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Graffiti Case Pushes for More Punitives
2013-06-14 03:47:06 PM
SAN FRANCISCO It could be some of the most expensive bathroom graffiti in history.
Arizona copper miner Angela Aguilar was forced to observe a vulgar drawing of herself, along with the words "put your penis here" every time she used the mine's portable toilet. The mine's failure to get rid of the graffiti, plus some unwanted sexual advances by Aguilar's supervisor, led to an $868,751 sexual harassment verdict.
There was a catch, though, and it could lead to new U.S. Court of Appeals for the Ninth Circuit law on punitive damages in Title VII workplace discrimination cases.
The jury awarded zero compensatory damages and $1 in nominal damages. The remaining $868,750 was for punitives. Even with the trial judge reducing it to $300,000, that's many orders of magnitude beyond the maximum 9-to-1 ratio counseled by the U.S. Supreme Court.
On Wednesday, a Ninth Circuit panel featuring the court's newest judge and one of its most influential veterans wrestled with the ratio whether it should be 9-to-1 as suggested by BMW of North America v. Gore; 2,500-to-1 as allowed by the Ninth Circuit in an exceptional case, or 300,000-to-1 because Title VII puts employers on notice of specific statutory penalties.
"This is 300,000-to-1," said Judge Diarmuid O'Scannlain, a 1986 appointee of President Ronald Reagan. "And Gore tells us to be concerned if the ratio is two digits."
But, said Obama appointee Andrew Hurwitz, "Let's assume it's one of those rare cases" that doesn't fall under the Gore guidelines. "What is the appropriate punitive damages award?"
"That's the million-dollar question," acknowledged David Barton of Phoenix's BurnsBarton, representing mine operator ASARCO.
"I think you want to go in the other direction, counsel," O'Scannlain cautioned.
"Or the $300,000 question," Hurwitz said.
"The $9 question," Barton clarified.
Aguilar and the state of Arizona sued ASARCO in 2008. Aguilar says she complained to management about two different supervisors during her yearlong tenure as a car loader at a mine near Arizona. One supervisor made unwanted sexual advances and another was verbally hostile, but management ignored her. When Aguilar worked at a filter plant the company set up a portable toilet to accommodate her, but someone drew a picture of a naked woman with Aguilar's name on it, along with the suggestion about what to do with one's penis.
"It's really an affront to personal dignity and the integrity of the individual," Aguilar's attorney, Jenne "Sandy" Forbes of Tucson's Waterfall, Economidis, Caldwell, Hanshaw & Villamana, argued Wedneday in Arizona v. ASARCO, 11-17484.
ASARCO argues that Aguilar is complaining about isolated incidents, the supervisors' conduct was relatively mild, and the company did take action. Aguilar was at the filter plant only a brief time and actually used the portable toilet on only five occasions, ASARCO says. "There's graffiti everywhere in this country," Barton argued Wednesday. "One cannot eliminate from everybody's hands the Magic Markers of idiots."
The judges seemed likely to uphold the harassment finding, as they focused almost all their attention on the punitive damages issue, sounding at times like con law professors and at other times like settlement judges.
"What I'm interested in is the context of Title VII," Hurwitz told Barton. The reason Gore limited punitives to nine times compensatories was to provide defendants notice about the maximum penalties they could face, he said. But Title VII's $300,000 maximum cap on damages provides the notice. The Fifth Circuit has upheld awards of $125,000 against nominal damages on those grounds, Hurwitz noted.
"We have a statute that itself provides for punitive damages," Hurwitz added. "How is the purpose of the statute served if the jury is limited to 10 bucks?"
O'Scannlain sounded willing to go beyond $10, but not to $300,000. "That will be the largest punitive damages [ratio] approved by a court since Gore," he said. "And it raises some troubling concerns about just how far one can go."
Barton pointed out that in a 2008 false arrest case involving nominal damages, the Ninth Circuit was unwilling to move beyond a ratio of 2,500-to-1 for punitive damages. And the conduct in that case, Mendez v. County of San Bernardino, was truly reprehensible, he argued. "You compare these facts to Mendez and I think you get a number that is south of 2,500," he said.
Hurwitz didn't sound inclined to go that low, but repeatedly pressed plaintiffs attorney Forbes for a compromise number. "Maybe it's an unanswerable question, I haven't gotten an answer yet," Hurwitz said at one point. "Why is this an $800,000 case and not a $100,000 case?"
"I don't have a suggestion, judge," she said.
At the same time Hurwitz, who clearly enjoys the give-and-take of argument, said he was skeptical of Barton's argument that "we start with 300[,000], and 300 is the worst case in the world, and we factor down."
"That is the maximum this court is ever going to be able to award," Barton said, moving off his $2,000 position. "If it says in this case, that this is a $300,000 case, there will never, ever be a case that is entitled to less. And that's a problem for this court."
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