Cadena v. The Pacesetter Corp.

• Decision Date: 12 September 2000
• Docket Number: Nos. 99-3047,99-3166,s. 99-3047
• Citation: 224 F.3d 1203
• Parties: (10th Cir. 2000) LYNN M. CADENA, Plaintiff-Appellee, v. THE PACESETTER CORPORATION, Defendant-Appellant. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Amicus Curiae
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1203

224 F.3d 1203 (10th Cir. 2000)

LYNN M. CADENA, Plaintiff-Appellee, v. THE PACESETTER CORPORATION, Defendant-Appellant.

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Amicus Curiae.

Nos. 99-3047, 99-3166

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

September 12, 2000

Appeal from the United States District Court for the District of Kansas (D.C. No. 97-CV-2659-KHV) [Copyrighted Material Omitted] Richard P. Barkley, of Brownstein, Hyatt & Farber, P.C. (Lisa Hogan, of Brownstein, Hyatt & Farber, P.C., Denver, Colorado, and Carl A. Gallagher and Patrice M. Brown, of McAnany, Van Cleave & Phillips, P.C., Kansas City, Kansas, with him on the briefs) for Appellant.

Michael S. Ketchmark, of Davis, Ketchmark & Eischens (Brett A. Davis, of Davis, Ketchmark & Eischens, Kansas City, Missouri, and Scott A. McCreight and Korey A. Kaul, of Sprenger & McCreight, L.C., Kansas City, Missouri, with him on the brief), for Appellee.

John F. Suhre, Attorney (C. Gregory Stewart, General Counsel Designate, Vincent J. Blackwood, Assistant General Counsel, Philip B. Sklover, Associate General Counsel, and Jodi B. Danis, Attorney, on the brief), of the Equal Employment Opportunity Commission, Office of General Counsel, Washington, D.C., for Amicus Curiae.

Before LUCERO, McKAY, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

I. INTRODUCTION

For four months, Lynn Cadena's supervisor at work subjected her to severe sexual harassment. As a consequence, Cadena successfully sued her former employer, the Pacesetter Corporation ("Pacesetter"), for violating Title VII of the 1964 Civil Rights Act. Pacesetter brought two separate appeals, which are now consolidated in the instant appeal. Pacesetter first challenges the underlying judgment, asserting the following arguments: (1) the district court erred in denying its post-verdict motion for judgment as a matter of law because no reasonable jury could have rejected its affirmative defense premised on Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998) and Burlington Industries v. Ellerth, 118 S. Ct. 2257 (1998); (2) in light of the Supreme Court's decision in Kolstad v. American Dental Association, 119 S. Ct. 2118 (1999), rendered subsequent to the entry of judgment, Pacesetter is entitled to either judgment as a matter of law or a new trial on the issue of punitive damages; and (3) the district court's erroneous admission of testimony mandates a new trial. Pacesetter also appeals the district court's award of attorneys' fees. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, this court affirms the judgments entered by the district court.

II. BACKGROUND

A. Factual Background

Pacesetter is a home improvement company which sells windows, siding, doors, and cabinets. In July 1996, Pacesetter hired Cadena to work as a telemarketer in its Lenexa, Kansas office. During the relevant time period, Timothy Whittinghill was the general manager of the Lenexa office. Charles Bauersfeld, David Hawley, and Ann Humphrey were the telemarketing managers for that office and supervised Cadena.

Several months after Cadena was hired, Bauersfeld began subjecting her to a steady barrage of severe sexual harassment. In November, Bauersfeld told Cadena he had experienced a "wet dream" about her which "was erotic" and that he "couldn't wait to have more." Cadena immediately complained about this comment to Hawley, who responded by stating "that is the way Charlie is." Hawley further indicated that officials at the company's headquarters knew about Bauersfeld's behavior but tolerated it.

Following that first harassing comment, Bauersfeld often told Cadena that she needed to go out with him "so that he could have more wet dreams about [her]." Bauersfeld constantly made references of a sexual nature to Cadena. One day, for example, when Cadena was not having great success with telemarketing, Bauersfeld asked, "What's wrong, Lynn, aren't you getting enough sex?" Another time, when Cadena asked Bauersfeld "where do you want me," referring to which cities he wanted her to call, Bauersfeld responded, "Well, preferably on my desk."

Bauersfeld also physically harassed Cadena on a regular basis. Bauersfeld would often call Cadena into his office and touch her in a sexual manner, massaging her lower back, putting his arms around her, touching her hair and the front of her body. He would touch her in this manner most often when she was on the phone conducting her telemarketing work. Bauersfeld even asked Cadena to change her physical appearance so she would not "turn[] him on too much."

Finally, on February 13, 1997, Bauersfeld approached Cadena in her cubicle and stated, "Lynn, why don't you flash Rick your breasts to get him going. I know that sure as hell would turn me on." Bauersfeld then told Cadena, "I am just joking," but immediately thereafter whispered in her ear, "You know what they say, though, Lynn, the truth is always said in jest." After Cadena completed her phone call, she began crying. Subsequently, she entered Bauersfeld's office and told him that his behavior bothered her and that it needed to stop. Bauersfeld merely responded, "Honey, I didn't mean anything by it. You know, you are one of my favorite sweethearts."

The following day, Cadena informed Hawley of the incident and complained to him about all of the harassment which she had endured. Hawley simply shrugged his shoulders and stated, "Lynn that's the way he is. . . . There's nothing nobody can do about it. That's Charlie for you. What can I say?" Hawley indicated further that Whittinghill and people at Pacesetter's corporate headquarters were aware of Bauersfeld's conduct but would do nothing about it because Bauersfeld made too much money for Pacesetter. Finally, Hawley suggested that if Cadena was unhappy with the situation, she should quit. Cadena also attempted to discuss the situation with Whittinghill that week, but he was not in the office.

On February 20, Cadena delivered a letter of resignation, which reiterated the problems she had been experiencing with Bauersfeld. That same day, Hawley flew to Florida, where Whittinghill was already vacationing, to play golf with Whittinghill. While there, Hawley informed Whittinghill about Cadena's complaint. When Whittinghill returned to Kansas, he questioned Bauersfeld about the February 13 incident, which Bauersfeld fully admitted. On February 28, Whittinghill telephoned Cadena, who informed him of all the problems she had experienced with Bauersfeld. Whittinghill then told her she should view Bauersfeld's conduct as a compliment to Cadena's attractiveness. Whittinghill also tried to make Cadena feel guilty about jeopardizing Bauersfeld's career by emphasizing Bauersfeld's vision problems. Finally, Whittinghill offered Cadena a raise if she would return to work and drop her sexual harassment complaint.

The following week, Cadena wrote Whittinghill a letter setting out the incidents of sexual harassment and the company's failure to address the problem and indicating she did not wish to return to work. In response, Whittinghill called her again, telling Cadena that Bauersfeld had been written up and would be fired if another incident occurred. The next day, Cadena phoned Hawley, who opined that Bauersfeld would not be fired even if he continued his sexually harassing behavior. Cadena did not return to work at Pacesetter.

B. Procedural Background

On March 27, 1997, Cadena filed a Charge of Discrimination with the Equal Employment Opportunity Commission ("EEOC"), which issued Cadena a Notice of Right to Sue. In December, she sued Pacesetter in federal district court, alleging Pacesetter had violated Title VII of the 1964 Civil Rights Act. See 42 U.S.C. § 2000e et. seq. Pacesetter subsequently moved for summary judgment, ultimately relying on the affirmative defense delineated in Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998) and Burlington Industries v. Ellerth, 118 S. Ct. 2257 (1998). The district court denied Pacesetter's motion for summary judgment, concluding that Cadena had alleged facts from which a jury could reject the Burlington/Faragher defense.

The district court held a three-day jury trial in September of 1998. The jury ultimately returned a verdict in favor of Cadena and against Pacesetter. The jury awarded Cadena $50,000 in compensatory damages for emotional distress and $700,000 in punitive damages. The district court then reduced the total award to $300,000 pursuant to the statutory cap and entered judgment reflecting this award. See 42 U.S.C. § 1981a(b)(3)(D). Pacesetter subsequently moved for judgment as a matter of law or, in the alternative, a new trial. The district court denied that motion.

Cadena then moved for attorneys' fees and related expenses totaling $163,582. Pacesetter objected to this motion, arguing, inter alia, that Cadena had engaged in the disapproved practice of "block billing." The district court denied that objection but reduced the fees sought by Cadena, awarding her $138,104 in fees and costs.

III. DISCUSSION

A. Judgment as a Matter of Law on the Burlington/Faragher Defense

Burlington and Faragher provide an employer an affirmative defense to a Title VII claim premised on vicarious liability when there has been no tangible employment action taken against the employee.¹ To succeed on the defense, the employer must establish by a preponderance of the evidence two elements: "(a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise." Faragher, 118 S. Ct. at 2292-93; see also Burlington, 118 S. Ct. at 2270. The two elements of the Burlington/Faragher defense were submitted as special interrogatories to the jury, which found Pacesetter failed to meet its burden on both elements. Pacesetter then moved...