Hudson v. Soft Sheen Products, Inc.

• Decision Date: 10 January 1995
• Docket Number: No. 94 c 0487.,94 c 0487.
• Citation: 873 F. Supp. 132
• Parties: Valarie HUDSON and Cynthia Freeman, Plaintiffs, v. SOFT SHEEN PRODUCTS, INC. and Larry Allen, Defendants.
• Court: U.S. District Court — Northern District of Illinois

873 F. Supp. 132

Valarie HUDSON and Cynthia Freeman, Plaintiffs, v. SOFT SHEEN PRODUCTS, INC. and Larry Allen, Defendants.

No. 94 c 0487.

United States District Court, N.D. Illinois, Eastern Division.

January 10, 1995.

Mary Stowell, Linda Debra Friedman, Leng, Stowell, Friedman & Vernon, Thomas Aquinas Daley, John Thomas Moran Law Offices, John Thomas Moran, Chicago, for plaintiffs.

Richard Burk Lapp, Ellen E. McLaughlin, Kenneth David Schwartz, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, for defendant Soft Sheen Products, Inc.

Alan Francis Curley, Cynthia H. Hyndman, Janice Nadler, Robinson, Curley & Clayton, P.C., Chicago, for defendant Larry Allen.

MEMORANDUM OPINION

BRIAN BARNETT DUFF, District Judge.

Plaintiffs Valarie Hudson and Cynthia Freeman ("Plaintiffs") allege that, while they worked for Defendant Soft Sheen Products, Inc. ("Soft Sheen"), Defendant Larry Allen ("Allen"), a vice president of Soft Sheen, sexually harassed them. They bring two counts under Title VII and one count each under common law theories of negligent retention and battery. Allen moves for judgment on the pleadings concerning the Title VII counts. Soft Sheen and the Plaintiffs ("the Opponents") oppose the motion. For the reasons discussed below, we grant Allen's motion.

I. Background

As a vice president of Soft Sheen, Allen was the Plaintiffs' supervisor, someone with the authority to alter the terms and conditions of their employment. While acting as their supervisor, he allegedly engaged in verbal and physical sexual harassment, including offering the Plaintiffs employment benefits in exchange for sexual favors. Eventually, after employees complained about Allen's conduct and the company conducted an internal investigation, Soft Sheen terminated his employment.

II. Standard of Review

We may review Fed.R.Civ.P. 12(c) motions for judgment on the pleadings under the same standard as we review Fed.R.Civ.P. 12(b)(6) motions for dismissal for failure to state a claim. Alexander v. City of Chicago, 994 F.2d 333, 336 (7th Cir.1993); see Thomason v. Nachtrieb, 888 F.2d 1202, 1204 (7th Cir.1989). "A party fails to state a claim ... only if it `can prove no set of facts upon which relief may be granted.' We assume well-pleaded allegations are true and ... draw all reasonable inferences in the light most favorable to the plaintiff." Bethlehem Steel Corp. v. Bush, 918 F.2d 1323, 1326 (7th Cir.1990) (citation omitted).

III. Discussion

A. Statutory Provisions

Title VII prohibits "employers" from discriminating against employees on the basis of their "race, color, religion, sex, or national origin ..." 42 U.S.C. § 2000e-2(a)(1). "The term `employer' means a person engaged in an industry affecting commerce who has fifteen or more employees ... and any agent of such a person." 42 U.S.C. § 2000e(b).

Before the Civil Rights Act of 1991 ("the Amendments"), prevailing plaintiffs could receive injunctive relief and "affirmative action" such as back pay. 42 U.S.C. § 2000e-5(g). After the Amendments, however, prevailing plaintiffs could receive additional remedies, most notably compensatory and punitive damages. 42 U.S.C. § 1981a(a)(1) and (b)(1) and (2). Still, Congress limited the scope of those new remedies:

The sum of the amount of compensatory damages ... and punitive damages awarded under this section, shall not exceed, for each complaining party —

(A) in the case of an employer who has more than 14 and fewer than 101 employees ..., $50,000;

(B) in the case of an employer who has more than 100 and fewer than 201 employees ..., $100,000;

(C) in the case of an employer who has more than 200 and fewer than 501 employees ..., $200,000;

(D) in the case of an employer who has more than 500 employees ..., $300,000.

42 U.S.C. § 1981a(b)(3).

B. Statutory Interpretation

Allen argues that the definition of "employer" excludes individuals in their individual capacity.¹ He relies on Weiss v. Coca-Cola Bottling Co., 772 F.Supp. 407 (N.D.Ill. 1991) (Duff, J.), in which we held that the "and any agent" language of § 2000e(b) merely incorporates respondeat superior into the statute, and "a person liable in his official capacity is liable only as a surrogate for the employer." Id. at 411. In other words, "the relief granted is against the employer, not the individual employees whose actions would constitute a violation of the Act." Hangebrauck v. Deloitte & Touche, 1992 WL 348743, at *3 (N.D.Ill. Nov. 9, 1992) (Duff, J.), (interpreting Weiss). We believed that this was the "more reasonable view," particularly because "the damages available under Title VII are damages which an employer, not an individual, would generally provide — i.e. backpay, reinstatement, etc." Weiss, 772 F.Supp. at 411. Consequently, Allen argues that the Plaintiffs improperly sued him in his individual capacity, and we should grant his motion for judgment on the pleadings.

The Opponents argue that the Amendments undercut the reasoning and result in Weiss. They rely on authority such as Vakharia v. Swedish Covenant Hospital, 824 F.Supp. 769 (N.D.Ill.1993), in which the court stated that "if the amendments did apply, Judge Duff's argument would lose virtually all of its force, since they allow for full compensatory ... as well as punitive damages." Id. at 785, n. 2; see § 1981a(a)(1) and (b)(1) and (2). In fact, in Hangebrauck, before we had occasion to focus of the issue, we also believed that our reasoning had lost force. 1992 WL 348743, at *3. With the force gone, the Opponents argue that our result in Weiss is overruled and that the definition of "employer" now includes individuals in their individual capacity. Consequently, they argue that the Plaintiffs properly sued Allen, and we should deny the motion for judgment on the pleadings.

This is our first opportunity to consider whether the reasoning and result in Weiss survive the Amendments. Undeniably, the Amendments allow for tort-style damages. Yet they contain a limitation on damages provision, § 1981a(b)(3), which directly ties the possible monetary awards to the size of the employer. As we see it, the issue is whether Congress gave with one hand and took with the other, meaning whether it allowed for individual liability through the tortstyle damages provision, but then disallowed it through the limitation on damages provision. In our discussion below, we assume that Congress gave with the one hand and consider only whether it took with the other. Our consideration includes an analysis of the statutory scheme of § 1981a(b)(3) and an investigation of the legislative history of the Amendments.

1. Plain Language

Allen urges us to adopt the Ninth Circuit's argument in Miller v. Maxwell's Int'l Inc., 991 F.2d 583 (9th Cir.1993), that "if Congress had envisioned individual liability under Title VII for compensatory and punitive damages, it would have included individuals in this litany of limitations and would have discontinued the exemption for small employers...." Id. at 588, n. 2. Courts in this District have found the argument in Miller persuasive. Hamilton v. City of Chicago, 1993 WL 535351, at *3 (N.D.Ill. Dec. 17, 1993); Finley v. Rodman & Renshaw, Inc., 1993 WL 512608, at *2 (N.D.Ill. Dec. 8, 1993); Pelech v. Klaff-Joss, LP, 828 F.Supp. 525, 529 (N.D.Ill.1993).

On four grounds, however, the Opponents do not find the argument in Miller persuasive. First, they argue that it derived from "unique facts," appeared in "a footnote," and expressed only "dicta." Op.Br. at 4. These disparagements just imply that the argument may be suspect; they do not disprove it. For the disproof, we look to the Opponents' other grounds.

Second, they argue that, because the Amendments "prohibit judges from informing the jury about the damage caps, ... one could ... conclude that Congress intended to create individual liability." Op.Br. at 6-7; see 42 U.S.C. § 1981a(c)(2). Their premise does not support their conclusion. Moreover, regardless of what the jury knows, Congress did link the damages caps to employer size. § 1981a(b)(3). Should we role-play as an uninformed jury member when we interpret the statute? That cannot be wise. What if the parties did not request a jury trial and we had no cause to reach § 1981a(c)(2)? Could there be individual liability in jury trials but not in bench trials? That cannot be right. The Opponents' argument is unpersuasive.

Third, they argue that because Congress "knew how to exclude certain types of potential respondents" and yet did not exclude individuals, it "logically follows" that Congress intended to include individuals among those who may be liable. Op.Br. at 7; see 42 U.S.C. § 1981a(b)(1). This overbroad, circular argument has no more strength than it did before the Amendments, when it was impotent. See § 2000e(b); see also, e.g., Tenn. Valley Authority v. Hill, 437 U.S. 153, 188, 98 S.Ct. 2279, 2298, 57 L.Ed.2d 117 (1977) (following the maxim expressio unius est exclusio alterius). Their argument is particularly unpersuasive given the legislative history of the Amendments, which we discuss below.

Fourth, the Opponents contend that "the `logic' of the damage caps in the Amendments is simply explained by the fact of political compromise." Op.Br. at 7. Again, they advance an overbroad argument. All legislation is the product of political compromise. Moreover, the logic should be in the statute, not the unexplained compromise. Sua sponte, then, we attempt to find the logic. One could argue that supervisors at larger companies have more responsibility and, therefore, should assume greater exposure to liability. Or that supervisors at larger companies make more money and, therefore, should assume greater exposure. No doubt, there is a host of potentially material factors such as corporate transfers and foreign travel that may fluctuate with the size of a company. With a little imagination, and a lot of patience, it is possible to make arguments for all of them. It is possible, but...