|
|
http://laws.findlaw.com/4th/011833p.html |
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
------------------------------------------------*
ADRIENNE C. CORTI,
Plaintiff-Appellee,
v.No. 01-1833
STORAGE TECHNOLOGY CORPORATION,
Defendant-Appellant.
------------------------------------------------*
Appeal from the United States District Court for the District of Maryland, at Greenbelt. Walter E. Black, Jr., Senior District Judge. (CA-97-608-B)
Argued: April 3, 2002
Decided: September 18, 2002
Before NIEMEYER, KING, and GREGORY, Circuit Judges.
____________________________________________________________
Affirmed by published opinion. Judge Gregory wrote the opinion, in
which Judge King joined. Judge Niemeyer wrote a concurring opin-
ion.
____________________________________________________________
COUNSEL
ARGUED: Stephen Michael Silvestri, MILES & STOCKBRIDGE,
P.C., Baltimore, Maryland, for Appellant. Patricia Ann Smith, LAW
OFFICES OF PATRICIA A. SMITH, Alexandria, Virginia, for
Appellee. ON BRIEF: Suzzanne W. Decker, MILES & STOCK-
BRIDGE, P.C., Baltimore, Maryland, for Appellant.
____________________________________________________________
OPINION
GREGORY, Circuit Judge:
Adrienne Corti brought suit pursuant to Title VII of the Civil
Rights Act of 1964, 42 U.S.C. §§ 2000(e) et seq., against Storage
Technology Corporation (StorageTek) for gender based employment
discrimination after she was demoted. A jury returned a verdict in
favor of Corti, awarding her $100,000 in punitive damages, but no
compensatory damages. On appeal, StorageTek argues, inter alia, that
the district court erred in denying its Rule 50(a) motion for judgment
as a matter of law and that the jury's award of punitive damages can-
not stand without an award of compensatory damages.1 Finding no
error, we affirm.
I.
In 1993, Adrienne Corti was hired by StorageTek as a Financial
Services Manager (FSM) in its Silver Spring, Maryland office.
StorageTek is a Colorado-based company that manufactures, sells and
services storage devices for mainframe and network computer sys-
tems. As a FSM in StorageTek's Federal Systems Division, Corti
worked with sales representatives to structure transactions and
respond to federal bids. She engaged in price negotiations and lease
structuring, and worked towards a quota that was based in part on
sales revenue. Corti received a base salary, along with commissions
and bonuses.
____________________________________________________________
1 StorageTek also asserts that the district court erred in admitting a sub-
stantial amount of non-probative evidence and that this evidence preju-
diced the jury. Appellant's Opening Brief, 32-34. After thoroughly
reviewing the record, the applicable law, and the extensive briefs submit-
ted by the parties, and having had the benefit of oral argument, we find
no abuse of discretion in the court's admission of the challenged evi-
dence, see Bank of Montreal v. Signet Bank, 193 F.3d 818, 833 (4th Cir.
1999). We also find no abuse of discretion in the court's award of back
pay, see Dennis v. Columbia Colleton Medical Ctr., Inc., 290 F.3d 639,
651 (4th Cir. 2002); Brady v. Thurston Motor Lines, Inc., 753 F.2d 1269,
1273 (4th Cir. 1985), or in its award of pre-judgment interest, see Mak-
symchuk v. Frank, 987 F.2d 1072, 1077 (4th Cir. 1993), and we decline
to address these issues further.
2
Corti met her quota in her first year at StorageTek. In 1994, her
second year, she met her quota and was ranked the number one FSM
in the Mid-Atlantic region. For this, she became part of StorageTek's
"Master's Club," and was rewarded with a trip to Hawaii. In 1995,
Corti not only ranked number one in her region, she was StorageTek's
top FSM in the entire United States and Canada.
Despite her ability to meet and exceed quota, Corti encountered
problems at StorageTek, most stemming from her interactions with
District Sales Manager Edwin Hartman. Though she reported directly
to Curt Mikkelsen, the regional FSM, it was necessary for Corti to
work closely with Hartman and his sales representatives.2 The evi-
dence established that Hartman did not communicate well with Corti.
He failed to inform her about important meetings and he withheld key
account information. Hartman told Corti he had never worked with a
woman equal before, and he was used to having women working for
him. After one off-site function, when part of the team went to play
golf, Hartman told Corti and another woman sales representative that
they should go shopping because golf was a "guy thing." Corti's com-
plaints about Hartman to Mikkelsen and Bob Silk fell on deaf ears.
In late 1995, Silk and Hartman met with Corti to inform her that
her position had been eliminated. Silk informed Corti that the deci-
sion to remove her from her position was part of a reorganization.
Shocked and confused, Corti accepted a Customer Service Sales Rep-
resentative (CSSR) position, which was presented to her as her only
option to remain with the company.3
Corti later learned that her position was given to Curt Mikkelsen.
Because of a company-wide restructuring, Mikkelsen's regional FSM
position had been eliminated. Silk had decided to move Mikkelsen
____________________________________________________________
2 Both Hartman and Mikkelsen reported to Bob Silk, regional Vice
President for the Federal Systems Division
3 The new position was clearly a demotion, both in compensation and
status. Corti had no experience in sales, and as a CSSR, Hartman was her
direct supervisor. Her problems with Hartman continued, and Corti vol-
untarily sought a transfer to a different division. She was ultimately ter-
minated for poor performance.
3
into a FSM position, which meant that one of the three current FSMs
would lose his or her position to make room for Mikkelsen.
Of the three FSMs in the Federal Systems Division, Corti was the
only woman. The other two FSMs, Greg Tignor and Bill Rowan,
retained their FSM positions. Corti was told that her performance
evaluations were the reason for her demotion.4 These evaluations,
reviewed by Silk, were prepared by Mikkelsen, with Hartman's input.5
While Corti was ranked number one FSM in her region, and her
supervisors knew she would be a top FSM nationally in 1995, both
Tignor and Rowan had consistently experienced problems meeting
quota. The only time Tignor and Rowan reached quota was when the
company offered quota relief.
In February of 1997, Corti filed a complaint against StorageTek in
the United States District Court for the District of Maryland, alleging
sex discrimination arising out of StorageTek's decision to demote her.
After extensive discovery, StorageTek moved for summary judgment,
and the district court granted the motion. Corti appealed, and we
reversed, finding that the district court applied the wrong standard
under the McDonnell Douglas burden-shifting framework, and that
summary judgment was improper because Corti produced sufficient
evidence of pretext to place a material fact in dispute. Corti v. Storage
Technology Corp., 199 F.3d 1326 (4th Cir. 1999) (per curiam) (citing
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973)).
The case proceeded to jury trial in January of 2001. At the close
of Corti's case, StorageTek moved for judgment pursuant to Rule
50(a), asserting that Corti had not presented a legally sufficient evi-
dentiary basis on which to find in her favor. The court denied the
____________________________________________________________
4 The performance evaluations were allegedly based on objective stan-
dards (quota attainment), as well as on more subjective standards, such
as communication skills.
5 Corti presented substantial evidence of other discriminatory acts by
Silk, Mikkelsen and Hartman. StorageTek conceded that Silk and Mik-
kelsen were decision-makers in the removal of Corti from her FSM posi-
tion. The question of whether Hartman was also a decision-maker was
left to the jury.
4
motion. StorageTek renewed its motion at the close of all the evi-
dence, and the court again denied the motion.
The jury returned a verdict in favor of Corti, awarding her $0 com-
pensatory damages and $100,000 in punitive damages. After briefing
and further argument, the district judge issued a judgment order,
which included the jury's verdict and an award of $410,974.63 in
back pay and prejudgment interest. StorageTek moved to alter or
amend the judgment pursuant to Rule 59(e), challenging the district
court's calculation of back pay and interest. On May 23, 2001, the
district court issued an order denying StorageTek's motion. Storage-
Tek timely noted its appeal.
II.
StorageTek argues that the court erred in denying its Rule 50(a)
motion for judgment as a matter of law. It does not dispute that Corti
established a prima facie case for gender discrimination.6 Rather, it
asserts that Corti did not "present evidence that StorageTek's stated
reason for the RIF [reduction in force] (to downsize and eliminate a
layer of management) was false and that the real reason was her gen-
der." StorageTek misstates Corti's burden. Corti was not required to
____________________________________________________________
6 To establish a prima facie case for gender discrimination in a reduc-
tion in force (RIF) context, a plaintiff must show that 1) she was pro-
tected under Title VII, 2) she was selected from a larger group of
candidates, 3) she was performing at a level substantially equivalent to
the lowest level of that in the group retained, and 4) the process of selec-
tion produced a residual work force that contained some unprotected per-
sons who were performing at a level lower than that at which the plaintiff
was performing. See Mitchell v. Data Gen. Corp., 12 F.3d 1310, 1315
(4th Cir. 1993). Even though Mikkelsen, a male, was moved into a FSM
position when his regional FSM position was eliminated, seemingly
replacing Corti, this is nevertheless a force reduction case. Thus, rather
than showing that she was replaced by a man, Corti was required to dem-
onstrate that persons outside the protected class "were retained in the
same position or that there was some other evidence that the employer
did not treat [gender] neutrally" in deciding to demote her over one of
the other two male FSMs. Tuck v. Henkel Corp., 973 F.2d 371, 375, n.3
(4th Cir. 1992) (citing Herold v. Hajoca Corp., 864 F.2d 317, 319 (4th
Cir. 1988)).
5
show that StorageTek's reason for eliminating a layer of management
was a pretext, she was required to show that the excuse given for
choosing her for a demotion (her performance) was a pretext for discrim-
ination.7 See Rummery v. Illinois Bell Tel. Co., 250 F.3d 553, 557 (7th
Cir. 2001) (explaining that "even if a reduction in force is otherwise
legitimate (i.e. not simply an excuse to terminate [female] workers),
a plaintiff may establish pretext by showing that the specific reasons
given for including [her] in the reduction were pretextual.").
A district court should grant a motion for judgment as a matter of
law during a jury trial "if a party has been fully heard on an issue and
there is no legally sufficient evidentiary basis for a reasonable jury to
find for that party on that issue." Fed. R. Civ. P. 50(a). Judgment as
a matter of law is only appropriate if, viewing the evidence in the
light most favorable to the non-moving party, the court concludes that
"a reasonable trier of fact could draw only one conclusion from the
evidence." Brown v. CSX Transportation, Inc., 18 F.3d 245, 248 (4th
Cir. 1994). When reviewing a district court's denial of a Rule 50(a)
motion, this court applies the same standards de novo. Id.
The evidence here demonstrated that Corti was a top producer as
a FSM, and that she consistently outperformed the two male FSMs
who retained their positions. Corti's superiors knew she would be one
of the most profitable FSMs nationwide in 1995. Though a company
may base its decision to demote an employee on a number of factors,
the employee evaluations that were allegedly used by Silk in his deci-
sion to demote Corti were based in part on the subjective input of two
____________________________________________________________
7 Under the McDonnell Douglas framework, once the plaintiff estab-
lishes a prima facie case of discrimination, the defendant must respond
with evidence that it acted with a legitimate, nondiscriminatory reason.
See Murrell v. Ocean Mecca Motel, Inc., 262 F.3d 253, 257 (4th Cir.
2001) (citing St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 506-07
(1993)). If the defendant makes this showing, the plaintiff must then
present evidence to prove that the defendant's articulated reason was a
pretext for unlawful discrimination. Id. Although the evidentiary burdens
shift back and forth under the McDonnell Douglas framework, the "ulti-
mate burden of persuading the trier of fact that the defendant intention-
ally discriminated against the plaintiff remains at all times with the
plaintiff." Id. (citing Texas Dep't. of Cmty. Affairs v. Burdine, 450 U.S.
248, 253 (1981)).
6
managers who were shown to have problems with women.8 In the
light most favorable to Corti, the evidence established that Storage-
Tek's proffered reason for her demotion was "unworthy of credence,"
see Burdine, 450 U.S. at 256, and therefore a pretext for discrimina-
tion. Accordingly, the district court properly denied StorageTek's
motion for judgment as a matter of law.
III.
StorageTek further contends that error occurred here because the
jury awarded Corti $100,000 in punitive damages, but it awarded her
no compensatory damages. It asserts that compensatory damages are
required to support a punitive damage award in Title VII cases, and
the jury failed to follow the district court's punitive damages instruc-
tion. Because StorageTek failed to raise these issues before the trial
court, we review the allegations of error for plain error only. Taylor
v. Virginia Union University, 193 F.3d 219, 239 (4th Cir. 1999) (en
banc) (citing Owens-Illinois, Inc. v. Rapid Am. Corp. (In re Celotex),
124 F.3d 619, 630-31 (4th Cir. 1997)). Before we can exercise our
discretion to correct an error not raised below in a civil case, at a
minimum, the requirements of United States v. Olano, 507 U.S. 725
(1993), must be satisfied. Id. at 239-40. Thus, under Olano, Storage-
Tek must show that 1) there is an error, 2) the error is plain, 3) the
error affects substantial rights, and 4) the error seriously affects the
fairness, integrity or public reputation of judicial proceedings. Olano,
507 U.S. at 730. Here, because we find no error, StorageTek cannot
meet even the first prong of the Olano test.
The issue of whether punitive damages can be awarded in the
absence of any actual damages in a Title VII case is one of first
impression in this circuit. Because we are satisfied that the evidence
at trial was sufficient to support the punitive damages award9 and
____________________________________________________________
8 See ante, 3-4, n.5; see, e.g., Corti I, 199 F.3d 1326 (describingdeposi-
tion testimony substantially similar to witness testimony later admitted
at trial).
9 Before the Civil Rights Act of 1991, punitive damages were unavail-
able under Title VII. As part of the 1991 enactments, Congress added a
provision allowing Title VII plaintiffs to recover punitive damages when
7
because the district court awarded Corti back pay based on the jury's
finding of liability, we find no error in allowing the punitive damages
award to stand.10
Our holding is in accord with opinions of the First, Seventh and
Eleventh Circuits. See Provencher v. CVS Pharmacy, 145 F.3d 5, 11
(1st Cir. 1998); Hennessy v. Penril Datacomm Networks, Inc., 69 F.3d
1344, 1352 (7th Cir. 1995); EEOC v. W&O, Inc., 213 F.3d 600, 615
(11th Cir. 2000). These circuits have recognized, as we do, that noth-
ing in the plain language of § 1981a conditions an award of punitive
damages on an underlying award of compensatory damages. Hen-
nessy, 69 F.3d at 1352.
StorageTek relies heavily on this court's decision in People Help-
ers Found., Inc. v. Richmond, 12 F.3d 1321 (4th Cir. 1993), where we
held that punitive damages are not recoverable under the Fair Housing
Act, 42 U.S.C. § 3601 et seq., when compensatory damages have not
been awarded. In People Finders, the panel noted that a majority of
the states prohibit punitive damages when a fact finder fails to award
compensatory damages. Id. at 1327. It explained that the reasoning
supporting this majority rule is "the belief that punitive damages are
not appropriate in cases where a plaintiff has failed to demonstrate
actionable harm." Id. (citing James A. Ghiardi & John J. Kircher,
Punitive Damages: Law and Practice, § 5.37 (1985 and Supp. 1993)).
____________________________________________________________
it is shown that the defendant employer engaged in intentional discrimi-
nation with "malice or with reckless indifference to the federally pro-
tected rights" of the plaintiff. 42 U.S.C. § 1981a(b)(1); Anderson v.
G.D.C. Inc., 281 F.3d 452, 459 (4th Cir. 2002) (citing Kolstad v. Am.
Dental Ass'n, 527 U.S. 526, 534 (1999)).
10 The district judge instructed the jury that if it determined punitive
damages were appropriate, in fixing the amount, it "should consider the
following questions: How offensive was the conduct? What amount is
needed considering the defendant's financial condition to prevent future
repetition? Does the amount of punitive damages have a reasonable rela-
tionship to the actual damages awarded?" J.A. 768. We do not read this
instruction as a specific command to the jury that it could not award
punitive damages without first awarding actual damages. Thus, we do
not accept StorageTek's contention that the jury did not follow the dis-
trict court's instruction.
8
We stated that "to hold otherwise would create a windfall by allowing
the recovery of damages when no actionable harm has been suffered."
Id. The crucial difference between People Helpers and the case at
hand is that People Helpers involved a suit under the Fair Housing
Act, which, unlike Title VII, does not contain a provision for an
award of back pay.11 We find that a loss of income due to discrimina-
tion amounts to "actionable harm."
Title VII's back pay remedy is "a `make-whole' remedy that
resembles compensatory damages in some respects." Landgraf v. USI
Film Products, 511 U.S. 244, 253 (1994); see also Albemarle Paper
Co. v. Moody, 422 U.S. 405, 418-22 (1975). While the jury awarded
Corti no compensatory damages, after the jury found StorageTek lia-
ble for unlawful discrimination, the district court awarded Corti over
$410,000 in back pay and interest. J.A. 1046.
Unlike compensatory damages at common law, compensatory
damages under § 1981a are defined to omit back pay, which is "the
most obvious economic damage in a wrongful discharge case." Hen-
nessy, 69 F.3d at 1352. The omission occurs under the 1991 Act to
prevent double recovery. See Landgraf, 511 U.S. at 253. For this rea-
son, the court instructed the jury that "[i]n calculating damages, you
may not consider any wages or benefits that Ms. Corti may have lost.
The award of lost pay or benefits should you find StorageTek liable,
will be determined by the Court." J.A. 767. We believe that the award
of back pay clearly establishes that Corti suffered injury.12 Because
back pay awards serve a similar purpose as compensatory damage
awards, the "familiar tort mantra" that punitive damages may not be
assessed in the absence of compensatory damages will not aid
StorageTek in this case. See Hennessy, 69 F.3d at 1352.13 In Title VII
____________________________________________________________
11 A prevailing plaintiff in a Title VII case is entitled to back pay. See
42 U.S.C. § 2000e-5(g).
12 StorageTek has not offered, nor can we find, any reason to disallow
punitive damages merely because the court, not the jury, is responsible
for awarding back pay under the statutory scheme.
13 After Hennessy, the Seventh Circuit went further, holding that a
punitive damage award survives even without an award of back pay. See
Timm v. Progressive Steel Treating, Inc., 137 F.3d 1008, 1010 (7th Cir.
1998); see also Cush-Crawford v. Adchem Corp., 271 F.3d 352, 357 (2d
Cir. 2001). Because back pay was awarded in the case at hand, we need
not reach this question today.
9
cases, a jury's punitive damage award will stand even in the absence
of compensatory damages if back pay has been awarded.
IV.
For the foregoing reasons, we affirm the judgment of the district
court.
AFFIRMED
NIEMEYER, Circuit Judge, concurring:
I write separately to clarify what, I conclude, we hold in Part III
and to explain my support of the judgment reached there.
With respect to the standard of review, it remains the law of this
circuit that when a party to a civil action fails to raise a point at trial,
that party waives review of the issue unless there are exceptional or
extraordinary circumstances justifying review. See Canada Life
Assurance Co. v. Estate of Lebowitz, 185 F.3d 231, 239 (4th Cir.
1999) (holding that insurance company's failure to raise specific
interpretation of contract at trial resulted in a waiver of its argument
on appeal); United States v. Vanhorn, 20 F.3d 104, 114 (4th Cir.
1994) (finding that physician had waived her argument that she was
entitled to partial credit for her service under the National Health Ser-
vice Corps program because she "did not raise this issue before the
agency or the court below, and has not pointed to any exceptional cir-
cumstances justifying our consideration of it now"); Skippy, Inc. v.
CPC Int'l, Inc., 674 F.2d 209, 215 (4th Cir. 1982) ("In the absence
of exceptional circumstances, questions not raised and properly pre-
served in the trial forum will not be noticed on appeal"); Malbon v.
Pa. Millers Mut. Ins. Co., 636 F.2d 936, 940-41 (4th Cir. 1980)
(explaining reasons for requiring parties to raise all arguments at trial
and concluding that "[i]t is elementary that an issue not raised below
will not, absent extraordinary circumstances, . . . be considered on
appeal"). When a case meets the necessary criterion of exceptionality
or extraordinariness, then we may notice the error and analyze it
under the plain-error standard that we apply in the opinion for the
court. The court's opinion fails, however, to address this necessary
10
prerequisite for our consideration of an issue that was not raised
below. While the issue in this case may well be a candidate to meet
the exceptionality or extraordinariness criterion, the fact that the
court's opinion does not explicitly address it cannot be construed as
overruling precedent set by a prior panel of this court. Only an en
banc decision could do that. See Mentavlos v. Anderson, 249 F.3d
301, 312 n.4 (4th Cir. 2001); Bell v. Jarvis, 236 F.3d 149, 159 (4th
Cir. 2000) (en banc).
On the substance of the punitive-damages issue, I write separately
to clarify our holding that punitive damages are appropriate in this
Title VII case because they accompany an award of lost wages. Such
a holding is in accordance with the common-law rule, to which we
continue to adhere in Title VII cases, that punitive damages are not
appropriate unless they accompany compensatory damages.
In this case, the jury awarded Corti $100,000 in punitive damages,
but no compensatory damages. The court, however, awarded Corti
more than $410,000 in backpay and interest. StorageTek argues that
Corti is not entitled to the punitive damages award because the jury
did not award her compensatory damages. This argument rests on the
general rule that punitive damages are prohibited in the absence of
compensatory damages. See, e.g., People Helpers Found., Inc. v.
Richmond, 12 F.3d 1321, 1327 (4th Cir. 1993); Provencher v. CVS
Pharmacy, 145 F.3d 5, 11 (1st Cir. 1998). While the rule is an estab-
lished one, StorageTek's argument fails in application. Our holding
that Corti may receive punitive damages is grounded on the fact that
the district court awarded her lost wages, and we do not violate the
general rule that punitive damages must be supported by compensa-
tory damages in so holding.
Title VII authorizes punitive damages when a defendant discrimi-
nates against the plaintiff "with malice or with reckless indifference
to the federally protected rights of an aggrieved individual." 42
U.S.C. § 1981a(b)(1). That provision does not address, one way or the
other, whether the common-law rule - that compensatory damages
must be proved as a condition to an award of punitive damages -
applies. Section 1981a does, however, remove from the jury's consid-
eration of compensatory damages any award for "backpay." See 42
U.S.C. § 1981a(b)(2). This provision was necessary to avoid double
11
recovery for backpay because 42 U.S.C. § 2000e-5(g)(1) already pro-
vided for backpay. See Landgraf v. USI Film Prods., 511 U.S. 244,
253 (1994); Provencher, 145 U.S. at 11; Hennessy v. Penril Data-
comm Networks, Inc., 69 F.3d 1344, 1352 (7th Cir. 1995). Thus,
under the scheme established under Title VII, the court awards back-
pay, and the jury awards other compensatory damages. The fact that
the statute separates these factfinding responsibilities does not suggest
that Congress abolished the general requirement that some form of
compensatory damages be awarded before punitive damages be
awarded.
Indeed, backpay awards are compensatory in nature and are, in
fact, "the most obvious economic damages in a wrongful discharge
case." Hennessy, 69 F.3d at 1352; see also Landgraf, 511 U.S. at 253
(recognizing that backpay "is a `make-whole' remedy that resembles
compensatory damages in some respects"). In this case, Corti was not
awarded compensatory damages as those damages are defined in
§ 1981a, but she was awarded damages to compensate her for the loss
of income resulting from her employer's discriminatory tactics.
Because Corti received a backpay award compensating her for her
lost wages, she received "compensatory damages" and thereby
became authorized to receive punitive damages in the circumstances
prescribed by Title VII.
With these modest clarifications, I am pleased to concur.
12