Martini v. Federal Nat. Mortg. Ass'n

Decision Date18 June 1999
Docket NumberNos. 98-7068,98-7081,s. 98-7068
PartiesElizabeth A. MARTINI, Appellee/Cross-Appellant, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION, et al., Appellants/Cross-Appellees.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia (No. 95cv01341) (No. 95cv03141).

Paul J. Mode, Jr., argued the cause and filed the briefs for appellants/cross-appellees.

Michael H. Gottesman argued the cause for appellee/crossappellant. With him on the briefs were David E. Schreiber and Larry S. Greenberg.

Philip B. Sklover, Associate General Counsel, Equal Employment Opportunity Commission, Lorraine C. Davis, Assistant General Counsel, and Caren I. Friedman, Attorney, were on the brief for amicus curiae Equal Employment Opportunity Commission.

Before: WILLIAMS, ROGERS and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge:

A jury found the Federal National Mortgage Association liable under Title VII and the District of Columbia Human Rights Act for sexual harassment and retaliation against one of its employees, Elizabeth Martini, and awarded nearly $7 million in damages. The district court reduced her damages to $903,500. In this appeal, Fannie Mae claims that Martini's Title VII suit was untimely because she initiated it less than 180 days after she filed discrimination charges with the Equal Employment Opportunity Commission. In her cross-appeal, Martini challenges several legal conclusions underlying the district court's reduction of her damages. Finding that Title VII requires complainants to wait 180 days before suing in federal court so that the Commission may informally resolve as many charges as possible, we reverse the judgment in her favor and remand with instructions to dismiss her untimely suit without prejudice. Since Martini's claims on cross-appeal are fully briefed and likely to arise again in a new trial, we decide them as well, holding first that frontpay is not subject to Title VII's cap on compensatory damages, second that the district court should have reallocated the portion of Title VII damages above the statutory cap to Martini's recovery under D.C. law, and third that D.C. law permits Martini to recover punitive damages on a given claim as long as she has proven a basis for actual damages.

I

Appellee Elizabeth Martini went to work for appellant Federal National Mortgage Association as a debt manager in 1988. By 1995, she was earning $71,000 a year and held valuable stock options. In early 1994, she alleged, one of her co-workers, Forrest Kobayashi, began harassing her because of her sex, humiliating her with abusive comments in the presence of colleagues and subordinates, and excluding her from meetings to which she should have been invited. Martini complained to her supervisor, Linda Knight, who also supervised Kobayashi, but Knight failed to come up with a solution. Despite Martini's complaints to Fannie Mae's Office of Diversity, Knight recommended Kobayashi for a promotion. Once promoted, Kobayashi was asked by Knight to reorganize his department. Designed by Kobayashi and approved by Knight, the reorganization eliminated only one job: Martini's. In March 1995, Knight fired Martini, telling her that Fannie Mae would give prospective employers no information about her job performance. Martini applied to five firms with positions similar to the one she held at Fannie Mae, but received no offers. She eventually abandoned her job search, enrolling in a two-year course to become a financial planner.

On April 10, 1995, Martini filed a sexual harassment and retaliation charge with the Equal Employment Opportunity Commission. Twenty-one days later, at her request, the EEOC issued a "right-to-sue" letter authorizing her to bring a private action in federal court. In doing so, the EEOC acted pursuant to 29 C.F.R. § 1601.28(a)(2) (1998), which provides that the Commission may, upon a complainant's request, authorize a private suit "at any time prior to the expiration of 180 days from the date of filing the charge with the Commission; provided, that [an appropriate Commission official] has determined that it is probable that the Commission will be unable to complete its administrative processing of the charge within 180 days from the filing of the charge." Issuance of the right-to-sue letter terminated further EEOC processing of Martini's charge. See id. § 1601.28(a)(3); Oral Arg. Tr. at 22 (quoting Martini's right-to-sue letter). On July 20, 101 days after filing the EEOC charge, Martini sued Kobayashi, Knight, and Fannie Mae in the United States District Court for the District of Columbia, alleging sexual harassment and retaliation in violation of Title VII and the D.C. Human Rights Act. Although Fannie Mae offered Martini a new position one month later, she rejected it because it would have put her in close contact with Kobayashi and Knight, and because Fannie Mae offered her no protection from further harassment.

Before trial, Fannie Mae moved to dismiss, arguing that the EEOC's early right-to-sue regulation, 29 C.F.R. § 1601.28(a)(2), violates the 180-day waiting period for private suits established by 42 U.S.C. § 2000e-5(f)(1) (1994), which says:

If a charge filed with the Commission ... is dismissed by the Commission, or if within one hundred and eighty days from the filing of such charge ... the Commission has not filed a civil action ... or the Commission has not entered into a conciliation agreement to which the person aggrieved is a party, the Commission ... shall so notify the person aggrieved and within ninety days after the giving of such notice a civil action may be brought against the respondent named in the charge....

The district court denied the motion.

After an eleven-day trial, the district court gave the jury a single set of instructions for both the Title VII and the D.C. Human Rights Act claims. Finding the defendants liable for harassment and retaliation, the jury awarded Martini nearly $7 million in damages--$153,500 in backpay, $1,894,000 in frontpay and benefits, and $3,000,000 in punitive damages under Title VII, as well as $615,000 in compensatory damages and $1,286,000 in punitive damages under the D.C. Human Rights Act.

In a post-trial motion, Fannie Mae again challenged the timeliness of Martini's suit under section 2000e-5(f)(1) of Title VII. Finding pre-180 day private suits not prohibited by section 2000e-5(f)(1), the district court upheld the early rightto-sue regulation. See Martini v. Federal Nat'l Mortgage Ass'n, 977 F.Supp. 464, 471-72 (D.D.C.1997). The district court noted, however, that the D.C. Circuit "has not addressed this issue" and that "there is a split of authority" among other courts. Id. at 471.

Fannie Mae also sought a reduction in damages, arguing that the evidence was insufficient to justify the large awards, that punitive damages unsupported by compensatory damages are impermissible under D.C. law, and that Title VII's cap on compensatory damages, see 42 U.S.C. § 1981a(b)(3), applied to Martini's frontpay award. Finding these arguments persuasive, the district court reduced the Title VII damages to $453,500, see Martini, 977 F.Supp. at 469-71, 478-79, and reduced the D.C. Human Rights Act damages to $450,000, see id. at 474-79. In order to avoid a new trial, Martini agreed to a remittitur order prohibiting her from challenging the reduction in damages based on evidence insufficiency.

On appeal, Fannie Mae argues that the district court wrongly rejected its challenge to the timeliness of Martini's suit. Although Fannie Mae also claims that the jury verdict should be set aside because it improperly resulted from passion or prejudice, Fannie Mae waived that claim by failing to object to allegedly inflammatory statements by Martini's lawyer at trial. See Hooks v. Washington Sheraton Corp., 578 F.2d 313, 316-17 (D.C.Cir.1977). Martini raises three claims on cross-appeal: that Title VII's damages cap is inapplicable to frontpay, that any Title VII damages exceeding the cap should be reallocated to her D.C. Human Rights Act recovery, and that D.C. law allows punitive damages to be awarded in the absence of compensatory damages.

II

The 1972 amendments to Title VII established "an integrated, multistep enforcement procedure" prescribing the powers and duties of the EEOC once a discrimination charge has been filed. Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 359, 97 S.Ct. 2447, 53 L.Ed.2d 402 (1977) (discussing the Equal Employment Opportunity Act of 1972, Pub.L. No. 92-261, 86 Stat. 103, 104-07 (codified at 42 U.S.C. § 2000e-5)). The statute directs the EEOC to notify the respondent of the charge within 10 days, to investigate the charge, and to determine "as promptly as possible and, so far as practicable, not later than one hundred and twenty days from the filing of the charge" whether there is reasonable cause to believe that the charge is true. 42 U.S.C. § 2000e-5(b). If the EEOC finds no reasonable cause, then it must dismiss the charge. See id. If it finds reasonable cause, then it must attempt to resolve the dispute "by informal methods of conference, conciliation, and persuasion." Id. "If within thirty days after a charge is filed ... the Commission has been unable to secure from the respondent a conciliation agreement acceptable to the Commission, the Commission may bring a civil action against any [non-governmental] respondent...." Id. § 2000e-5(f)(1).

In language lying at the heart of Fannie Mae's challenge to the timeliness of Martini's suit, the statute further provides:

If a charge filed with the Commission ... is dismissed by the Commission, or if within one hundred and eighty days from the filing of such charge ... the Commission has not filed a civil action ... or the Commission has not entered into a conciliation agreement to which the person aggrieved is a party...

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