Cadena v. Pacesetter Corp.

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
SEP 12 2000
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

LYNN M. CADENA,

Plaintiff-Appellee,

v.
No. 99-3047
THE PACESETTER CORPORATION,
No. 99-3166
Defendant-Appellant.

___________

EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION,

Amicus Curiae.

Appeal from the United States District Court
for the District of Kansas
(D.C. No. 97-CV-2659-KHV)

Richard P. Barkley, of Brownstein, Hyatt & Farber, P.C. (Lisa Hogan, of
Brownstein, Hyatt & Farber, P.C., Denver, Colorado, and Carl A. Gallagher and
Patrice M. Brown, of McAnany, Van Cleave & Phillips, P.C., Kansas City,
Kansas, with him on the briefs) for Appellant.

Michael S. Ketchmark, of Davis, Ketchmark & Eischens (Brett A. Davis, of
Davis, Ketchmark & Eischens, Kansas City, Missouri, and Scott A. McCreight
and Korey A. Kaul, of Sprenger & McCreight, L.C., Kansas City, Missouri, with
him on the brief), for Appellee.
John F. Suhre, Attorney (C. Gregory Stewart, General Counsel Designate, Vincent
J. Blackwood, Assistant General Counsel, Philip B. Sklover, Associate General
Counsel, and Jodi B. Danis, Attorney, on the brief), of the Equal Employment
Opportunity Commission, Office of General Counsel, Washington, D.C., for
Amicus Curiae.

Before LUCERO, McKAY, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

I. INTRODUCTION

For four months, Lynn Cadena’s supervisor at work subjected her to severe

sexual harassment. As a consequence, Cadena successfully sued her former

employer, the Pacesetter Corporation (“Pacesetter”), for violating Title VII of the

1964 Civil Rights Act. Pacesetter brought two separate appeals, which are now

consolidated in the instant appeal. Pacesetter first challenges the underlying

judgment, asserting the following arguments: (1) the district court erred in

denying its post-verdict motion for judgment as a matter of law because no

reasonable jury could have rejected its affirmative defense premised on Faragher

v. City of Boca Raton, 118 S. Ct. 2275 (1998) and Burlington Industries v.

Ellerth, 118 S. Ct. 2257 (1998); (2) in light of the Supreme Court’s decision in

Kolstad v. American Dental Association, 119 S. Ct. 2118 (1999), rendered

subsequent to the entry of judgment, Pacesetter is entitled to either judgment as a

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matter of law or a new trial on the issue of punitive damages; and (3) the district

court’s erroneous admission of testimony mandates a new trial. Pacesetter also

appeals the district court’s award of attorneys’ fees. Exercising jurisdiction

pursuant to 28 U.S.C. § 1291, this court affirms the judgments entered by the

district court.

II. BACKGROUND

A. Factual Background

Pacesetter is a home improvement company which sells windows, siding,

doors, and cabinets. In July 1996, Pacesetter hired Cadena to work as a

telemarketer in its Lenexa, Kansas office. During the relevant time period,

Timothy Whittinghill was the general manager of the Lenexa office. Charles

Bauersfeld, David Hawley, and Ann Humphrey were the telemarketing managers

for that office and supervised Cadena.

Several months after Cadena was hired, Bauersfeld began subjecting her to

a steady barrage of severe sexual harassment. In November, Bauersfeld told

Cadena he had experienced a “wet dream” about her which “was erotic” and that

he “couldn’t wait to have more.” Cadena immediately complained about this

comment to Hawley, who responded by stating “that is the way Charlie is.”

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Hawley further indicated that officials at the company’s headquarters knew about

Bauersfeld’s behavior but tolerated it.

Following that first harassing comment, Bauersfeld often told Cadena that

she needed to go out with him “so that he could have more wet dreams about

[her].” Bauersfeld constantly made references of a sexual nature to Cadena. One

day, for example, when Cadena was not having great success with telemarketing,

Bauersfeld asked, “What’s wrong, Lynn, aren’t you getting enough sex?”

Another time, when Cadena asked Bauersfeld “where do you want me,” referring

to which cities he wanted her to call, Bauersfeld responded, “Well, preferably on

my desk.”

Bauersfeld also physically harassed Cadena on a regular basis. Bauersfeld

would often call Cadena into his office and touch her in a sexual manner,

massaging her lower back, putting his arms around her, touching her hair and the

front of her body. He would touch her in this manner most often when she was on

the phone conducting her telemarketing work. Bauersfeld even asked Cadena to

change her physical appearance so she would not “turn[] him on too much.”

Finally, on February 13, 1997, Bauersfeld approached Cadena in her

cubicle and stated, “Lynn, why don’t you flash Rick your breasts to get him

going. I know that sure as hell would turn me on.” Bauersfeld then told Cadena,

“I am just joking,” but immediately thereafter whispered in her ear, “You know

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what they say, though, Lynn, the truth is always said in jest.” After Cadena

completed her phone call, she began crying. Subsequently, she entered

Bauersfeld’s office and told him that his behavior bothered her and that it needed

to stop. Bauersfeld merely responded, “Honey, I didn’t mean anything by it. You

know, you are one of my favorite sweethearts.”

The following day, Cadena informed Hawley of the incident and

complained to him about all of the harassment which she had endured. Hawley

simply shrugged his shoulders and stated, “Lynn that’s the way he is. . . . There’s

nothing nobody can do about it. That’s Charlie for you. What can I say?”

Hawley indicated further that Whittinghill and people at Pacesetter’s corporate

headquarters were aware of Bauersfeld’s conduct but would do nothing about it

because Bauersfeld made too much money for Pacesetter. Finally, Hawley

suggested that if Cadena was unhappy with the situation, she should quit. Cadena

also attempted to discuss the situation with Whittinghill that week, but he was not

in the office.

On February 20, Cadena delivered a letter of resignation, which reiterated

the problems she had been experiencing with Bauersfeld. That same day, Hawley

flew to Florida, where Whittinghill was already vacationing, to play golf with

Whittinghill. While there, Hawley informed Whittinghill about Cadena’s

complaint. When Whittinghill returned to Kansas, he questioned Bauersfeld

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about the February 13 incident, which Bauersfeld fully admitted. On February 28,

Whittinghill telephoned Cadena, who informed him of all the problems she had

experienced with Bauersfeld. Whittinghill then told her she should view

Bauersfeld’s conduct as a compliment to Cadena’s attractiveness. Whittinghill

also tried to make Cadena feel guilty about jeopardizing Bauersfeld’s career by

emphasizing Bauersfeld’s vision problems. Finally, Whittinghill offered Cadena

a raise if she would return to work and drop her sexual harassment complaint.

The following week, Cadena wrote Whittinghill a letter setting out the

incidents of sexual harassment and the company’s failure to address the problem

and indicating she did not wish to return to work. In response, Whittinghill called

her again, telling Cadena that Bauersfeld had been written up and would be fired

if another incident occurred. The next day, Cadena phoned Hawley, who opined

that Bauersfeld would not be fired even if he continued his sexually harassing

behavior. Cadena did not return to work at Pacesetter.

B. Procedural Background

On March 27, 1997, Cadena filed a Charge of Discrimination with the

Equal Employment Opportunity Commission (“EEOC”), which issued Cadena a

Notice of Right to Sue. In December, she sued Pacesetter in federal district court,

alleging Pacesetter had violated Title VII of the 1964 Civil Rights Act. See 42

U.S.C. § 2000e et. seq. Pacesetter subsequently moved for summary judgment,

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ultimately relying on the affirmative defense delineated in Faragher v. City of

Boca Raton, 118 S. Ct. 2275 (1998) and Burlington Industries v. Ellerth, 118 S.

Ct. 2257 (1998). The district court denied Pacesetter’s motion for summary

judgment, concluding that Cadena had alleged facts from which a jury could

reject the Burlington/Faragher defense.

The district court held a three-day jury trial in September of 1998. The jury

ultimately returned a verdict in favor of Cadena and against Pacesetter. The jury

awarded Cadena $50,000 in compensatory damages for emotional distress and

$700,000 in punitive damages. The district court then reduced the total award to

$300,000 pursuant to the statutory cap and entered judgment reflecting this award.

See 42 U.S.C. § 1981a(b)(3)(D). Pacesetter subsequently moved for judgment as

a matter of law or, in the alternative, a new trial. The district court denied that

motion.

Cadena then moved for attorneys’ fees and related expenses totaling

$163,582. Pacesetter objected to this motion, arguing, inter alia, that Cadena had

engaged in the disapproved practice of “block billing.” The district court denied

that objection but reduced the fees sought by Cadena, awarding her $138,104 in

fees and costs.

III. DISCUSSION

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 A. Judgment as a Matter of Law on the Burlington/Faragher Defense

Burlington and Faragher provide an employer an affirmative defense to a

Title VII claim premised on vicarious liability when there has been no tangible

employment action taken against the employee. 1 To succeed on the defense, the

employer must establish by a preponderance of the evidence two 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.” Faragher, 118 S. Ct. at 2292-93; see

also Burlington, 118 S. Ct. at 2270. The two elements of the

Burlington/Faragher defense were submitted as special interrogatories to the jury,

which found Pacesetter failed to meet its burden on both elements. Pacesetter

then moved for judgment as a matter of law, arguing no reasonable jury could

have found against it on the Burlington/Faragher defense. The district court

denied that motion, and Pacesetter now appeals that ruling.

This court reviews de novo the district court’s denial of a motion for

judgment as a matter of law, construing the evidence in a light most favorable to

the nonmoving party. See Vining v. Enterprise Fin. Group, 148 F.3d 1206, 1213

Cadena does not assert on appeal that she suffered any tangible
1

employment action. This court, therefore, offers no opinion on that question.

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(10th Cir.1998). “[W]e . . . will reverse only if there is no legally sufficient

evidentiary basis ... with respect to a claim or defense ... under the controlling

law.” Smith v. Northwest Fin. Acceptance, Inc., 129 F.3d 1408, 1412 (10th Cir.

1999) (quotation omitted). Because the affirmative defense in this case requires

Pacesetter to demonstrate two elements, we must affirm the district court’s denial

of the motion if a reasonable jury could have found against Pacesetter on either

element. See Clark v. Brien, 59 F.3d 1082, 1086 (10th Cir. 1995).

Contrary to Pacesetter’s contention, a reasonable jury could well conclude

that Pacesetter had failed to demonstrate by a preponderance of the evidence “that

[Pacesetter] exercised reasonable care to prevent and correct promptly any

sexually harassing behavior.” Faragher, 118 S. Ct. at 2293. In arguing that

Pacesetter promptly corrected Bauersfeld’s sexual harassment of Cadena,

Pacesetter relies entirely on the evidence of Whittinghill’s actions after he learned

about Bauersfeld’s flashing comment of February 13, 1997. 2 Pacesetter, however,

fails to acknowledge the substantial evidence demonstrating that Whittinghill, as

well as people working at Pacesetter’s corporate headquarters, knew of

2
Pacesetter concedes that if Whittinghill did not exercise reasonable care to
promptly correct Bauersfeld’s sexually harassing behavior, the jury would be
entitled to reject the Burlington/Faragher defense. Because this court concludes
the evidence supported a finding that Whittinghill did not take reasonable steps to
remedy Bauersfeld’s conduct, we need not decide the disputed question of
whether the company could also be liable based on Hawley’s or Humphrey’s
similar inaction.

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Bauersfeld’s harassing behavior well before the February 1997 incident yet did

nothing to stop it.

For example, Cadena testified that when she complained to Hawley both in

November of 1996 and February of 1997, Hawley stated that Whittinghill and

other corporate officers were already cognizant of Bauersfeld’s sexually harassing

conduct but would not address it because he made too much money for the

company. Moreover, Greg Fuller, Cadena’s co-worker, testified that when he

complained to Whittinghill about Bauersfeld’s offensive behavior in February

1997, Whittinghill merely responded “that things had been that way for a long

time at Pacesetter, that the business world was full of pricks like Charlie . . .

[a]nd . . . to get used to it because that is the way the business world was.”

Fuller’s testimony suggests that Whittinghill was previously aware of

Bauersfeld’s conduct but that neither he nor anyone else at Pacesetter intended to

stop it. Finally, Cadena testified that the first time Whittinghill spoke with her

about her complaints, he justified Bauersfeld’s behavior as a “compliment” to

Cadena and did not offer to take corrective action. Instead, he simply told

Cadena if she returned to work and dropped her complaints she would receive a

raise. A jury could reasonably conclude that this response did not constitute

“reasonable care to . . . correct promptly [the] sexually harassing behavior.” Id.

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 In addition to the ample evidence demonstrating Whittinghill’s less than

reasonable efforts to remedy Bauersfeld’s sexual harassment, other evidence was

presented indicating the company’s investigation of Bauersfeld’s conduct was

inadequate, if not a complete sham. Cricket Thompson, Pacesetter’s assistant

vice-president of Human Resources who was in charge of investigating

Bauersfeld’s sexual harassment in early 1997, conceded that she never spoke with

Cadena, Bauersfeld, Humphrey, Hawley, Whittinghill, or Fuller. Thompson

further admitted that when she conducted her investigation, she did not know that

Cadena was the complainant or that Bauersfeld was the harasser. Thompson even

testified that she was unsure if she had ever been told the nature or the specifics

of the complaint.

Based on all this evidence, 3 the jury’s finding that Pacesetter failed to

prove by a preponderance of the evidence that it “exercised reasonable care to

prevent and correct promptly [Bauersfeld’s] sexually harassing behavior” was

more than reasonable. Id. Because the jury reasonably found Pacesetter failed to

meet its burden on the first element of the Burlington/Faragher defense, the

3
We do not mean to suggest that the evidence discussed above constitutes
the only evidence to support the jury’s finding on the first element of Pacesetter’s
affirmative defense. It is, however, more than sufficient to support that finding.
This court, therefore, need not discuss other such evidence.

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district court properly denied Pacesetter’s post-verdict motion for judgment as a

matter of law based on that defense.

B. Pacesetter’s Kolstad Arguments

Subsequent to the district court’s entering judgment, which included an

award of punitive damages, the Supreme Court handed down its decision in

Kolstad v. American Dental Association, 119 S. Ct. 2118 (1999). In Kolstad, the

Court held that in a Title VII case based on vicarious liability for the acts of a

managerial employee, the employer cannot be liable for punitive damages if the

managerial employee’s actions were “contrary to the employer’s good-faith

efforts to comply with Title VII.” Id. at 2129 (quotation omitted). Pacesetter

first argues that this court should reverse the district court’s judgment and enter

judgment as a matter of law in its favor on the issue of punitive damages because

the undisputed evidence demonstrates that Bauersfeld’s harassing conduct was

contrary to Pacesetter’s good faith efforts to prevent sexual harassment and thus

comply with Title VII. Based on a review of the evidence, this court concludes

that Pacesetter is not entitled to judgment as a matter of law under Kolstad. 4

4
It is unclear whether the good-faith-compliance standard set out in Kolstad
represents an affirmative defense on which the defendant bears the burden of
proof or whether the plaintiff must disprove the defendant’s good faith
compliance with Title VII. See Kolstad v. American Dental Ass’n, 119 S. Ct.
2118, 2128-30 (1999). This court need not resolve that question in the instant
case. Even assuming that, under Kolstad, Cadena would be required to prove by a
preponderance of the evidence that Pacesetter failed to make good faith efforts to

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 This court recently stated that “Kolstad provides us no definitive standard

for determining what constitutes good-faith compliance with” Title VII. EEOC v.

Wal-Mart Stores, Inc., 187 F.3d 1241, 1248 (10th Cir. 1999). Wal-Mart,

however, recognized that to avail itself of Kolstad’s good-faith-compliance

standard, an employer must at least adopt antidiscrimination policies and make a

good faith effort to educate its employees about these policies and the statutory

prohibitions. See id. at 1248-49. Pacesetter asserts that the undisputed evidence

demonstrates both that it maintains a strong policy against sexual harassment and

that it adequately trained its employees to comply with that policy and Title VII.

Contrary to Pacesetter’s contention, there was evidence presented at trial

undermining Pacesetter’s claim that it made good faith efforts to educate

employees about sexual harassment. For example, Humphrey, the manager

responsible for sexual harassment training at the office where Cadena worked,

testified that she discussed the topic of sexual harassment at meetings with her

co-workers on a monthly basis. However, Richard Payne, another telemarketing

manager at the Lenexa office, testified that no such monthly training sessions

occurred. More significantly, Humphrey conceded that when she gave her

deposition testimony, she believed that a male supervisor would not commit

comply with Title VII in order to recover punitive damages from Pacesetter, the
evidence presented was sufficient to meet that standard.

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sexual harassment if he either exposed his genitalia to a female subordinate or

grabbed her breasts, so long as he apologized after the incident. Based on

Humphrey’s admitted ignorance about sexual harassment, a jury could reasonably

infer that Pacesetter failed to make good faith efforts to adequately educate its

employees about its non-discrimination policy and Title VII.

Moreover, Kolstad itself suggests that the good-faith-compliance standard

requires the employer to make “good faith efforts to enforce an antidiscrimination

policy.” 119 S. Ct. at 2130 (emphasis added). Therefore, even if an employer-

defendant adduces evidence showing it maintains on paper a strong non-

discrimination policy and makes good faith efforts to educate its employees about

that policy and Title VII, a plaintiff may still recover punitive damages if she

demonstrates the employer failed to adequately address Title VII violations of

which it was aware. As discussed supra, Cadena presented substantial evidence

suggesting that Pacesetter knew about Bauersfeld’s sexually harassing conduct

but failed to take any action to stop it. See supra Section III.A. Because

sufficient evidence was presented on which a jury could have found Pacesetter did

not make good faith efforts to comply with Title VII, this court will not enter

judgment as a matter of law in favor of Pacesetter on the question of punitive

damages.

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 Pacesetter alternatively contends it is entitled to a new trial on punitive

damages because (1) the jury was not instructed on the Kolstad good-faith-

compliance standard, (2) the jury applied the wrong standard in deciding the

question of punitive damages, 5 and (3) the district court similarly applied the

wrong standard on punitive damages when resolving Pacesetter’s post-verdict

motion for judgment as a matter of law. This court concludes that Pacesetter

waived the first two of these challenges to punitive damages. Federal Rule of

Civil Procedure 51 provides, “No party may assign as error the giving or the

failure to give an instruction unless that party objects thereto before the jury

retires to consider its verdict, stating distinctly the matter objected to and the

grounds of the objection.” Pacesetter does not and cannot contend that it objected

to the district court’s instruction to the jury concerning the standard for imposing

punitive damages. Pacesetter stipulated to a substantially similar instruction to

the one given and did not itself propose a good faith compliance instruction.

Instead, Pacesetter argues it should be excused from the objection requirement of

5
This court fails to understand the difference between these first two
arguments. A jury applies whatever legal standard the district court instructs it to
apply. See United States v. Lonedog, 929 F.2d 568, 576 (10th Cir. 1991) (noting
that this court assumes the jury followed its instructions). If the jury in this case
applied an incorrect legal standard, it only did so because the jury instructions
were erroneous. Pacesetter’s challenge, therefore, must be to the instructions
informing the jury of the standard to apply in resolving the punitive damages
issue.

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Rule 51 because Kolstad represents a significant change in the law subsequent to

the trial. Pacesetter’s position is that it could not be expected to have anticipated

this change and, therefore, it is entitled to a new trial even if it failed to object to

the punitive damages instructions as otherwise required by Rule 51.

In support of this argument, Pacesetter cites three cases, United States v.

Spring, Anixter v. Home-Stake Production Co., and Key v. Rutherford, in which

this court remanded for a new trial because the jury was improperly instructed in

light of Supreme Court decisions handed down after judgment was entered. See

80 F.3d 1450, 1464-66 (10th Cir. 1996); 77 F.3d 1215, 1231-32 (10th Cir. 1996);

645 F.2d 880, 883 (10th Cir. 1981). This court, however, does not read these

cases as establishing a categorical rule that in an appeal from a district court

judgment, we must remand for a new trial whenever a Supreme Court decision

issued subsequent to the entry of that judgment calls into question or renders

incorrect jury instructions given at trial.

Spring was a criminal appeal in which this court reviewed the challenged

jury instructions for plain error, pursuant to Federal Rule of Criminal Procedure

52(b). The Spring court ultimately remanded for retrial only because it

determined that in light of a Supreme Court decision issued subsequent to the

defendant’s conviction, the instructions given at trial were plainly erroneous,

affected the defendant’s substantial rights, and undermined the fairness, integrity,

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or public reputation of the judicial proceedings. See 80 F.3d at 1464-66; see also

United States v. McGuire, 200 F.3d 668, 671 n.2 (10th Cir. 1999) (holding that

we review for plain error only a district court’s failure to submit a jury instruction

when the appellant-defendant made no objection at trial, even if the failure to

object was based upon well-settled circuit precedent subsequently overruled by

the Supreme Court). If a criminal defendant must show plain error rather than

automatic entitlement to a new trial when he failed to object to jury instructions

ultimately rendered erroneous by a subsequent Supreme Court decision, certainly

a similarly defaulting civil litigant is not automatically entitled to a new trial.

Moreover, in the two civil cases on which Pacesetter relies, this court made

clear that we will excuse a party’s failure to object to jury instructions and

address its challenge to those instructions on appeal only “when the interests of

justice require,” a standard which necessarily involves a case-by-case

determination. 6 Key, 645 F.2d at 883; see also Anixter, 77 F.3d at 1231-32 (“Like

6
We recognize that, in the civil context, this court has also stated it may
review the propriety of jury instructions which were not objected to at trial if the
instructions given were “patently plainly erroneous and prejudicial.” Medlock v.
Ortho Biotech, Inc., 164 F.3d 545, 553 (10th Cir. 1999) (quotation omitted). It is
interesting to note that the Federal Rules of Civil Procedure reference neither the
patently-plainly-erroneous-and-prejudicial standard nor the interests-of-justice
exception to Rule 51. See Hammer v. Gross, 932 F.2d 842, 847 (9th Cir. 1991)
(en banc) (plurality opinion) (“[T]here is no ‘plain error’ exception [to Rule 51]
in civil cases in this circuit.”); Deppe v. Tripp, 863 F.2d 1356, 1361-62 (7th Cir.
1988) (noting “there is a conspicuous absence of a plain error doctrine provision
the Federal Rules of Civil Procedure” and holding that “in civil cases a plain error

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the court in Key, we believe that in this case the interests of justice and the

policies underlying Rule 51 reject forcing an appellant to object to a jury

instruction where, based on the state of the then applicable law, her objection

would have been futile.” (emphasis added)). This “rarely” applied “narrow

exception” to Rule 51, however, should not be employed in this appeal.

Glasscock v. Wilson Constructors, Inc., 627 F.2d 1065, 1067-68 (10th Cir. 1980).

Prior to trial in the instant case, this court had “not had occasion to

determine comprehensively what burden a plaintiff must carry” to be able to

receive punitive damages for a Title VII violation. Medlock v. Ortho Biotech,

Inc., 164 F.3d 545, 551 (10th Cir. 1999). One year before Cadena’s case went to

trial, however, the very district court in which this case was tried had issued a

published memorandum and order in a different case entitled Baty v. Willamette

Industries, rejecting a post-verdict motion for judgment as a matter of law on

doctrine is not available to protect parties from erroneous jury instructions to
which no objection was made at trial”). Apparently, these concepts are purely
creatures of case law. Even if this court, however, were to conclude that the
instructions given in the instant case were patently plainly erroneous and
prejudicial and thus determine whether relief is warranted, Pacesetter “has the
heavy burden of demonstrating fundamental injustice.” Medlock, 164 F.3d at 553
(quotation omitted). Upon a thorough review of the record in the instant case,
particularly the evidence which this court discussed in affirming the denial of
judgment as a matter of law on both the Burlington/Faragher defense and
punitive damages, we are satisfied that the district court’s failure to instruct the
jury on the good-faith-compliance standard did not result in a fundamental
injustice.

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punitive damages in a Title VII suit premised on vicarious liability. See 985 F.

Supp. 987, 996 (D. Kan. 1997); Baty v. Willamette Indus., 172 F.3d 1232, 1242

(10th Cir. 1999) (recognizing that the district court’s decision was limited to the

plaintiff’s vicarious liability theory). In Baty, the district court concluded that the

jury properly awarded punitive damages because, inter alia, “plaintiff presented

evidence from which a reasonable jury could have inferred that management did

not really respond to plaintiff’s complaints, despite knowledge of serious

problems with sexual harassment.” 7 See Baty, 985 F. Supp. at 996. In essence,

the district court ruled that a plaintiff asserting vicarious liability against her

employer in a Title VII suit may receive punitive damages if she presents

evidence demonstrating the employer’s failure to make good faith efforts to

remedy known harassment. This standard is effectively the same as that

announced in Kolstad, in which the Court stated that under Title VII, an employee

is not entitled to punitive damages on a vicarious liability theory unless she

proves that the employer was not “making good faith efforts to enforce an

antidiscrimination policy.” Kolstad, 119 S. Ct. at 2130. The good-faith-

compliance standard articulated in Kolstad, therefore, was entirely consistent with

7
The district court’s ruling that the jury properly awarded punitive damages
was ultimately affirmed by this court on the precise grounds articulated by the
district court. See Baty v. Willamette Indus., 172 F.3d 1232, 1242-43 (10th Cir.
1999).

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an opinion which had been published by the district court in which Cadena

brought her suit at the time it went to trial.

Other circuits had similarly foreshadowed the pronouncement of the good-

faith-compliance standard in Kolstad prior to the instant trial. For example, in

Patterson v. P.H.P. Healthcare Corp., the Fifth Circuit reversed an award of

punitive damages because there was no evidence “to show that PHP Healthcare

took any action which was inconsistent with [its non-discrimination] policy . . .

[nor] that PHP Healthcare had knowledge of [the harasser’s] malicious or reckless

conduct, or authorized, ratified, or approved [the harasser’s] actions.” 90 F.3d

927, 944 (5th Cir. 1996). As the Fifth Circuit later characterized this decision,

“Patterson . . . put [employers] on notice that evidence of a faithfully-adhered-to

non-discrimination policy may bar imputing punitive damages liability to an

employer when its employee acts with malice or reckless indifference.” See

Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d 278, 283 (5th Cir.

1999). Also prior to the trial in the instant case, the Eleventh Circuit had

reversed an award of punitive damages against an employer for sexual harassment

committed by its employee when the evidence showed that the employer “had a

general policy against sexual harassment and did investigate the complaints it

received.” Splunge v. Shoney’s, Inc., 97 F.3d 488, 491 (11th Cir. 1996).

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 Research by Pacesetter prior to or during trial would have revealed the

district court’s published memorandum and order in Baty, as well as the Fifth

Circuit opinion in Patterson and the Eleventh Circuit opinion in Splunge. A

reading of these decisions, in turn, should have led Pacesetter to request an

instruction informing the jury that Cadena cannot recover punitive damages if

Bauersfeld’s harassment was contrary to Pacesetter’s good faith efforts to prevent

and remedy sexual harassment. Such an instruction would not have differed

significantly from that which Pacesetter now contends is mandated by Kolstad.

The interests of justice, therefore, do not demand that this court excuse

Pacesetter’s failure to object to the district court’s instructions concerning

punitive damages. See Deffenbaugh-Williams, 188 F.3d at 284 (“Kolstad’s

imputation holding was not such a sudden shift as to require, in fairness, giving

Wal-Mart an opportunity to present additional evidence.”). To the contrary,

allowing Pacesetter to benefit from the serendipity of the Kolstad decision when

it reasonably could have recognized the availability of the good-faith-compliance

standard at the time of trial would work an injustice upon Cadena. This court

thus concludes that Pacesetter waived for appellate review its argument that the

jury was improperly instructed and applied the wrong standard concerning the

imposition of punitive damages.

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 Finally, we reject Pacesetter’s contention that remand is necessary because

the district court, in deciding Pacesetter’s post-verdict motion for judgment as a

matter of law, failed to apply the good faith compliance standard. This court has

already concluded that even under Kolstad, Pacesetter is not entitled to judgment

as a matter of law on the question of punitive damages. See supra. Therefore,

even if the district court did err in not considering the good faith compliance

defense when deciding Pacesetter’s motion, a question we need not decide, any

such error was harmless.

C. Evidence of Humphrey’s and Bauersfeld’s Affair

During Cadena’s case-in-chief, she called Humphrey as a witness and asked

Humphrey, inter alia, whether she ever had a sexual relationship with Bauersfeld.

After Humphrey denied having a sexual relationship with Bauersfeld, Cadena

asked whether Humphrey had ever told Mary Sorrels, a former Pacesetter

employee, about the existence of such a relationship. Humphrey replied that she

never made that disclosure to Sorrels and that she never admitted to Sorrels that

she lied during her deposition about a relationship with Humphrey. Finally, when

asked whether she had asked solicited Sorrels to lie about the purported sexual

relationship with Bauersfeld if Sorrels was questioned about it during her

deposition, Humphrey denied making such a request. Cadena later elicited

testimony from Sorrels that Humphrey had confided in Sorrels about having a

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sexual relationship with Bauersfeld, that Cadena knew about the relationship

when still working at Pacesetter, that Humphrey admitted lying about the

relationship in her deposition, and that Humphrey had asked Sorrels to similarly

lie about the relationship if questioned.

On appeal, Pacesetter contends the district court erred in allowing both

Humphrey’s and Sorrels’ testimony regarding Humphrey’s relationship with

Bauersfeld, thus entitling Pacesetter to a new trial. This court reviews a district

court’s decision to receive evidence for abuse of discretion. See United States v.

Guardia, 135 F.3d 1326, 1328 (10th Cir. 1998).

Pacesetter first argues that any evidence concerning the alleged relationship

should have been excluded as irrelevant. See Fed. R. Evid. 401, 402. As the

district court recognized in its ruling admitting this testimony, evidence

demonstrating a sexual relationship between Humphrey and Bauersfeld was

directly relevant to rebut Pacesetter’s asserted Burlington/Faragher affirmative

defense. Under that defense, Pacesetter would not be liable if it showed that it

“exercised reasonable care to correct promptly any sexually harassing behavior”

and that Cadena “unreasonably failed to take advantage of any preventitive or

corrective opportunities provided by [Pacesetter] or to avoid harm otherwise.”

Faragher, 118 S. Ct. at 2293. In arguing its motion in limine to exclude evidence

concerning the purported relationship, Pacesetter indicated that it intended to

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prove the second element of the affirmative defense by demonstrating Cadena

failed to report Bauersfeld’s harassment to management. Cadena did adduce

evidence, however, showing that she complained about the harassment to Hawley

and Bauersfeld himself. The jury, therefore, might have wondered why Cadena

never reported Bauersfeld’s harassing conduct to Humphrey, particularly since

she was Cadena’s only female supervisor. The evidence indicating Cadena knew

Humphrey was having a sexual relationship with Bauersfeld was directly relevant

to demonstrate that Cadena’s decision not to report the harassment to Humphrey

was reasonable. 8 Thus, the district court did not abuse its discretion in

concluding this evidence was relevant.

Pacesetter next asserts the evidence should have been excluded under

Federal Rule of Evidence 608(b). That rule provides in relevant part, “Specific

instances of the conduct of a witness, for the purpose of attacking or supporting

the witness’ credibility, other than conviction of a crime as provided in rule 609,

may not be proved by extrinsic evidence.” Fed. R. Evid. 608(b) (emphasis

8
The record of the motion in limine hearing belies Pacesetter’s contention
that “there was no suggestion that Cadena should have reported Bauersfeld’s
conduct to Humphrey.” Although it is true that “Pacesetter’s own witnesses
testified that Cadena had complied with Pacesetter’s policy against sexual
harassment by reporting incidents to Hawley,” as Pacesetter argues, that testimony
was elicited after Cadena had completed her case-in-chief. Given Pacesetter’s
representations during the motion in limine hearing concerning its intended means
of proving the second element of the affirmative defense, the district court
properly ruled that the challenged testimony was relevant to that defense.

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added). As just discussed, the challenged testimony was not elicited solely “for

the purpose of attacking . . . [Humphrey’s] credibility.” Id. Rule 608(b),

therefore, does not require the exclusion of the challenged testimony.

Finally, Pacesetter argues the testimony concerning the alleged sexual

relationship and perjury should have been excluded under Federal Rule of

Evidence 403. Rule 403 states, “Although relevant, evidence may be excluded if

its probative value is substantially outweighed by the danger of unfair prejudice .

. . .” Fed. R. Evid. 403. “This court has recognized that exclusion of evidence

under Rule 403 is an extraordinary remedy to be used sparingly.” Koch v. Koch

Indus., 203 F.3d 1202, 1229 (10th Cir. 2000) (quotation omitted). We are

unconvinced that the district court abused its discretion in concluding that the

danger of prejudicing the jury by exposing it to evidence of the alleged sexual

relationship and perjury did not substantially outweigh that evidence’s probative

value to rebut Pacesetter’s affirmative defense.

D. Attorneys’ Fees

After the district court entered judgment in favor of Cadena reflecting an

award of damages of $300,000, Cadena moved for an award of attorneys’ fees and

related nontaxable expenses. Specifically, Cadena requested attorneys’ fees of

$156,846.30 and expenses totaling $6,735.70. Pacesetter objected to Cadena’s

motion on numerous grounds, arguing, inter alia, that Cadena’s use of “block

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billing,” i.e., lumping multiple tasks into a single entry of time, is precluded by

this court’s decision in Ramos v. Lamm, 713 F.2d 546, 553 (10th Cir. 1983).

Pacesetter thus requested that the district court reduce the amount of hours

factored into its attorneys’ fees calculus. The district court denied that objection,

stating, “[T]he use of single entries of time expended for more than one task is

not per se forbidden. In this case, plaintiff’s counsel has produced

contemporaneous time records that sufficiently meet the requirements set out in

Ramos.” The district court ultimately awarded Cadena $131,368.30 in attorneys’

fees and $6,735.70 in related expenses.

On appeal, Pacesetter argues the district court should have further reduced

the amount of time claimed by Cadena because her attorneys employed the block-

billing practice. This court reviews for abuse of discretion a district court’s

award of attorneys’ fees. See Roberts v. Roadway Express, Inc., 149 F.3d 1098,

1111 (10th Cir. 1998).

A plaintiff who prevails in a Title VII lawsuit “ordinarily is to be awarded

attorney’s fees in all but special circumstances.” Metz v. Merrill Lynch, Pierce,

Fenner & Smith, Inc., 39 F.3d 1482, 1492 (10th Cir. 1994) (quotation omitted).

To recover such fees, however, the plaintiff must “prove and establish [the]

reasonableness of each dollar, each hour, above zero.” Jane L. v. Bangerter, 61

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F.3d 1505, 1510 (10th Cir. 1995) (quotation omitted). More specifically, in

Ramos this court stated,

[I]f [prevailing parties] intend to seek attorney’s fees . . . [their
attorneys] must keep meticulous, contemporaneous time records to
present to the court upon request. These records must reveal, for
each lawyer for whom fees are sought, all hours for which
compensation is requested and how those hours were allotted to
specific tasks–for example, how many hours were spent researching,
how many interviewing the client, how many drafting the complaint,
and so on.

713 F.2d at 553.

Pacesetter is correct in contending that Ramos admonishes attorneys who

wish to recover attorneys’ fees not to utilize the practice of block billing, because

block billing does not precisely delineate “how . . . hours were allotted to specific

tasks.” Id. As the district court properly recognized, however, this court has not

established a rule mandating reduction or denial of a fee request if the prevailing

party submits attorney-records which reflect block billing. See Robinson v. City

of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998) (“[A] district court may

discount requested attorney hours if the attorney fails to keep ‘meticulous,

contemporaneous records’ that reveal ‘all hours for which compensation is

requested and how those hours were allotted to specific tasks.’” (emphasis added)

(quoting Ramos, 713 F.2d at 553)). This court’s review of the time records

submitted by Cadena fails to convince us that the district court abused its

discretion in concluding that those records sufficiently allowed the court to

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determine the time allotted by her attorneys to specific tasks and the

reasonableness of that time. See Roberts, 149 F.3d at 1112 (“We recognize that

the billing records submitted to the district court would benefit from greater

specificity, but cannot conclude that the district court abused its discretion in

awarding attorneys’ fees.”). We will not, therefore, disturb the attorneys’ fees

and related expenses awarded by the district court.

IV. CONCLUSION

This court concludes that the district court properly denied Pacesetter’s

post-verdict motion for judgment as a matter of law premised on the

Burlington/Faragher defense. Additionally, the Supreme Court’s decision in

Kolstad does not entitle Pacesetter to either judgment as a matter of law or a new

trial. Furthermore, the district court did not abuse its discretion in admitting

testimony concerning Humphrey’s alleged sexual relationship with Bauersfeld and

related perjury. This court, therefore, AFFIRMS the judgment entered by the

District Court for the District of Kansas in favor of Cadena and against Pacesetter

on her Title VII claim, in which Cadena was awarded $300,000 in compensatory

and punitive damages. Finally, because the district court did not abuse its

discretion in its award of attorneys’ fees, this court AFFIRMS the judgment

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entered by the district court awarding Cadena $131,368.30 in attorneys’ fees and

$6,735.70 in related expenses.

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