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Friday, July 19, 2024 | Back issues
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Punitive Damages Scaled Back in Harassment Case

SAN FRANCISCO (CN) - A jury that awarded just $1 in nominal damages to a victim of sexual harassment improperly ordered $300,000 in punitive damages, the 9th Circuit ruled.

Angela Aguilar had been working for copper-mining company Asarco at its Mission Mine complex in Sahuarita, Ariz., for just a few months when she was promoted to car loader at Asarco's filter plant in March 2006.

Her new supervisor, Wayne Johnson, allegedly asked her out every day and expressed a romantic interest. At trial she testified that she feared he would rape her because whenever she asked for help he would loom over her and press up against her.

She said Human Resources ignored her complaints about Johnson and told her to handle the situation herself. Though the mill manager eventually threatened to fire Johnson unless he stopped harassing Aguilar, the harassment continued, forcing her to bid for promotion to another crew to escape him, according to the complaint.

But then Aguilar allegedly faced verbal abuse from a control-systems operator. Among other things, he told her "your ass is mine," yelled at her, and frequently threatened to fire her, she claimed.

Asarco claimed at trial that the operator was simply a "rude bully" to everyone, an attitude that inspired the managers to ignore Aguilar's complaints. Aguilar took a long leave of absence in September 2006 to deal with custody issues, returned Nov. 1 and worked only a few more days before she quit.

The case that went to court represented a consolidation of both Aguilar's claims and those filed on her behalf by the state of Arizona.

After an eight-day trial, a federal jury found Asarco liable only for the sexual harassment claims. They awarded Aguilar $1 in nominal damages, no compensatory damages and $868,750 in punitive damages.

The court reduced the award to the Title XII statutory maximum of $300,000, but a divided panel of the 9th Circuit found Thursday that $125,000 is more appropriate.

In refusing to let Asarco off the hook, the three-judge panel was unanimous that its treatment of Aguilar was reprehensible because it intentionally discriminated against her on the basis of sex, ignoring her complaints of harassment and verbal abuse.

"Substantial punitive damages are constitutionally acceptable in this case," according to the lead opinion by Judge Diarmuid O'Scannlain.

A punitive damages to compensatory damages ratio of 300,000 to 1 ratio, however, is more than twice the highest ratio approved for a discrimination case in the 5th Circuit, according to the ruling.

That case, Abner v. Kansas City Southern Railroad Co., settled on a ratio of 125,000 to 1.

"Given Asarco's highly reprehensible conduct and the presence of a comparable civil penalty in the form of the Title VII damages cap, we conclude that the Constitution does not bar the imposition of a substantial punitive award in this case," O'Scannlain wrote. "But this does not change the fact that a 300,000 to 1 ratio raises our 'judicial eyebrows."

Since the Supreme Court has not established a "bright line ratio" as a guideline for determining the egregiousness of a punitive award, the majority concluded that "the highest punitive award supportable under due process is $125,000, in accord with the highest ratio we could locate among discrimination cases."

On remand, the district court order a new trial unless Aguilar accepts the $125,000.

In his partial dissent, Judge Andrew Hurwitz said he would have upheld the $300,000 award.

The issue in Title VII cases is not the ratio between punitive and compensatory damages, "but instead if the statutory cap itself offends due process," Hurwitz wrote.

"And, although I agree with the analysis in Abner, I find it problematic that the majority believes that the ceiling of constitutionally acceptable punitive damages in Title VII cases has somehow forever been fixed by that opinion," Hurwitz added. "Would a different result be mandated if the Fifth Circuit in Abner had upheld a jury award of the full $300,000 allowed by Title VII? Abner simply affirmed a jury award of $125,000 in exemplary damages. It did not hold that this award was the maximum permissible under the Constitution, let alone that it was forever fixing the constitutional ratio for punitive damage awards." [p. 24 second graf]

David Barton, Eric Johnson and Brian Howie with Quarles & Brady of Phoenix, Ariz., represented Asarco.

Jenne Forbes with Waterfall, Economidis, Caldwell, Hanshaw & Villamana of Tucson, Ariz., represented the state of Arizona and Aguilar. Assistant Attorneys General Thomas Horne, Ann Hobart and Leslie Ross joined her on the briefs.

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