Romano v. U-Haul Int'l

• Decision Date: 03 August 2000
• Docket Number: No. 99-2328,U-HAUL,99-2328
• Citation: 233 F.3d 655
• Parties: (1st Cir. 2000) KAREN ROMANO, Plaintiff, Appellee, v.INTERNATIONAL,COMPANY OF MAINE, INC., Defendants, Appellants. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 655

233 F.3d 655 (1st Cir. 2000)

KAREN ROMANO, Plaintiff, Appellee, v. U-HAUL INTERNATIONAL, U-HAUL COMPANY OF MAINE, INC., Defendants, Appellants.

No. 99-2328.

United States Court of Appeals, For the First Circuit.

Heard August 3, 2000.

Decided December 7, 2000.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE.

Hon. Morton A. Brody, U.S. District Judge.

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[Copyrighted Material Omitted] S. Elaine McChesney, with whom Patricia J. Hill, Daniel J. Jackson, James M. Hankins and Bingham Dana LLP were on brief, for appellants.

Jeffrey Neil Young, with whom Stephen J. Sucy, and McTeague, Higbee, Case, Cohen, Whitney & Toker, P.A. were on brief, for appellee.

Before Torruella, Chief Judge, Casellas^* and Saris,^** District Judges.

TORRUELLA, Chief Judge.

This is an appeal from a jury verdict in the District of Maine finding that appellants U-Haul International and U-Haul Company of Maine unlawfully terminated appellee Karen Romano on the basis of her sex in violation of Title VII of the Civil Rights Act of 1964 and the Maine Human Rights Act. Appellants (for simplicity,¹ referenced in this appeal as U-Haul) do not appeal the underlying jury finding of liability. Instead, they oppose the inclusion of U-Haul International in this lawsuit, contending that it cannot properly be considered appellee's "employer" for purposes of Title VII. In addition, U-Haul appeals several issues regarding the imposition of punitive and other damages. We affirm the jury verdict and subsequent action of the district court in all respects.

BACKGROUND

In mid-April of 1996, Greg Nadeau, Manager of the Waterville, Maine U-Haul Center, placed an advertisement in the local paper for a customer service representative. Appellee Karen Romano responded to the advertisement and was told by Nadeau that the job entailed answering phones, renting trucks, and installing trailer hitches. After informing Nadeau that she had customer service experience, had worked with computers, and enjoyed working on cars with her husband (though she had no formal mechanical background), Romano was hired for the position.

Romano began part-time work on May 1, 1996. On her second or third day of work, U-Haul Company of Maine President Paul Smedberg called the Waterville Center. Romano answered the phone. Smedberg seemed quite surprised, inquiring twice whether he had reached U-Haul of Waterville, and then asked to speak with Nadeau. From hearing Nadeau's side of the conversation, Romano discerned that there was a problem with her hiring. After hanging up the phone, Romano testified that Nadeau told her that: "they didn't want women installing hitches, that women are supposed to be working in the main office."

No further training of Romano took place. At the end of her first week, Romano learned that a new employee, Robert Runshe, had been hired. Nadeau reportedly told Romano that he had not hired Runshe; that they "came in over his head." On May 14 or 15, Nadeau called Romano and terminated her employment. According to Romano, Nadeau apologized, claimed no responsibility in the decision but said that it came from higher up. He explained, "The only problem you have is you sit when you pee." Later, Nadeau allegedly repeated that Romano had been fired because of her sex to Romano and her then-husband Nick Romano, to Robert Runshe, and to Romano's father, Roland Daigneault. U-Haul, in contrast, claimed that Romano was fired because she did not have hitch installation experience and there was no time to train her.

Romano filed a complaint against U-Haul on May 18, 1999 charging sex discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., and the Maine Human Rights Act, 5 Me. Rev. Stat. Ann. 4613. Following a three-day trial, the jury returned a verdict in favor of Romano and awarded $0 in compensatory damages, $15,000 in nominal damages, and $625,000 in punitive damages. The district court, concluding that the verdict reflected confusion over compensatory and nominal damages, resubmitted the special interrogatories relating to these damages. After asking the court whether only $1 may be awarded in nominal damages,² the jury returned with a verdict of $15,000 compensatory damages and $0 nominal damages. On July 15, 1999, the district court entered judgment for Romano in the amount of $15,000 compensatory damages and $285,000 punitive damages, adjusting the jury award to conform with Title VII punitive damages caps. By Order and Memorandum of October 28, 1999, the district court denied U-Haul's Motions for Judgment as a Matter of Law, for a New Trial, or, in the alternative, for Remittitur.

Appellant U-Haul appeals the following issues: (1) the submission of a jury instruction on the integrated-enterprise test instead of an "agency" test instruction to determine whether both U-Haul International and U-Haul Company of Maine should be considered Romano's employer³ for purposes of Title VII; (2) the formulation of the integrated-enterprise test for purposes of jury instruction; (3) the determination by the jury that U-Haul International and U-Haul Company of Maine are a single employer for purposes of Title VII; (4) the imposition of punitive damages liability on U-Haul International; (5) the resubmission of Special Interrogatories 4 and 5 on compensatory and nominal damages to the jury; and (6) the amount of punitive damages awarded. Appellee Romano disagrees with the substance of appellants' arguments and claims that appellants have waived most of these arguments for failure to properly assert them prior to this appeal. We will discuss each issue in turn.

DISCUSSION

I. Determination of Employer Status for U-Haul International

A. Throughout pre-trial, trial, and post-trial motions, U-Haul International has consistently argued that it was not Romano's employer. In support, U-Haul International offers that it was not responsible for hiring, supervising, or firing Romano. Those responsibilities fell entirely upon U-Haul Company of Maine and its personnel. As to the relationship between U-Haul International and U-Haul Company of Maine, U-Haul described it, in its Motion for Summary Judgment, as a "complex contractual relationship between two entities." This relationship, from U-Haul International's perspective, is insufficient to render it liable under Title VII for Romano's firing.

U-Haul acknowledges that, under certain circumstances,⁴ two entities may be sued as a "single employer" under Title VII. The district court, considering which test to instruct the jury on in determining single-employer status, elected to apply the integrated-enterprise test. The integrated-enterprise test, first developed to determine whether interrelated companies should be treated as one entity under the National Labor Relations Act, 29 U.S.C. 164, examines four factors: (1) interrelation of operations; (2) common management; (3) centralized control of labor relations; and (4) common ownership. In pre and post-trial motions, U-Haul argued that either the integrated-enterprise test should be instructed with an emphasis on the labor factor, or, preferably, a joint-enterprise test⁵ should be given to the jury.

Appellant U-Haul now appeals the district court's choice of the integrated-enterprise test and argues that common-law agency principles⁶ should have determined the single-employer issue. U-Haul's legal support for application of the "agency" test is allegedly based on the principles articulated by the Supreme Court in Kolstad v. American Dental Ass'n, 527 U.S. 526 (1999). According to U-Haul, the Kolstad decision mandates application of common-law agency principles in Title VII cases. As such, appellant urges that the district court should have instructed the jury using a test formulated by the Seventh Circuit in Papa v. Katy Industries, Inc., 166 F.3d 937 (7th Cir. 1999). U-Haul failed, however, to argue prior to filing the brief in this appeal that agency principles should be followed. Appellant had accordingly never cited Papa as the proper standard for instructing the jury. Because we find, as discussed below, that U-Haul has forfeited its agency argument, the district court's use of the integrated-enterprise test instead of appellants' agency test is subject to plain error review. Under this standard, we uphold the decision of the district court to instruct on the integrated-enterprise test for determining single-employer status.

Rule 51 of the Federal Rules of Civil Procedure states, in relevant part: "No party may assign as error the giving or the failure to give an instruction unless that party objects thereto before the jury retires to consider its verdict, stating distinctly the matter objected to and the grounds of the objection." Fed. R. Civ. P. 51 (emphasis added). While it is true that: "[f]rom the outset, UHI [U-Haul International] has consistently argued that it cannot be held responsible as Romano's employer as a matter of law," the agency argument presented in U-Haul's brief was not made by U-Haul in its objections to the jury instructions. Throughout the proceedings, U-Haul repeatedly made the argument that either the integrated-enterprise or the joint-enterprise test should apply. No mention at any time was made by U-Haul that agency principles should govern the employer test. U-Haul did submit a jury instruction on agency (Request No. 8), but then failed to raise it at the charge conference or to object to its absence after jury instructions were given. In fact, U-Haul made no reference to its Request No. 8 on the record at any point. U-Haul cannot claim that its agency argument is preserved simply because it generally objected to being characterized as appellee's employer.

U-Haul further argues that they did raise the agency issue by consistently objecting to the identity-of-employer test. They...