Sackett v. Itc ^; Deltacom, Inc.
| Decision Date | 24 June 2005 |
| Docket Number | No. 1:03-CV-159.,1:03-CV-159. |
| Parties | Michelle SACKETT, Plaintiff, v. ITC ^; DELTACOM, INC., and ITC ^; Deltacom Communications, Inc., Defendants. |
| Court | U.S. District Court — Eastern District of Tennessee |
Harry F. Burnette, Burnette, Dobson & Hardeman, Chattanooga, TN, for Plaintiff.
Michael A. Kent, Christine Mabe Scott, Strang, Fletcher, Carriger, Walker, Hodge & Smith, Chattanooga, TN, John A. Wilmer, Shannon S. Simpson, Wilmer & Lee, PA, Huntsville, AL, for Defendants.
In Kolstad v. American Dental Association, 527 U.S. 526, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999) the Supreme Court for the first time considered the language providing for punitive damages in the Civil Rights Act of 1991, 42 U.S.C. § 1981a, and provided its construction of that language. In this Title VII lawsuit the Court is now required to apply the holding of Kolstad to the particular facts before the Court. In so doing, the Court of necessity must sift through the text of the Kolstad opinion, consider the purposes espoused in the decision, and discern the logical extensions or implications of that text. This has led the Court to certain conclusions regarding the precise meaning and contours of Kolstad. The Court understands that by venturing into this endeavor it is exploring largely uncharted waters. Because the parties to this action must make important decisions regarding their future course of action, the Court through this opinion shares and informs the parties of those conclusions. This opinion will be as comprehensive as possible because the Court wishes to provide guidance to the litigants and also because much of the law in this area is sparse and unsettled.
Plaintiff Michelle Sackett ("Plaintiff") brought this lawsuit1 against Defendants ITC ^; Deltacom, Inc. and ITC ^; Deltacom Communications, Inc. ("Defendants") under Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. §§ 2000e to 2000e-17, for claims of gender and pregnancy discrimination. In her amended complaint she sought punitive damages (see Court File No. 7, p. 4). As is the Court's practice since Kolstad, the punitive damages aspect of the trial was bifurcated from the liability and compensatory damages aspect of the trial. The matter proceeded to trial and consumed nine days.2 Upon the completion of the liability and compensatory damages phase of the trial, the jury returned a verdict in favor of Plaintiff, finding her gender was a motiving factor in the adverse employment action taken against her (see Court File No. 89). The jury also awarded her $35,000 in compensatory damages. Thereafter, Plaintiff sought to proceed to the punitive damages phase of the trial. Because it was apparent to the Court the parties did not fully appreciate the change Kolstad had brought about in punitive damages under Title VII, the Court instructed the parties to submit briefs on this issue (see Court File No. 92). Since the case had not concluded, the Court did not discharge the jury but rather instructed the jury there was some possibility it would be called back to reconvene for further proceedings. That jury is available for recall to consider additional proof should the Court determine this is an appropriate case for submission of the question of punitive damages to the jury.
Since the case was bifurcated, the trial only concerned issues relevant to liability and compensatory damages. For example, an individual's exact role and authority in the defendant company or companies, past discriminatory conduct on the part of the company or supervisory employees involved in this case, the existence of an antidiscrimination policy, whether such a policy was effective or not, how well such a policy was enforced, and what a particular individual did or did not know about Title VII are all issues with little or no relevance to liability and compensatory damages. However, those issues would be of great relevance to the question of punitive damages. The Court assumes there was evidence the parties possessed that pertained only to the question of punitive damages that was not, and properly should not have been, offered on the liability and compensatory damages issues at trial.3 Accordingly, to the extent the parties have evidence relevant to punitive damages that was not introduced, they have never had an opportunity to offer such evidence. Moreover, the parties may know of evidence that is relevant to punitive damages that they do not now possess but which they know they could obtain and introduce at the punitive damages aspect of the trial.
The Court will summarize the evidence produced during trial only for the purpose of providing context to the analysis that follows. This summary also will allow comparison with other cases where punitive damages were an issue. By setting out this summary, the Court is not attempting to make any factual findings. In all material respects this was a typical, run-of-the-mill Title VII case.
Defendants are in the telecommunications business and operate branch offices in the southeastern United States. One branch office was located in Chattanooga, Tennessee. This branch was opened in early 2000. During the time period relevant to this law suit the branch manager of that office was Julie Whitchurch who was hired in October 2000. This branch office sold telecommunications services (Internet connections, local telephone lines, long distance and data services) to business customers.
Each branch office is supervised by a regional director, who oversees several branch offices at any given time. Bill Koepsel was regional director in charge of the North Alabama region. Branch offices overseen by Koepsel during the relevant time period included the Chattanooga branch, the Florence, Alabama branch, the Huntsville, Alabama branch, the Birmingham, Alabama branch, and the Anniston, Alabama branch. Koepsel was not based in Chattanooga but rather was located in another city and visited the Chattanooga branch periodically. Among all the branches in its region, the Chattanooga branch generally suffered the poorest sales performance.
Whitchurch hired Plaintiff after meeting her when Plaintiff was working at a shopping mall kiosk selling cellular phones. Plaintiff had no experience doing the type of work required by Defendants and nothing in her background suggested she had any aptitude for cold call sales, which were a staple of her sales duties with Defendants. Whitchurch provided Plaintiff with little training or direction after she was hired. In fact, Whitchurch had little respect for her supervisor, Koepsel, and was openly defiant and dismissive of him to branch employees. Whitchurch's hostility towards and constant state of conflict with Koepsel contributed to Plaintiff's lack of progress in her sales. Over the few months of her employment, Plaintiff was one of the poorest performing, if not the poorest performing, salesperson in the branch. Each salesperson had a quota of phone lines to sell each month; Plaintiff never met her quota.
After Plaintiff was hired she became pregnant. Plaintiff and some of the witnesses testified that Koepsel's attitude towards her changed after he learned of her pregnancy. According to Plaintiff's testimony, on two occasions when Koepsel was visiting the Chattanooga branch, he called Plaintiff into Whitchurch's office, locked the door, and yelled at her, questioning her about potential child care arrangements and demeaning her because she did not have full custody of her first child. According to Plaintiff, Koepsel accused her of being a failure and hopeless. These meetings in which she was subjected to Koepsel screaming at her lasted an hour and a half. Plaintiff and her witnesses described her demeanor after these meetings as hysterical and said she was crying uncontrollably. Plaintiff also testified Koepsel harassed her during sales meetings and berated her after he found out she was pregnant. Plaintiff was placed on a "performance improvement plan," the ostensible purpose of which was to help her meet her sales quota. Plaintiff and some of her witnesses testified this performance improvement plan deviated from Defendants' standard plan and contained sales goals that were virtually unattainable, and which Koepsel increased after it appeared she would meet them.
Approximately four months after she was hired, and while she was participating in the performance improvement plan, Plaintiff was terminated by Defendants. Koepsel was the driving force behind her termination although it is not clear whether he possessed the authority to terminate employees without approval from others.
Prior to 1991, punitive damages were not available in Title VII cases. Congress made such damages available to prevailing plaintiffs in the 1991 Civil Rights Act ("Act"). The Act provides for punitive damages with the following language:
A complaining party may recover punitive damages under this section against a respondent (other than a government, government agency or political subdivision) if the complaining party demonstrates that the respondent engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to the federally protected rights of an aggrieved individual.
42 U.S.C. § 1981a(b)(1).
The statute is silent regarding the standard of proof, i.e., whether the standard is preponderance of the evidence, clear and convincing evidence, or some other standard. The statute also is silent as to whether punitive damages should be routinely available to every prevailing plaintiff or only to some smaller number. The statute does make clear the plaintiff bears the burden of proving the employer acted with malice or with reckless indifference.
Prior to the Supreme Court's decision in Kolstad, it was ...
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