Equal Employment Opportunity Comm'n v. Wal-Mart

• Decision Date: 23 August 1999
• Docket Number: Nos. 98-2015,98-2030,WAL-MART,s. 98-2015
• Citation: 187 F.3d 1241
• Parties: (10th Cir. 1999) EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff - Appellee, v.STORES, INC., Defendant - Appellant. EDUARDO AMARO, Intervenor - Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1241

187 F.3d 1241 (10th Cir. 1999)

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff - Appellee, v. WAL-MART STORES, INC., Defendant - Appellant.

EDUARDO AMARO, Intervenor - Appellee.

Nos. 98-2015, 98-2030.

UNITED STATES COURT OF APPEALS TENTH CIRCUIT.

August 23, 1999.

Appeal from the United States District Court for the District of New Mexico

[Copyrighted Material Omitted] Mark Jarmie (Ned S. Fuller with him on the briefs), Sharp, Jarmie & Scholl, P.A., Albuquerque, New Mexico, for the Appellant.

Lisa J. Banks (C. Gregory Stewart, General Counsel, Philip B. Sklover, Associate General Counsel and Lorraine C. Davis, Assistant General Counsel with her on the brief), Equal Employment Opportunity Commission, Washington, D.C., for the Appellee.

Brad Hall, Gaddy & Hall, Albuquerque, New Mexico, for the Intervenor - Appellee.

Before PORFILIO, MAGILL^* and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

In this appeal, we consider, in light of recent Supreme Court precedent, the evidentiary showing required to recover punitive damages under a vicarious liability theory against an employer accused of violating the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq. We exercise jurisdiction under 28 U.S.C. § 1291, and affirm.

I

In 1991, Wal-Mart hired Eduardo Amaro, with the knowledge that he was hearing-impaired and would need an interpreter in certain circumstances, including training sessions and meetings. On January 19, 1993, Amaro left a mandatory training session requiring viewing of a video tape because there was neither closed-captioning nor an interpreter, and he consequently could not understand the presentation. Amaro's supervisor, Kim Wiggins, ordered him to return to the session, explaining that a co-worker who could finger-spell, but was not a certified "ASL" interpreter, would interpret for him. When Amaro rejected this suggestion, Wiggins reported the matter to the store manager, Robert Dunn.

The next day, January 20, 1993, Amaro, who had worked in the receiving department, where his responsibilities included scanning and marking labels, was transferred to the maintenance department to perform janitorial duties. Amaro questioned the transfer and again requested an interpreter, but Wiggins responded with a note accusing him of refusing to perform his job. On the following day, January 21 1993, Wiggins and Amaro, without an interpreter, met with Dunn, who, in a written note, informed Amaro that the transfer was necessary for two reasons: because payroll reductions had reduced the staff in the receiving department, while creating an opening in the maintenance department; and because the maintenance position would "involve less communications and be more simple for you." Appellant's App. at 208. To no avail, Amaro requested an interpreter to explain the transfer, which he viewed as a demotion, and threatened to file a complaint with the EEOC. Dunn thereupon suspended Amaro.

About a week later, with an interpreter present, Dunn met with Amaro, in the presence of two other managerial employees, and again insisted on transferring him to the maintenance crew. Claiming that he was being assigned a dead-end job because he had refused to attend the video training session, Amaro refused the transfer. Dunn immediately terminated Amaro, who then filed a discrimination claim with the EEOC. Although Wal-Mart rehired Amaro in June 1993, the EEOC filed suit on his behalf in October 1993, alleging disability discrimination and retaliation in violation of the ADA based on Amaro's suspension and termination. Amaro intervened, also asserting ADA claims.¹

The jury returned a verdict for the plaintiffs, awarding Amaro $3,527.79 in compensatory damages and $75,000 in punitive damages. The district court granted Amaro's motion for attorneys' fees, awarding him a total of $41,063.72 as fees. On appeal, Wal-Mart argues against the award of punitive damages and attorneys' fees. The EEOC cross-appeals, challenging the district court's denial of its motion for equitable relief which sought to secure an injunction barring Wal-Mart from committing future violations of the ADA.

II

Wal-Mart appeals the punitive damage award on three grounds. First, Wal-Mart contends that there is insufficient evidence to support a finding that Amaro's suspension and termination, even if discriminatory, were in willful disregard of his rights. Second, Wal-Mart argues that the supervisors who were responsible for Amaro's transfer and termination did not exercise sufficient corporate control to be agents of Wal-Mart and thus their conduct cannot be imputed to their employer for purposes of awarding punitive damages. Even if they were managerial employees, argues Wal-Mart, their conduct was contrary to company policy and hence provides no ground for vicarious liability. Finally, Wal-Mart contends that even if the supervisors' conduct justified an award of punitive damages, the actual amount awarded was excessive.

A

"Whether sufficient evidence exists to support punitive damages is a question of law reviewed de novo." Fitzgerald v. Mountain States Telephone and Telegraph Co., 68 F.3d 1257, 1262 (10th Cir. 1995) (citing Mason v. Texaco, 948 F.2d 1546, 1560 (10th Cir. 1991)).

The Civil Rights Act of 1991, 105 Stat. 1071, provides that a court may award punitive damages to an ADA plaintiff upon proof that the defendant engaged in "a discriminatory practice or discriminatory practices with malice or reckless indifference to the federally protected rights of an aggrieved individual." 42 U.S.C. § 1981a(b)(1). The precise burden a plaintiff must carry to prove malice or recklessness for purposes of 42 U.S.C. § 1981a(b)(1) was the source of conflict among the various circuits, see Baty v. Willamette Industries, Inc., 172 F.3d 1232, 1244 n.6 (10th Cir. 1999) (identifying circuit split), until recently resolved by Kolstad v. American Dental Ass'n, 119 S. Ct. 2118 (1999).

The plaintiff in Kolstad, who had recovered back pay in a Title VII gender discrimination suit against her employer appealed the district court's finding of insufficient evidence to support an award of punitive damages. See Kolstad v. American Dental Ass'n, 108 F.3d 1431, 1435 (D.C. Cir. 1997) ("Kolstad II") (discussing Kolstad v. American Dental Ass'n, 912 F. Supp. 13 (D.C.D.C. 1996)) ("Kolstad I"). On appeal, a panel of the District of Columbia Circuit concluded that because "the jury could reasonably find from the evidence that [the employer] intentionally discriminated against [the plaintiff], the district court should have instructed the jury [to] consider a punitive award" upon the requisite finding of malice or reckless indifference to the plaintiff's right. Kolstad II, 108 F.3d at 1437-38. The en banc court disagreed, requiring a "threshold [showing] of egregiousness for the imposition of punitive damages." Kolstad v. American Dental Ass'n, 139 F.3d 958, 965 (D.C. Cir. 1998) (en banc) ("Kolstad III").

The Supreme Court granted certiorari, addressing "the circumstances under which a jury may consider a request for punitive damages under § 1981a(b)(1)." Kolstad, 119 S. Ct. at 2123.² Discussing the structure of the 1991 Act, the Court noted that although 42 U.S.C. § 1981a(a)(1) provides for "compensatory and punitive damages awards [in] cases of 'intentional discrimination' [s]ection 1981a(b)(1) further qualifies the availability of punitive awards" by requiring proof that the defendant engaged in discriminatory conduct "'with malice or reckless indifference to the federally protected rights of an aggrieved individual.'" Kolstad, 119 S. Ct. at 2124 (quoting 42 U.S.C. § 1981a(b)(1)). Agreeing with the proposition that the Act requires two separate standards for recovery of compensatory and punitive damages, the Court opined that:

The very structure of § 1981a suggests a congressional intent to authorize punitive awards in only a subset of cases involving intentional discrimination. Section 1981a(a)(1) limits compensatory and punitive awards to instances of intentional discrimination, while § 1981a(b)(1) requires plaintiffs to make an additional "demonstrat[ion]" of their eligibility for punitive damages. Congress plainly sought to impose two standards of liability-- one for establishing a right to compensatory damages and another, higher standard that a plaintiff must satisfy to qualify for a punitive award.

Id. at ___, 119 S.Ct at 2124 (alteration in original).

Having concluded that Congress sought to impose a "higher standard" for recovery of punitive damages in workplace discrimination cases, the Court confronted the task of defining just what that standard should be. As traditionally used, the terms "malice or reckless indifference . . . ultimately focus on the actor's state of mind." Id. Egregious misconduct may certainly be "evidence of the requisite mental state [but] § 1981a does not limit plaintiffs to this form of evidence, and the section does not require a showing of egregious or outrageous discrimination independent of the employer's state of mind." Id. (citation omitted). Thus, the proper question is whether the employer engaged in the conduct alleged with the "knowledge that it may be acting in violation of federal law." Id. "[A]n employer must at least discriminate in the face of a perceived risk that its action will violate federal law to be liable in punitive damages." Id. at ___, 119 S.Ct. at 2125.

The Court in Kolstad did not resolve but left for remand the questions of whether the plaintiff had established the requisite mental state, and whether the defendant could be held liable under the agency principles the Court set forth. See id. at ___, 119 S.Ct. at 2129-30 ("The parties have not yet had an opportunity to marshal the record evidence in support of their views on the application of agency principles in the instant case, and the en banc majority had no reason to resolve the issue because it concluded that petitioner had...