Greenbaum v. Svenska Handelsbanken, Ny

Decision Date23 September 1997
Docket NumberNo. 95 Civ. 3850(SS).,95 Civ. 3850(SS).
PartiesVictoria GREENBAUM, Plaintiff, v. SVENSKA HANDELSBANKEN, NY, Defendant.
CourtU.S. District Court — Southern District of New York

Robert E. Sapir, Cooper, Sapir & Cohen Melville, New York, Donald L. Sapir, Sapir & Frumkin, LLP., White Plains, New York, Robert T. McGovern, Louis S. Santangelo, Steven R. Shapiro, of Counsel, for plaintiff.

Peter N. Hillman, Debra M. Patalkis, Chadbourne & Parke, LLP., New York City, Jonathan M. Sobel, Mitchell P. Hurley, Of Counsel, for defendant.

OPINION AND ORDER

SOTOMAYOR, District Judge.

The above-referenced action was tried before a jury from April 28, 1997 to May 12, 1997. On May 16, 1997, the jury rendered a verdict in favor of plaintiff on her claims of gender discrimination and retaliation and against plaintiff on her claims of sexual harassment and age discrimination. The jury awarded plaintiff $320,000.00 in back pay and $1,250,000.00 in punitive damages. The parties then filed post-trial motions, including defendant's motion regarding the correct standard of proof for punitive damages under New York law and the appropriate cap on punitive damages under Title VII, and plaintiff's motions for prejudgment interest, front pay or reinstatement. Plaintiff has also filed a motion for reasonable attorneys' fees, which motion will be addressed at a later date.

BACKGROUND

Plaintiff Victoria Greenbaum, age 47, was formerly an assistant vice president in the trading room of defendant Svenska Handelsbanken, New York ("SNY"). SNY is the New York branch office of a much larger banking corporation known as Svenska Handelsbanken AB ("SHB"), headquartered in Stockholm, Sweden. After repeatedly being denied promotion to vice president at SNY, plaintiff brought an action in the Southern District claiming that the defendant violated her rights under Title VII and the equivalent provisions of the New York Human Rights Law and New York City Administrative Code. Plaintiff alleged that she was denied promotions and other benefits afforded other employees because of her gender and her age. She also claimed that she was subjected to a hostile work environment and that she was retaliated against because of her filing of an administrative complaint with the New York State Division of Human Rights.

The jury was charged on all of plaintiff's claims. Because the state of the law with respect to the appropriate burden of proof for establishing punitive damages under state law was unclear, the Court charged the jury with two evidentiary standards, charging punitive damages under a preponderance standard for plaintiff's Title VII claim and under a clear and convincing standard for plaintiff's claim under the New York City Administrative Code. As noted above, the jury found in favor of plaintiff on her gender discrimination and retaliation claims, but against her on all other claims. They awarded compensatory damages and punitive damages under the federal preponderance standard, but they declined to award punitive damages under the clear and convincing standard charged under state law. The instant post-trial motions followed.

DISCUSSION
I. Punitive Damages
A. The Appropriate Standard of Proof for Punitive Damages under New York Law

One court has recently recognized that "New York law on burden of proof in deciding punitive damages is unclear." Geressy v. Digital Equipment Corp., 950 F.Supp. 519, 522 (E.D.N.Y.1997); see also Richard L. Blatt et al., Punitive Damages: A State-by-State Guide to Law and Practice § 8.42 (1993 & 1996 Supp.) ("It appears as though the New York courts themselves have not specifically addressed the burden of proof in the context of punitive damages."). The federal and state court cases on the question are mired in a morass of ambiguity. Often, both New York and federal courts applying New York law have invoked the wanton and malicious substantive standard of conduct relating to punitive damages, see, e.g., Geressy, 950 F.Supp. at 522 (discussing the high substantive standard for punitive damages under New York law), without discussing the evidentiary standard of proof applicable thereto. See, e.g., United States v. Merritt Meridian Construction Corp., 95 F.3d 153, 160 (2d Cir.1996) (discussing type of conduct warranting punitive damages in breach of contract case, but neglecting to mention evidentiary standard applicable thereto); Cleveland v. Beltman North American Co., Inc., 30 F.3d 373, 376 (2d Cir.1994) (discussing punitive damages at length and providing substantive standard without any discussion of applicable burden of proof), cert. denied, 513 U.S. 1110, 115 S.Ct. 901, 130 L.Ed.2d 785 (1995); Riordan v. Nationwide Mutual Fire Ins. Co., 977 F.2d 47, 56 (2d Cir.1992) (certifying to New York Court of Appeals question of whether provision of state insurance law preempts common law right to punitive damages and, if not, what substantive standard was applicable to recover punitive damages; no discussion of evidentiary standard), certified question withdrawn due to mootness, 984 F.2d 69 (2d Cir.1993); MaGee v. Paul Revere Life Ins. Co., 954 F.Supp. 582, 588 (E.D.N.Y.1997) (extensive discussion of standard of conduct warranting punitive damages but no mention of burden of proof on the question); New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 315-16, 639 N.Y.S.2d 283, 287, 662 N.E.2d 763, 767 (1995) (discussing punitive damages substantive standard of "gross" and "morally reprehensible behavior" without mentioning evidentiary standard); Rocanova v. Equitable Life Assurance Soc'y of the United States, 83 N.Y.2d 603, 613, 612 N.Y.S.2d 339, 342-43, 634 N.E.2d 940, 943-44 (1994) (characterizing substantive standard for punitive damages in breach of contract case as "strict" but not discussing evidentiary standard); Home Ins. Co. v. American Home Prods. Corp., 75 N.Y.2d 196, 201, 551 N.Y.S.2d 481, 484, 550 N.E.2d 930, 933 (1990) (discussing substantive standard for punitive damages in product liability case, but not providing burden of proof required for punitive damages); Mulder v. Donaldson, Lufkin & Jenrette, 208 A.D.2d 301, 308-09, 623 N.Y.S.2d 560, 564-65 (1st Dept.1995) (discussing substantive standard of conduct warranting punitive damage without mention of evidentiary standard).

Adding to the confusion, the Second Circuit has tacitly endorsed both instructions that charge juries with preponderance of the evidence, see, e.g., Denny v. Ford Motor Co., 42 F.3d 106, 110 (2d Cir.1994) (quoting, without discussion, district court's verdict form that applied preponderance standard); Vasbinder v. Ambach, 926 F.2d 1333 (2d Cir. 1991) (quoting, without discussion, jury instruction which provided that in order to recover punitive damages "plaintiff has the burden of proving by a fair preponderance of the credible evidence that a defendant acted maliciously or wantonly with regard to his rights."), and instructions that charge juries with the clear and convincing standard. See, e.g., Racich v. Celotex Corp., 887 F.2d 393, 397 (2d Cir.1989) (quoting, without discussion, district court's jury instruction that punitive damages be "clearly established"); Brink's, Inc. v. City of New York, 717 F.2d 700, 706 n. 4 (2d Cir.1983) (quoting, in a footnote and without discussion, jury instruction that conduct "tantamount to `willful, wanton and reckless' conduct" had to be found by "clear and convincing evidence").

Where the cases do specify a particular burden of proof with respect to punitive damages — as opposed to merely quoting trial court jury instructions that charge either standard — the authorities are also in conflict. Some cases call for application of the preponderance standard. See Simpson v. Pittsburgh Corning Corp., 901 F.2d 277, 282-283 (2d Cir.) (rejecting a due process claim that clear and convincing evidence standard must be applied to punitive damages and noting that "[a]ppellant acknowledges that the burden of proof under New York law for punitive damages in product liability cases is `preponderance of the evidence.'"), cert. dismissed, 497 U.S. 1057, 111 S.Ct. 27, 111 L.Ed.2d 840 (1990); United States v. Hooker Chemicals & Plastics Corp., 850 F.Supp. 993, 1003 (W.D.N.Y.1994) ("The applicable standard of proof for punitive damages is preponderance of the evidence, which the Supreme Court held suffices even in civil suits involving `proof of acts that expose a party to criminal prosecution.'"); Lawrence v. Cade & Saunders, 149 F.R.D. 14, 17 (N.D.N.Y. 1993) (providing that "the plaintiff has the burden of proving by a fair preponderance of the credible evidence that defendants acted maliciously or wantonly."); Corrigan v. Bobbs-Merrill Co., 228 N.Y. 58, 66-67, 126 N.E. 260, 264 (1920) (libel case providing that "[i]n order to recover punitive damages, plaintiff was bound to satisfy the jury by a fair preponderance of evidence" that defendant had ill will toward him and that defendant did not publish book in good faith and honest belief that it was fiction); In re Seventh Judicial District Asbestos Litig., 190 A.D.2d 1068, 1069, 593 N.Y.S.2d 685, 687 (4th Dept.1993) (providing that "[t]he trial court properly instructed the jury that the evidentiary standard for proving entitlement to punitive damages is preponderance of the evidence, not clear and convincing evidence") (citing cases and contrary authority in Camillo); Frechette v. Special Magazines, 285 A.D. 174, 176, 136 N.Y.S.2d 448, 451 (3rd Dept.1954) (libel case noting trial court's jury instructions which provided that "plaintiff must establish" punitive damages "by a fair preponderance of the evidence.").

Other courts have applied a clear and convincing evidence standard for punitive damages under New York law. See Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832, 850-51 (2d Cir.1967) ("New York demands, as is might have to before punishing a defendant with fines similar to those imposed on a criminal charge, that the quality of conduct necessary to...

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