PASSANTINO v JOHNSON JOHNSON
9736191 venue is proper in both the forum where the employment
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| FindLaw: Laws: Cases and Codes: 9TH CIRCUIT COURT Opinions | |
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JENNIFER L. PASSANTINO, and No. 97-36191
the marital community; CHARLES No. 98-35036
PASSANTINO, and the marital
community, D.C. No. CV-96-05044-RJB
Plaintiffs- OPINION
Appellees-Cross-
Appellants,
v.
JOHNSON & JOHNSON CONSUMER
PRODUCTS, INC., dba Customer
Support Center,
Defendant-
Appellant-Cross-
Appellee.
UNITED STATES OF AMERICA,
Intervenor.
On Appeal from the United States District Court
for the Western District of Washington
Robert J. Bryan, District Judge, Presiding
Argued and Submitted March 11, 1999
Seattle, Washington
Filed March 10, 2000
Before: B. FLETCHER, REINHARDT, THOMAS, Circuit Judges.
Reinhardt, Circuit Judge,
Defendant, Johnson and Johnson Consumer Products, Inc.
(hereinafter CPI), a subsidiary of Johnson & Johnson, appeals the
district court's decision and order entering judgment for
1
plaintiff, Jennifer Passantino (hereinafter Passantino), after a
jury awarded her substantial damages. We affirm the district
court's decision in all respects but one. We remand for a new
trial on the punitive damages issue in light of the Supreme
Court's decision in Kolstad v. American Dental Association, 119
S.Ct. 2118 (1999). With respect to the other issues on this
appeal, we hold that venue was proper, that the evidence was
sufficient to support the jury's finding that CPI retaliated
against Passantino, that the district court did not abuse its
discretion in admitting a taped interview into evidence, that the
district court did not err in its jury instructions, and that the
district court acted within its discretion in allocating all
front pay, backpay, and compensatory damages to Passantino's
state law claims while allocating the punitive damages to
Passantino's Title VII claim. Additionally, we hold that, under
Washington state law, the district court did not err in
determining the front pay, backpay, and compensatory damage
awards. Finally, we affirm the district court's award of
attorneys' fees.
I. FACTS
Jennifer Passantino began working for Johnson & Johnson
Consumer Products Inc. (CPI) in 1979, when she was 25 years old.
Over the next 18 years, she rose through the ranks at CPI to
become one of its most successful female managers, and was
characterized by executives as "a leader in her field." She was
2
personally responsible for selling $12 million in product
annually, within a division with total sales of $48 million. Her
success is all the more remarkable because she worked within
CPI's "military" division, characterized by one of its own
executives as an "old boy network." In spite of her success,
Passantino's career prospects deteriorated rapidly after she
complained that her advancement within the company was being
limited by sex discrimination.
Passantino started with CPI in 1979 as a Health Care
territory manager in the San Francisco Bay area. In 1982, she
was promoted to territory manager for northern California and
Washington state in the military sales department. After a brief
stint in the child development products division, she was asked
to return to the military sales department. She became area
manager for the western region in the military sales department
in 1986. Her title was changed to Western Regional Manager in
1987. In 1988, with CPI's permission, Passantino relocated to
Tacoma, Washington. She was promoted to National Account Manager
in December, 1989, a position she held for the remainder of her
employment with CPI.
Passantino maintained a home office, as CPI requested.
(Most sales persons within CPI had home offices.) Passantino
testified that she was on the "developmental" path, which is the
career path for employees within sales who are in line for
executive and management positions. Her testimony is confirmed
by her performance reviews, which were consistently "outstanding"
3
and "above average." For example, her 1992 performance report
which was considered at her May 1993 performance evaluation
meeting with her supervisor, Lew Williams, stated that "Jennifer
demonstrates very strong selling skills, organizational ability,
and good business judgment. She has developed the sales and
promotional plan for Key Accounts, generating 12 million dollars
in Johnson & Johnson annual volume." It added that she was "well
qualified" and should be "strongly considered" for promotions
within CPI's parent company, Johnson & Johnson. In fact,
Williams discussed several promotional opportunities with her.
As the Western regional manager, Passantino was rated the
employee with the greatest promotional potential in her division.
Here, it is useful to describe CPI's advancement track in
order to help explain Passantino's history with the company. The
track was composed of multiple "levels." Level 3 includes mid-
level managers, Level 4 includes upper level managers and staff
directors, and Level 5 refers to executive and corporate officer
jobs. Passantino, as a National Account Manager, held a high-end
Level 3 position. Making the step between Level 3 and 4 is very
important to staying on the "promotion" track, and Level 4 pays
approximately $50,000 more than Level 3. Level 5 positions carry
very high compensation, as much as $200,000 more than
Passantino's salary at Level 3. In spite of the importance of
promotion, the method for determining who was to advance within
the company was neither systematic nor fair. Instead, employees
were promoted through what the district court called "the worst
4
kind of a good old boy system that allowed discrimination and
discouraged reasonable questions about the promotion process."
Despite her qualifications for promotion and her string of
positive reviews, Passantino began to suspect that, because of
her sex, she had been passed over for several promotions for
which she was qualified. Several events gave her reason to
suspect discrimination. First, Williams, her supervisor,
exhibited sexist behavior. He referred to women buyers as "PMS,"
"menstrual," and "dragon lady." He also stated that most women
probably just wanted to stay home. This sexism was not limited
to Williams. Passantino also testified that two co-workers,
VanDerveer and Kenan, had a condescending attitude towards women.
Most important, during her 1993 performance evaluation meeting,
Williams told Passantino that she should consider looking outside
the company for employment because he did not believe that either
the company or his boss was committed to promoting women.
In 1993, both Passantino and Jackie Upshaw, the only other
female manager in the military division, voiced complaints to
Williams. First, Passantino complained about the conduct of
VanDerveer and Kenan, as well as about Williams' behavior.
Upshaw also told Williams that she found his use of crude
language troublesome. Both women testified that Williams'
response was inadequate; Williams was short and brusque with
Passantino and told her that it was her problem to get along with
her co-workers.
Following the complaints by Passantino and Upshaw, the
5
offensive behavior of all three men increased both in degree and
frequency. Although Passantino's 1993 performance report was
good overall, Williams was brusque at the subsequent performance
evaluation meeting and gave her a low rating for "relationship
with peers."1 From this point on, Passantino felt she was
slighted when trying to speak, and was the subject of derision
generally -- co-workers rolled their eyes at her suggestions, and
there were side-bar conversations among other managers that
excluded her. In short, after Passantino complained, she was no
longer taken seriously.2
In 1994, her opportunities for advancement within the
company appeared to further close down. Following Johnson &
Johnson's reorganization, Passantino expressed interest in a
particular sales administration manager position, but she was not
interviewed for the job and the position was filled by a male co-
worker about whom she had complained to Williams. In October of
that year, Passantino learned about three newly-created positions
(National Commissary Manager, Director of Trade Marketing, and
Manager of Sales Administration) that she felt would offer her
greater exposure, experience, and higher sales volume than her
current position. However, these jobs were filled, before she
had a chance to apply and, without being advertised openly, by
1Williams testified at trial that although he believed the
men complained of bore equal responsibility for the problems
between them and Passantino, he did not give them a reduced
performance rating for relationship with peers.
2 In contrast, the male colleagues Passantino and Upshaw
complained about were promoted.
6
the two men she had complained of and by a third male employee
from outside the division.
In November 1994, Passantino contacted CPI's EEO officer and
was warned several times that if she made a complaint, she would
have to "live with the burden of coming forward" because the
decision to complain "could have many ramifications." In spite
of these warnings, Passantino formally complained to Doug Soo Hoo
in the Human Resources department. Soo Hoo offered to try to
determine whether he could raise her concerns without revealing
Passantino's identity. He also offered to perform a salary
analysis in order to see if there was any truth to Passantino's
suspicion that she was being paid less than similarly-situated
male workers. Passantino testified that Soo Hoo never provided
her with the results of his inquiry.
In December, 1994, Passantino decided to lodge a formal
complaint. In response to her complaint, Soo Hoo contacted
Upshaw, who supported Passantino's version of the facts and
echoed her concerns about discrimination. In January 1995, a
meeting was held in New Jersey with Soo Hoo, Williams, John
Hogan, who was Vice President of Sales, Passantino, and Ruth
Hague from the Employee Assistance Program. At this meeting,
Passantino recounted her complaints. Williams, her supervisor,
responded that the military market was an "old boy network" in
which it was hard for women to be successful. He also asked
Passantino directly if she thought he was a sexist.
A second meeting was held in February, also in New Jersey.
7
First, Williams and Hogan conducted Passantino's 1995 performance
review, based on her 1994 evaluation report. She was given a
good review and told she was qualified for a number of
promotional positions. Then, Hogan told Passantino that his
salary analysis had revealed no discrepancies and no
discrimination. Although Passantino never saw this analysis, a
salary analysis document was placed in her personnel file. This
document falsely reported that Kenan -- one of Passantino's
colleagues about whom she had complained -- received a
performance rating of "5," while in fact he had received a "4."
Another performance review in the document similarly
misrepresented another male manager's performance rating.
Passantino asserts that these ratings were fabricated in order to
justify the fact that these male workers were better paid than
she. Apart from this, her complaints were not addressed.3
At a subsequent division meeting, Hogan said that everyone
needed to "shape up and act professional" or they would be "off
the team." He also indicated his support for Williams. Both
Passantino and Upshaw testified that they understood this to be a
public rebuke of them for their complaints. Both women felt that
they were being told that if they did not shut up they would be
fired.
Passantino remained unsatisfied with CPI's response to her
3Upshaw also had a "follow-up" meeting with Hogan at which
she was told that her male colleagues were better paid than she
was. In fact, Upshaw was informed by Hogan that her pay was not
even within the appropriate range for her position even though
she had been in that position for five years.
8
complaint. On March 16, 1995, she informed Soo Hoo of her
intentions to seek private legal counsel. She filed an EEOC
complaint in June, 1995. Thereafter Passantino testified that
she experienced a range of retaliatory acts by CPI, making it
nearly impossible for her to perform her job effectively. Job
responsibilities (such as her training duties) were removed,
accounts (including the European account) were transferred to
other employees without notice, and she was no longer included in
division managers' meetings, such as those concerning development
of the division business plan. In addition, her performance
objectives were reduced (which, according to her testimony,
indicated that she was considered less capable than before her
complaint) and her job title was changed (and then restored after
she protested). Passantino also testified that other actions
were taken which undermined her performance. She stated that
Williams became distant and communicated less with her, that she
received product and sales information late, and that she lost
out on bonuses (including an award trip) and sales opportunities
as a result. Finally, Passantino stated that Williams made
comments demeaning her participation in the policy groups that
she had joined, even though she had joined them upon his
suggestion, in order to enhance her advancement within the
military division.
Passantino testified, and provided documentary corroboration
to prove, that prior to her complaints she was consistently
regarded as well-qualified for promotion into upper management.
9
After her complaints, and particularly after her public EEOC
complaint, however, it was a different story. Passantino was
told by Hogan that she would have to accept taking a step back in
order to advance, and that she should accept a district manager
job, which is the lowest position within her job grade. Her
review also stated, for the first time in years, that she was not
qualified for a national account manager position. Her 1997
promotional assessment described her as "not to VP level," an
obvious sign that, as Passantino put it, she was "losing ground."
For some unexplained reason, Williams was instructed to send his
evaluations of Passantino and Upshaw to Hogan, the Vice
President, before releasing them to the two women. No other
employees' evaluations were similarly screened.
CPI also retaliated against Passantino by offering her
demotions, without always making clear that the jobs offered were
below her current level. After initiating her complaints,
Passantino received three offers of district manager positions.
She rejected these jobs as demotions. Then, in August 1995, she
was offered the position of National Accounts Manager in Dallas.
Although this would have been a lateral move, it would have been
undertaken as a part of a test group, with the distinct
possibility of layoffs in the immediate future, Passantino
accepted on the condition that CPI guarantee her one year of
employment, absent cause for termination, as insurance against
the inherently risky undertaking. CPI refused. In March 1996,
Passantino rejected a district manager position in Los Angeles
10
because it was a "step backwards" with no potential for salary
growth (and a higher cost of living). Passantino was then
offered a demotion to a position as a sales administration
manager, with a much lower salary range. In this position, she
would have lost her company car, had no opportunity for
commissions, and would have had to live in a more expensive area.
Passantino accepted the position, however, on the condition that
she receive a year of guaranteed employment. Again rejecting her
conditional acceptance, Hogan told her not to take the job, that
the position was two steps backwards, and that it was only
offered to Passantino because it was one of the jobs involved in
her litigation. Finally, she rejected another position which was
a step back with no potential for salary growth. During the same
period, on a different occasion, when Passantino expressed
interest in a new military marketing position, Williams told her
she should not be interested in that position because it paid
less, even though in fact that position paid $20,000 more than
the position she held at the time.
Ultimately, Hogan told Passantino that because she refused
to accept these district manager positions (which were
demotions), she would not be considered for higher positions. He
also told her that her decision not to accept the demotions meant
that she could be deemed no longer promotable. After August
1996, Passantino did not receive any further offers.
Throughout this period, which followed her complaints, CPI
executives were repeatedly vague about whether positions offered
11
to Passantino were promotions, demotions, or lateral transfers.
For example, Hogan initially characterized the district manager
demotions as promotions. In a letter sent several months later,
equivocation marked CPI's other job offers and its responses to
4: Passantino never knew if she was considering a
job that would improve her prospects or effectively end her he called them laterals. Others in the corporation told her that these jobs would be demotions. The same dissembling and her inquiries
career's advancement opportunities.
Passantino testified that, as a result of this stressful
series of events, she constantly worried, cried, and felt trapped
and upset. She felt she was forced to spend less time with her
family because she feared she would lose her job, given that her
performance rating had been declining. She suffered stomach
problems, rashes, and headaches which required medical attention.
4At her performance review held in 1996, Passantino asked
Hogan about a position that in fact would have been a promotion,
Director of Trade Marketing. The company's failure to promote
Passantino to this position was one of the allegations of
discrimination in her EEOC complaint. Hogan characterized it as
a lateral, telling Passantino that it was at the "same level" she
currently held, Level 3, and that it was "not a promotion from
where you're at today." Corporate records showed that the job
was actually Level 4. This meeting was tape recorded by both
Passantino and Hogan, but CPI's tape was apparently inaudible.
Passantino produced her copy of the tape during discovery.
During his direct examination, Hogan testified accurately that
the position would have been a promotion. After an unsuccessful
attempt by CPI's counsel to prevent the jury from hearing the
tape, Hogan was impeached with it; it showed him misrepresenting
the nature of the position to Passantino and telling her it was
at the "same level." Hogan was thus forced to admit on the stand
that his statement to Passantino was false. The district court
stated that Hogan and Williams "were probably viewed by the jury
as being caught in lies, having demeanors of untruthfulness,
lacking credibility."
12
In addition, she sought counseling from her pastor. Most
important, her advancement within the company was brought to a
halt.
II. PROCEDURAL HISTORY
In January, 1996, Passantino brought this action in the
United States District Court for the Western District of
Washington for violations of Title VII and the Washington Law
Against Discrimination. CPI immediately moved for a change of
venue to New Jersey, which was denied.
Following a jury trial, the jury returned a large verdict in
Passantino's favor. The jury found that although CPI had not
discriminated against Passantino initially, it did retaliate
against her for complaining about what she perceived as sex
discrimination. The jury awarded Passantino $100,000 in back
pay, $2,000,000 in front pay, $1,000,000 in compensatory
emotional distress damages, and $8,600,000 in punitive damages.
CPI moved to strike or reduce the punitive and compensatory
damage awards, which the court granted in part and denied in
part. The court allocated all of the compensatory damages, front
pay, and back pay to Passantino's state law claim and all of the
punitive damages to the Title VII claim. It then reduced the
punitive damage award to the $300,000 Title VII cap and affirmed
the remainder of the award.5 CPI then moved for judgment as a
5Title VII limits compensatory and punitive damages based on
the size of the defendant corporation. For a plaintiff suing
CPI, a company with more than 500 employees, damages are capped
13
matter of law, or in the alternative for a new trial, or to
amend the judgment; all were denied. The court then awarded
Passantino $580,414 in attorney's fees, costs, and expenses.
III. VENUE
CPI argues that venue was improper in Washington, because
the unlawful employment practices at issue occurred in New
Jersey. We review the district court's venue ruling de novo.
Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 841
(9th Cir. 1986). CPI argues that when a plaintiff alleges a
discriminatory or retaliatory failure to promote, the decision
not to promote is the sole act that can constitute the unlawful
employment practice for venue purposes. Thus, under CPI's
theory, for purposes of promotion claims, unlawful employment
action "is committed" where the decision to take that action is
made. Passantino counters that the unlawful action occurs where
its effects are felt.6
Title VII authorizes suit "in any judicial district in the
State in which the unlawful employment practice is alleged to
at $300,000. 42 U.S.C. S 1981a(b)(3). Backpay does not
constitute damages for purposes of the cap. 42 U.S.C. S
1981a(2).
6We note that venue is based on the allegations set forth in
the complaint, not solely on the counts on which a plaintiff
prevails. Passantino alleged a variety of acts, both of
discrimination and retaliation, in addition to the actual failure
to promote. For purposes of venue, we can consider any of those
actions. However, because she worked out of a home office, it is
likely that none of the decisions to engage in unlawful actions
against her occurred in Washington.
14
have been committed" as well as in the district where employment
records are kept, in the district where the plaintiff would have
worked but for the alleged unlawful practice, and, if those
provisions fail to provide a forum, in the district where the
defendant keeps its principal office. 42 U.S.C. S 2000e-5(f)(3);
Johnson v. Payless Drug Store Northwest, 950 F.2d 586 (9th Cir.
1991).7 Some courts have noted that "this broad provision for
alternative forums was necessary to support the desire of
Congress to afford citizens full and easy redress of civil rights
grievances." Richardson v. Alabama State Board of Education, 935
F.2d 1240, 1248 (11th Cir. 1991). In fact, the only limitation
contemplated by the provision is that it seeks to "limit venue to
the judicial district concerned with the alleged discrimination."
Stebbins v. State Farm Mutual Ins., 413 F.2d 1100, 1102 (D.C.
Cir. 1969); Ford v. Valmac Industries, Inc., 494 F.2d 330, 332
(10th Cir. 1974).
In general, the effect of Title VII's venue provision is to
allow suit in the judicial district in which the plaintiff worked
or would have worked. See, e.g., Montero v. AGCO Corp., 192 F.3d
856 (9th Cir. 1999) (suit brought in district where plaintiff
worked). This is consistent with our case law in analogous
contexts. For example, in Varsic v. United States District
Court, 607 F.2d 245 (9th Cir. 1979), a case involving a suit
against a pension fund, we found venue to be proper where the
7Only the first of the possible bases for venue is at issue
here.
15
employee works (and earns his pension credits). Id. at 247. We
rejected the Fund's argument that venue should be limited to the
district in which the Fund is administered because that district
is where the decisionmaking for the plan's administration takes
place. Id. at 248.
We have also held that personal jurisdiction over a
defendant may be proper where the defendant has committed an act
which has effects in a state, because the defendant "purposefully
directed" its economic activity towards that state. Haisten v.
Grass Valley Medical Reimbursement Fund, 784 F.2d 1392, 1397-98
(9th Cir. 1986). In Haisten, we held that jurisdiction was
proper even though the defendant had absolutely no physical
contact with California, because its policies had effects in the
state, and because California had an interest in providing a
forum for the protection of its residents. Id. at 1399. See
also Gordy v. Daily News, 95 F.3d 829 (9th Cir. 1996) (finding
personal jurisdiction proper in California defamation action
against New York newspaper because 13 to 18 California residents
subscribed to the paper).8 Thus, the statute itself and
analogous case law suggest that venue should be found where the
effect of the unlawful employment practice is felt: where the
plaintiff works, and the decision to engage in that practice is
8Although we recognize that the issues involved in personal
jurisdiction disputes are different from the issues involved in
venue disputes, it is clear that if exercising personal
jurisdiction over a particular defendant would comport with due
process, this fact provides support for reading an otherwise
ambiguous venue statute in harmony with the jurisdictional rule.
16
implemented.
CPI, however, would have us reject such a rule, at least for
cases involving failure to promote, in favor of one that would
allow venue only where the decision to commit the unlawful
employment practice is made. We find this theory unpersuasive
for several reasons. First, CPI's theory would require us to
draw a distinction between promotion claims and other types of
Title VII claims -- which allow venue where the plaintiff is
employed. Had Passantino been wrongfully discharged or subjected
to a hostile work environment, she could have sued in the
district in which she worked. Nothing in the text or history of
the statute's venue provision suggests that a different rule
should apply in failure-to-promote cases. Plaintiffs unlawfully
denied a promotion, like those discharged, feel the effects of
their injury where they actually work.
CPI suggests that the rule advanced by Passantino would
leave corporations which employ people in far-away home offices
vulnerable to suit in distant fora, a problem which it warns will
increase in the internet age. CPI is concerned that "potential
plaintiffs could evaluate their preferred locations for bringing
a lawsuit and simply locate their home offices within that
jurisdiction." This forum shopping scenario seems fanciful; we
doubt that many people would reorganize their entire lives by
moving home offices to other judicial districts in anticipation
of as yet uncommitted acts of discrimination, in order to file
Title VII actions in those districts. It is of more concern that
17
national companies with distant offices might try to force
plaintiffs to litigate far away from their homes, as CPI seeks to
do here. Forcing the plaintiff to litigate in a federal court on
the other side of the country would significantly increase the
plaintiffs' costs of prosecuting her action. CPI's theory would
create a substantial burden on plaintiffs working for national
sales companies, a burden inconsistent with the beneficent
purposes of Title VII.
This is not to suggest that an action involving a failure to
promote is not also appropriately brought in the district in
which the employment decision is made. CPI rightly points out
that that district also has some interest in an action involving
promotions. Here, however, we need not choose between districts.
Title VII's venue provision obviously contemplates the
possibility that several districts could provide an appropriate
venue for the same action. For example, a company could keep
business records in an office located in one judicial district,
but engage in discriminatory hiring practices at a different
office in another district. An action could properly be brought
in either district. See 42 U.S.C. S 2000e-5(f)(3). Thus, we
hold that venue is proper in both the forum where the employment
decision is made and the forum in which that decision is
implemented or its effects are felt.
IV. RETALIATION
CPI also appeals the district court's denial of its motion
18
for judgment as a matter of law on Passantino's retaliation
claim. We review the district court's decision de novo, and
reverse only if the evidence, viewed in the light most favorable
to the prevailing party, admits only of a contrary conclusion.
Omega Environmental, Inc. v. Gilbarco, Inc., 127 F.3d 1157, 1161
(9th Cir. 1997).
Under Title VII, a plaintiff may establish a prima facie
case of retaliation by showing that (1) she engaged in activity
protected under Title VII, (2) the employer subjected her to an
adverse employment decision, and (3) there was a causal link
between the protected activity and the employer's action.
Yartzoff v. Thomas, 809 F.2d 1371, 1375 (9th Cir. 1987).
Initially, we note that Passantino's informal complaints to
Williams in 1993 constitute a protected activity, such that
actions taken against her after these initial complaints are
appropriately the subject of her retaliation claim. See, e.g.,
Moyo v. Gomez, 40 F.3d 982 (9th Cir. 1994) (allowing retaliation
claim based on informal protest of allegedly discriminatory
policy).
CPI contends that Passantino suffered no adverse employment
action. However, ample evidence exists in the record for the
jury to have made a contrary finding. There was evidence that
her complaints affected a performance review she received and
resulted in decreased job responsibilities. Other evidence
supported her contention that CPI responded to her complaints by
transferring accounts out of her portfolio, excluding her from
19
planning meetings, and preventing her from receiving information
she needed. The jury could also have found that CPI
substantially downgraded her promotability status and that she
failed to receive promotions because of her complaint. We have
held such actions sufficient to establish retaliation. For
example, in Hashimoto v. Dalton, 118 F.3d 671, 675 (9th Cir.
1997) we held that the dissemination of a negative job reference
constituted retaliation. Similarly, in Yartzoff, we held that
transfers of job duties and "undeserved" performance ratings were
adverse employment decisions. Yartzoff, 809 F.2d at 1376. See
also Strother v. Southern California Permanente Group, 79 F.3d
859, 869 (9th Cir. 1996) (exclusion from meetings, denial of
administrative support, and transfer of duties deemed
retaliatory).
The purpose of Title VII's anti-retaliation provision is to
bar employers from taking actions which could have "a deleterious
effect on the exercise of these rights by others." Garcia v.
Lawn, 805 F.2d 1400, 1405 (9th Cir. 1986). Title VII allows
employees to freely report actions that they reasonably believe
are discriminatory, even if those actions are in fact lawful.
Moyo, 40 F.3d at 985. Absent a judicial remedy, the type of
actions Passantino asserts her employer engaged in could
discourage other employees from speaking freely about
discrimination. We hold that the actions the jury could properly
have attributed to CPI were sufficient to constitute retaliation
within the meaning of Title VII.
20
CPI also argues that there was insufficient evidence to
establish that the adverse employment actions occurred because of
CPI's desire to retaliate against Passantino. However, we have
held that causation may be established based on the timing of the
relevant actions. Specifically, when adverse employment
decisions are taken within a reasonable period of time after
complaints of discrimination have been made, retaliatory intent
may be inferred. Yartzoff, 809 F.2d at 1375-76 (finding
causation based on timing of retaliation); Miller v. Fairchild
Industries, Inc., 885 F.2d 498, 505 (9th Cir. 1989) (holding that
discharges 42 and 59 days after EEOC hearings were sufficient to
establish prima facie case of causation); Hashimoto, 118 F.3d at
680. Moreover, we have held that evidence based on timing can be
sufficient to let the issue go to the jury, even in the face of
alternative reasons proffered by the defendant. Strother, 79 F.3d
at 870-71. While CPI correctly notes that there was some
evidence at trial that the alteration in job responsibilities and
the obstruction of information may not have been due to
retaliatory motives, the evidence as a whole does not compel this
conclusion.9
Finally, CPI argues that we should order a new trial on
liability to allow it to pursue an affirmative defense under
9For example, CPI's reference to decreased inventory
obviously does not provide a sufficient explanation for all of
Passantino's information problems. While there was testimony
that information problems occurred throughout the division, that
testimony was from Hogan, who was severely discredited at trial.
Williams' explanations are problematic for the same reason.
21
Burlington Industries v. Ellerth,
524 U.S. 742
, 118 S.Ct 2257
(1998). establishes an affirmative defense to
evidence that "the employer exercised reasonable care to prevent
and correct promptly any sexually harassing behavior," and that
"the plaintiff employee unreasonably failed to take advantage of Burlington liability where an employer shows by a preponderance of the
any preventive or corrective opportunities provided by the
employer." Id. at 2270. However, as Burlington expressly
states, "[n]o affirmative defense is available . . . when the
supervisor's harassment culminates in a tangible employment
action." Id. at 2270. Thus, while the defense may be available
when the employer can disclaim liability for a hostile
environment created by a supervisor in contravention of company
policy,10 it is not available to allow the employer to escape
liability for discriminatory tangible employment actions, because
such actions are necessarily those of the company itself.11
VII. ADMISSION OF THE HOGAN TAPE
10We need not consider whether or not Burlington's defense
could ever be available in retaliation cases, even in those cases
which do not involve tangible employment actions.
11While an employer is always liable for tangible employment
actions taken in its name, it does not follow that employers are
always subject to punitive damages for tangible employment
actions by their employees, because there may be reasons to limit
damages when companies engage in good faith efforts to comply
with Title VII, even if they ultimately fail to prevent
discriminatory conduct by their managerial employees. We discuss
this issue in detail in the punitive damages section of this
opinion, which considers the effect of Kolstad v. American Dental
Association, 119 S.Ct. 2118 (1999). See section VIII D., infra.
22
CPI argues that the district court erred by allowing
Passantino to impeach defense witness Hogan using a portion of a
tape of the interview he conducted with Passantino. CPI claims
that because its copy of that portion of the tape was allegedly
unclear, it was error to admit Passantino's version of the tape.
The tape exposed Hogan lying to Passantino about whether a
particular job was a promotion, a lateral, or a demotion. We
review the district court's decision for abuse of discretion.
EEOC v. Pape Lift, Inc., 115 F.3d 676, 680 (9th Cir. 1997). The
moving party must demonstrate prejudice. California Sansome Co.
v. U.S. Gypsum, 55 F.3d 1402, 1405 (9th Cir. 1995).
Here, we need not reach the merits, because CPI cannot show
prejudice. While CPI complains of the prejudicial effect of
Hogan's statements recorded on Passantino's version of the tape
(which the jury heard), Hogan also stated on a different,
uncontested part of the tape that the job Passantino inquired
about was on the "same level" as her current job. In addition to
being false, this statement was essentially identical to the
statement from the contested part of the tape. Thus, the jury
would have heard Hogan's false and damaging statement regardless
of which version of the tape was used.
CPI asserts that it need not show prejudice where plaintiff
has engaged in intentional misconduct. Although we could find no
Ninth Circuit case that supports this proposition, we need not
reach the question because there is no evidence of intentional
misconduct here. Both CPI and Passantino had copies of the tape.
23
If, as CPI alleges, its copy of the of the tape was inaudible, it
could have requested an audible copy prior to Passantino's
introduction of the tape into evidence. The district court's
decision to include the whole tape did not constitute an abuse of
discretion.
VI. JURY INSTRUCTIONS
CPI argues that the district court erred by not giving the
mitigation instruction described in Ford Motor Co. v. EEOC, 458
U.S. 219, 241 (1982), and by not giving an instruction explaining
reduction to present value. Because all of the non-punitive
damages were allocated to the state law claims, state law governs
the substance of the jury instructions given at trial. In re
Asbestos Cases, 847 F.2d 523, 524 (9th Cir. 1988); Miller v.
Republic National Life Insurance, 789 F.2d 1336, 1338-39 (9th
Cir. 1986) (holding that, in diversity action, substance of jury
instructions is governed by state law). We review errors for
abuse of discretion and reverse only if we find prejudice.
Abromson v. American Pacific Corp., 114 F.3d 898, 902 (9th Cir.
1997).
CPI cites no case suggesting that the Ford instruction,
authorized in the Title VII context, is required under Washington
law, and we have found no cases requiring it. In fact, as a
general matter, Washington discrimination law remedies are more
robust than those authorized under Title VII. See Martini v.
Boeing Co., 971 P.2d 45, 53 (Wash. 1999) (en banc). In any case,
24
any error would have been harmless. The jury's verdict with
respect to retaliation makes clear that it did not think that the
offers made to Passantino were promotions, so it would not have
found that Passantino failed to mitigate by not accepting the
retaliatory offers. Moreover, the jury received a general
mitigation instruction which is consistent with the Ford
instruction, and counsel, with the court's approval, was given
the opportunity to argue the Ford instruction to the jury.
CPI also argues that the Supreme Court's decision in
Monessen Southwestern Railway Co. v. Morgan,
486 U.S. 330
(1988)
requires that the jury be instructed to discount its damages
award to present value.12 In Monessen, the Supreme Court
reversed a decision after the trial judge told the jury it could
not discount its damage award to present value.
486 U.S. at 339
.
However, nothing in that opinion requires any particular method
of dealing with present value issues, except insofar as it
requires that "the present value calculation is to be made by the
`trier of fact.'" Id. at 341.
The district court refused to give the instruction here
because there was no evidence presented as to what the
appropriate discount rate should be. This decision was correct,
because under Washington and Ninth Circuit law, a present value
instruction should not be given where no evidence of appropriate
discount rates has been introduced. See Hinzman v. Palmanteer,
12We note that CPI did not argue below that the District
Court's decision was inconsistent with Monessen.
25
501 P.2d 1228, 1233-34 (Wa. 1972).13 Thus, the rule applied by
the relevant Washington law.
CPI argues that the district court erred in allocating the
jury's damage award. The district court allocated all of the
compensatory damages, front pay, and backpay to Passantino's the district court was completely consistent with Monessen and VII. ALLOCATION OF DAMAGES
state law claim, while allocating the punitive damages to her
Title VII claim. CPI contends that the entire award (apart from
backpay) should have been subject to the $300,000 Title VII
damages cap.14 While the district court generally has discretion
regarding how to allocate the damage award, to the extent that
the allocation decision rests on an interpretation of the
statute, we review it de novo. Hudson v. Reno, 130 F.3d 1193,
1198 (6th Cir. 1997); Johnson v. Shalala, 35 F.3d 401, 405 (9th
Cir. 1994).
CPI claims that because the jury instructions said that
punitive damages could be awarded only if the jury awarded
13This is also the rule in the Ninth Circuit. See Alma v.
Manufacturers Hanover Trust Co., 684 F.2d 622, 626 (9th Cir.
1982).
14 Wholly aside from the allocation issue, CPI's argument
that the front pay award is subject to the cap is erroneous.
Front pay is not part of the compensatory award for purposes of
Title VII's damage cap. Gotthardt v. National Railroad Passenger
Corp., 191 F.3d 1148, 1155 (9th Cir. 1999). Backpay is also
excluded. See 42 U.S.C. S 1981a(b)(3). Thus, those parts of the
award are not subject to the cap, whether or not the allocation
was appropriate.
26
compensatory damages on Passantino's federal claims, and because
the jury awarded punitive damages, the jurors must have intended
to award federal compensatory damages. While this reasoning is
correct, it does not follow that the court erred by allocating
the compensatory damages to the state law claims. As the verdict
form indicates, the jury found for Passantino on both federal and
state law retaliation claims, and awarded damages without
specifying any particular allocation. Thus, the most reasonable
assumption is that the jury awarded the same damages on both the
federal and state claims. The damages were duplicative, however,
because the two claims were essentially the same; they involved
the same conduct and were evaluated under the same legal
standard. In the absence of a contrary directive, such as a
statutory mandate that damages be allocated to one claim rather
than another, the district court had authority to allocate the
damages to either claim. Faced with the general verdict, the
district court chose to allocate the award to the state rather
than the federal claim. As the jury had awarded damages without
differentiating between the claims, the awards were effectively
fungible, and the district court's action was entirely within its
discretion and consistent with the jury's verdict. See Martini
v. Federal National Mortgage Association, 178 F.3d 1336, 1349-50
(D.C. Cir. 1999) (treating damage award as interchangeable under
local and federal law where standards of liability are
identical).
In contrast to the district court's allocation method, CPI
27
suggests that all the damages should be allocated to Passantino's
Title VII claim, ignoring the fact that the jury found for
Passantino on her state retaliation claim. CPI's suggested
allocation would partially nullify the jury's state law
determination, by effectively subjecting the entire compensatory
award to Title VII's cap. We have held, under similar
circumstances, that compensatory damages allocated by the court
to claims other than Title VII claims should not be subject to
Title VII's cap. Pavon v. Swift Transportation Co., 192 F.3d
902, 910-11 (9th Cir. 1999). In Pavon, the plaintiff recovered
damages in excess of $300,000 on discrimination claims under
state law, Title VII, and S 1981. The district court allocated
the damages in excess of $300,000 to the 1981 and state law
claims. Id. Although the jury's verdict form, like the form in
this case, did not differentiate among the claims in awarding
damages, we rejected the argument that the entire award should be
subject to Title VII's cap and upheld the district court's
allocation method, noting that neither S 1981 nor Title VII was
intended to force plaintiffs to choose between remedial statutes.
We can find no relevant distinction between Pavon and the present
case.
In addition to nullifying the state cause of action in this
case and violating our rule in Pavon, CPI's allocation method
would drastically curtail the ability of states to provide damage
remedies greater than those authorized by Title VII. Such a rule
would violate Title VII's explicit prohibition against limiting
28
state remedies. See 42 U.S.C. S 2000e-7; Pavon, 192 F.3d at 911;
Martini, 178 F.3d at 1349-50 (holding that "were we not to treat
damages under federal and local law as fungible where the
standards of liability are the same, we would effectively limit
the local jurisdiction's prerogative to provide greater remedies
for employment discrimination than those Congress has afforded
under Title VII.")
Moreover, CPI's proposed allocation would conflict with the
district court's general obligation to preserve lawful jury
awards when possible. The jury's entire compensatory damage
award was lawful under state law, and its punitive damage award
was lawful under federal law (subject to any constitutionally
valid limitation imposed by the statutory cap). An allocation
that would serve to reduce lawfully awarded damages would fail to
respect the jury's verdict and conflict with the purpose and
intent of one or both statutes. Thus, we hold that the district
court's allocation decision was not an abuse of discretion, and
furthermore that, in circumstances such as these, subjecting the
whole damage award to Title VII's cap would be inconsistent with
Title VII's provisions.
VIII. DAMAGES
CPI argues that the district court erred in refusing to
grant its motion for judgment as a matter of law, or in the
alternative its motion for a new trial, because there was
insufficient evidence to establish any of the damages. We review
29
de novo the district court's decision to deny judgment as a
matter of law. EEOC v. Pape Lift, Inc., 115 F.3d 676, 680 (9th
Cir. 1997).15 We hold that the district court committed no error
in holding the evidence sufficient and denying the motions. As
the damage awards involving backpay, front pay, and emotional
damages were allocated to the state law claim, we analyze those
awards under Washington law, and affirm. We discuss the punitive
damages question separately below.
A. Backpay
CPI claims that there was "no evidence" to support any
backpay, let alone the $100,000 backpay award. This claim is
without merit. At the least, the jury clearly was entitled to
find that Passantino would have won a bonus trip, worth $12,000,
had CPI not prevented her from receiving timely information.
Moreover, the jury was entitled to believe Passantino's testimony
that she would have received one of several National Account
Manager positions for which she was qualified. Williams stated
that she was clearly qualified for those positions as of 1993 (if
15Judgment as a matter of law is only appropriate if the
evidence, viewed in the light most favorable to the nonmovant,
permits only one decision, which is contrary to that reached by
the jury. Forrett v. Richardson, 112 F.3d 416, 419 (9th Cir.
1997). A district court's refusal to grant a new trial should be
reversed only if it constitutes an abuse of discretion. Wharf v.
Burlington Northern R.R. Co., 60 F.3d 631, 637 (9th Cir. 1995).
The trial court may grant a new trial only if the verdict is
contrary to the clear weight of the evidence, is based upon false
or perjurious evidence, or to prevent a miscarriage of justice.
Ace v. Aetna Life Ins. Co., 139 F.3d 1241, 1248 (9th Cir.), cert.
denied, 119 S.Ct. 338 (1998).
30
not earlier), and such positions were available after she
complained of discrimination. The actual amount awarded by the
jury, $100,000, could easily be derived from Passantino's
testimony estimating that she would have received between
$130,000 and $200,000 more in salary had she been promoted to one
of those positions.
CPI argues that Passantino's damage estimates cannot apply
because they are based on the harm she suffered from
discrimination, not retaliation. However, the fact that she gave
those estimates in the context of a claim of discrimination is
irrelevant. Even if the jury did not find that Passantino was
denied promotions prior to her complaints, it obviously did find
that CPI punished her in retaliation for those complaints. After
she complained, Passantino went from being the most highly rated
performer in her division to being not promotable beyond that
position. Thus, the most plausible reading of the record in
light of the jury's verdict is that the jurors believed
Passantino was denied promotions because she complained. The
change in her status regarding her promotability after the
complaints strongly supports this finding. We cannot say that
this conclusion is contrary to the clear weight of the evidence.
B. Front Pay
CPI also argues that we should disallow the jury's $2
million front pay award as a matter of law. We disagree. First,
under Washington law the jury has substantial autonomy when
31
awarding front pay. See Lords v. Northern Automotive Corp., 881
P.2d 256, 266 (Wash. Ct. App. 1994) (striking down trial court
decision limiting front pay to five years after termination).
Front pay may be awarded whenever the antagonism between the
plaintiff and her employer is such that it would be inappropriate
to expect her to return to work. See Pannell v. Food Services of
America, 810 P.2d 952, 966 (Wash. Ct. App. 1991) (holding that
front pay issue is not too speculative to go to jury, and
endorsing it as substitute for reinstatement, citing Ninth
Circuit's decision in Cassino); Hayes v. Trulock, 755 P.2d 830,
834 (Wash. Ct. App. 1988) (describing front pay as substitute for
reinstatement); Cassino v. Reichhold Chemicals, Inc., 817 F.2d
1338, 1347 (9th Cir. 1987) (upholding front pay award based on
"some hostility" in spite of testimony that plaintiff and
defendant were still friends); Thorne v. City of El Segundo, 802
F.2d 1131, 1137 (9th Cir. 1986). Here, there was ample evidence
to support a finding that substantial hostility existed between
Passantino and her employer, such that a front pay award was
appropriate. If the jury believed, as we presume it did, that
CPI retaliated against Passantino because of her complaints, they
could easily have believed that it would be inappropriate for
Passantino to continue working at CPI, particularly given her
testimony that she could not continue to work there indefinitely
because of the hostility created by her complaints and
litigation.
CPI contends that no front pay award was justified because a
32
front pay award must be based on a finding of constructive
discharge. CPI cites Gomez v. Great Lakes Steel Division, 803
F.2d 250, 256-57 (6th Cir. 1986) for the proposition that lost
wages cannot be recovered without a finding of constructive
discharge. Of course, even if Gomez did support that rule, we
would be bound by Washington's law and, by extension, our
decision in Cassino. However, Gomez provides no support for the
proposition that an award of front pay requires a finding of
constructive discharge. That case merely describes requirements
for finding constructive discharge, and does not mention front
pay at all. See id.
CPI also argues, in the alternative, that the jury's front
pay award was excessive and speculative. Under Washington law,
This court will not willingly assume that the jury did not
fairly and objectively consider the evidence and the
contentions of the parties relative to the issues before it.
The inferences to be drawn from the evidence are for the
jury and not for this court. The credibility of witnesses
and the weight to be given to the evidence are matters
within the province of the jury and even if convinced that a
wrong verdict has been rendered, the reviewing court will
not substitute its judgment for that of the jury, so long as
there was evidence which, if believed, would support the
verdict rendered.
Herring v. Dept. of Social and Health Services, 914 P.2d 67, 77
(Wash. Ct. App. 1996) (internal citations omitted) (holding that
$500,000 award was within "the range" of the evidence).16 Here,
we find that the award was supported by the evidence.
16Similarly, Ninth Circuit law provides for "substantial
deference" to a jury's findings as to the appropriate amount of
damages. Del Monte v. Monterey, 95 F.3d 1422, 1435 (9th Cir.
1996). A jury's award of damages should not be disturbed unless
it is clearly unsupported by the evidence. Chalmers v. City of
Los Angeles, 762 F.2d 753, 760 (9th Cir. 1985).
33
At the time of the trial, Passantino was 43 years old, with
an expected working life of 22 years to her normal retirement age
of 65. She had 18 years experience at CPI and her annual salary
in her Level 3 position with CPI at that time was $71,500.
Evidence showed that if Passantino left CPI, her annual salary
with a new employer would likely be $50-60,000. On the other
hand, if her career had not been cut short by CPI's violations of
Title VII, the jury could easily have concluded that she was on
the path to upper executive management at Level 4 or above.
Evidence presented at trial indicated that the compensation
packages available to Level 4 managers included base salaries of
$94,000, potential cash bonuses, stock bonuses of 4-7% of salary,
and stock options worth 200-300% of salary.
As an example, Passantino testified that she was qualified
for a position held by John Wernicki (a job that was falsely
described to her as a lateral). Wernicki earned $140,000 in base
salary double Passantino's pay, plus bonuses, stock options,
and other perks. The difference between what Passantino earned
at the time she was discriminated against (without even
considering the pay cut she would have to take upon leaving) and
what Wernicki earned over the 22 years of her expected work life
adds up to a total of $1.54 million. That calculation does not
include the cash bonuses, stock bonuses, or stock options worth
two to three times her salary. Figuring in those amounts could
obviously result in a total in excess of the jury's $2 million
award.
34
C. Compensatory Damages
CPI also challenges the district court's decision upholding
the jury's compensatory damage award. CPI claims that the
evidence of emotional damage arising from lost promotional
opportunities can only be attributed to Passantino's gender
discrimination claims. This argument is misguided. The jury
could have found that Passantino suffered substantial emotional
damage because of CPI's retaliation against her. Her
"promotability" status within the company plummeted after she
complained. She testified, and her husband and sister
corroborated, that she experienced substantial anxiety as a
result of her sense that she could no longer advance within the
company. The jury could have attributed this anxiety, as well as
her rashes, stomach problems, and other symptoms, to CPI's
retaliatory action. While the jury could have believed, as CPI
argues, that these problems were caused by her unwarranted
perception that she suffered discrimination (or even some pre-
existing condition), we cannot reverse its findings merely
because our reading of the evidence might have been different,
especially where the district court concluded that the "evidence
at trial was sufficient to support the verdict[ ] on emotional
distress damages." Here, there is evidence which, if believed,
would support the verdict. See Herring, 914 P.2d at 78.
CPI also appears to suggest that emotional damages awards
must be supported by some kind of "objective" evidence. While
objective evidence requirements may exist in other circuits, such
35
a requirement is not imposed by case law in either Washington,
the Ninth Circuit, or the Supreme Court. See Herring, 914 P.2d
at 77-83 (upholding damage award in excess of $1,000,000,
including $550,000 for emotional damages, in disability
discrimination and retaliation case based on testimonial evidence
of emotional harm); Chalmers, 762 F.2d at 761 (upholding
emotional damages based solely on testimony); Johnson v. Hale, 13
F.3d 1351, 1352 (9th Cir. 1994) (noting that emotional damages
may be awarded based on testimony alone or appropriate inference
from circumstances); Carey v. Piphus,
435 U.S. 247
, 264 n.20
(1978) (noting that emotional distress damages are "essentially
subjective" and may be proven by reference to injured party's
conduct and observations by others). See also Merriweather v.
Family Dollar Store, 103 F.3d 576, 580 (7th Cir. 1996) (noting
that plaintiff's testimony can be enough to support emotional
damages). Most important, Washington law contains no severity
requirement as a precondition to awarding compensatory damages;
thus, Passantino's testimony corroborated by that of her husband
and sister is adequate to support the jury's verdict. Herring,
914 P.2d at 81.
CPI also argues that the Fourth Circuit ruled against
substantial compensatory damages in a case extremely similar to
this one, citing Hetzel v. County of Prince William, 89 F.3d 169,
171 (4th Cir. 1996). First, Hetzel is distinguishable. In
Hetzel the plaintiff offered no corroborating evidence for her
emotional damages, and she sought no counseling from anyone.
36
Here, in contrast, Passantino's claims were corroborated by her
husband and sister, and she sought help from her pastor. Second,
the Fourth Circuit's holding does not bind us, even when we are
applying federal law, let alone when it is Washington law that
guides us. We find no basis under Washington law for reversing
the district court's decision.
D. Punitive Damages
CPI argues that the district court erred in upholding the
punitive damages award, because no federal compensatory or
nominal damages were awarded and therefore the punitive damages
cannot stand under federal law. In addition, it argues that
allowing the jury to consider punitive damages was error because
there was insufficient evidence to submit the issue to the jury.
Passantino argues, on cross-appeal, that the application of Title
VII's $300,000 damages cap violates the Seventh Amendment. CPI
responds that the cap is constitutional, and that in any event
the punitive damages award is excessive under BMW of North
America v. Gore,
517 U.S. 559
(1996).17
Although we conclude that the evidence was unquestionably
sufficient and that the form of the jury's verdict properly
supported a punitive damages award, we remand so that the
district court may apply the Supreme Court's decision in Kolstad
17To the extent that CPI's argument can be read to challenge
the capped punitive damage award of $300,000 as excessive, we
reject its argument. As we uphold the compensatory award of
$1,000,000, there is no doubt that the capped punitive damages
are not excessive.
37
v. American Dental Association, 119 S.Ct 2118 (1999) --
specifically so that the district court may determine whether CPI
is entitled to present the vicarious liability defense outlined
in Kolstad, and if so, for a new trial on punitive damages. For
this reason, we need not reach either cross-appeal issue, as both
of them concern the amount of the punitive damages award.18
Because we do not reach the issue, although raised to us on
appeal, Passantino is not foreclosed from seeking reconsideration
before the district court or on further appeal to this court if
it becomes appropriate to do so.
1. The Award of Federal Compensatory Damages
CPI argues that because the non-punitive damages were all
allocated to the state claim, the punitive damages award under
Title VII should not have been upheld. In support of its
argument, it cites the jury instructions, which stated that under
Title VII a plaintiff may not recover punitive damages without
establishing liability for either compensatory or nominal
damages.
We have held in S 1983 cases that punitive damages may be
awarded in the absence of compensatory or nominal damages, as
long as the plaintiff has shown that the defendant violated a
federally protected right. Gill v. Manuel, 488 F.2d 799, 802
(9th Cir. 1973); Bise v. Int'l Brotherhood of Electrical Workers,
18The cap was applied only to Passantino's punitive damages
award.
38
618 F.2d 1299, 1305-06 (9th Cir. 1979). Other circuits have
adopted the same rule. See, e.g. King v. Macri, 993 F.2d 294,
297-98 (2d Cir. 1993); , Basista v. Weir, 340 F.2d 74, 88 (3rd Cir.
1965).19
Here, we need not decide if punitive damages may be awarded
under Title VII in the absence of a compensatory or nominal
damage award, because the jury did award compensatory damages.
As we explained in our discussion of the district court's
allocation decision, supra, Passantino did establish liability
for compensatory damages on her federal claim, and the jury
actually awarded her compensatory damages under federal law. It
did so in the form of a general compensatory damages award that
applied to both the federal and state claims. Because the
standards for liability under state and federal law were similar,
the damage awards were fungible and, barring some statutory or
other reason (see p. 31 supra), could be allocated, by the court,
to either the state or federal claims, in whole or in part.
Although the district court acted properly in allocating the
compensatory part of the jury's damage award to Passantino's
state law claim, the fact remains that the jury awarded
compensatory damages under both federal and state law retaliation
claims. That is all that is required to permit an award of
19The First Circuit held, however, in a case in which it did
not discuss any of the cases noted above, that compensatory or
nominal damages were required in a Title VII case. Kerr-Selgas
v. American Airlines, 69 F.3d 1205, 1214 (1st Cir. 1995)
(requiring compensatory or nominal damages for award of punitive
damages).
39
punitive damages in cases in which predicate damages are
necessary. A court's subsequent allocation of compensatory or
nominal damages among various claims does not change that rule.
Moreover, in the present case, it is clear that the jury thought
it was, inter alia, awarding federal damages, because it was told
that it could not award punitive damages without awarding federal
damages, and it did award punitive damages. Accordingly, the
compensatory damages are adequate to sustain the award of
punitive damages, if such predicate damages are required.
2. Sufficiency of the Evidence
The standard for determining when evidence is sufficient to
present the punitive damages issue to the jury is now governed by
Kolstad v. American Dental Asociation, 119 S.Ct 2118 (1999). In
that case, the Supreme Court rejected the District of Columbia
Circuit's interpretation of Title VII, which would have required
"egregious" conduct by an employer before punitive damages could
be available. Id. at 2124. Instead, the Court stated that an
employer may be liable for punitive damages in any case where it
"discriminate[s] in the face of a perceived risk that its actions
will violate federal law." Id. at 2125. The court made clear
that although egregious conduct could be evidence of evil intent,
such conduct was not required to establish punitive damages
liability. Id. at 2126 (holding that egregious behavior provides
"one means" of satisfying plaintiff's burden of proof for
punitive damages). Thus, in general, intentional discrimination
40
is enough to establish punitive damages liability.
However, the Court also acknowledged that there could be
some instances in which intentional discrimination did not give
rise to punitive damages liability. The Court set forth three
areas in which the factfinder could find intentional
discrimination but the defendant would nonetheless not be liable
for punitive damages. First, if the theory of discrimination
advanced by the plaintiff was sufficiently novel or poorly
recognized, the employer could reasonably believe that its action
was legal even though discriminatory. Second, the employer could
believe it had a valid BFOQ defense to its discriminatory
conduct. Third, in some (presumably rare) situations, the
employer could actually be unaware of Title VII's prohibition
against discrimination. Id. at 2125. Common to all of these
exceptions is that they occur when the employer is aware of the
specific discriminatory conduct at issue, but nonetheless
reasonably believes that conduct is lawful. Under such
circumstances, an employer may not be liable for punitive
damages.
An application of Kolstad's intentional discrimination
requirement to the facts here leaves no doubt that punitive
damages were available. The jury had substantial evidence based
upon which it could find malice or reckless indifference to
Passantino's federally protected rights. The jury could have
found that CPI downgraded Passantino's promotability status and
offered her demotions in retaliation for her complaints. The
41
jury also could have found that defense witnesses lied (both to
Passantino and at trial) about their actions, as part of a
continuing effort to cover up their campaign against her,
including giving her false or misleading information about
potential jobs as well as about salaries, and that its actions
against Upshaw suggested a pattern of similar action. These
actions are sufficient to permit a jury to conclude that CPI
could not have reasonably believed that its conduct was lawful.
As the exceptions outlined in Kolstad are not applicable here,
there was sufficient evidence to submit the claim for punitive
damages to the jury.
3. Vicarious Liability
In addition to clarifying the standard for intentional
discrimination claims under Title VII, Kolstad also expanded the
availability of the Burlington defense to punitive damage claims.
Defendants may now establish an affirmative defense to punitive
damages liability when they have a bona fide policy against
discrimination, regardless of whether or not the prohibited
activity engaged in by their managerial employees involved a
tangible employment action. While Burlington had created a
similar affirmative defense for hostile work environment claims,
Kolstad extends the doctrine by allowing defendants to assert it
in response to punitive damages claims, even in cases involving
tangible employment action. Kolstad, 119 S.Ct. at 2129-30.
In light of the facts before us, we considered undertaking
42
the task of determining whether Kolstad applies. However, the
parties had no reason to litigate the issues involved in a
Burlington defense, leaving the record unclear to us in at least
two material respects. First, while the actors here were clearly
managerial, it is not apparent to us exactly how senior they
were. We are not aware of any evidence that establishes how high
up in CPI's corporate structure Williams, the supervisor of a
"National Account Manager," and Hogan, a "Vice President of
Sales" actually were. A determination regarding the status of
the principal actors is crucial to the outcome, for while Kolstad
established that, under some circumstances, corporations may not
be subject to punitive damages for actions taken by their
"managerial" employees, it did nothing to eliminate the rule
established in earlier cases that an individual sufficiently
senior in the corporation must be treated as the corporation's
proxy for purposes of liability. See, e.g., Faragher v. City of
Boca Raton, 118 S.Ct 2275, 2284 (1998) (citing Harris v. Forklift
Systems,
510 U.S. 17, 19
(1993)).
In fact, Kolstad makes it clear that the proxy doctrine
constitutes a bar to the successful invocation of the Burlington
defense as to punitive damages. In Kolstad, the plaintiff,
Carole Kolstad, was denied a promotion within the American Dental
Association because of her sex. The people primarily responsible
for her failure to receive the promotion were William Allen, who
was the acting executive director of the Association, and Leonard
Wheat, who was the acting head of the Washington office where
43
Kolstad worked. 119 S.Ct. at 2122.
After announcing that the standard governing the
availability of punitive damages in Title VII cases requires
proof of "malice or reckless indifference" to the rights
guaranteed by Title VII, the Court discussed how the district
court should apply the standard on remand. For Allen, the Court
stated that because he held the highest position within the
Association, the only question for the district court would be
whether or not he acted with malice or reckless indifference.
For Wheat, the Court noted that the district court would have to
determine whether or not Wheat served in a "managerial capacity"
and whether or not he behaved with "malice or reckless
indifference." Id. at 2130.
Thus, the Burlington defense remains inapplicable as a
defense to punitive damages when the corporate officers who
engage in illegal conduct are sufficiently senior to be
considered proxies for the company. If Hogan and Williams hold
positions sufficiently high up within CPI, they would be CPI's
proxies, which would bar CPI from asserting a vicarious liability
defense to punitive damages. This is one of the matters for the
district court to examine upon remand.
Second, the record does not contain enough information about
CPI's anti-discrimination policy to allow us to determine whether
it was implemented in good faith. As Kolstad makes clear, even
if the defendant shows that the relevant actors were merely
managerial, it can escape punitive damages only if it has
44
undertaken sufficient "good faith efforts at Title VII
compliance." Kolstad, 119 S.Ct. at 2129.20 Although the purpose
of Title VII is served by rewarding employers who adopt anti-
discrimination policies, see id., it would be undermined if those
policies were not implemented, and were allowed instead to serve
only as a device to allow employers to escape punitive damages
for the discriminatory activities of their managerial employees.
Thus, to avail itself of a Burlington defense, an employer must
show not only that it has adopted an anti-discrimination policy,
but that it has implemented it in good faith.
While the record reflects that CPI had promulgated a policy
against workplace discrimination and a complaint mechanism to
which Passantino turned, CPI did not, understandably (given the
then-current state of the case law) introduce the requisite
evidence establishing that the policy was fairly and adequately
enforced. To the contrary, Passantino testified that the policy
and mechanism were not enforced and were used to discourage her
from asserting her rights. Unless the district court is able to
determine from the record that one of the individuals responsible
for the acts of retaliation is a proxy for CPI, the proxy issue
and the issue of whether CPI's anti-discrimination policy and
20For this reason, the Court stated that the Association's
good faith efforts "may" be relevant to determining liability for
Wheat's actions, while it did not mention those efforts when
discussing the possibility of liability for Allen's actions. As
Allen was without doubt a proxy for the Association, it could not
escape punitive damages liability for its proxy's actions by
relying on its anti-discrimination policy. Kolstad, 119 S.Ct. at
2130.
45
mechanism meets the good faith standard will be subject to
resolution only following the introduction of further evidence on
remand.21
Because we remand for consideration of whether punitive
damages are available under the circumstances of this case, we do
not reach the question of the constitutionality of Title VII's
damage cap. See Ashwander v. Tennessee Valley Authority, 297
U.S. 288, 347 (1936) (Brandeis, J., concurring). Because we do
not reach the issue, although raised to us on appeal, Passantino
is not foreclosed from seeking reconsideration before the
district court or on further appeal to this court if it becomes
appropriate to do so.
IX. ATTORNEYS' FEES
CPI argues that Passantino's counsel's fees should be
reduced because Passantino did not prevail on some of her claims.
We review a fees award for abuse of discretion, and review the
legal analysis involved in the award de novo. Cabrales v. County
of Los Angeles, 935 F.2d 1050, 1052 (9th Cir. 1991). The
prevailing party is entitled to reasonable attorneys' fees if she
succeeds on "any significant issue in litigation which achieves
some of the benefit" of her suit. Hensley v. Eckerhart, 461 U.S.
424, 433 (1983). The district court did not abuse its
21It is, of course, never necessary to reach the "good
faith" compliance with Title VII issue if it is determined that
the discriminatory action was committed by a "proxy." Kolstad,
119 S.Ct. at 2129-30.
46
discretion.
Although Passantino did not prevail on her discrimination
claims or her claim for injunctive relief, she prevailed on her
retaliation claims, which were inextricably intertwined with her
discrimination claims. In fact, in order to prevail on her
retaliation claims, she had to prove that she reasonably believed
that CPI was engaged in discriminatory activity. Moyo v. Gomez,
32 F.3d 1382, 1384-85 (9th Cir. 1994). Thus, the time spent on
her discrimination claims contributed to the success of her
retaliation claims. Cabrales, 935 F.2d at 1052. Her multi-
million dollar verdict represented success on a significant issue
which achieved a substantial portion of the benefit sought from
the suit. Given the broad discretion to which attorneys' fees
determinations are entitled on appellate review, Hensley, 461
U.S. at 437, we decline to second-guess the district court's
decision.
X. CONCLUSION
For the foregoing reasons, we affirm the district court's
judgment and jury's award of compensatory damages, front pay, and
back pay to Passantino. We vacate the punitive damages award
against CPI and remand for the district court to apply the
Supreme Court's decision in Kolstad. If necessary, the district
court should conduct a trial on the punitive damages issue.
AFFIRMED IN PART; VACATED AND REMANDED IN PART.
47
48
COUNSEL LISTING
Marsha S. Berzon, Altshuler, Berzon, Nussbaum, Berzon & Rubin,
San Francisco, California; John R. Connelly, Jr., Victoria L.
Vreeland, Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim,
Tacoma, Washington; for Plaintiffs-Appellees.
Steve B. Berlin, Ronald J. Holland, Terry Chapko, Katherine C.
Franklin, Littler, Mendelson, et. al., Seattle, Washington; Susan
L. Barnes, McCay, Chadwell & Matthews, Seattle, Washington; Paul
G. Ulrich, Ulrich, Kessler & Anger, Phoenix, Arizona; for
Defendants-Appellants.
David O. Ogden, Marleigh D. Dover, and Dana J. Martin, Department
of Justice, Washington, D.C., for Intervenor.
Elliot L. Bien and E. Elizabeth Summers, Bien & Summers, Novato,
California, for Amicus Curiae Chamber of Commerce of the United
States.
C. Gregory Stewart, Philip B. Sklover, and Robert J. Gregory,
EEOC, Washington, D.C., for Amicus Curiae Equal Employment
Opportunity.
49
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