68 F.3d 1257 (10th Cir. 1995), 93-1142, Fitzgerald v. Mountain States Tel. and Tel. Co.

Docket Nº:93-1142.
Citation:68 F.3d 1257
Party Name:Laurie FITZGERALD and Aaron Hazard, Plaintiffs-Appellees, v. The MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY d/b/a U.S. West Communications, Inc., Defendant-Appellant.
Case Date:October 27, 1995
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 1257

68 F.3d 1257 (10th Cir. 1995)

Laurie FITZGERALD and Aaron Hazard, Plaintiffs-Appellees,

v.

The MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY d/b/a

U.S. West Communications, Inc., Defendant-Appellant.

No. 93-1142.

United States Court of Appeals, Tenth Circuit

October 27, 1995

Page 1258

[Copyrighted Material Omitted]

Page 1259

Kathryn E. Miller, Miller & Steiert, Littleton, Colorado, Doris B. Truhlar and Robert J. Truhlar, Truhlar & Truhlar, Littleton, Colorado, for Plaintiffs-Appellees.

Jerry R. Atencio, U.S. West, Denver, Colorado, for Defendant-Appellant.

Before BRORBY, SETH, and KELLY, Circuit Judges.

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PAUL KELLY, Jr., Circuit Judge.

Defendant-appellant, The Mountain States Telephone & Telegraph Company d/b/a U.S. West Communications, Inc. (hereinafter U.S. West) appeals from the denial of its post-trial motion seeking a new trial on the issue of damages, or remittitur. 1 U.S. West contends that the jury award in this action for race discrimination under 42 U.S.C. Sec. 1981 was the result of passion or prejudice, that the jury should not have been allowed to consider punitive damages, and the jury should have been instructed that unreimbursed expenses should be deducted from any compensatory award for lost profits. At trial, U.S. West twice sought judgment as a matter of law that punitive damages were not supported by the evidence, see Fed.R.Civ.P. 50(a); Ruyle v. Continental Oil Co., 44 F.3d 837, 841 (10th Cir.1994), cert. denied, --- U.S. ----, 116 S.Ct. 272, 133 L.Ed.2d 193 (1995), and made specific objection concerning a net profits instruction in accordance with the district court's procedure, see Fed.R.Civ.P. 51; Abercrombie v. Osteopathic Hosp. Founders Assn., 950 F.2d 676, 679-80 (10th Cir.1991). See Amend.Aplt.App. 828-30, 1046-49. Though the relief requested is more limited than might be requested, U.S. West has preserved error. Our jurisdiction arises under 28 U.S.C. Sec. 1291. We agree with U.S. West on these issues and therefore reverse for a new trial on the issue of damages as outlined in this opinion and for dismissal of the punitive damage claims.

Background

Plaintiffs Laurie Fitzgerald, a white female, and Aaron Hazard, a black male, claim that U.S. West discriminated against each of them based on their color or race by not entering into contracts with them as diversity trainers. In February 1989, Plaintiffs, as agents of The Consultancy, Inc., responded to U.S. West's request for proposal (RFP) to provide diversity training to U.S. West employees. They urged that their proposal be accepted, though one day late. In March 1989, Plaintiffs' proposal was accepted on the condition of successful completion of a five-day "Train the Trainer" program. The purpose of the program was to "learn the workshop material, demonstrate your awareness of the nine dimensions of diversity, 2 and demonstrate your facilitation skills." Amend.Aplt.App. 126. Upon successful completion of the program, U.S. West indicated that it would contract with various consultant groups for approximately six three-day workshops per year over three years. Id. A prerequisite to subsequent workshops, however, was certification by U.S. West after the first workshop.

Facilitating the training session attended by Plaintiffs and several others were independent contractors Dr. Tom Gordon and Marilyn Loden, both highly experienced in the field. After the session, U.S. West terminated its contract with Dr. Gordon and Ms. Loden. They were joined by U.S. West employee Debra Sapp, also experienced. Dr. Gordon and Ms. Sapp are black; Ms. Loden is white. Before the program began, Ms. Sapp had a very cordial dinner with several program participants including Plaintiffs. Amend.Aplt.App. 681. The difficulty began the next day. Program participants were asked to recount an experience which led them to this type of work. Plaintiff Fitzgerald discussed her romantic involvement with a black man and how the relationship was ending due to "the pressure of the black community of Denver." Amend.Aplt.App. 686-87. She told of incidents which illustrated this pressure and blamed in large part "the racial intolerance that the black community in Denver could not see the love that we had for each other and the value in our relationship and wouldn't allow it to happen." Id. at 687. From this point forward, Ms.

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Sapp was hostile to Plaintiff Fitzgerald and made the training session more difficult for her. Although accounts differ, 3 Plaintiff Fitzgerald testified that when evaluating her, Ms. Sapp said "You white bitches are always taking up the air time, and I'm sick of it." Id. at 706-07. Ms. Sapp continued her mean-spirited treatment of Plaintiff Fitzgerald throughout the week. Although the other facilitators, Dr. Gordon and Ms. Loden, had reservations about Ms. Sapp's conduct toward Plaintiff Fitzgerald, they did not inform U.S. West at the time and they voted against Plaintiff Fitzgerald continuing in the program. Amend.Aplt.App. 1148 (Dr. Gordon depo.); Aplee.Supp.App. 69 (Loden depo.). Unlike any other participant, Plaintiff Fitzgerald was placed in a "Services Not Needed" category and dismissed from the program. Ms. Sapp then told Plaintiff Hazard that he would receive diversity training contracts if he divorced himself from Plaintiff Fitzgerald. He was unwilling to do this.

A few days later, Plaintiff Fitzgerald wrote to a U.S. West official about the problem, but the intended official had transferred. She described the offensive remark made by Ms. Sapp as "You white women are always trying to take all the air time and I'm sick of it." Aplees.Supp.App. 8. Her complaints were twofold: (1) Ms. Sapp violated group confidentiality by discussing her personal opinions of Plaintiff Fitzgerald with other program participants, and (2) Ms. Sapp had not provided feedback "but a racial/gender stereotype and a personal issue that Debra apparently has not yet worked through." Plaintiff Fitzgerald requested another opportunity for training and to "be evaluated by someone who is not working personal issues and can therefore see me and my abilities through fewer filters."

After one month without response, Plaintiff Fitzgerald wrote another letter to the CEO of U.S. West, with which she included a copy of her first letter. These letters were turned over to the management training director, Jan Fincher, who met with Ms. Sapp's supervisor, Ann Welter, as well as with Ms. Sapp. Ms. Welter and Ms. Sapp then contacted the other facilitators, Dr. Gordon and Ms. Loden, who indicated that they "agreed to go along" with Ms. Sapp's decision on Plaintiff Fitzgerald. Aplees.Supp.App. 73. The training director also received reports from some of the program participants. Thereafter, U.S. West wrote Plaintiff Fitzgerald, explained its investigation, concluded that there was "no evidence to support your allegations of racial or gender-based discrimination" and reaffirmed its "initial position that your particular skills and facilitation style, and our expectations regarding the facilitation of this particular workshop, are not compatible." Id. at 17-18. Further attempts to dissuade U.S. West were unavailing. In anticipation of litigation, U.S. West did not give Plaintiff Hazard a contract, although he had successfully completed the training.

After a six-day trial against U.S. West as the sole defendant, the jury found against U.S. West on liability and awarded Plaintiff Fitzgerald $535,000 and Plaintiff Hazard $310,000 in economic damages. Each Plaintiff also was awarded $250,000 for emotional distress damages, and $500,000 in punitive damages. Thus, the jury awarded $2,345,000 to Plaintiffs, $1,285,000 to Plaintiff Fitzgerald and $1,060,000 to Plaintiff Hazard.

Discussion

Federal law governs damages in civil rights cases. 42 U.S.C. Sec. 1988; Garrick v. City and County of Denver, 652 F.2d 969, 971 (10th Cir.1981). We review for an abuse of discretion the district court's decision to not grant a new trial, or remittitur, on the grounds of excessive damages. Garrick, 652 F.2d at 971. "[A]bsent an award so excessive as to shock the judicial conscience and to raise an irresistible inference that passion, prejudice, corruption or other improper cause invaded the trial, the jury's determination of the damages is considered inviolate."

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Malandris v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 703 F.2d 1152, 1168 (10th Cir.1981) (en banc) (citations omitted), cert. denied, 464 U.S. 824, 104 S.Ct. 92, 78 L.Ed.2d 99 (1983). Plainly excessive damages, however, may support an inference that bias, passion or prejudice contributed to the award. Wells v. Colorado College, 478 F.2d 158, 162 (10th Cir.1973). Whether sufficient evidence exists to support punitive damages is a question of law reviewed de novo, Mason v. Texaco, 948 F.2d 1546, 1560 (10th Cir.1991), cert. denied, 504 U.S. 910, 112 S.Ct. 1941, 118 L.Ed.2d 547 (1992). Our review of a challenged jury instruction is de novo, against a backdrop of the jury instructions as a whole and the entire record. United States v. Consolidated Mayflower Mines, Inc., 60 F.3d 1470, 1475-76 (10th Cir.1995). Reversal is warranted only where a deficient jury instruction is prejudicial. Id. We address these claims in inverse order.

  1. Jury Instruction

    Plaintiffs sought compensatory damages based upon the denial of opportunity to enter training contracts with U.S. West. Both Plaintiffs testified that they had consulting businesses in various years. In computing taxable income, substantial expenses were deducted from revenues. Amend.Aplt.App. 412-416 (Hazard); 754-66 (Fitzgerald). Plaintiff Fitzgerald incorporated her business in 1987 and filed corporate tax returns. Id. at 758. Plaintiff Hazard admitted to expenses he would incur had he left salaried employment for...

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