Thoreson v. Penthouse Intern., Ltd.

• Decision Date: 21 December 1992
• Citation: 80 N.Y.2d 490,591 N.Y.S.2d 978,606 N.E.2d 1369
• Parties: , 606 N.E.2d 1369, 60 Fair Empl.Prac.Cas. (BNA) 955, 61 Empl. Prac. Dec. P 42,107, 61 USLW 2395 Marjorie L. THORESON, Also Known as Anneka DiLorenzo, Appellant-Respondent, v. PENTHOUSE INTERNATIONAL, LTD., et al., Respondents-Appellants.
• Court: New York Court of Appeals Court of Appeals

Page 978

591 N.Y.S.2d 978

80 N.Y.2d 490, 606 N.E.2d 1369,

60 Fair Empl.Prac.Cas. (BNA) 955,

61 Empl. Prac. Dec. P 42,107, 61 USLW 2395

Marjorie L. THORESON, Also Known as Anneka DiLorenzo Appellant-Respondent, v. PENTHOUSE INTERNATIONAL, LTD., et al., Respondents-Appellants.

Court of Appeals of New York.

Dec. 21, 1992.

[80 N.Y.2d 491] [606 N.E.2d 1370] Murray Schwartz and Davida S. Perry, New York City, for appellant-respondent.

Proskauer Rose Goetz & Mendelsohn, New York City (Bettina B. Plevan and Myron D. Rumeld, of counsel), and Carb, Luria, Glassner, Cook & Kufeld (Jeffrey H. Daichman, of counsel), for respondents-appellants.

[80 N.Y.2d 492] George W. Madison, Herbert Semmel and Ellen M. Saideman, New York City, for Association of the Bar of the City of New York, amicus curiae.

[80 N.Y.2d 493] Dorchen A. Leidholdt and Wendy C. Lecker, New York City, for Women's Bar Association of the State of N.Y. and another, amici curiae.

[80 N.Y.2d 494] Nadine Taub, of the New Jersey Bar, Newark, NJ, admitted pro hac vice, for Women's Rights Litigation Clinic of Rutgers Law School-Newark and another, amici curiae.

OPINION OF THE COURT

HANCOCK, Judge.

This appeal presents a question of statutory construction which we have not addressed: whether a person aggrieved by a discriminatory practice in violation of the Human Rights Law may recover punitive damages in a court action brought pursuant to Executive Law § 297(9). Based on our analysis of the statutory language and the relevant legislative history, we conclude that such damages are not recoverable.

I

Plaintiff--alleging sexual harassment in violation of the Human Rights Law--brought an action in Supreme Court pursuant to Executive Law § 297(9) against her former employer, Penthouse International, Ltd., and its chairman and principal shareholder, Robert Guccione, the publisher of Penthouse Magazine. After a nonjury trial, the court found that defendants had exploited plaintiff as an employee by, among other things, coercing her, as an implicit condition of her employment, into having sexual liaisons with two of Guccione's business associates. The court granted plaintiff $60,000 for compensatory and $4,000,000 for punitive damages.

A majority at the Appellate Division found sufficient evidence in the record to support the conclusion of Supreme Court that plaintiff was the victim of quid pro quo sexual harassment and, with one Justice dissenting, affirmed the award of compensatory damages (see, Thoreson v. Penthouse, Intl., 179 A.D.2d 29, 31, 583 N.Y.S.2d 213). The Appellate Division, however, held unanimously that punitive damages were not recoverable and vacated that part of the award. Both plaintiff and defendants have appealed to this Court by leave of the Appellate Division.

We agree with the majority at the Appellate Division that " 'the decision of the fact-finding court should not be disturbed upon appeal unless it is obvious that the court's conclusions could not be reached under any fair interpretation of the evidence, especially when the findings of fact rest in large measure on considerations relating to the credibility of witnesses' " (id., at 31, 583 N.Y.S.2d 213 [quoting Claridge Gardens v. Menotti, 160 A.D.2d 544, 544-545, 554 N.Y.S.2d 193]. Based on our review of the record, we hold, as did the Appellate Division majority, "that the totality of the circumstances, as perceived by the Trial Justice from the testimony, [permits] the conclusion that plaintiff was the victim of quid pro quo sexual harassment" (id., at 31, 583 N.Y.S.2d 213) and that "it cannot be said that the amount of the compensatory damages awarded by the Trial Justice is without foundation" (id., at 31, 583 N.Y.S.2d 213). We, therefore, affirm the compensatory damages award. Further discussion on this point is unnecessary.

The only question to be addressed is whether punitive damages are permissible in a statutory action under Executive Law § 297(9). For reasons which follow, we concur with the Appellate Division that such damages are not permitted and, accordingly affirm that portion of the order also.

II

In approaching the subject of punitive damages in a court action for Human Rights Law violations, it must be understood that we are discussing an action to enforce substantive legal rights and duties created solely by statute. When it enacted Executive Law § 297(9) to provide a judicial remedy for discriminatory practices in addition to the existing administrative remedies, the Legislature created a new statutory cause of action not previously cognizable at common law (see, Murphy v. American Home Prods. Corp., 58 N.Y.2d 293, 307, 461 N.Y.S.2d 232, 448 N.E.2d 86; Matter of State Div. of Human Rights v. Luppino, 35 A.D.2d 107, 112, 313 N.Y.S.2d 28 [Hopkins, J., dissenting in part], rev'd sub nom. State Commn. for Human Rights v. Speer, 29 N.Y.2d 555, 324 N.Y.S.2d 297, 272 N.E.2d 884).

Thus, to determine whether punitive damages are legally permissible in a court action we look to the statute--not to whether the nature of the wrong alleged would permit recovery under traditional concepts of punitive damages in tort law (see, e.g., Home Ins. Co. v. American Home Prods. Corp., 75 N.Y.2d 196, 203-204, 551 N.Y.S.2d 481, 550 N.E.2d 930). It is settled that if an aggrieved person seeks relief for discriminatory practices before the State Division of Human Rights rather than in a court of law, punitive damages are not allowed (see, Executive Law § 297[4][c]; Matter of New York City Tr. Auth. v. State Div. of Human Rights, 78 N.Y.2d 207, 216, 573 N.Y.S.2d 49, 577 N.E.2d 40). The precise question before us, then, is: did the Legislature, in creating the cause of action in Executive Law § 297(9), intend that an aggrieved person could recover punitive damages in a court action when, if that person had chosen the administrative alternative, such damages could not be recovered?

In searching for the legislative intent we, of course, first examine the words of the statute both for their meaning as used in the specific section and in their context as part of the statutory scheme (see, Price v. Price, 69 N.Y.2d 8, 13, 511 N.Y.S.2d 219, 503 N.E.2d 684). Here, the particular language to be interpreted is:

"Any person claiming to be aggrieved by an unlawful discriminatory practice shall have a cause of action in any court of appropriate jurisdiction for damages and such other remedies as may be appropriate, unless such person had filed a complaint hereunder or with any local commission on human rights, or with the superintendent pursuant to the provisions of section two hundred ninety-six-a of this chapter" (Executive Law § 297[9] [emphasis added].

From the statutory language, it is evident that the word "damages" relates to one of the "remedies" for which a person "aggrieved by" an unlawful practice "shall have a cause of action". Nothing in the statute indicates that the Legislature, in making legal remedies available in a judicial proceeding, contemplated that the courts would grant relief for a purpose other than alleviating or rectifying the harm done to the person aggrieved by the discrimination. Certainly, no language suggests that the Legislature intended to authorize punitive relief in the nature of a fine for the purpose of punishing the wrongdoer or deterring similar conduct by others. Punitive damages, it has been held, are to:

"serve as a warning to others. They are intended as punishment for gross misbehavior for the good of the public and have been referred to as 'a sort of hybrid between a display of ethical indignation and the imposition of a criminal fine'. Punitive damages are allowed on the ground of public policy and not because the plaintiff had suffered any monetary damages for which he is entitled to reimbursement; the award goes to him simply because it is assessed in his particular suit. The damages may be considered expressive of the community attitude towards one who wilfully and wantonly causes hurt or injury to another" (Reynolds v. Pegler, 123 F.Supp. 36, 38 [S.D.N.Y.1954],aff'd 223 F.2d 429 [2d Cir.1955], cert. denied 350 U.S. 846, 76 S.Ct. 80, 100 L.Ed. 754 [quoted in Toomey v. Farley, 2 N.Y.2d 71, 83, 156 N.Y.S.2d 840, 138 N.E.2d 221]; see, Home Ins. Co. v. American Home Prods. Corp., 75 N.Y.2d 196, 203-204, 551 N.Y.S.2d 481, 550 N.E.2d 930, supra ).

In administrative proceedings before the State Division, the purpose of the permissible remedies is solely to right the wrong done to the aggrieved person, not to punish the wrongdoer. This is reflected in the statute itself which limits the relief available to the aggrieved person to measures...