FILED
NOT FOR PUBLICATION JUN 16 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
EDWARD ALVARADO; JOHN No. 08-15935
AZZAM; TANDA BROWN; BERTHA
DUENAS; PERNELL EVANS; D.C. No. 3:04-cv-00098-SI
CHARLES GIBBS; JANICE LEWIS;
MARIA MUNOZ; KEVIN NEELY;
LORE PAOGOFIE; DYRONN MEMORANDUM *
THEODORE; LASONIA WALKER;
CHRISTOPHER WILKERSON,
Plaintiffs,
and
CHARLOTTE BOSWELL,
Plaintiff - Appellee,
v.
FEDERAL EXPRESS CORPORATION, a
Delaware corporation, DBA Fedex
Express,
Defendant - Appellant.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
EDWARD ALVARADO; JOHN No. 08-16088
AZZAM; TANDA BROWN; BERTHA
DUENAS; PERNELL EVANS; D.C. No. 3:04-cv-00098-SI
CHARLES GIBBS; JANICE LEWIS;
MARIA MUNOZ; KEVIN NEELY;
LORE PAOGOFIE; DYRONN
THEODORE; LASONIA WALKER;
CHRISTOPHER WILKERSON,
Plaintiffs,
and
CHARLOTTE BOSWELL,
Plaintiff - Appellant,
v.
FEDERAL EXPRESS CORPORATION, a
Delaware corporation, DBA Fedex
Express,
Defendant - Appellee.
Appeal from the United States District Court
for the Northern District of California
Susan Illston, District Judge, Presiding
Argued and Submitted May 12, 2010
San Francisco, California
Before: REINHARDT, W. FLETCHER and N.R. SMITH, Circuit Judges.
2
Defendant Federal Express Corporation (“FedEx”) appeals the judgment
entered for plaintiff Charlotte Boswell following a jury trial on her hostile work
environment, retaliation, and constructive discharge claims. Boswell cross-appeals
the district court’s post-trial decision capping the punitive damages award at
$300,000. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm the
judgment with the exception of the punitive damages award, and reverse and
remand for a new trial on punitive liability and damages.
FedEx argues that it is entitled to judgment as a matter of law because
Boswell’s complaint did not explicitly enumerate claims of sexual harassment,
retaliation, and constructive discharge. We hold that the district court did not
abuse its discretion in holding that Boswell could try these claims. As Federal
Rule of Civil Procedure 15(b)(2) makes clear, the failure to formally amend a
complaint is not fatal. Because FedEx had notice of Boswell’s theory, addressed
the merits of the claims in its summary judgment motion filed a year before the
scheduled trial date, and did not raise objections until one week before the
scheduled trial date, it impliedly consented to an effective amendment of the
complaint and trial on the claims. See Lone Star Sec. & Video, Inc. v. City of Los
Angeles, 584 F.3d 1232, 1235 n.2 (9th Cir. 2009); Hernandez-Loring v.
3
Universidad Metropolitana, 233 F.3d 49, 51 n.1 (1st Cir. 2000); Price v. Kramer,
200 F.3d 1237, 1249-50 (9th Cir. 2000).
FedEx appeals the district court’s failure to give business judgment and
reasonable person instructions. FedEx contends that a business judgment
instruction was needed to prevent the jury from second guessing FedEx’s
personnel decisions. We disagree. “[I]f the jury instructions set forth the essential
elements the plaintiff needs to prove, the district court’s refusal to give an
instruction explicitly addressing pretext is not reversible error.” Browning v.
United States, 567 F.3d 1038, 1041 (9th Cir. 2009). The district court properly
instructed the jury on the elements of the sexual harassment hostile work
environment claim. The instructions given would not have permitted the jury to
find for Boswell based merely upon finding that FedEx made an error in judgment,
but only if it found that she was subjected to discrimination. Nor did the district
court abuse its discretion in instructing the jury that Boswell needed to prove that
“a reasonable woman in the plaintiff’s circumstances would consider the working
environment to be abusive or hostile.” We have adopted a “reasonable woman”
standard for hostile work environment sexual harassment claims brought by female
plaintiffs. See Ellison v. Brady, 924 F.2d 872, 879 (9th Cir. 1991). There was no
error in the straightforward instruction given, which separately identified the
4
plaintiff’s need to prove the subjective and objective components of her claim.
Nor was there any need to further elaborate on the “reasonable woman standard” in
order for the jury to be able to apply it.
FedEx also challenges various aspects of the district court’s management of
the case and trial. We reject these challenges. The district court did not abuse its
discretion in refusing to let FedEx question Boswell about the absence of certain
allegations in her complaint. Given that the case had evolved significantly since
the complaint was filed, the district court was appropriately concerned about
confusion and unfair prejudice. FedEx suffered no prejudice, as FedEx’s counsel
was permitted to read relevant paragraphs of the complaint to the jury, highlighting
that Boswell’s original claims, focused largely on race, were different than those
ultimately tried.
Nor did the district court abuse its discretion in admitting the testimony of
two of Boswell’s co-workers regarding the sexual harassment they experienced at
the hands of the same perpetrator. “The sexual harassment of others, if shown to
have occurred, is relevant and probative of [defendant’s] general attitude of
disrespect toward his female employees, and his sexual objectification of them.”
Heyne v. Caruso, 69 F.3d 1475, 1479-81 (9th Cir. 1995). The co-workers’
testimony also corroborated Boswell’s testimony about her supervisor’s actions
5
towards her, and provided evidence of the supervisor’s retaliatory motive towards
female employees who did not submit to his advances.
As for the request to interview class members, the district court may not
have had the authority to bar interviews, see Wharton v. Calderon, 127 F.3d 1201,
1204 (9th Cir. 1997), but FedEx was not entitled to the requested order allowing it
to interview class members. Class counsel in Satchell, who represented the class
members in their own discrimination claims against FedEx, refused to consent.
Since the class members would have had the right to refuse to talk to FedEx in any
case, their attorneys had the right to refuse on their behalf.
FedEx also argues that substantial evidence did not support the verdict. We
disagree. We may only overturn the verdict “if the evidence, construed in the light
most favorable to the nonmoving party, permits only one reasonable conclusion,
and that conclusion is contrary to the jury’s verdict.” Harper v. City of Los
Angeles, 533 F.3d 1010, 1021 (9th Cir. 2008). Whether there is a sexually hostile
work environment is determined by looking at the totality of the circumstances.
Brooks v. City of San Mateo, 229 F.3d 917, 923 (9th Cir. 2000). Boswell presented
evidence that her supervisor attempted to kiss and hug her and other female
employees at every mandatory meeting, which took place as often as weekly when
Boswell was a full-time employee. The unwelcome “chest to breast” hugs made
6
Boswell feel embarrassed and humiliated, and the jury could conclude that a
reasonable woman in Boswell’s position would have felt the same way. Finally,
testimony about favoritism shown to employees who did cooperate, dual standards
for taking breaks and vacation time, and her supervisor’s bizarre behavior after
Boswell’s employment ended support a finding that the environment unreasonably
interfered with Boswell’s work performance.
As for the retaliation claim, there was testimony that Boswell told her
supervisor and her supervisor’s supervisor that she objected to the kissing and
hugging. Protected activity includes opposing a practice reasonably believed to be
unlawful, including making an informal complaint to a supervisor. See 42 U.S.C. §
2000e-3(a); Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 59 (2006);
Freitag v. Ayers, 468 F.3d 528, 541 (9th Cir. 2006); Ray v. Henderson, 217 F.3d
1234, 1240 n.3 (9th Cir. 2000). Boswell offered evidence of a number of allegedly
retaliatory acts: delays in receiving her paychecks on multiple occasions; the denial
of personal time; criticisms of her performance by her supervisor; condoned
yelling at her by coworkers; her shift change; and ultimately her forced resignation.
A jury could conclude that these actions, taken in their totality, would dissuade a
reasonable worker from making or supporting a charge of discrimination. See
Burlington Northern, 548 U.S. at 57, 68-69. As for causation, although there was
7
conflicting evidence whether her supervisor had any responsibility for Boswell’s
shift change, the jury could have concluded that he did, and also that the various
adverse actions commenced soon after Boswell complained. See Davis v. Team
Elec. Co., 520 F.3d 1080, 1094 (9th Cir. 2008).
As for Boswell’s constructive discharge claim, we conclude for similar
reasons that the jury’s verdict was supported by substantial evidence. Boswell
resigned because her shift had been changed to a time she could no longer make.
Although the overall shift schedule may have been changed for legitimate business
reasons, a rational jury could still conclude that a reasonable person in Boswell’s
position would have felt compelled to resign. She had complained about her
supervisor’s conduct and her conditions of employment had only worsened; her
efforts to discuss the shift change or obtain another shift were entirely rebuffed;
and there was evidence she was singled out for harsh treatment.
***
Both parties challenge the punitive damages award. FedEx argues that the
failure of the district court to instruct on a good faith affirmative defense, and the
failure to instruct the jury on a “clear and convincing” standard on the state claim,
requires reversal. (FedEx does not make entirely clear whether it challenges the
lack of an affirmative defense instruction on the federal and state law claims, or
8
just the federal law claim. Because on appeal it cites only caselaw interpreting
Title VII, we consider the argument to be restricted to the federal law claim.)
Boswell takes no position on the propriety of the jury instructions on the state
claim but argues that the district court erred in reducing her punitive damages
award to $300,000 without awarding her a new trial on her state claim. We sustain
these challenges and reverse and remand for a new trial on punitive liability and
damages.
The district court rejected FedEx’s request that the jury be instructed that
FedEx would not be liable for punitive damages if the jury found that FedEx
engaged in good faith efforts to implement company policies prohibiting and
addressing sexual harassment and retaliation in the workplace. “[I]n the punitive
damages context, an employer may not be vicariously liable for the discriminatory
employment decisions of managerial agents where those decisions are contrary to
the employer’s ‘good-faith efforts to comply with Title VII.’” Kolstad v. Am.
Dental Ass’n, 527 U.S. 526, 545 (1999) (citation omitted). In Passantino v.
Johnson & Johnson Consumer Products, Inc., 212 F.3d 493, 516-17 (9th Cir.
2000), we explained that a defendant has an affirmative defense to punitive
damages stemming from an action taken by a “managerial” employee when the
defendant has in good faith implemented a bona fide policy against discrimination.
9
Where, on the other hand, the agent is “sufficiently senior,” he must be treated as
the corporation’s proxy for purposes of liability and the affirmative defense is
unavailable. Id. Although FedEx’s proposed instruction may not have been a
completely accurate statement of the law, the district court was not thereby relieved
of the obligation to instruct accurately on this topic. See Merrick v. Paul Revere
Life Ins. Co., 500 F.3d 1007, 1017 (9th Cir. 2007).
FedEx also objects that the district court failed to instruct the jury on the
state law clear and convincing evidence standard. As the district court
acknowledged in its post-trial ruling, its failure to do so was error, since punitive
damages awards on state law claims are subject to state law standards, including, in
this case, the clear and convincing standard. Even assuming the district court had
properly instructed on the federal law claim, applying the Title VII cap to the
punitive award could not cure this error, because doing so effectively eliminated
Boswell’s state law claim for punitive damages, which was not subject to a
statutory cap.
Because we cannot say that “it is more probable than not that the jury would
have reached the same verdict had it been properly instructed,” these instructional
errors require us to reverse the award of punitive damages on both the federal and
10
state law claims. Clem v. Lomeli, 566 F.3d 1177, 1182 (9th Cir. 2009); see Dang
v. Cross, 422 F.3d 800, 811-12 (9th Cir. 2005).
Because we have affirmed the jury’s verdict and award of compensatory
damages, we remand for a new trial solely on the state and federal law claims for
punitive liability and damages. We reject FedEx’s contention that punitive
damages may not be tried separately once compensatory damages have been
established. See Merrick, 500 F.3d at 1018. We do not reach the question of
whether the first and second line managers whose conduct is at issue in this case
are “managerial” or sufficiently senior to be treated as FedEx’s proxy, leaving that
to the district court on remand. Finally, we note that the Title VII damages cap of
$300,000 applicable to large employers includes the combined sum of future
pecuniary losses, emotional damages, nonpecuniary losses, and punitive damages,
but not back pay or other equitable relief. See 42 U.S.C. §§ 1981a(b)(2)-(3),
2000e-5(g).
Boswell may, of course, elect to pursue only her federal or state law claims
on remand, and we leave it to the district court to shape the proceedings
accordingly. We suggest that if Boswell elects to pursue punitive damages under
both federal and state law, that the district court instruct the jury to return separate
verdicts after instructing it as to the differing law applicable to each. We suggest,
11
further, that the district court give appropriate instructions on the issue of whether,
or to what degree, punitive damage awards under federal and state law may be
cumulative.
AFFIRMED IN PART; REVERSED AND REMANDED IN PART. Each
party to bear its own costs on appeal.
12