F.3d 1057, 1067 (9th Cir. 2004) ("Congress has armed Title VII plaintiffs with remedies designed to punish employers who engage in unlawful discriminatory acts, and to deter future discrimination both by the defendant and by all other employers.").
57. Kolstad v. Am. Dental Ass'n, 527 U. S. 526, 540-41(1999).
58. (quoting RESTATEMENT (SECOND) OF AGENCY § 217C (1957)) (internal quotation marks omitted).
59. (discussing RESTATEMENT (SECOND) OF AGENCY § 217C (1957)).
60. 42 U. S. C. § 1981a (b) (1) (2006).
61. BMW of N. Am., Inc. v. Gore, 517 U. S. 559, 568(1996).
62. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U. S. 408(2003).
63. Exxon Shipping Co. v. Baker, 554 U. S. 471(2008).
64. Even before Exxon, these guideposts should not have been the focus of cases analyzed under federal common law. See generally TXO Prod. Corp. v. Alliance Res. Corp., 509 U. S. 443, 465-66(1993) (discussing the Due Process Clause and punitive damages);
65. Donovan v. Penn Shipping Co., 429 U. S. 648, 649-50(1977) (discussing the role of federal courts in reviewing jury awards);
66. Perez v. Z Frank Oldsmobile, Inc., 223 F.3d 617, 625 (7th Cir. 2000) (discussing the role of the Constitution in federal cases). At a minimum, however, Exxon helps clarify that the courts need not reach the due process issues raised in Gore and State Farm when addressing employment discrimination claims brought under Title VII.
67. Exxon, 554 U. S. at 501-02.
68. 42 U. S. C. § 1981a (b) (3) (2006);
69. see also BMW of N. Am., Inc. v. Gore, 517 U. S. 559, 583(1996) ("[A] reviewing court engaged in determining whether an award of punitive damages is excessive should 'accord substantial deference to legislative judgments concerning appropriate sanctions for the conduct at issue.'"
70. (quoting Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U. S. 257, 301(1989) (O'Connor, J., concurring in part and dissenting in part)));
71. Perez, 223 F.3d at 625 ("[W]hen a plaintiff seeks punitive damages in a federal case, it is unnecessary to look for limits in the Constitution. ").
72. 42 U. S. C. § 1981a (b) (3) (A) - (D).
73. Another federal civil rights statute, 42 U. S. C. § 1981, contains no statutory cap for punitive damages.
74. See infra Part V (discussing limitations of the model proposed in this Article). While beyond the scope of this Article, an important issue remaining after Exxon is the extent to which that decision would apply to claims brought under 42 U. S. C. § 1981. See infra Part V (same).
75. See, e.g., Abner v. Kan. City S. R. R. Co., 513 F.3d 154, 164 (5th Cir. 2008) ("[T]he combination of the statutory cap and high threshold of culpability for any [Title VII] award confines the amount of the award to a level tolerated by due process.");
76. Romano v. U-Haul Int'l, 233 F.3d 655, 673 (1st Cir. 2000) (discussing reasonableness of punitive damages awards that fall within the Title VII statutory limits).
77. See 42 U. S. C. § 1981a;
78. EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1249 (10th Cir. 1999) ("The reasonableness of the punitive award is buttressed by the fact that the [employment discrimination] statute [the defendant] was found to have violated caps punitive awards.... The award in this case falls within the range that Congress has determined to be reasonable...." (citation omitted)).
79. Romano, 233 F.3d at 673. This is not to say that any federal statute would necessarily pass constitutional muster, and one could certainly hypothesize a federal law that would encounter due process problems. However, given that the Title VII punitive limits are reasonable and have remained unchanged over the last twenty years, it seems likely that the statute complies with the constitutional requirements.
80. Exxon Shipping Co. v. Baker, 554 U. S. 471, 502(2008);
81. see also Abner, 513 F.3d at 164 ("Given that Congress has effectively set the tolerable proportion [for Title VII claims], the three-factor Gore analysis is relevant only if the statutory cap itself offends due process. It does not and, as we have found in punitive damages cases with accompanying nominal damages, a ratio-based inquiry becomes irrelevant.").
82. See generally Perez v. Z Frank Oldsmobile, Inc., 223 F.3d 617, 625 (7th Cir. 2000) ("Federal judges may, and should, insist that the award be sensible and justified by a sound theory of deterrence. Random and freakish punitive awards have no place in federal court, and intellectual discipline should be maintained. If the award is well justified, then it is also constitutionally sound...." (citation omitted)).
83. See, e.g., Abner, 513 F.3d 154 at 164
84. (discussing relevance of Gore factors to Title VII cases). Nonetheless, it could be argued after Exxon that the ratio of punitive to actual damages is still a critical inquiry. Indeed, in Exxon the Court concluded that a 1:1 ratio of punitive to compensatory damages "is a fair upper limit in such maritime cases." 554 U. S. at 513. In employment discrimination cases, however, Congress has clearly set a reasonable upper limit of punitive damages that can be imposed on the largest employers.
85. See 42 U. S. C. § 1981a (b) (3) (D). The statute is thus clear that Congress intended for employers that run afoul of the provisions to potentially be subjected to these upper punitive limits-irrespective of the ratio to actual harm.
86. Cf. Pickett v. Sheridan Health Care Ctr., 610 F.3d 434, 447 (7th Cir. 2010) ("[A]ppellant asks us to extend [Exxon] to mandate a one-to-one ratio between compensatory and punitive damages in this case. The logic of [Exxon] does not apply to this Title VII case.").
87. Some federal courts have even approved "infinite" ratios of punitive damages to actual harm in the employment discrimination context. See Cush-Crawford v. Adchem Corp., 271 F.3d 352, 357 (2d Cir. 2001) ("An award of actual or nominal damages is not a prerequisite for an award of punitive damages in Title VII cases.");
88. Timm v. Progressive Steel Treating, Inc., 137 F.3d 1008, 1010 (7th Cir. 1998) ("No reason comes to mind for reading a compensatorypunitive link into § 1981a or Title VII....").
89. But see Kerr-Selgas v. Am. Airlines, Inc., 69 F.3d 1205, 1215 (1st Cir. 1995) ("[T]he punitive damages award must be vacated absent either a compensatory damages award, or a timely request for nominal damages, on the federal claims.").
90. See generally Abner, 513 F.3d at 159-60 (discussing various appellate court approaches to issue of whether actual damages are necessary for an award of exemplary relief in a Title VII case);
91. Azimi v. Jordan's Meats, Inc., 456 F.3d 228, 237-38 (1st Cir. 2006) (same);
92. See Philip Morris USA v. Williams, 549 U. S. 346(2007).
93. Phillip Morris, 549 U. S. at 353-54.
94. It should be noted that in Kolstad, the Court downplayed the importance of considering reprehensibility when awarding punitive relief for workplace claims, stating that "the reprehensible character of the conduct is not generally considered apart from the requisite state of mind." Kolstad v. Am. Dental Ass'n, 527 U. S. 526, 538(1999). Thus, the reprehensibility question in employment discrimination cases will often be considered as part of the mental state of the employer.
95. See generally Joseph A. Seiner, After Iqbal, 45 WAKE FOREST L. REV. 179, 200-03(2010) (discussing studies on employment discrimination that show its continued prevalence).
96. See Michael J. Yelnosky, Title VII, Mediation, and Collective Action, 1999 U. ILL. L. REV. 583, 587-88 ("Prospective Title VII plaintiffs worry about retaliation, particularly if they are still employed by the defendant, and worry about being labeled 'troublemakers.'");
97. Brianne J. Gorod, Rejecting "Reasonableness": A New Look at Title VII's Anti-Retaliation Provision, 56 AM. U. L. REV. 1469, 1478(2007) ("That a reluctance to report Title VII violations persists is a serious problem because Title VII's ability to realize its potential depends, more so than with much other federal legislation, on the willingness of victims of workplace discrimination to bring that discrimination to light.").
98. See generally Judith J. Johnson, Rebuilding the Barriers: The Trend in Employment Discrimination Class Actions, 19 COLUM. HUM. RTS. L. REV. 1, 54(1987) (arguing that in the employment discrimination class action context, courts "should take into account that fear of retaliation will prevent the vast majority of employees from joining a suit").
99. Phillip Morris, 549 U. S. at 354-55.
100. Compare Exxon Shipping Co. v. Baker, 554 U. S. 471(2008)
101. with Philip Morris, 549 U. S. 346.
102. See 42 U. S. C. § 1981a (2006) (setting forth potential punitive damages awards in Title VII cases).
103. See Exxon, 554 U. S. 471;
104. Philip Morris, 549 U. S. 346. Of course, successful class action employment discrimination litigation may result in substantial punitive awards.
105. See Exxon, 554 U. S. 471;
106. Philip Morris, 549 U. S. 346.
107. 42 U. S. C. § 1981a (b) (1).
108. Kolstad v. Am. Dental Ass'n, 527 U. S. 526(1999).
109. EEOC v. Siouxland Oral Maxillofacial Surgery Assocs., 578 F.3d 921 (8th Cir. 2009).
110. EEOC v. Heartway Corp., 466 F.3d 1156, 1171 (10th Cir. 2006).
111. The damages provision of the Americans with Disabilities Act adopts the punitive damages standard set forth in Title VII. 42 U. S. C. § 1981a (a) (2) (2006). The author served as lead counsel in the Heartway case (and the Stocks, Inc. case, infra notes 206-07 and accompanying text) on behalf of the EEOC. The views expressed in this Article are those of the author and do not represent the views of the U. S. Equal Employment Opportunity Commission or of the United States.
112. Heartway, 466 F.3d at 1159-60, 1169.
113. EEOC v. Stocks, Inc., 228 F. App'x 429, 432-33 (5th Cir. 2007).
114. Canny v. Dr. Pepper/Seven-Up Bottling Grp., Inc., 439 F.3d 894, 905 (8th Cir. 2006).
115. 42 U. S. C. § 1981a (b) (1) (2006).
116. On the other hand, the plaintiffs in Siouxland, Heartway, and Stocks, Inc. all prevailed to some degree in their respective cases at the district-court level but still chose to appeal the adverse determination on punitive damages. See generally EEOC v. Siouxland Oral Maxillofacial Surgery Assocs., 578 F.3d 921 (8th Cir. 2009);
117. EEOC v. Stocks, Inc., 228 F. App'x 429 (5th Cir. 2007);
118. EEOC v. Heartway Corp., 466 F.3d 1156 (10th Cir. 2006).
119. Kolstad v. Am. Dental Ass'n, 527 U. S. 526(1999). In this regard, the supervisor must have acted within the scope of the supervisor's employment and with the knowledge that the acts violated federal law (or with reckless disregard of the law).
120. Exxon Shipping Co. v. Baker, 554 U. S. 471(2008). The Exxon Court specifically acknowledged that where federal common law addresses punitive relief, due process concerns are not implicated
121. and Title VII itself provides a reasonable upper limit for potential punitive relief, 42 U. S. C. § 1981a (b) (3).
122. Philip Morris USA v. Williams, 549 U. S. 346(2007).
123. 301 F.3d 1204, 1208-09 (10th Cir. 2002) (setting forth test);
124. Bruso v. United Airlines, Inc., 239 F.3d 848, 857-58 (7th Cir. 2001) (same).
125. See Kolstad v. Am. Dental Ass'n, 527 U. S. 526, 539-46(1999).
126. (citing RESTATEMENT (SECOND) OF AGENCY § 217C (1957)).
127. (quoting RESTATEMENT (SECOND) OF AGENCY § 217C) (internal quotation marks omitted).
128. (quoting SCHLEUTER & REDDEN, supra note 43, § 4.4 (B) (2) (a), at 181) (internal quotation marks omitted).
129. (quoting 2 JAMES D. GHIARDI & JOHN J. KIRCHER, PUNITIVE DAMAGES: LAW AND PRACTICE § 24.05, at 14(1998)) (internal quotation marks omitted).
130. Burlington Indus., Inc. v. Ellerth, 524 U. S. 742, 761(1998) ("A tangible employment action constitutes a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.");
131. see also Faragher v. City of Boca Raton, 524 U. S. 775, 790(1998) ("[T]here is nothing remarkable in the fact that claims against employers for discriminatory employment actions with tangible results, like hiring, firing, promotion, compensation, and work assignment, have resulted in employer liability once the discrimination was shown. ").
132. Ellerth, 524 U. S. at 765.
133. See generally Stephanie Ann Henning Blackman, Note, The Faragher and Ellerth Problem: Lower Courts' Confusion Regarding the Definition of "Supervisor," 54 VAND. L. REV. 123, 163(2001) ("Because the Supreme Court did not intend to overrule the traditional 'hiring, firing, or conditions of employment' definition of supervisor, most courts have correctly continued to apply this definition. Other courts have utilized the expansive language of Faragher and Ellerth." (footnote omitted)).
134. (discussing supervisor status); EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241 (10th Cir. 1999) (addressing whether an individual was a supervisor under the ADA for purposes of exemplary relief).
135. But see Parkins v. Civil Constructors of Ill., Inc., 163 F.3d 1027, 1034 (7th Cir. 1998) (noting that supervisory employees have authority to "hire, fire, demote, promote, transfer, or discipline an employee" and that without "an entrustment of at least some of this authority, an employee does not qualify as a supervisor for purposes [of] imputing liability to the employer");
136. cf. West v. Tyson Foods, Inc., 374 F. App'x 624, 639 (6th Cir. 2010) ("Given that [the specified individual] was listed as a proper contact under [defendant's] policy, the district court cannot be said to have committed plain error in concluding that there was sufficient evidence for the jury to find that [the individual] was a managerial employee for purposes of awarding punitive damages." (footnote omitted)).
137. Kolstad, 527 U. S. at 542-43;
138. Ellerth, 524 U. S. at 761;
139. Faragher, 524 U. S. at 790. The EEOC has also defined who is a manager in the sexual-harassment context, noting that a supervisor is someone who "has authority to undertake or recommend tangible employment decisions affecting the employee" or someone who "has authority to direct the employee's daily work activities."
140. EEOC, EEOC ENFORCEMENT GUIDANCE: VICARIOUS EMPLOYER LIABILITY FOR UNLAWFUL HARASSMENT BY SUPERVISORS, No. 915.002 (June 18, 1999), available at http://archive.eeoc.gov/policy/docs/harassment.html.
141. Ellerth, 524 U. S. at 761;
142. Faragher, 524 U. S. at 790.
143. See Ellerth, 524 U. S. at 759 ("An employer is negligent with respect to sexual harassment if it knew or should have known about the conduct and failed to stop it.").
144. Kolstad, 527 U. S. at 543
145. (citing RESTATEMENT (SECOND) OF AGENCY § 217C (1957)).
146. See David D. Powell, Jr. & Catherine C. Crane, Complying with the Mandate of Kolstad: Are Your Good Faith Efforts Enough?, 36 TULSA L. J. 591, 593(2001)
147. (discussing Baty v. Willamette Indus., 172 F.3d 1232 (10th Cir. 1999), and stating that the Tenth Circuit held that "the plaintiff was entitled to punitive damages upon a showing that the employer failed to make good faith efforts to investigate and respond to her complaints, and that high-level management was aware of and implicitly condoned the offending conduct [of coworkers]").
148. Kolstad, 527 U. S. at 536.
149. See, e.g., Smith v. Xerox Corp., 602 F.3d 320, 335 (5th Cir. 2010) ("[A]n employer that is unaware of the relevant federal prohibition or that acts with a justifiable belief that its discrimination is lawful will not be liable for punitive damages.");
150. West v. Tyson Foods, Inc., 374 F. App'x 624, 638 (6th Cir. 2010) ("In general, courts have found this element met where the plaintiff shows the supervisors involved in the decision at issue had anti-discrimination training or even very general knowledge about anti-discrimination laws or an employer's antidiscrimination policies."
151. (quoting Sackett v. ITC∧Deltacom, Inc., 374 F. Supp. 2d 602, 612 (E. D. Tenn. 2005) (internal quotation marks omitted)));
152. EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1246 (10th Cir. 1999) (discussing whether store manager had sufficient knowledge of the ADA for purposes of awarding exemplary relief);
153. Bruso v. United Airlines Inc., 239 F.3d 848, 857 (7th Cir. 2001) ("To be entitled to punitive damages, a plaintiff must first demonstrate that the employer acted with the requisite mental state.").
154. See EEOC v. Siouxland Oral Maxillofacial Surgery Assocs., 578 F.3d 921, 925 (8th Cir. 2009) (holding that the evidence "was sufficient to submit the question of punitive damages to the jury" where a supervisor involved in the unlawful conduct "testified that she knew that discrimination on the basis of pregnancy was illegal").
155. See EEOC v. Stocks, Inc., 228 F. App'x 429, 431-32 (5th Cir. 2007) ("The owner... testified that he did not discipline the plaintiff after her initial complaints, because she would have gone 'to the EEOC.' In several of our sister circuits, evidence that the employer has knowledge of the anti-discrimination laws alone is sufficient to demonstrate reckless indifference and allow punitive damages to be submitted to the jury.").
156. See, e.g., EEOC v. Heartway Corp., 466 F.3d 1156, 1169 (10th Cir. 2006) (manager involved in unlawful conduct concedes at trial that on the basis of training received he was aware "that it was against the law to fire someone because they had a disability");
157. Zimmermann v. Assocs. First Capital Corp., 251 F.3d 376, 385 (2d Cir. 2001) (discussing whether antidiscrimination training is sufficient to impute knowledge of federal law);
158. Lowery v. Circuit City Stores, Inc., 206 F.3d 431, 443 (4th Cir. 2000) (same);
159. see also Monteagudo v. Asociación de Empleados del Estado Libre Asociado de P. R., 554 F.3d 164, 176-77 (1st Cir. 2009) (noting importance of training for good-faith defense).
160. See, e.g., West, 374 F. App'x at 638 (discussing mangers' knowledge of company's antiharassment policy);
161. Bruso, 239 F.3d at 857-58 (noting importance of knowledge of company antidiscrimination policy for purposes of awarding punitive damages);
162. Ogden v. Wax Works, Inc., 214 F.3d 999, 1010 (8th Cir. 2000) (noting importance of manager's knowledge of sexual-harassment policy for purposes of exemplary relief).
163. Bruso, 239 F.3d at 858
164. (citing Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 516 (9th Cir. 2000)).
165. See generally Di Marco-Zappa v. Cabanillas, 238 F.3d 25, 38 (1st Cir. 2001) ("The extent of federal statutory and constitutional law preventing discrimination on the basis of ethnicity or race suggests that defendants had to know that such discrimination was illegal....");
166. Zimmermann, 251 F.3d at 385
167. (citing Dimarco-Zappa, 238 F.3d at 38)
168. and Molnar v. Booth, 229 F.3d 593 (7th Cir. 2000), and noting that "some courts have ruled" that "all managers are now chargeable with knowledge of Title VII's clear requirements");
169. Molnar, 229 F.3d at 604 (upholding punitive damages award and emphasizing that "[t]he events here took place in 1994, long after the law of sexual harassment had become well established by the Supreme Court").
170. See, e.g., Andrew Weissmann with David Newman, Rethinking Criminal Corporate Liability, 82 IND. L. J. 411, 438 n. 90(2007) (noting circumstances the Kolstad Court identified where intentional discrimination would not subject the employer to exemplary damages).
171. Kolstad v. Am. Dental Ass'n, 527 U. S. 526, 536-37(1999).
172. See, e.g., Monteagudo v. Asociación de Empleados del Estado Libre Asociado de P. R., 554 F.3d 164, 176 (1st Cir. 2009) (noting that plaintiff can impute liability "by showing that the employee who discriminated against her was a managerial agent acting within the scope of his employment"
173. (quoting Rodriguez-Torres v. Caribbean Forms Mfr., Inc., 399 F.3d 52, 64 (1st Cir. 2005)) (internal quotation marks omitted));
174. Lowery v. Circuit City Stores, Inc., 206 F.3d 431, 444 (4th Cir. 2000) (noting that Kolstad "adopt[ed] [the] Restatement (Second) of Agency's scope of employment test for intentional torts but modif[ied] it to provide a goodfaith exception");
175. EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1248 (10th Cir. 1999) (discussing the scope of the employment test from Kolstad).
176. See generally Kolstad, 527 U. S. at 542-43
177. (quoting RESTATEMENT (SECOND) OF AGENCY § 217C (1957)).
178. Kolstad, 527 U. S. at 543
179. (quoting RESTATEMENT (SECOND) OF AGENCY § 228(1)) (internal quotation marks omitted).
180. See Kolstad, 527 U. S. at 543-45.
181. 42 U. S. C. § 2000e-2 (a) (2006).
182. Kolstad, 527 U. S. at 543.
183. See 42 U. S. C. § 2000e-2002 (a).
184. See generally Timothy J. Moran, Punitive Damages in Fair Housing Litigation: Ending Unwise Restrictions on a Necessary Remedy, 36 HARV. C. R.-C. L. L. REV. 279, 317-19(2001) (discussing scope-of-employment concept).
185. See Kolstad, 527 U. S. at 543-45.
186. Another scenario that could call the "scope-of-employment" test into question would be where an individual is retaliated against outside of the workplace after complaining of the employer's discriminatory conduct. See generally Burlington N. & Santa Fe Ry. Co. v. White, 548 U. S. 53, 67(2006) ("Title VII's substantive provision and its antiretaliation provision are not coterminous. The scope of the antiretaliation provision extends beyond workplace-related or employment-related retaliatory acts and harm."). Given the somewhat lower threshold for what constitutes a retaliatory act, as opposed to a substantive violation under the statute, Title VII retaliation claims should be examined particularly closely to make certain that the manager's conduct occurs within the scope of employment.
187. Kolstad, 527 U. S. at 545-46.
188. (discussing RESTATEMENT (SECOND) OF AGENCY § 217C (1957)).
189. (quoting RESTATEMENT (SECOND) OF AGENCY § 230 cmt. B).
190. (quoting Kolstad v. Am. Dental Ass'n, 139 F.3d 958, 974 (D. C. Cir. 1998) (Tatel, J., dissenting)).
191. See, e.g., Monteagudo v. Asociación de Empleados del Estado Libre Asociado de P. R., 554 F.3d 164, 176-77 (1st Cir. 2009) (discussing good-faith standard);
192. McInnis v. Fairfield Cmtys., Inc., 458 F.3d 1129, 1139 (10th Cir. 2006) (same);
193. Zimmermann v. Assocs. First Capital Corp., 251 F.3d 376, 385-86 (2d Cir. 2001) (same);
194. Lowery v. Circuit City Stores, Inc., 206 F.3d 431, 446 (4th Cir. 2000) (same).
195. One court lamented that "Kolstad provides us no definitive standard for determining what constitutes good-faith compliance with the antidiscrimination requirements." EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1248 (10th Cir. 1999).
196. See West v. Tyson Foods, Inc., 374 F. App'x 624, 639 (6th Cir. 2010) (noting the importance of a company antidiscrimination policy for purposes of avoiding imposition of punitive damages);
197. Monteagudo, 554 F.3d at 176-77 (same);
198. McInnis, 458 F.3d at 1138 (same);
199. Anderson v. G. D. C., Inc., 281 F.3d 452, 461 (4th Cir. 2002) (same);
200. Davey v. Lockheed Martin, 301 F.3d 1204, 1209 (10th Cir. 2002) (same);
201. Lowery, 206 F.3d at 446 (same).
202. See Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d 278, 286 (5th Cir. 1999) (finding that an employer policy of simply encouraging employees to report grievances to management was insufficient to establish good-faith defense).
203. See West, 374 F. App'x at 639 ("An employer will not be shielded simply by having an antidiscrimination policy. It must demonstrate that it engaged in good-faith efforts to implement that policy.");
204. Monteagudo, 554 F.3d at 176-77 (noting the importance of following company policy);
205. McInnis, 458 F.3d at 1138 (noting the importance of enforcing company policy);
206. Zimmermann, 251 F.3d at 385 (same);
207. Cadena v. Pacesetter Corp., 224 F.3d 1203, 1210 (10th Cir. 2000) (same).
208. See Tisdale v. Fed. Express Corp., 415 F.3d 516, 533 (6th Cir. 2005) (stating that the plaintiff "presented evidence of a number of inconsistent practices... which calls into question [defendant's] sincerity to abide by its own written [antidiscrimination] policies").
209. See Monteagudo, 554 F.3d at 176-77 (noting the importance of education for goodfaith defense);
210. McInnis, 458 F.3d at 1138 (same);
211. Davey, 301 F.3d at 1209 (same);
212. Anderson, 281 F.3d at 461 (noting the importance of training for good-faith defense).
213. See West, 374 F. App'x at 639 (discussing the sufficiency of company response to discrimination);
214. Golson v. Green Tree Fin. Servicing Corp., 26 F. App'x 209, 215 (4th Cir. 2002) (same);
215. Hertzberg v. SRAM Corp., 261 F.3d 651, 663-64 (7th Cir. 2001) (same).
216. See Melissa Hart, The Possibility of Avoiding Discrimination: Considering Compliance and Liability, 39 CONN. L. REV. 1623, 1641-43(2007)
217. See, e.g., Davey, 301 F.3d at 1209 (noting that "[i]t is unclear whether the good-faithcompliance standard set out in Kolstad represents an affirmative defense on which the defendant bears the burden of poof or whether the plaintiff must disprove the defendant's good faith compliance with Title VII"
218. (quoting Cadena, 224 F.3d at 1209 n. 4) (alteration in original) (internal quotation marks omitted)).
219. See Kolstad v. Am. Dental Ass'n, 527 U. S. 526, 545-46(1999).
220. See Davey, 301 F.3d at 1209 & n. 4
221. (citing Zimmermann v. Assocs. First Capital Corp., 251 F.3d 376, 385 (2d Cir. 2001);
222. Romano v. U-Haul Int'l, 233 F.3d 655, 670 (1st Cir. 2000);
223. Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 516 (9th Cir. 2000);
224. Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d 278, 286 (5th Cir. 1999)) (not resolving the question of which party has the burden of proof for the good-faith test, but noting that a number of circuits "have determined the defense is an affirmative one").
225. See Kolstad, 527 U. S. at 543-46;
226. FED. R. CIV. P. 50 (a) - (b).
227. See, e.g., Lucille M. Ponte, Putting Mandatory Summary Jury Trial Back on the Docket: Recommendations on the Exercise of Judicial Authority, 63 FORDHAM L. REV. 1069, 1078 n. 68(1995) ("A jury trial, even one of summary nature, however, requires at minimum the time-consuming process of assembling a panel and (one would hope) thorough preparation for argument by counsel, no matter how brief the actual proceeding."
228. (quoting In re NLO Inc., 5 F.3d 154, 158 (6th Cir. 1993)).
229. See, e.g., EEOC v. Heartway Corp., 466 F.3d 1156, 1171 (10th Cir. 2006) (noting that reversing the district court's flawed decision not to give a punitive damages instruction to the jury "requires that we remand for a new trial, solely on the issue of punitive damages");
230. see also EEOC v. Siouxland Oral Maxillofacial Surgery Assocs., 578 F.3d 921, 927 (8th Cir. 2009) (holding that the "district court erred in granting [defendant] judgment as a matter of law on [certain] punitive-damages claims" and remanding "for a new trial solely on the issue of punitive damages").
231. See, e.g., EEOC v. Stocks, Inc., 228 F. App'x 429, 433 (5th Cir. 2007) (holding that district court erred in failing to give punitive damages instruction and stating that "[a] future jury's decision to award punitive damages will be tied to the same evidence of intent as will be the liability decision, and the factual dispute surrounding the events leading to [the victim's] suspension will be central to the decision that [the defendant] retaliated in reckless indifference to her rights.... By our remand, we leave to the [plaintiff] the choice of whether it wants a new trial on all issues, or wishes instead to retain its judgment [without punitive damages]").
232. cf. Alvarado v. Fed. Express Corp., 384 F. App'x 585, 590 (9th Cir. 2010) ("Because we have affirmed the jury's verdict and award of compensatory damages, we remand for a new trial solely on the state and federal law claims for punitive liability and damages.").
233. Philip Morris USA v. Williams, 549 U. S. 346(2007).
234. Exxon Shipping Co. v. Baker, 554 U. S. 471, 501-02(2008).
235. See 42 U. S. C. § 1981a (b) (3) (2006).
236. 42 U. S. C. § 2000e-2 (a) (2006).
237. 42 U. S. C. § 1981(2006);
238. see also Sperino, Judicial Preemption of Punitive Damages, supra note 13, at 235
239. (noting that there are no statutory caps in 42 U. S. C. § 1981 claims).
240. Faragher v. City of Boca Raton, 524 U. S. 775(1998).
241. Burlington Indus., Inc. v. Ellerth, 524 U. S. 742(1998).
242. Burlington N. & Santa Fe Ry. Co. v. White, 548 U. S. 53(2006).
243. For example, as Professor Sandra Sperino correctly points out in her excellent response to this Article, employers may also be responsible for punitive damages via direct liability. See Sandra F. Sperino, Direct Liability for Punitive Damages, 97 IOWA L. REV. BULL. (forthcoming 2012).
244. See Richard B. Stewart, The Discontents of Legalism: Interest Group Relations in Administrative Regulation, 1985 WIS. L. REV. 655, 662 ("The more certain the law-the less the variance in expected outcomes-the more likely the parties will predict the same outcome from litigation, and the less likely that litigation will occur because of differences in predicted outcomes.").