Pavon v. Swift Transportation

• Decision Date: 12 July 1999
• Docket Number: No. 98-35119,98-35119
• Citation: 192 F.3d 902
• Parties: (9th Cir. 1999) FERNANDO PAVON, Plaintiff-Appellee, v. SWIFT TRANSPORTATION CO., INC., an Arizona corporation, Defendant-Appellant
• Court: U.S. Court of Appeals — Ninth Circuit

Page 902

192 F.3d 902 (9th Cir. 1999)

FERNANDO PAVON, Plaintiff-Appellee, v. SWIFT TRANSPORTATION CO., INC., an Arizona corporation, Defendant-Appellant.

No. 98-35119

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted July 12, 1999--Portland, Oregon

Decided September 20, 1999

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Craig A. Crispin, Crispin and Associates, Portland, Oregon, for the plaintiff-appellee.

Edward S. McGlone III, Wallace & Klor, Portland, Oregon, for the defendant-appellant.

Appeal from the United States District Court for the District of Oregon; James A. Redden, District Judge, Presiding. D.C. No. CV-96-01401-JAR.

Before: Betty B. Fletcher, Warren J. Ferguson, and A. Wallace Tashima, Circuit Judges.

B. FLETCHER, Circuit Judge:

Swift Transportation Company, Inc., ("Swift") appeals the district court's judgment, following a jury trial, in favor of Fernando Pavon in Pavon's wrongful discharge action, pursuant to 42 U.S.C. S 1981, Title VII of the Civil Rights Act of 1964 (42 U.S.C. S 2000e), and O.R.S. 659.030, arising when Pavon was terminated after complaining about ongoing racial harassment in his job as a diesel mechanic at Swift. Swift also appeals the district court's denial of its motion for a new trial. We have jurisdiction pursuant to 28 U.S.C. S 1291, and we affirm.

FACTS AND PROCEDURAL BACKGROUND

Pavon was hired by Swift in November, 1994. Pavon is a United States citizen of Hispanic origin, born in Honduras. While working at his post in February, 1995, Pavon was subjected to racial slurs and harassment by his co-worker, Kevin Sterle. Sterle's harassment of Pavon included calling him "beaner," "fucking Mexican," "wet back," "spic," "illiterate," and "stupid." Sterle also taunted Pavon with comments like "go home," and "go back to Columbia," and threatening to turn him in to immigration.

Pavon complained several times to his shop foreman and supervisor, Ted Staley, about Sterle's remarks. Staley reported Pavon's complaints to his superior, Mark Janszen. The harassment continued on a near-daily basis. Pavon complained directly to Janszen, who issued Pavon a disciplinary warning. After meeting with Pavon and Sterle, Janszen decided to transfer Pavon to a separate workstation, the Fuel Shop. The transfer was not accompanied by a loss of pay or benefits, but Pavon saw it as a demotion and disciplinary action, because the Fuel Shop was a station to which new and inexperienced employees were normally assigned.

After Pavon's transfer, Sterle continued to search out Pavon and to taunt him with racial slurs. Plaintiff again complained to his supervisors. Janszen prepared disciplinary notices relating to Pavon. Larry Sampson, a colleague of Pavon's at Swift, advised Pavon to contact the company recruiter, Don Diggins, and Ron Rodriguez at company headquarters in Phoenix. Pavon could not reach Diggins, but did contact Rodriguez. Pavon followed the latter's advice to start keeping a notebook of what was going on. Despite having been told of Pavon's complaints by Sampson, Diggins took no action to interview Pavon or to investigate the allegations.

On July 5, 1995, Pavon was called into a meeting with Jan-szen and Diggins. Pavon continued to object to the company's discipline of him and its refusal to remedy the ongoing racial harassment. Diggins asked Pavon, "Do you know who Martin Luther King was? Remember what happened to him?" Pavon returned to work after the meeting. Later that day, he was terminated.

Following his termination, Pavon lost $1,218 in wages in a two week period before he secured comparable employment. On September 18, 1995, Pavon filed a complaint in Multnomah County District Court seeking unpaid wages. That action was dismissed following settlement by the parties. On October 2, 1995, Pavon filed this action in federal district court under Title VII of the Civil Rights Act of 1991, 42 U.S.C. S 1981, and O.R.S. 659.030, as well as for common law wrongful discharge. Defendant's motion for summary judgment, based on the ground that the action was claim precluded because it involved issues that could have been raised in the state court action, was denied. Following a three day jury trial, judgment was entered in favor of Pavon. As total economic damages for all four of his claims, he was awarded $1,218. In addition, on his S 1981, Title VII, and wrongful discharge claims, he was awarded $250,000 in non economic damages and $300,000 in punitive damages. The Special Verdict form did not specify separate amounts for each claim. Defendant's motion for a new trial was denied, and Swift appealed.

DISCUSSION

Claim Preclusion

Swift's first argument is that all of Pavon's employment related claims form a single transaction for purposes of claim preclusion. We review res judicata--claim preclusion-claims de novo. See First Nat'l Bank v. Russell (In re Russell), 76 F.3d 242, 244 (9th Cir. 1996); Miller v. County of Santa Cruz, 39 F.3d 1030, 1032 (9th Cir. 1994). Because the underlying judgment was rendered in an Oregon state court, we must apply Oregon's rules of claim preclusion. 28 U.S.C. S 1738; Russell, 76 F.3d at 244.

As a threshold matter, we decide whether to review this claim which was not raised interlocutorily. While this court will often decline to engage in the "pointless academic exercise" of reviewing a denial of summary judgment after a trial on the merits, Lum v. City and County of Honolulu, 963 F.2d 1167, 1169-70 (9th Cir. 1992), such a case is not presented here, because the question of claim preclusion was not a disputed factual issue that went to the jury, but was a ruling by the district court on an issue of law. See, e.g., id. at 1170 n.1 ("We adhere to the majority view that in the ordinary case where a motion for summary judgment has been denied because the trial court determined that issues of fact had tobe tried, there is no useful purpose in reviewing the pretrial ruling on summary judgment after a plenary trial on the merits.") (emphasis added).

Upon review of Oregon law, we find that Pavon's federal suit was not barred by his state wage penalty action. Oregon law focuses on the transaction at issue in the state and federal cases and gives preclusive effect to all claims against the defendant that were available to the plaintiff arising from that transaction. Lee v. Mitchell, 152 Or. App. 159 (1998). "The expression `transaction, or series of connected transactions,' is not capable of a mathematically precise definition; it invokes a pragmatic standard to be applied with attention to the facts of the cases." Troutman v. Erlandson, 287 Or. 187 (1979) (en banc), quoting Restatement (Second) of the Law of Judgments, S 61, Comment B (1978). The court in Troutman listed the following criteria as relevant to the transaction inquiry: time, space, origin of the harm, subjective or objective motivation, convenience, and similar acts. We agree with the district court that there is not enough similarity of facts or claims underlying the federal and state claims for claim preclusion to apply. As the district court explained, Pavon's state court action was a wage penalty claim which required proof of unpaid wages and failure to pay within thirty days, and a payroll penalty claim involving the absence of authorization for a payroll deduction. His federal court action, in contrast, involves proof of an allegedly hostile work environment, plaintiff's complaints to management, defendant's alleged failure to take effective remedial action and retaliation against plaintiff for his complaints, defendant's termination of plaintiff, and the connection between the termination and plaintiff's membership in a protected class.

Showing discriminatory intent was an essential element of the federal claims, but not of the state claims. Pavon did need to show in his state court action that Swift's failure to pay him his final wages was "wilful" in order to recover. O.R.S. 652.150. However, under the statute, "wilful" means "merely that the thing done or omitted to be done was done or omitted intentionally." Sabin v. Willamette-Western Corp., 276 Or. 1083, 1094 (1976). Showing "wilfulness " in the state proceedings required different witnesses, and different evidence than what was required to show discriminatory intent in federal court. While the events that gave rise to the federal claims were connected to those that gave rise to the wage claims, we find that aspects of the state and federal claims did not "necessarily overlap any complete litigation of another," Whitaker v. Bank of Newport, 313 Or. 450, 458 (1995) (emphasis added), and that therefore, under Oregon law, Swift's defense of claim preclusion would fail. ¹

Jury Instructions

Swift next challenges the trial court's jury instructions on the reasonableness of the employer's conduct and on hos-tile work environment. We decline to review the former as it was not properly preserved below, and we reject the latter. The district court's formulation of civil jury instructions is reviewed for an abuse of discretion. Scott v. Ross, 140 F.3d 1275, 1280 (9th Cir. 1998). Jury instructions must be formulated so that they fairly and adequately cover the issues presented, correctly state the law, and are not misleading. Mockler v. Multnomah County, 140 F.3d 808, 812 (9th Cir. 1998). When the claim is that the trial court misstated the elements that must be proved at trial, the reviewing court must view the issue as one of law and review the instruction de novo. Mockler, 140 F.3d at 812; Masson v. New Yorker Magazine, Inc., 85 F.3d 1394, 1397 (9th Cir. 1996).

Far from preserving any objection to the jury instruction on reasonableness at trial, Swift actually told the court that its instruction was probably correct under Ninth Circuit law. Swift failed to tell the court that it had made an error. Although Swift proposed its preferred alternative instruction, this was insufficient, under...