On August 21, 2014, in the case EEOC v. Swissport Fueling, Inc., Case No. CV-10-02101-PHX-GMS (D. Ariz. Aug. 21, 2014) (a case we previously blogged about here), Judge G. Murray Snow of the U.S. District Court for the District of Arizona denied the EEOC’s motion to set aside the jury’s answers regarding its rejection of an award of punitive damages. The Court also denied the EEOC’s motion for judgment as a matter of law or new trial with respect to Swissport Fueling, Inc.’s (“Swissport”) affirmative defense to punitive damages under Kolstad v. Amer. Dental Ass’n, 527 U.S. 526 (1999).
This ruling is a good read for employers faced with a trial on employment discrimination claims where the EEOC is seeking punitive damages. The ruling provides insight into how courts handle seemingly inconsistent jury verdicts, and also provides employers tools for defending against a motion for a judgment as a matter of law on the Kolstad affirmative defense.
Background Of The Case
The EEOC brought suit against Swissport alleging claims of race, national origin, and color discrimination on behalf of fourteen current or former Swissport employees (the “Claimants”). Id. at 1. The Court held a jury trial in March 2014. Id. At the conclusion of the trial, the Court instructed the jurors that they could only award punitive damages if they found Swissport’s conduct was malicious, oppressive, or in reckless disregard of the Claimants’ rights. Id. at 2.
The jurors were then given a verdict form that asked the jury to decide for either the EEOC or Swissport. Id. at 2-3. The form instructed the jurors that if they find in favor of the EEOC on any of the Claimant’s claims, they need to (i) state the amount of compensatory damages, if any, and (ii) state whether Swissport acted with malice or reckless indifference to the federally protected rights of the Claimants. Id.
The jury reached a unanimous verdict regarding six of the Claimants’ claims, but was unable to reach a unanimous verdict regarding the other eight Claimants’ claims. For seven of the eight remaining Claimants (“Remaining Claimants”) the jury unanimously held that the EEOC was not entitled to punitive damages. Id. at 1.
The EEOC moved to set aside the jury’s answers regarding punitive damages for the Remaining Claimants and also renewed its Motion for Judgment as a Matter of Law Under Rule 50 Or For a New Trial Under Rule 59 with respect to Swissport’s affirmative defense to punitive damages. Id.
The Court’s Ruling
The Court denied the EEOC’s motion to set aside the jury’s answers regarding punitive damages, finding that the jury’s verdict was not inconsistent and did not violate the Court’s express instructions. Id. at 5-6. The EEOC argued that the jury’s answers to the punitive damages question regarding the Remaining Claimants should be dismissed as surplusage because the jury should not have answered any damages questions once they failed to reach a unanimous verdict. Id. at 2. The Court first noted that the jury’s responses were not internally inconsistent because it is not illogical that the jury was unable to reach a unanimous decision on Claimant’s harassment or retaliation claim, but could determine Swissport had not acted with malice or reckless indifference to the Claimant’s rights. Id. at 5. Next, the Court held that the jury did not disobey the Court’s express instructions. The Court reasoned that the jury was instructed that they could only award punitive damages if they first found for the EEOC on at least one of the Claimants’ claims. Id. The jury instructions did not reference whether or not the jury might determine whether Swissport acted with malice or reckless indifference even in the event they could not reach a unanimous decision on liability. Thus, the Court found there was no violation of its instructions. Id.
The Court also denied the EEOC’s motion for judgment as a matter of law with respect to Swissport’s affirmative defense to punitive damages. Id. at 8. In support of its motion, the EEOC argued that there was no legally sufficient basis on which a reasonable juror could have found that Swissport was entitled to the Kolstad affirmative defense (which holds that employers may not be vicariously liable for punitive damages if they make “good faith efforts” to comply with anti-discrimination law). Id. at 7. Specifically, the EEOC argued that the defense cannot be asserted regarding Jim Vescio’s, Swissport’s highest ranking official in its Arizona facility, purported improper conduct because a high ranking official is a proxy for the company. The Court, however, held that a reasonable jury could have found Vescio’s testimony more credible than conflicting testimony and determined he acted appropriately responding to the complaints and made good faith efforts to comply with the law. The Court also ruled that Swissport did not waive this affirmative defense by failing to specifically name it in its Answer or Final Pretrial Order. Id.
Finally, the Court denied the EEOC’s motion for a new trial, holding that the EEOC failed to demonstrate that the jury’s verdict was against the weight of the evidence. The Court noted that Swissport was entitled to the Kolstad defense and the jury did not actually reach the issue as the jurors did not find any punitive damages liability. Id. at 8.
Implications For Employers
In the course of his opinion, Judge Snow showed his unwillingness to disrupt the jury’s findings on the issue of whether the EEOC is entitled to punitive damages. This is helpful authority for employers faced with post-trial motions relating to punitive damages, as it outlines useful arguments employers can make when faced with inconsistent jury verdicts and/or a motion for judgment as a matter of law on the Kolstad defense.
Readers can also find this post on our Workplace Class Action blog here.