Smith v. Department of Human Services, State of Okl.
| Decision Date | 02 June 1989 |
| Docket Number | Nos. 87-2054,87-2111,s. 87-2054 |
| Parties | 49 Fair Empl.Prac.Cas. 1742, 50 Empl. Prac. Dec. P 39,083, 58 USLW 2011 Gladys G. SMITH, Administratrix of the Estate of Ray L. Smith, Plaintiff-Appellant and Cross-Appellee, v. DEPARTMENT OF HUMAN SERVICES, STATE OF OKLAHOMA, Defendant-Appellee and Cross-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
E.V. Spadafora of Spadafora & Neugebauer, Oklahoma City, Okl., for plaintiff-appellant and cross-appellee.
Richard W. Freeman, Jr., Asst. Gen. Counsel (Charles Lee Waters, Gen. Counsel, David A. Brown, Asst. Gen. Counsel, with him on the brief), Dept. of Human Services, Oklahoma City, Okl., for defendant-appellee and cross-appellant.
Before BALDOCK, BRORBY and EBEL, Circuit Judges.
On August 20, 1982, Ray L. Smith (Smith), then 59 years of age, was terminated by his employer, the Oklahoma Department of Human Services (DHS). Smith's appeal of that termination decision was dismissed by the Oklahoma Ethics & Merit Commission (Commission). Smith sought review of the Commission's decision in Oklahoma state court, requesting that he be reinstated to his former position and receive back pay. Prior to the rendering of the state court decision, he received from the Equal Employment Opportunity Commission (EEOC) a letter giving him the right to sue the DHS in federal court for age discrimination under the ADEA. Smith filed his complaint in federal court on March 29, 1984, seeking reinstatement and back pay as in state court, along with attorney fees and costs of the federal action. Smith also requested liquidated damages, represented by an amount equal and in addition to actual damages, as provided for in cases of "willful" violations of the ADEA. See 29 U.S.C. Secs. 626(b) & 216(b).
In April 1984, Smith was granted judgment in Oklahoma state court, which ordered Smith reinstated to his former position and awarded him all back pay and benefits accruing since his discharge. Smith v. Oklahoma Ethics and Merit Comm'n, No. C-82-116 (D.Ct. of Alfalfa County, May 15, 1984). In September 1984, the federal district court stayed the proceedings under the ADEA pending the appeal of the Oklahoma state court decision. The Oklahoma Court of Appeals affirmed, and certiorari was denied by the Oklahoma Supreme Court. Department of Human Servs. v. Smith, No. 62,360 (Okla.Ct.App. July 30, 1985), cert. denied, No. 62-360 (Okla. Nov. 13, 1985). After the mandate of the Oklahoma Supreme Court issued, the DHS reinstated Smith to his employment and paid him gross back pay of $56,243.04. 1 Rec. vol. I, doc. 25 at 2 n. 2. The stay of the federal action was vacated in April 1986. Smith died in January 1987, and the federal district court entered an order in May 1987, substituting Gladys Smith (Mrs. Smith), the administratrix of Smith's estate, as plaintiff.
Although Smith received actual damages in state court in excess of that requested in federal court on the basis of the same discriminatory action, 2 he continued to pursue an award of liquidated damages under the ADEA in federal court. 3 After the federal district court disposed of a number of issues on various motions for partial summary judgment, 4 trial was had to the court on the remaining issue of whether the DHS had acted willfully in terminating Smith, thereby giving rise to liability for liquidated damages. Smith introduced into evidence a set of stipulated facts and rested. The trial court ruled in favor of the Oklahoma DHS, finding that Smith had not met his burden of showing willfulness as required to support an award of liquidated damages. We have jurisdiction of this appeal pursuant to 28 U.S.C. Sec. 1291.
According to Mrs. Smith, the trial court's conclusion that the DHS did not act willfully is unsupported either by the relevant facts or the applicable law. The DHS seeks affirmance of the trial court's ruling on willfulness, but in the event that that decision is not affirmed, asserts four issues on cross-appeal. First, the DHS argues that the ADEA action in federal court was barred by the doctrine of res judicata, based on the prior state court proceedings. Second, the DHS contends that the Eleventh Amendment immunizes the DHS from a suit for damages under the ADEA. Third, according to the DHS, Smith's failure to recover actual damages in the federal action precludes an award of liquidated damages. Lastly, the DHS asserts that Smith's claim for liquidated damages did not survive his death. As we agree with this last contention, we need not address the other issues. We affirm the judgment of the district court as hereafter modified and remand to the district court with an order to dismiss Smith's complaint.
The question of the survival of an action grounded in federal law is governed by federal common law when, as here, there is no expression of contrary intent. James v. Home Constr. Co., 621 F.2d 727, 729 (5th Cir.1980); 7C C. Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 1952 at 526 (1986). The general rule under the federal common law is that an action for a penalty does not survive the death of the plaintiff. Schreiber v. Sharpless, 110 U.S. 76, 80, 3 S.Ct. 423, 424, 28 L.Ed. 65 (1884); Smith v. No. 2 Galesburg Crown Fin. Corp., 615 F.2d 407, 414 (7th Cir.1980), overruled on other grounds, Pridegon v. Gates Credit Union, 683 F.2d 182, 194 (7th Cir.1982). The issue here, then, is whether Smith's action for liquidated damages under the ADEA is penal such that it does not survive his death.
A number of courts have considered whether actions under various federal statutes survive the death of the plaintiff. See, e.g., Kilgo v. Bowman Transp., Inc., 789 F.2d 859, 876 (11th Cir.1986); In re Wood, 643 F.2d 188, 190 (5th Cir.1980); James v. Home Constr. Co., 621 F.2d 727, 729 (5th Cir.1980); Smith v. No. 2 Galesburg Crown Fin. Corp., 615 F.2d 407, 414 (7th Cir.1980); Murphy v. Household Fin. Corp., 560 F.2d 206, 208 (6th Cir.1977); Khan v. Grotnes Metalforming Systems, Inc., 679 F.Supp. 751, 756 (N.D.Ill.1988); Asklar v. Honeywell, Inc., 95 F.R.D. 419, 422 (D.Conn.1982). Typically, a court is required to infer from a reading of the relevant statute and its history whether a cause of action is penal or remedial in nature. In doing so, most courts employ a test first articulated by the Sixth Circuit in Murphy v. Household Finance Corp., 560 F.2d 206 (6th Cir.1977). There, distilling a discussion of penal laws found in Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L.Ed. 1123 (1892), the court developed a three-factor analysis requiring an assessment of "1) whether the purpose of the statute was to redress individual wrongs or more general wrongs to the public; 2) whether recovery under the statute runs to the harmed individual or to the public; and 3) whether the recovery authorized by the statute is wholly disproportionate to the harm suffered." Murphy, 560 F.2d at 209.
Applying Murphy 's analysis, at least two courts have held that an action under the ADEA survives the death of the plaintiff. Khan, 679 F.Supp. at 756; Asklar, 95 F.R.D. at 424. According to those courts, "[w]hile the ADEA does provide for liquidated damages, ... its primary purpose is to compensate, and where appropriate reinstate, individuals who have suffered employment discrimination because of their advanced age." Asklar, 95 F.R.D. at 423 (quoted in Khan, 679 F.Supp. at 756). Further, according to those courts, the recovery under the ADEA redresses individual wrongs, runs to the individual wronged, and is not disproportionate to the harm suffered. 5 Id.
Both cases, however, are distinguishable. Asklar involved an allegation of willful discrimination, and thus apparently involved a claim for liquidated damages, but was decided before the Supreme Court's characterization of liquidated damages as punitive in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985) (discussed infra ). Additionally, the court's holding in Asklar, 95 F.R.D. at 423, that the ADEA's primary purpose is remedial, although providing for liquidated damages claims, is not applicable to a situation involving a claim only for liquidated damages, especially in light of Thurston. Khan is inapposite because, while decided after Thurston, it makes no reference to any willful violation of the ADEA, or any claim for liquidated damages. Unlike the instant case, then, Khan apparently considers only the compensation and reinstatement functions of the ADEA, and cites Asklar for the proposition that the ADEA is primarily remedial in nature.
Further, and most significantly, we are not required to apply the Murphy factors in order to infer the nature of a liquidated damages claim. In Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985), the Supreme Court considered the issue of the appropriate standard by which to determine the "willfulness" needed to support an award of liquidated damages under the ADEA. The Court stated that "[t]he legislative history of the ADEA indicates that Congress intended for liquidated damages to be punitive in nature." Id. at 125, 105 S.Ct. at 623. According to the Court, the original administration bill incorporated Sec. 16(a) of the Fair Labor Standards Act, imposing criminal liability for a willful violation. Id. However, because of anticipated difficulties of proof under a criminal provision, as well as impediments to investigation, conciliation, and enforcement that might arise from an employer's invocation of the fifth amendment, the criminal penalty for willful violations was eliminated and replaced by a double, or liquidated, damages provision. Id. The legislative history reflected that the liquidated damages provision was intended to provide an effective deterrent to willful violations of the ADEA. Id. 6
To the extent that the Supreme Court's discussion of penal laws in Huntington v. Attrill, 146 U.S. 657, 13...
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