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$3 million punitive damages award in Tesla discrimination suit

Monday's verdict is a far cry from what the $137 million original award and the $15 million a federal judge reduced it to.

SAN FRANCISCO (CN) — A federal jury on Monday awarded a former Tesla employee nearly $3.2 million in damages in a race discrimination case — far less than what a judge suggested and the plaintiff turned down.

After deliberating for two hours late afternoon last Friday, jurors in the verdict trial broke for the weekend. The eight-member jury finally returned Monday afternoon with a verdict: Owen Diaz is entitled to $175,000 in past and future noneconomic damages, plus $3,000,000 in punitive damages.

That there would be an award for Diaz was never in doubt but keeping down the size of the award was the defense’s major concern. Over four days of testimony, Tesla’s attorneys did what they could to cast doubt on Diaz’s entitlement to damages as they dredged up old criminal records from nearly three decades before, picked apart Diaz’s story of his damaged relationship with his son, and suggested that Diaz was as racist as those he blamed for the racist harassment he had endured while working for Tesla.

Diaz, formerly an elevator operator at Tesla’s 5.5 million square foot factory across the bay in Fremont, sued the automaker in 2017 claiming he was subjected to racist epithets and harassment, including a derogatory racist drawing of a figure based on the 1940s-era cartoon character Caveman Inki, wearing a bone in his hair with exaggerated facial features.

In 2021, a jury awarded Diaz $137 million in damages, with nearly $7 million allotted for emotional distress and the rest as punitive damages. U.S. District Judge William Orrick III reduced the award to $15 million while still upholding the jury’s findings. At the time, Tesla had pushed to limit the damage to $600,000.

Diaz, however, eventually rejected that award, saying it wasn't punitive enough. After Monday's dramatically smaller award, Diaz’s attorneys hope Orrick rules quickly on a motion for a mistrial they filed last week.

“This was basically an attack defense,” said lead plaintiff attorney Larry Organ of Tesla’s defense strategy, adding that Tesla has probably spent more on its defense than it will have to pay Diaz.

The defense, Organ said, pulled out evidence that amounted to little more than smoke and mirrors and, ultimately, influenced the jury’s decision. Another of Diaz's attorneys, Bernard Alexander — who gave closing arguments — said, visibly angry: "It’s an insult to every Black person being called the N-word at the workplace."

Saying they had more evidence to bolster their case should Orrick rule in favor of a mistrial or if they decide to appeal appeal, Organ made it clear they were not yet finished with Diaz’s case. Diaz declined to comment after the verdict was announced.

Tesla’s lead attorney Alex Spiro declined comment when asked about his team’s success in holding down the damages.

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