Finding that a lower court gave improper instruction on punitive damages in an especially egregious sexual harassment case against the Atlantic City Police Department — by failing to tell the jury that it must find “actual participation by upper management or willful indifference” — the 3rd U.S. Circuit Court of Appeals has ordered a new trial on the punitive damages.

But the court upheld the compensatory damages award to Sgt. Donna M. Hurley — which was reduced from the jury’s $575,000 to $175,000 by the lower court — after rejecting a series of evidentiary and legal challenges waged by lawyers for the department and individual officers.

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