Argued February 26, 2014.
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
The defendants appeal from an amended judgment entered in the United States District Court for the Western District of New York (William M. Skretny, Chief Judge) on February 5, 2013, arising from employment discrimination and racial harassment claims against them. We conclude that the district court correctly instructed the jury as to employer liability, that the jury could find that the plaintiff's direct employer and the parent company constituted a single employer for the purposes of federal and state non-discrimination statutes, that the jury's verdict as to intentional infliction of emotional distress was supported by the evidence, and that the jury's compensatory damages award was proper. We also conclude, however, that the district court erred in failing to further reduce the punitive damages awards.
RICHARD T. SULLIVAN, Harris Beach PLLC, Buffalo, N.Y. (Ryan J. Mills and Mary C. Fitzgerald, Brown & Kelly LLP, Buffalo, NY, on the brief), for Plaintiff-Appellee.
EVAN M. TAGER, Mayer Brown LLP, Washington, DC (Miriam R. Nemetz, Mayer Brown LLP, Washington, DC, and Lynn A. Kappelman and Dawn Reddy Solowey, Seyfarth Shaw LLP, Boston, MA, on the brief), for Defendants-Appellants.
Before: KATZMANN, Chief Judge, SACK, Circuit Judge, and RAKOFF,[*] District Judge.
Sack, Circuit Judge :
This is an appeal from an amended judgment of the United States District Court for the Western District of New York (William M. Skretny, Chief Judge ) filed February 5, 2013, on a multimillion-dollar jury award (reduced by the district court on remittitur) for compensatory and punitive damages for violations of state and federal anti-discrimination statutes, and for intentional infliction of emotional distress under New York law. The case before us on appeal involves a pattern of extreme racial harassment in the workplace.
The plaintiff, a longtime steelworker at a plant in Lackawanna, New York, endured an extraordinary and steadily intensifying drumbeat of racial insults, intimidation, and degradation over a period of more than three years. The demeaning behavior of the plaintiff's tormentors included insults, slurs, evocations of the Ku Klux Klan, statements comparing black men to apes, death threats, and the placement of a noose dangling from the plaintiff's automobile. Supervisors' meager investigations and nearly total lack of action failed to stop the escalating abuse; instead, managers often appeared to condone or even participate in part in the harassment. The experience left the plaintiff psychologically scarred and deflated--injury for which a jury awarded $1.32 million in compensatory damages for the violation of statutes prohibiting a hostile or abusive work environment because of his race and the state tort of intentional infliction of emotional
distress. The jury also assessed $24 million in punitive damages, mostly against the employer and its parent company. The district court subsequently granted a motion for remittitur as to the punitive damages, which remittitur was accepted by the plaintiff, and reduced the punitive award by $19 million, to $5 million. The court also awarded the plaintiff substantial attorney's fees and costs.
The defendants appeal from this judgment and award. They do not seriously dispute the gravity of the underlying conduct, but they raise several procedural and substantive objections to the district court's findings on liability and to its damages award. We reject most of these challenges, finding no error in the district court's judgment concerning liability on the common-law and statutory claims or compensatory damages. We do, however, conclude that the punitive damages award, even after the remittitur in the district court, is excessive in light of the principles set forth in the prior case law of the Supreme Court and of this Circuit.
We are required to police closely the size of awards rendered in the trial courts within our Circuit. In recent opinions, we have addressed at length the individual and social harms associated with excessive awards of compensatory and punitive damages, many of which are relevant to this case. A jury's assessment of damages based on intangibles such as emotional harm or the need for punishment injects an additional element of the immeasurable and subjective into the proceedings, which trial and appellate courts are expected to oversee with care. Excessive punitive damages also implicate a defendant's constitutional due process rights insofar as they impose a substantial punishment without the safeguards, constitutional or otherwise, that attend criminal proceedings. Pursuant to these concerns, we scrutinize awards for fairness, consistency, proportionality, and, in the case of punitive damages, constitutionality.
After completing that review on the facts in the record before us, we conclude, first, that the jury's award for compensatory damages was permissible in light of the nature of the plaintiff's claims. Second, we conclude that the punitive damages were excessive. We will remand to the district court for imposition of a remittitur, requiring a new trial on the issue unless the plaintiff accepts an award to be calculated by the district court. The resulting damages, which will remain substantial, will be appropriate and sufficient to remedy the plaintiff's injury and to impose civil punishment on the defendants for their misbehavior.
Elijah Turley was hired at the Buffalo-area Lackawanna Steel Plant in 1995, and remained in this job despite intense racial harassment until his employment was terminated when the plant closed its doors in 2009. During the period relevant to this litigation, the Lackawanna plant changed hands several times in a series of mergers and acquisitions that followed the 2003 liquidation of Bethlehem Steel, its longtime owner. For purposes of this appeal, it is sufficient to note that the plant was owned successively by three Delaware-based corporations (referred to here as " the employer" or " Lackawanna" ) whose names reflected those of three successive corporate parents (hereinafter " the parent company" ;
the last of which hereinafter " ArcelorMittal USA" ).
The Pattern of Racial Harassment
From 1997 onward, Turley worked as a process operator in the Lackawanna plant's " pickler"  department. Throughout the relevant time-period, he was the only African-American working regularly on his shift. Initially, he regarded the environment as pleasant and congenial, where workers treated each other " like a family." 2 Trial Tr. 199, 201. But things deteriorated rapidly in 2005, after Turley filed a grievance alleging that Thomas Jaworski, the manager in the pickler department, was giving favorable treatment to white employees. From that point onward, Turley testified, life in the pickler " was like hell." 2 Trial Tr. 205.
Throughout the remainder of his employment, Turley's co-workers frequently subjected him to racist epithets, degrading treatment, and, from time to time, outright threats. Co-workers declined to speak to him or interact with him socially on the job, by, for example, joining him for lunch. Jaworski, Turley testified, continually referred to him as " boy." 3 Trial Tr. 4-5. Another witness estimated that thirty percent of the workers in the department referred to Turley as " that [fucking nigger]."  2 Trial Tr. 90-91. Unidentified coworkers broadcast monkey sounds over the plant's intercom system, also using the system to threaten Turley anonymously: " We['re] going to fucking kill you, fucking nigger, we're going to kill your fucking Jewish lawyer too." 3 Trial Tr. 81.
Turley's workstation became a stage for repeated intimidation and harassment. Sometime in December 2005, he arrived at work to find a sign hanging from his workstation, printed with the words " dancing gorilla." Joint Stmt. of the Case ¶ 20(a). Days later, the initials " KK" were spray-painted on the wall near his workstation, and the phrases " King Kong" and
" King Kong lives" appeared on the floor plate that Turley crossed to enter his booth. Id. ¶ 20(b). In July 2006, someone spray-painted the initials " KKK" on the wall near Turley's workstation; the initials appeared again in 2007. Id. ¶ 20(f). In late 2006, after Turley had filed two harassment complaints with the New York State Division of Human Rights, a face with tears was drawn on the wall in the pickler department. Id. ¶ 20(g). In 2008, a graffiti drawing of an ape-like man was found in a railroad car that had been parked inside the department.
Although many employees harassed and threatened Turley, a coworker, Frank Pelc, was responsible for some of the more extreme conduct. He addressed Turley as " you fucking black bitch," and " you fucking black piece of shit." 3 Trial Tr. 26. Pelc would make monkey sounds when Turley tried to speak to him. Id. A worker who replaced Turley at his workstation at shift changes testified that, on a daily basis, the door handles and controls that Turley used would be covered with thick, black motor grease. When the worker complained about this to co-workers, Pelc said, " It must be that [']boon that's doing it," referring to Turley. 2 Trial Tr. 166. In May 2006, the same sort of grease was smeared all over Turley's chair in the processor booth. Once, Pelc told Turley: " [W]hen I see your black nigger ass on the outside, I'm going to fucking shoot you." 3 Trial Tr. 28. When Turley reported the threat to management, " [t]hey laughed it off." Id.
The campaign of racial harassment intensified from 2005 into 2008. In one incident, on December 3, 2007, Turley was told to go check on his car, which had been vandalized several times in the past. Upon arriving, Turley found, dangling from his side-view mirror, a stuffed toy monkey with a noose around its neck.
Because Turley brings this claim against his immediate employer, its corporate parent, and three individually named plant managers, rather than against the persons most directly involved in the daily abuse, his claim depends on the adequacy of the supervisors' response, or on their direct involvement in the harassment. Among the named defendants, Thomas Jaworski managed the pickler department from May 2003 to January 2007. Gerald Marchand was the plant's manager of human resources from May 2003 until March 2007. And Larry Sampsell was the plant manager of labor relations and security during the entire relevant time period.
Management was not wholly unresponsive to Turley's complaints. A foreman removed the " dancing gorilla" sign, and managers painted over some graffiti. After the " dancing gorilla" and " King Kong" incidents, Jaworski stated at a crew meeting that such conduct would not be tolerated. The situation nonetheless continued to worsen. Plant managers interviewed employees after many of Turley's complaints. After the 2007 incident with the stuffed monkey, the company hired a lawyer to conduct an investigation. And defendant Larry Sampsell, the manager of labor relations and security, installed lights in the parking lot. Sampsell also once arranged for a private investigator to pose as a contractor working in the pickler department in order to gather information, but the plan failed when employees discovered that the investigator was taking photographs.
On other occasions, however, supervisors were apparently unresponsive; to the contrary, they appeared to encourage some of the behavior. For example, a coworker accosted Turley while he was meeting with Sampsell and Marchand, shouting, " Shut up you fucking black crybaby
bitch. Fuck you. You ain't shit. You're always crying like a bitch." 3 Trial Tr. 32. Turley testified that Sampsell and Marchand " just stood there," id., and the employee was not disciplined for the verbal assault. In another incident, another coworker, David Pyanowski, apparently attempted to bait Turley into striking him, calling Turley a " black bitch," a " cry baby," and a " black piece of shit," and saying, " Why don't you get your b[l]ack ass out of here. Get the fuck out of here. We don't want you here anyway." 3 Trial Tr. 82. When Turley and a union representative went to report the incident, they found Pyanowski and Sampsell laughing about the confrontation in Sampsell's office. Pyanowski was not disciplined for his behavior.
During the multiyear period in which this harassment took place, only two employees were disciplined for their roles in the abuse. Frank Pelc was suspended for three days for painting the " King Kong" graffiti in January 2006, and for another two days the following month for threatening to " deal with [Turley] on the outside." 4 Trial Tr. 19. In 2007, another employee received a five-day suspension for asking, in reference to Turley, " Do I have to work with that black man?" 2 Trial Tr. 110-11. The defendants have contended that their efforts to root out further culprits were frustrated by a " code of silence" among the workers, 1 Trial Tr. 231, but they have not explained why employees such as Pyanowski went unpunished for hostile acts of which the supervisors were aware.
Several witnesses testified that management seemed uninterested in addressing the ongoing harassment. Turley testified that multiple calls to the company's complaint telephone line, " Alertline," met with no response or investigation. Company managers, including Sampsell, also were unresponsive to the efforts of local police to investigate the continuing course of threats and harassment. Detective Daniel Cardi testified that he repeatedly asked Sampsell and other plant managers for access to surveillance video and other records of the company's investigations. Each time, managers told Cardi that they would have to check with the company's legal department, and failed to follow up.
Sampsell did, however, begin to monitor Turley closely after the complaints started. After Turley had filed suit in federal court, Sampsell surreptitiously installed two cameras trained on Turley's workstation. Although Sampsell testified that the cameras were meant to detect the persons responsible for harassing Turley, it is undisputed that he did not inform Turley as to their presence; indeed, he initially denied it. After the cameras were removed, a spray-painted eyeball appeared on the wall where one of the cameras had been.
Sampsell also retained a private investigator to run a background check on Turley. At trial, Turley's counsel reminded Sampsell that, in an earlier deposition, he had testified that he ran the background check because he was looking for a felony or other offense in Turley's history. Sampsell did not deny saying this, and admitted that his recollection would have been better at the time of the deposition than it was at the time of trial. The defendants did not object to this exchange, and it therefore became part of the record that the jury could consider.
Effects on Turley
At trial, the union representative testified that between 2006 and 2008, inclusive, Turley, " was losing it." 1 Trial Tr. 191. Turley's psychologist noted that Turley suffered serious panic attacks and engaged in other abnormal behavior. The psychologist diagnosed Turley with a short-term adjustment ...