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Click here for the full text of this decision FACTS:Eight plaintiffs, employees of Kansas City Southern Railway Co. (KCSR), sued KCSR under the 1964 Civil Rights Act and 42 U.S.C. �1981, alleging that KCSR subjected them to a racially hostile work environment. Plaintiffs alleged that they encountered repeated instances of racially derogatory acts in KCSR’s diesel shop in Shreveport, La., including, inter alia, a wire hanging near the workshop that allegedly had been bent to form the shape of a noose; racial graffiti on the workshop walls; racially derogatory comments and threats, both spoken and written; and transfers to unwanted night and weekend shifts when employees objected to the comments and to other racially motivated activity. A first trial ended in a mistrial when the jury failed to reach a verdict. At the second trial, a jury found that KCSR had created a hostile work environment and failed to show by a preponderance of the evidence that it had corrected the racially derogatory behavior. It awarded no compensatory damages but awarded $125,000 in punitive damages to each plaintiff. The district court’s judgment incorporated the jury award and additionally awarded each plaintiff $1 in nominal damages. The court denied KCSR’s motion for judgment as a matter of law and alternative motion for a new trial. On appeal, KCSR urged the U.S. 5th Circuit Court of Appeals to overturn the judgment entered upon the jury verdict of punitive damages awarded under Title VII and �1981, because there was no award of compensatory damages. HOLDING:Affirmed. The court first sought to determine whether a constitutional violation occurred in the dispute in which case, the court stated, a sole award of punitive damages would be permissible. The court found that the trial court submitted questions to the jury that asked the jury if it found by a preponderance of the evidence that each plaintiff was subjected to a racially hostile work environment. The jury answered yes for each plaintiff, and it also answered no the question of whether KCSR exercised reasonable care to prevent and promptly correct “any racially harassing behavior.” The trial court, however, did not instruct the jury to address whether a constitutional violation occurred. The court noted that Title VII is valid under the enabling clause of the 13th Amendment. But the court further stated that “[a] constitutional grant of power to Congress in enacting a statute does not require that a statute directly incorporate a constitutional principle.” Thus, the court found that although �1981 and Title VII more generally arise from the powers granted to Congress by the 13th Amendment and embody its principles, the jury finding pursuant to these statutes and its instructions did not amount to a finding of a constitutional wrong. The court’s conclusion that the jury did not find a constitutional violation left it to resolve “whether the punitive damages award coupled with the district judge’s grant of $1 in nominal damages can stand alone.” The court noted that it has “upheld jury awards of punitive damages without a finding of a constitutional violation or accompanying compensatory damages, while skirting the underlying constitutional question of whether such awards are permissible.” But the court found that other federal appeals courts have explicitly upheld punitive damages awards without an accompanying award of compensatory damages or backpay in Title VII cases. Specifically, the court found that “our sister circuits have relied on a textual reading of Title VII, finding that”nothing in the plain language of � 1981a conditions an award of punitive damages on an underlying award of compensatory damages. . . . Extra-statutory requirements for recovery should not be invented.’” Unlike the Fair Housing Act, the court stated, Title VII specifically provides for punitive damages and for a cap on these damages. Title VII’s plain language, the court stated, points to congressional acceptance of independent awards of punitive damages in Title VII actions. It contains a clause providing that “[a] complaining party may recover punitive damages under this section against a respondent” if that party proves certain conditions � namely discrimination with “malice or with reckless indifference” to federal rights. Legislative history, the court stated, provides additional guidance but does not clarify congressional purpose regarding the necessity of compensatory damages attending punitive damages. The legislative history, the court stated, showed that Congress intended to increase the remedies available to complainants in Title VII cases in its effort to prevent discrimination in the workplace. In sum, the court found that the text of Title VII, as amended in 1991, and its history demonstrated that Congress did not require actual damages to accompany punitive damages in Title VII actions. But the text did not show whether Congress anticipated that punitive damages would be awarded independently. Thus, the court looked to common law to answer the question. Injury that results from discrimination under Title VII, the court noted, is often difficult to quantify in physical terms. Preventing juries, the court stated, from awarding punitive damages when an employer engaged in reprehensible discrimination without inflicting easily quantifiable physical and monetary harm would quell the deterrence that Congress intended in the most egregious discrimination cases under Title VII. Moreover, the court found it unseemly that a defendant who engages in malicious or reckless violations of legal duty would escape either the punitive or deterrent goal of punitive damages “merely because either good fortune or a plaintiff’s unusual strength or resilience protected the plaintiff from suffering harm.” Indeed, the court found that “the federal common law recognizes the importance of jury discretion to award punitive damages.” The court found that the awards of punitive damages in the case did not violate due process. The combination of the statutory cap and high threshold of culpability for any award, the court stated, confines the amount of the award to a level tolerated by due process. In addition, the court stated, there was no indication that the jury awards resulted from jury bias or insufficient evidence of malice. With respect to the district court’s award of nominal damages of $1 to each plaintiff, the court found such formalities to be unnecessary. Because Title VII caps the award of actual or punitive damages, the court did not require a ceremonial anchor of nominal damages to tie to a punitive damages award. OPINION:Higginbotham, J.; Higginbotham, Wiener and Garza, JJ.

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