The full case caption appears at the end of this opinion.
LOKEN, Circuit Judge. Lori Todd, a former sales representative for Ortho Biotech, Inc. (“Ortho”), wassexually assaulted by James Moreland, Ortho’s Director of Trade Relations, whileattending Ortho’s 1992 national sales meeting in Boston. Todd sued Ortho, claimingMoreland’s assault constituted a hostile work environment violation of Title VII ofthe Civil Rights Act of 1964, 42 U.S.C. �� 2000e et seq. (1988), and actionablesexual harassment under the Minnesota Human Rights Act, MINN. STAT. �� 363.01et seq. A jury found Ortho liable under Title VII, and the court imposed additionaldamages under the state law claim. Ortho appealed. Based upon the jury’s findingthat Ortho took prompt and effective remedial action after learning of the assault, wereversed. See Todd v. Ortho Biotech, Inc., 138 F.3d 733 (8th Cir. 1998). Toddpetitioned the Supreme Court for a writ of certiorari, and that Court vacated ourjudgment and remanded for further consideration in light of newly decidedBurlington Industries, Inc. v. Ellerth, 118 S. Ct. 2257 (1998), and Faragher v. City ofBoca Raton, 118 S. Ct. 2275 (1998). See Todd v. Ortho Biotech, Inc., 119 S. Ct. 33(1998) (mem.). At our request, the parties submitted supplemental briefs in whichOrtho argues we should reinstate our prior judgment because the new standard ofEllerth and Faragher does not apply, and Todd argues the new standard does applyand requires that we now affirm. For the following reasons, we remand Todd’s TitleVII hostile work environment claim to the district court for further proceedings. I. The Title VII Claim. In Ellerth and Faragher, the Supreme Court articulated a new standard fordetermining when a supervisor’s sexual harassment subjects the employer to hostilework environment liability under Title VII:
An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence, see Fed. Rule Civ. Proc. 8(c). The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.Ellerth, 118 S. Ct. at 2270. This holding overrules the Eighth Circuit standard weapplied in Todd, 138 F.2d at 736, at least in some situations.
A. To determine the impact of Ellerth and Faragher on our initial decision, wemust first consider whether the new Ellerth/Faragher standard applies to the facts ofthis case. That question is problematic for at least two reasons. 1. In deciding Todd, 733 F.3d at 736, this court assumed, as did Ortho, that asingle severe act of sexual harassment can, without more, constitute a hostile workenvironment that is actionable under Title VII. Neither the Supreme Court nor thiscourt has squarely addressed this issue, and portions of the opinions in Ellerth andFaragher cast doubt on its resolution. The Supreme Court’s new affirmative defensewas adopted to avoid “automatic” employer liability and to give credit to employerswho make reasonable efforts to prevent and remedy sexual harassment. See Faragher,118 S. Ct. at 2291-92. But that defense, adopted in cases that involved ongoingsexual harassment in a workplace, may not protect an employer from automaticliability in cases of single, severe, unanticipatable sexual harassment unless, forexample, the harassment does not ripen into an actionable hostile work environmentclaim until the employer learns that the harassment has occurred and fails to takeproper remedial action. Cf. Indest v. Freeman Decorating, Inc., 164 F.3d 258, 265(5th Cir. 1999). Though this is an issue of law, it is the kind of issue that is moreproperly addressed by the district court in the first instance. 2. The new Ellerth/Faragher vicarious liability standard is limited to cases ofharassment by a “supervisor with immediate (or successively higher) authority overthe employee.” The Court did not further explain what it meant by “supervisor.”Ortho argues that Moreland was not a supervisor under Ellerth and Faragher becausehe was not in Todd’s “chain of command” at the time of the assault. Todd respondsthat Moreland had retained supervisory authority over Todd and, at any rate, appearedto Todd to possess such authority. The contours of the term “supervisor” as used inthe new Ellerth/Faragher standard is another question more appropriately addressedby the district court in the first instance. B. Assuming the new Ellerth/Faragher standard applies to this case, there arefact questions that we cannot answer on the present record and that prevent us fromdeciding, as a matter of law, which side should prevail. 1. The district court’s vicarious liability instruction did not accurately forecastthe new Ellerth/Faragher standard. The court instructed:
An employer is liable for the sexual harassment committed by its supervisor if the supervisor used his actual or apparent authority to further the harassment, or if he was otherwise aided in accomplishing the harassment by the existence of his supervisory powers. . . . Apparent authority means such authority as an employer knowingly permits a manager to assume, or which it holds the manager out as possessing; such authority as the manager appears to have by reason of his or her actual authority; or such authority as a reasonably prudent person, using diligence and discretion, would naturally suppose the manager to possess.
In Ellerth and Faragher, the Supreme Court stated that “[a]pparent authority analysistherefore is inappropriate in this context.” Ellerth, 118 S. Ct. at 2268. Because thejury may have found Ortho liable for Moreland’s harassment solely by reason of hisapparent authority, we cannot conclude that the jury’s verdict was tantamount to afinding of liability under Ellerth and Faragher. On the other hand, had the jury beenproperly instructed in accordance with the new standard, the evidence appearssufficient to support a verdict in Todd’s favor. Thus, Ortho is entitled to a new trial,but not judgment as a matter of law, on this issue. 2. The district court’s instructions did not ask the jury whether Ortho provedthe Ellerth/Faragher affirmative defense, an essential component of the new standard.The jury found that Ortho took timely and effective action in response to Moreland’sassault, the affirmative defense under prior Eighth Circuit law. Because the law haschanged dramatically on this key issue, our review of the present record does notreveal whether a reasonable jury could have found for Ortho on the new affirmativedefense. In these circumstances, the appropriate disposition is to remand for a newtrial. See Hill v. International Paper Co., 121 F.3d 168, 177 (5th Cir. 1997). This survey of certain issues is intended only to illustrate why Todd’s Title VIIhostile work environment claim must be remanded. Our discussion should not beread as dictating a particular resolution of these issues, nor does it foreclose theparties from raising on remand additional issues concerning the proper application ofEllerth and Faragher to this case. II. The State Law Claim. Though Minnesota courts often look to Title VII case law in applying theMinnesota Human Rights Act, our prior decision granting Ortho judgment as a matterof law on Todd’s state law claim was based upon a Minnesota statute that definessexual harassment as requiring proof that “the employer knows or should know of theexistence of the harassment and fails to take timely and appropriate action.” MINN.STAT. � 363.01, subd. 41(3). If presented with this case, we conclude the MinnesotaSupreme Court would apply the plain language of that statute, rather than the contrarystandard of Ellerth and Faragher. Therefore, we adhere to our prior decision thatOrtho is entitled to judgment as a matter of law on Todd’s state law claim. III. Conclusion. The judgment of the district court is reversed and the case is remanded to thedistrict court (a) for further proceedings not inconsistent with this opinion on LoriTodd’s Title VII claim for hostile work environment sexual harassment, and (b) withinstructions to dismiss Ms. Todd’s sexual harassment claim under the MinnesotaHuman Rights Act. The district court’s order awarding attorneys’ fees is vacated. RICHARD S. ARNOLD, Circuit Judge, concurring in the judgment. I agree that a remand is appropriate in this case, at least to allow the employerto try to prove the new affirmative defense established by the recent Supreme courtopinions in Ellerth and Faragher. There are a few other aspects of today’s opinion,however, with which I am not in entire agreement, and I desire to add a few words ofexplanation. First, I have no doubt that a single severe act of sexual harassment can amountto a hostile work environment actionable under Title VII. I see nothing in Ellerth orFaragher to negative this proposition. The Court expresses the fear that employerliability might be automatic if a single severe act is allowed to create liability. Thisresult, the Court says, would be inconsistent with the Supreme Court’s reasons forcreating the new affirmative defense. The affirmative defense set out in the tworecent Supreme Court opinions, however, is not always a complete defense toliability. It can also be a defense to damages only. See Ellerth, 118 S. Ct. at 2270.If a supervisor abuses his authority to commit a sufficiently severe act of harassment,the employer’s affirmative defense, if established, should serve to reduce thedamages, but I don’t understand why it should always erase the tort completely. Second, I cannot agree that apparent-authority analysis would be inappropriatein the present case. Maybe it’s just a question of words, but if the plaintiff reasonablybelieved that the supervisor in this case, despite not being any longer in the directchain of command, still possessed a substantially equivalent power to affect hercareer, that would be enough, in my view, for Mr. Moreland to be treated as a”supervisor” within the meaning of the new rule. The Court quotes a passage fromEllerth as holding that “[a]pparent authority analysis . . . is inappropriate in thiscontext.” Id. at 2268. When the entire paragraph in which this sentence appears isread, however, it seems that the Supreme Court was not laying down a flat rule oflaw. A fuller quotation from the Ellerth opinion should make this clear:
In the usual case, a supervisor’s harassment involves misuse of actual power, not the false impression of its existence. Apparent authority analysis therefore is inappropriate in this context.
The present case may be an “unusual” one in the terms of this analyticalapproach. Here, Mr. Moreland was not in the direct chain of command, but he wasstill a high ranking official in the area of sales, and, as I have said, the plaintiff mayreasonably have believed that he had not lost much of his power, if any. It seems tome not inappropriate to characterize this approach as involving the concept ofapparent authority. I believe the Court unduly restricts the analysis when it rulesapparent authority out as a matter of law. With these observations, I concur in the judgment remanding this case forfurther proceedings. A true copy. Attest: CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
LORI A. TODD, Plaintiff – Appellee, v. ORTHO BIOTECH, INC., Defendant – Appellant. Nos. 97-1126 and 97-1220 United States Court of Appeals for the Eighth Circuit Appeal from the United States District Court for the District of Minnesota. Submitted: December 16, 1998 Filed: April 30, 1999 Before RICHARD S. ARNOLD, LOKEN, and HANSEN, Circuit Judges.