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In a case of vital concern to New York City and municipalities statewide, the Court of Appeals on Tuesday will consider whether the city is liable for punitive damages in a sexual harassment lawsuit. Krohn v. New York City Police Department has immediate million-dollar implications for New York, and potentially far greater implications for the city and other municipalities in the future. It arises at a time when Mayor Michael R. Bloomberg’s administration and municipal authorities across the state are lobbying for legislation that would ease their actual and potential liability, primarily in torts. The case comes to Albany via the federal courts, where a civilian employee of the New York City Police Department won a $1 million punitive damage award against the city under the Human Rights Law. After the trial judge set aside the punitive damage award, the 2nd U.S. Circuit Court of Appeals asked the state’s highest court to advise on whether such damages are available. The statute may imply the availability of such a remedy, but it does not explicitly permit punitives against the city, according to the briefs. At issue before the Court of Appeals is whether the city implicitly waived its immunity to punitive damages. Local government lobbying groups, in support of the city, are urging the Court to stand by the time-honored principle that the imposition of punitive damages against a municipality is contrary to public policy in that it punishes taxpayers while yielding little if any deterrent force. On the other hand, amici for the plaintiff contend that the statute clearly contemplates punitive damages against the city — even if it is not spelled out in chapter and verse — and that the threat of such awards is necessary to deter sexual harassment in the government workplace. PUNITIVE DAMAGES Krohn, titled after a bankruptcy trustee, involves a woman named Alli Katt who worked for the New York Police Department in the early 1990s. Katt brought a human rights suit against her former supervisor, Lieutenant Anthony DiPalma, and the city, alleging sexual harassment and a sexually hostile work place. A Southern District jury awarded Katt $400,000 in compensatory damages against DiPalma and the city. It tacked on a $1 million punitive award against the city. Southern District Judge Gerard E. Lynch set aside the punitive damage award on the grounds that such damages are not expressly authorized under the Human Rights Law. The 2nd Circuit noted that the statute does indeed include punitive damages, but it does not evince “an overt intent to subject municipalities to” such awards. On appeal, the city’s attorney, Assistant Corporation Counsel Scott Shorr, relies primarily on the argument that the statute, while clearly creating a private cause of action and clearly permitting punitive damages, does not specifically authorize punitives against the city. Absent clear, expressed, unequivocal language, Shorr maintains, the court should not conclude that the city intended to divest itself of common-law sovereignty. He is joined by the New York State Conference of Mayors and the County Attorneys Association of the State of New York. David A. Kotler, a Princeton, N.J., attorney representing the appellant, counters that a fair reading of the statute and its history suggests the provision for punitive damages was meant to include any defendant, including the City of New York.

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