Gotthardt v. Nat'l Railroad Passenger Corp.

• Decision Date: 10 February 1999
• Docket Number: 98-15074,Nos. 98-15072,s. 98-15072
• Parties: (9th Cir. 1999) MERIOLA Z. GOTTHARDT, Plaintiff-Appellee-Cross-Appellant, v. NATIONAL RAILROAD PASSENGER CORPORATION, dba AMTRAK, Defendant-Appellant Cross-Appellee. , and 98-15274
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1148

191 F.3d 1148 (9th Cir. 1999)

MERIOLA Z. GOTTHARDT, Plaintiff-Appellee-Cross-Appellant, v. NATIONAL RAILROAD PASSENGER CORPORATION, dba AMTRAK, Defendant-Appellant Cross-Appellee.

Nos. 98-15072, 98-15074, and 98-15274

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted February 10, 1999--San Francisco, California

Decided September 14, 1999

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Charlotte F. Adington, Kauff, McClain & McGuire, San Francisco, California, and Kathleen J. Raynsford, National Railroad Corporation, Washington, D.C., for the defendant appellant-cross-appellee.

Howard Moore, Oakland, California and Felicia C. Curran, Sterns & Walker, San Francisco, California, for the plaintiff appellee-cross-appellant.

Appeal from the United States District Court for the Northern District of California; Joan S. Brennan, Magistrate Judge, Presiding, D.C. Nos. CV-93-03398 JSB, CV-95-02416 JSB.

Before: Phyllis A. Kravitch,¹ Stephen Reinhardt, and Thomas G. Nelson, Circuit Judges.

KRAVITCH, Circuit Judge:

The National Railroad Passenger Corporation ("Amtrak") appeals the district court's award of $124,010.46 in back pay and $603,928.37 in front pay to Meriola Z. Gotthardt ("Gotthardt") in an employment discrimination action. Gotthardt cross-appeals, claiming that the district court also should have awarded her back pay in a related, consolidated action. In addition to a number of other issues, this appeal requires us to address an issue of first impression in this circuit, whether a court may award front pay in a Title VII action in excess of the $300,000 cap set out in 42 U.S.C. S 1981a(b)(3). Finding no error, we affirm.

I. BACKGROUND AND PROCEEDINGS BELOW

Gotthardt began working as a fireman, or assistant engineer, on Amtrak's trains in 1988. Between early 1990 and late 1991, Gotthardt attempted to qualify to become an engineer on certain train routes. Amtrak engineers must qualify for each route they cover by passing an oral examination and operating a train on the route, accompanied by a supervisor, to demonstrate their ability to handle the train and their familiarity with the route. Gotthardt alleges that on a number of occasions she was subjected to conduct that constituted hostile work environment sexual harassment.

In early 1993, after a series of developments that rendered Gotthardt unable or unqualified to fill many of Amtrak's engineering positions, she took a position as an overnight shift yard engineer, or "midnight goat." According to Gotthardt, one of the yard supervisors regularly called her insulting, degrading names and subjected her to other harassing and discriminatory treatment. Amtrak eliminated Gotthardt's "midnight goat" position in April 1995.

Gotthardt then attempted to become an engineer on the Capitol Run (a route through Oakland, San Jose, and Sacramento). After training on this route, she scheduled a "checkride" to determine if she was qualified for the route. On May 5, 1995, before she could conduct the "checkride," she called in sick and never returned to work. Gotthardt's psychologist later diagnosed her as suffering from Post Traumatic Stress Disorder ("PTSD").

On September 13, 1993, Gotthardt sued Amtrak, alleging violations of Title VII including employment discrimination based on sex, hostile work environment sexual harassment, retaliation, and false imprisonment. We refer to this action, which covered events between 1991 and 1993, as "Gotthardt I." On July 5, 1995, after Gotthardt stopped working at Amtrak, she filed a second action alleging similar violations of Title VII² in the years up to and including 1995. The court consolidated this action, referred to as "Gotthardt II," with Gotthardt I, and the consolidated cases went to trial.

In Gotthardt I, the district court³ dismissed the retaliation and false imprisonment claims. The court then determined that Gotthardt had failed to prove employment discrimination based on sex, but had proved that Amtrak was liable for hostile work environment sexual harassment. It refused to award any damages, however, because Gotthardt had "failed to present testimony regarding the extent of her damages. " Amtrak does not appeal the district court's finding of liability.

Gotthardt II was decided by a jury. The jury found against Gotthardt on her retaliation and sex discrimination claims, but for her on her hostile work environment sexual harassment claim, and awarded her compensatory damages of $350,000.⁴ The district court instructed the jury that it could not find for Gotthardt on the hostile work environment claim unless "Gotthardt [had] proven . . . that at least part of Amtrak's conduct constituting . . . a hostile work environment took place after March 29, 1994." The district court, in its Findings of Fact and Conclusions of Law, adopted the jury's verdict. The court reduced the jury award of compensatory damages to $300,000, as required by 42 U.S.C. S 1981a(b)(3), which caps compensatory damages for Title VII claims.⁵ After an evidentiary hearing, it calculated equitable relief. It found that Gotthardt's PTSD had rendered her unable to return to Amtrak and that, given her age and background, she would be unable to enter another career. It also found that, if Gotthardt had not developed PTSD, she would have qualified for the Capitol Run, and assumed that she would have remained in that position until she retired. It therefore awarded her $124,010.46 in back pay (representing the pay she would have received if she had qualified for the Capitol Run and remained in that position until the time the district court issued its findings, minus the disability benefits she already had received, plus prejudgment interest), and $603,928.37 in front pay (representing the pay and benefits she would have received if she had worked as a locomotive engineer on the Capitol Run from the date of the court's decision until she reached Amtrak's mandatory retirement age of 70, discounted to present cash value). Gotthardt was 59 years old at the time of the award. Amtrak does not appeal the findings that Gotthardt was subjected to hostile work environment sexual harassment at the times alleged. The issues Amtrak raises on appeal all relate to remedies or damages.

II. DISCUSSION

A. Section 1981a(b)(3)'s Cap on Compensatory Damages

The district court concluded that section 1981a(b)(3), which caps compensatory damages in Title VII cases, does not apply to front pay awards. We review this conclusion of law de novo. See Fireman's Fund Ins. Cos. v. Big Blue Fisheries, Inc., 143 F.3d 1172, 1175 (9th Cir. 1998); Eldredge v. Carpenters 46 N. Cal. Counties Joint Apprenticeship & Training Comm., 94 F.3d 1366, 1369 (9th Cir. 1996).

In 1991 Congress passed 42 U.S.C. S 1981a, which authorized compensatory and punitive damages in Title VII actions for the first time. See Kolstad v. American Dental Ass'n, _______ U.S. _______, 119 S. Ct. 2118, 2123-24 (1999). Section 1981a(b)(3) caps the amount of these damages, stating that

The sum of the amount of compensatory damages awarded under this section for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non pecuniary losses . . . shall not exceed [$300,000, for a defendant with more than 500 employees].

42 U.S.C. S 1981a(b)(3). Before Congress authorized compensatory and punitive damages in Title VII actions by passing section 1981a, another provision of Title VII, section 706(g) (codified at 42 U.S.C. S 2000e-5(g)), permitted courts to grant equitable relief to successful plaintiffs.

[T]he court may enjoin the respondent from engaging in [an] unlawful employment practice, and order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay . . . or any other equitable relief as the court deems appropriate.

42 U.S.C. S 2000e-5(g). In section 1981a, Congress specifically preserved section 706(g)'s grant of authority to provide such equitable relief.

In an action brought by a complaining party under section 706 or 717 of the Civil Rights Act of 1964. . . the complaining party may recover compensatory and punitive damages as allowed in subsection (b) of this section, in addition to any relief authorized by section 706(g) of the Civil Rights Act of 1964 [42 U.S.C.A. S 2000e-5(g)] . . . .

42 U.S.C. S 1981a(a)(1) (emphasis added)."Compensatory damages awarded under this section shall not include backpay, interest on backpay, or any other type of relief authorized under section 706(g) of the Civil Rights Act of 1964 [42 U.S.C.A. S 2000e-5(g)]." Id.S 1981a(b)(2) (emphasis added).

The issue before us depends on how we characterize front pay. If, as Amtrak argues, front pay awards are "compensatory damages awarded under [section 1981a] for future pecuniary losses," id. S 1981a(b)(3), the district court should have capped the total amount of compensatory damages and front pay at $300,000. If, on the other hand, as Gotthardt claims, front pay is a form of equitable relief "authorized under section 706(g)" that Congress did not intend to limit when it passed section 1981a, id. S 1981a(b)(2), front pay does not fall within section 1981a's definition of "compensatory damages" and the district court correctly refused to cap Gotthardt's front pay award.

The circuits are divided on whether front pay falls within section 1981a's cap on damages. The Sixth Circuit has held that front pay falls within the cap. See Hudson v. Reno, 130 F.3d 1193, 1202-04 (6th Cir. 1997), cert. denied , 119 S. Ct. 64 (1998). The Hudson court relied on its construction of the plain language of section 1981a, also noting that section 706(g) did not specifically authorize front pay, that the Sixth Circuit usually had "treated front pay, in most contexts, as a legal, rather than an equitable, remedy," id. at 1203, and that it was...