Equal Employment Opportunity Commission v. Service Temps Inc.

Case: 11-10262 Document: 00511836421 Page: 1 Date Filed: 04/26/2012

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
April 26, 2012
No. 11-10262
Lyle W. Cayce
Clerk
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Plaintiff-Appellee

v.

SERVICE TEMPS INCORPORATED, doing business as Smith Personnel
Solutions,

Defendant-Appellant

Appeal from the United States District Court
for the Northern District of Texas

Before HIGGINBOTHAM, SMITH, and HIGGINSON, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
A Texas jury found that a corporate staffing company violated the
Americans with Disabilities Act when it refused to let a deaf woman apply for
a warehouse job, awarding her back pay, compensatory, and punitive damages.
Entering judgment on the verdict, the judge added injunctive relief. On appeal,
the company raises five categories of issues, ranging from jurisdiction to jury
instructions. We affirm.
I.
Looking for work in June 2006, Jacquelyn Moncada came across an online
posting that Smith Personnel (“Smith”), a staffing company that hires employees
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No. 11-10262

for corporate clients, was seeking a stock clerk to package cosmetics for its client
Tuesday Morning.
Deaf from birth, Moncada arranged for a sign language interpreter to meet
her at the job site to translate as she applied for the position. Carl Ray, an
account manager for Smith, met Moncada at the job site and told her she could
not apply for the position because she is deaf, that the warehouse environment
would be too dangerous for her. Moncada attempted to explain that she had had
no trouble communicating while working in warehouses in the past, but Ray
persisted, advising her that she could not apply.
Moncada filed a charge with the Equal Employment Opportunity
Commission (“EEOC”) on July 13, 2006. Smith responded, denying wrongdoing
and stating its willingness to “assist Ms. Moncada in her job search, assuming
that we can in fact communicate.” After investigating, the EEOC determined
that Smith had violated the Americans with Disabilities Act of 1990 (“ADA”) by
turning Moncada away at the job site. It issued a Notice of Determination on
December 18, 2007.
The same day, the EEOC proposed that Smith pay $65,000 to settle all
claims for back pay, compensatory, and other damages. Smith countered with
a $5,000 proposal and reiterated its offer to help Moncada find work. Without
informing Moncada of Smith’s offer, the EEOC countered, seeking $16,000 in
back pay and $39,000 for all other damages. Smith rejected the EEOC’s second
proposal and conditioned further conciliation on the EEOC’s presentation of
“calculations and justifications for the amount sought.” The EEOC sent Smith
and Moncada a Notice of Conciliation Failure on February 22, 2008. Voluntary
mediation among the parties in April 2009 also proved unsuccessful.
The EEOC filed suit on September 3, 2008, alleging that Smith’s refusal
to hire Moncada violated the ADA and that “[a]ll conditions precedent to the
institution of this lawsuit have been fulfilled.” In its answer, Smith generically

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denied “that all conditions precedent have been fulfilled.” The district court set
March 1, 2009, as the deadline for amending the pleadings.
In discovery, the EEOC stated that it was seeking up to the statutory cap
under the ADA for compensatory and punitive damages. It also disclosed
evidence that Moncada had sought other work after Smith had refused to hire
her. The EEOC admitted that it had not informed Moncada of Smith’s August
2006 offer to help her find a job, if they “[could] in fact communicate.”
More than three months after the pleadings deadline, Smith filed its first
motion for leave to amend its answer to add failure to conciliate as a defense,
pointing to the EEOC’s failure to inform Moncada of its offer. The court denied
the motion without prejudice for not addressing the appropriate legal standard.
Smith filed a second motion for leave to amend its answer on August 3, 2009.
The court also denied that motion, holding that Smith had failed to demonstrate
good cause for the delay in amending its answer, as required under FED. R. CIV.
P. 16(b)(4).
The EEOC moved for partial summary judgment on November 3, 2009,
arguing that it had met all conditions precedent to suit, including conciliation.
Smith then filed a motion for summary judgment arguing that the EEOC had
failed to conciliate in good faith, requiring dismissal of the action. The district
court granted the EEOC’s motion, holding that Smith could not assert failure to
conciliate as a defense because it had not specifically included it in its answer,
as required by FED. R. CIV. P. 9(c). Smith moved for reconsideration, arguing
that conciliation is not a condition precedent. The court denied it.
Smith also moved for partial summary judgment on the ground that the
EEOC had failed to provide “a computation of each category of damages,” as
required by FED. R. CIV. P. 26(a)(1)(A)(iii).1 Smith asserted that, as a result of

1
FED. R. CIV. P. 26(a)(1)(A)(iii) provides that, with some exemptions not relevant here,
“a party must, without awaiting a discovery request, provide to the other parties . . . a
computation of each category of damages claimed by the disclosing party—who must also

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the EEOC’s alleged failure, the EEOC should be precluded under FED. R. CIV. P.
37(c)2 from using information on damages at trial, and that therefore the action
for damages should be dismissed. The district court construed Smith’s motion
as a motion in limine and granted it, declaring that the EEOC could not state a
specific amount of damages during the trial without court approval.3
In the week preceding trial in September 2010, the district court
distributed a copy of the jury charge it planned to use and invited counsel to
make objections. Smith objected that the charge did not sufficiently articulate
the “heightened showing” required for punitive damages or the subjective
component of recklessness; Smith also asked the court to remove an instruction
on corporate agency. Ultimately, the district court delivered the following
instruction on punitive damages:
In order for Smith to be liable for punitive damages, the EEOC must
prove that the agent of Smith of whose conduct EEOC complains (1)
was employed in a position of managerial capacity, (2) acted within
the scope of employment, and (3) acted with malice or reckless
indifference to Moncada’s right not to be discriminated against
based on disability.
Smith moved for judgment as a matter of law at the end of the EEOC’s
case and also at the close of its case, which the court denied. Smith renewed the
motion after judgment was entered, raising for the first time that the EEOC had
failed to establish that Ray had acted with malice or reckless indifference.

make available for inspection and copying as under Rule 34 the documents or other
evidentiary material, unless privileged or protected from disclosure, on which each
computation is based, including materials bearing on the nature and extent of injuries
suffered.”
2
FED. R. CIV. P. 37(c)(1) provides that “[i]f a party fails to provide information . . . as
required by Rule 26(a) . . . , the party is not allowed to use that information . . . to supply
evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified
or is harmless.”
3
Shortly before trial, the district court said it would allow the EEOC to argue specific
back pay amounts, finding that any failure to disclose back pay calculations was harmless.

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Because Smith had not raised the malice issue in its Rule 50(a) motion during
trial, the court considered it waived and denied the motion.
After the three-day trial, the jury found that Smith had violated the ADA
by refusing to hire Moncada based on her disability, awarding $14,400 in back
pay, $20,000 in compensatory damages for emotional pain and suffering, and
$150,000 in punitive damages. The EEOC then moved for injunctive relief.
Smith moved to dismiss based on lack of subject matter jurisdiction and,
separately, for a new trial or a remittitur. The court granted the EEOC’s motion
for injunctive relief and denied Smith’s motion to dismiss for lack of jurisdiction,
but it conditioned its denial of Smith’s motion for a new trial on the EEOC’s
acceptance of a remittitur that would reduce the punitive damages award to
$68,800. The EEOC accepted. The court entered its amended judgment on
January 11, 2011, which included the injunctive relief the EEOC sought. As
injunctive relief, the district court required that Smith (1) refrain from
discriminating against disabled employees, (2) provide employees with, and
publicly post, a notice explaining the ADA’s protections, (3) provide one hour of
ADA training to managers, and (4) notify the EEOC when an employee
complains of disability discrimination.
Smith timely appealed.
II.
Smith contends that the district court lacked subject matter jurisdiction,
a determination we review de novo,4 because there was no evidence that Smith
was engaged in an industry affecting interstate commerce. Specifically, Smith
challenges (1) the district court’s conclusion that the ADA’s requirement that an
employer be “engaged in an industry affecting commerce”5 is not jurisdictional

4
See Arena v. Graybar Electric Co., 669 F.3d 214, 218-19 (5th Cir. 2012).
5
42 U.S.C. § 12111(5)(A). The ADA further defines “industry affecting commerce,” in
relevant part, as “any activity, business, or industry in commerce or in which a labor dispute
would hinder or obstruct commerce or the free flow of commerce.” Id. § 12111(7) (referencing

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and (2) the evidentiary basis for the district court’s conclusion that Smith was
in fact engaged in an industry affecting interstate commerce.
The district court held, and the EEOC urges, that the ADA’s “affecting
commerce” requirement is a substantive rather than a jurisdictional
requirement. We decline to resolve that question of law in this case, which
presents ample alternative grounds for affirming the district court’s conclusion
on subject matter jurisdiction.6 Whether or not the “affecting commerce”
requirement is jurisdictional, this case satisfies it.
A stipulation in the joint pretrial order informs the “affecting commerce”
analysis. Factual stipulations are binding on parties, having “‘the effect of
withdrawing a fact from issue and dispensing wholly with the need for proof of
the fact.’”7 Stipulations alone cannot confer jurisdiction, but they can form the
factual basis for jurisdiction,8 as one does here. In the joint pretrial order, the
parties agreed that Smith had advertised the stock clerk position to which
Moncada applied on the Texas Workforce Commission’s “Work in Texas” website.
That site provides resources for individuals, both Texans and out-of-staters, who
seek work in Texas. Smith’s advertising on an open website with the potential,
or even intent, to draw residents of other states to Texas in search of

id. § 2000e(h)). “Commerce” is defined, in relevant part, as “trade, traffic, commerce,
transportation, transmission, or communication among the several States.” Id. (referencing
id. § 2000e(g)).
6
See Ballew v. Continental Airlines, 668 F.3d 777, 781 (5th Cir. 2012) (“We may . . .
affirm [the district court’s conclusion on subject matter jurisdiction] on any ground supported
by the record, including one not reached by the district court.”).
7
Christian Legal Soc’y v. Martinez, 130 S. Ct. 2971, 2983 (2010) (quoting 2 MCCORMICK
ON EVIDENCE 181 (Kenneth S. Broun ed., 6th ed. 2006)).

8
See Ry. Co. v. Ramsey, 89 U.S. (22 Wall.) 322, 327 (1874) (“Consent of parties cannot
give the courts of the United States jurisdiction, but the parties may admit the existence of
facts which show jurisdiction, and the courts may act judicially upon such an admission.”);
Woolwine Ford Lincoln Mercury v. Consol. Fin. Res., Inc., 245 F.3d 791, at *2 (5th Cir. 2000)
(unpublished table decision) (per curiam); United States v. Mills, 199 F.3d 184, 188 & n.3 (5th
Cir. 1999) (per curiam).

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employment is enough to clear the “very low” bar that defines economic activity
affecting interstate commerce.9
The district court properly determined that it had subject matter
jurisdiction over this dispute.
III.
At the summary judgment stage, the district court twice rejected Smith’s
attempts to argue that the EEOC had not conciliated in good faith.10 The court’s
reasons were procedural, based on Smith’s failure to raise the issue in its
answer, and did not concern the merits of Smith’s claim.11 Smith now argues
that the district court (1) erred by concluding that Smith was required to plead
“lack of conciliation” with specificity in its answer and (2) abused its discretion
in denying Smith’s second motion for leave to amend its answer.
1. Denying Conciliation
Smith argues that failure to conciliate can be raised through motions, even
when not raised with particularity in previously filed pleadings, and that the
district court therefore erred by requiring Smith to have pleaded it specifically

9
EEOC v. Ratliff, 906 F.2d 1314, 1316 (9th Cir. 1990) (collecting cases from the Title
VII context); see id. at 1317 (noting “how rare it is for the ‘affects commerce’ requirement to
pose a bar to suit”); cf. United States v. Horne, 474 F.3d 1004, 1006 (7th Cir.) (holding that
advertising on an online auction site uses “an avenue of interstate commerce,” and collecting
cases from other circuits), cert. denied, 551 U.S. 1123 (2007); United States v. Runyan, 290
F.3d 223, 239 (5th Cir.) (holding that the transmission of child pornography via the Internet
constitutes transportation through interstate commerce), cert. denied, 537 U.S. 888 (2002).
10
Conciliation is a statutory requirement: “[T]he Commission shall endeavor to
eliminate any such alleged unlawful employment practice by informal methods of conference,
conciliation, and persuasion.” 42 U.S.C. § 2000e-5(b). This Court has held that the
requirement is not jurisdictional. See EEOC v. Agro Distribution, LLC, 555 F.3d 462, 469 (5th
Cir. 2009).
11
Smith’s argument on the merits is that the EEOC failed to conciliate in good faith
by ignoring Smith’s offer to assist Moncada in her job search and failing to inform Moncada
of the offer. The EEOC maintains that it was under no obligation to either act on the offer or
to inform Moncada because it was not an offer of unconditional employment. Without
speaking to the merits in this case, we emphasize that as a matter of best practice, the EEOC
should be conscientious about sharing settlement offers with those it represents.

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in its answer to the complaint. We review this legal question, stemming from
a summary judgment ruling, de novo.12
FED. R. CIV. P. 9(c) permits a plaintiff in its pleadings to aver generally
that all conditions precedent have been satisfied, but it requires that “when
denying a condition precedent has occurred or been performed, a party must do
so with particularity.” This Court has held that conciliation is a condition
precedent.13 It would seem to follow, then, that Smith was required to raise
failure to conciliate specifically in its answer. Because it did not,14 the district
court held, Smith was precluded from asserting it in a subsequent motion for
summary judgment.
To refute the district court’s analysis, Smith points to a quotation from
EEOC v. Klingler Electric Corp., stating that “Klingler’s motion to dismiss . . .
was sufficient to raise the [conciliation] issue.”15 Presumably, Smith is arguing
that a motion to dismiss—and, by extension, any motion—is appropriate for
raising failure to conciliate even when the pleadings did not. That argument
ignores that Klingler filed its motion to dismiss in lieu of an answer.16 Unlike
Smith, Klingler had not previously filed an answer that failed to raise the
conciliation issue. Klingler is no succor for defendants who would use motions

12
See Stewart v. Miss. Transp. Comm’n, 586 F.3d 321, 327 (5th Cir. 2009).
13
See Agro Distribution, 555 F.3d at 469 (“[W]e conclude that the EEOC’s conciliation
requirement is a precondition to suit.”). Smith attempts to argue that there is a distinction
between a “condition precedent” and a “precondition to suit,” but we agree with the district
court that the terms are “functionally synonyms.”
14
Smith included in its answer only a general denial that all conditions precedent had
been satisfied, which is insufficient under FED. R. CIV. P. 9(c). See Trinity Carton Co. v.
Falstaff Brewing Corp., 767 F.2d 184, 192 (5th Cir. 1985), cert. denied, 475 U.S. 1017 (1986).
15
636 F.2d 104, 107 (5th Cir. Unit A Feb. 1981) (per curiam).
16
See id. at 106; Docket Sheet at 2, EEOC v. Klingler Electric Corp., No. J80-0017(B)
(S.D. Miss., closed Apr. 14, 1983) (showing that Klingler’s first filing in the case was its motion
to dismiss the amended complaint, filed on March 5, 1980, and showing no answer filed until
after the Fifth Circuit’s decision reversing and remanding).

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to deny conditions precedent after failing to do so with particularity in their
answers.
Smith also points to Moore’s Federal Practice (“Moore’s”), which infers from
two cases that “[d]enial of performance or occurrence of a condition precedent
may . . . be made in a motion for summary judgment.”17 But neither of the courts
cited by Moore’s was faced with a summary judgment motion,18 and in any event,
they do not answer our ultimate question: whether a defendant can raise the
absence of a condition precedent in a summary judgment motion if he first
responded to the complaint with an answer that failed to raise it and was not
amended to include it.
Nevertheless, more recently, two Circuits have relied on the statement in
Moore’s to answer that question in the affirmative. In one of the cases, the only
support cited besides Moore’s is this Circuit’s case, Klingler, which, as we
explained, is no support at all.19 The other case, which is unpublished, relies on
the Seventh Circuit dicta cited in Moore’s, which in turn relies on Klingler.20
Thus, in neither case does the chain of citations and authorities lead to any

17
2 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 9.04[3] (3d ed. 2007).
18
Stearns v. Consol. Mgmt., Inc., 747 F.2d 1105, 1112 (7th Cir. 1984) (citing Klingler,
in dicta, for the proposition that “[a] defendant may raise the issue of non-performance of a
condition precedent prior to trial by way of a motion for summary judgment”); Spindle v.
Pennsylvania, 660 F. Supp. 941, 945 (M.D. Pa. 1987) (quoting Stearns, 747 F.2d at 1112, again
in dicta).
19
Associated Mech. Contractors, Inc. v. Martin K. Eby Constr. Co., 271 F.3d 1309, 1317
(11th Cir. 2001) (citing Klingler, 636 F.2d at 107, and 2 Moore’s Federal Practice § 9.04[3])
(“The specific denial of performance of conditions precedent may be raised by motion as well
as by answer.”).
20
Heights Driving Sch., Inc. v. Top Driver, Inc., 51 F. App’x 932, 939-40 (6th Cir. 2002)
(unpublished) (citing Stearns, 747 F.2d at 1112, and 2 Moore’s Federal Practice § 9.04[3])
(“Rule 9(c) does not specify that a denial of the performance of a condition precedent must be
made in an answer or amended answer. Under the circumstances of this case, we think that
the specific denials made in [the defendant]’s summary judgment motion are sufficient.”),
noted in 5A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE
§ 1304 (3d ed. 2004).

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substantive support for the proposition that those courts apply.21 In fact, those
Circuits had earlier expressed rules to the contrary,22 as have other Circuits.23
Smith shows us no reason that the district court erred in denying Smith’s
summary judgment motion as a long-shot attempt to cure a defect in its answer.
Rule 9’s scope, by its very title (“Pleading Special Matters”), is limited to
pleadings. For “special matters” like conditions precedent, Rule 9’s
requirements dictate what must appear in certain pleadings. Here, the Rule
requires that a party must deny the occurrence or performance of a condition
precedent, with particularity, in the operative pleadings. It does so for several
reasons of orderliness and efficiency. It is no surprise that there is no support
in the text of Rule 9 or the relevant case law24 for the proposition that the author
of a deficient pleading should be afforded the disruptive opportunity at the
summary judgment stage to explain for the first time why the case should not
have proceeded in the first place. Moving for leave to amend the pleadings is the
obvious and proper method for repairing pleadings that failed to raise such
preliminary matters. The Rule’s insistence upon leave of court for amendment

21
Cf. Adam D. Chandler, Comment, Puerto Rico’s Eleventh Amendment Status Anxiety,
120 YALE L.J. 2183, 2191 & n.44 (2011) (pursuing a chain of authorities to find a thirty-year-
old legal error that was entrenched through iterative citation).
22
See Jackson v. Seaboard Coast Line R.R. Co., 678 F.2d 992, 1010 (11th Cir. 1982)
(“If . . . the defendant does not deny the satisfaction of the preconditions specifically and with
particularity, then the plaintiff’s allegations are assumed admitted, and the defendant cannot
later assert that a condition precedent has not been met.” (emphasis added)); Ginsburg v. Ins.
Co. of N. Am., 427 F.2d 1318, 1322 (6th Cir. 1970) (“[The defendant] made only a general
denial [that all conditions precedent had been performed], and consequently failure to file
proof of loss did not become an issue in this case.”).
23
See Walton v. Nalco Chem. Co., 272 F.3d 13, 21-22 & n.14 (1st Cir. 2001) (quoting
Jackson, 678 F.2d at 1010); Lumbermens Mut. Ins. Co. v. Bowman, 313 F.2d 381, 387 (10th
Cir. 1963).
24
See generally Am. Bankers Ins. Co. of Fla. v. Irricon, 200 F.3d 815, at *1 n.1 (5th Cir.
1999) (unpublished table decision) (per curiam) (assuming without deciding that failure to
deny, with particularity, the performance of a condition precedent in the answer to a
complaint is a “deficiency in the answer”).

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is of a piece with the duties of management imposed upon district judges by Rule
26.
In sum, the district court correctly held that, to deny that a
nonjurisdictional condition precedent like conciliation had been performed,
Smith was required to do so with particularity in its answer.
2. Denying Leave To Amend the Answer
In December 2008, the district court set March 1, 2009, as the deadline for
filing motions for leave to amend the pleadings. The deadline was three-and-a-
half months from the time Smith filed its answer. And yet not until two months
after the pleadings deadline did Smith commence discovery, when it served the
EEOC with requests for admission that the EEOC had not acted on Smith’s offer
to assist Moncada in her job search before it issued the Notice of Determination.
Smith attempted to amend its answer when it received the EEOC’s response.
While amending its answer was the proper course, as we have found, the district
court could find no good cause for Smith’s delay and denied it leave to amend its
answer.
This Court reviews a trial court’s denial of leave to amend pleadings for
abuse of discretion.25 Under FED. R. CIV. P. 16(b)(4), a party seeking to amend
its pleadings after a deadline has passed must demonstrate good cause for
needing an extension.26 The four factors relevant to good cause are: “‘(1) the
explanation for the failure to timely move for leave to amend; (2) the importance
of the amendment; (3) potential prejudice in allowing the amendment; and (4)
the availability of a continuance to cure such prejudice.’”27

25
See United States ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262, 266 (5th Cir.
2010).
26
See Fahim v. Marriott Hotel Servs., Inc., 551 F.3d 344, 348 (5th Cir. 2008).
27
Id. (quoting Sw. Bell Tel. Co. v. City of El Paso, 346 F.3d 541, 546 (5th Cir. 2003)).

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For the first factor, the district court concluded that Smith “fail[ed] to
provide a plausible explanation for its delay.” Smith filed its answer, then
waited almost six months before commencing discovery, allowing the pleadings
deadline to pass in the meantime.28 The EEOC had been sending discovery
requests for months when Smith finally began. Smith had three-and-a-half
months to meet the particularity requirement for its conciliation defense, but it
dragged its feet on discovery and now cannot explain why.
Moreover, the EEOC’s discovery responses were not Smith’s initial source
of information for its conciliation argument. As the district court observed,
Smith “at least had enough knowledge of the facts to” have filed a Rule 11
motion in December 2008 (well before the pleadings deadline) alleging that the
EEOC had “completely ignored” its offer to help Moncada, and it later filed a
specifically worded request for admission on the same ground. Smith’s
knowledge, or at least its reasonable suspicion, accents its inability to explain
the delay.
Smith had time to obtain discovery and seek leave to amend by the March
1 deadline. The district court found that Smith’s failure to account for its delay
was dispositive, outweighing the other three factors for assessing good cause.
The district court’s determination is well supported and squarely within its
sound discretion.
IV.
Smith argues that, because the EEOC failed to provide computations for
compensatory or punitive damages under FED. R. CIV. P. 26(a)(1)(A)(iii), the
EEOC should have been precluded from seeking any damages whatsoever.
When Smith made this argument below, the district court ruled substantially in
its favor, instructing the EEOC that it would not be able to argue a specific

28
The April 2009 mediation was no impediment to commencing discovery, as the
parties had agreed that the mediation would not pause or delay any paper discovery.

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damages amount before the jury, but the court did not dismiss the entire action
for damages, as Smith had requested. The EEOC complied with the district
court’s instruction at trial. Now on appeal, Smith does not attempt to explain
why the district court’s accommodation was insufficient. FED. R. CIV. P. 37(c)(1),
which governs sanctions for failing to disclose information under FED. R. CIV. P.
26, explicitly provides for the curative measure that the district court imposed.
Smith points to no example of an appeals court’s reversing a jury verdict or
eliminating a damages award on this basis.29 We likewise find no reason to do
so here.30
V.
Smith contests the punitive damages award on four grounds: (1) that the
jury instruction was improper, (2) that there was no evidence that Ray was
malicious or recklessly indifferent, (3) that there was no evidence that Ray acted
in a managerial capacity within the scope of his employment, and (4) that the
award is excessive.
1. The Jury Instruction
Smith argues that the punitive damages instruction misled jurors to
mistakenly substitute Smith’s knowledge of the ADA for its agent’s when
analyzing the requisite intent. Smith did not make this objection below, raising

29
Cf. Batson v. Neal Spelce Assocs., Inc., 765 F.2d 511, 515 (5th Cir. 1985) (describing
a district court’s dismissal of a complaint with prejudice as “draconian” and a “remedy of last
resort” when imposed as a sanction under FED. R. CIV. P. 37).
30
Smith makes a second argument, that mitigation of damages is not an affirmative
defense that must be included in a defendant’s answer to prevent waiver. This Court has
repeatedly referred to failure to mitigate as an affirmative defense, see, e.g., Jackson v. Host
Int’l, Inc., 426 F. App’x 215, 224 (5th Cir. 2011) (unpublished) (per curiam); St. Paul Fire &
Marine Ins. Co. v. Labuzan, 579 F.3d 533, 537 (5th Cir. 2009), and therefore the district court
did not abuse its discretion by granting the EEOC’s motion in limine to exclude evidence of
failure to mitigate at trial, see Vanhoy v. United States, 514 F.3d 447, 450 (5th Cir. 2008)
(requiring that affirmative defenses must generally be “set forth in a defendant’s responsive
pleading” or else the defendant waives them); Hesling v. CSX Transp., Inc., 396 F.3d 632,
643(5th Cir. 2005) (reviewing the grant of a motion in limine for abuse of discretion).

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our standard of review to plain error.31 That is, for Smith to prevail, it must
establish “‘(1) that an error occurred; (2) that the error was plain, which means
clear or obvious; (3) [that] the plain error must affect substantial rights; and (4)
[that] not correcting the error would seriously affect the fairness, integrity, or
public reputation of judicial proceedings.’”32
Smith points to one instance from the opening sentence of the jury charge
on punitive damages in which the district court used “Smith” when it could have
specified “Ray” or “Smith’s agent” instead. That sentence instructed that, before
punitive damages can be awarded, the EEOC must prove that “Smith
discriminated against Moncada with malice or reckless indifference.” Read in
full, though, the instruction goes on to specify, twice, that Smith’s agent is the
relevant actor for the purpose of punitive damages, and one of those times, it
explicitly distinguishes the agent from Smith itself.33 Those statements refine
and clarify the more general opening statement. They also unambiguously and
correctly explain that the jury must examine the agent’s intent in order to
impute liability to the company.34 The prior reference to “Smith” that Smith
alleges is improper was not a part of that explication of the operative law. When

31
See Russell v. Plano Bank & Trust, 130 F.3d 715, 719-21 (5th Cir. 1997), cert. denied,
523 U.S. 1120 (1998).
32
Id. at 721 (quoting Highlands Ins. Co. v. Nat’l Union Fire Ins. Co., 27 F.3d 1027, 1032
(5th Cir. 1994)).
33
The jury charge provided:

In order for Smith to be liable for punitive damages, the EEOC
must prove that the agent of Smith of whose conduct the EEOC
complains . . . acted with malice or reckless indifference to
Moncada’s right not to be discriminated against based on
disability. . . . Additionally, you cannot award punitive damages
against Smith if Smith proves that its agent’s actions regarding
Moncada were contrary to Smith’s good faith efforts to prevent
discrimination in the workplace.
34
See Kolstad v. Am. Dental Ass’n, 527 U.S. 526 (1999) (a Title VII case).

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the district court laid out the law of this case, it got it right. The isolated
introductory reference to Smith as the defendant does not rise to the level of
plain error.35
2. Evidence That Ray Acted with Malice or Reckless Indifference
Smith argues that the jury only had evidence that Smith, not Ray, was
aware of the ADA’s prohibitions, and so Ray could not have had the intent that
would justify punitive damages. Because Smith did not assert this claim in its
pre-verdict motion for judgment as a matter of law, this Court reviews for plain
error.36 Under that inquiry, this Court will uphold a verdict “[i]f any evidence
exists that supports the verdict.”37
The jury did have evidence that Ray was aware of the ADA. Although
Smith’s highest-ranking employee testified that Smith had never held a training
on the ADA, he also testified that workplace discrimination was discussed at
Smith’s semi-annual managers’ meetings. Ray was a manager at all times
during his employment. The jury could infer from those facts that Ray had
knowledge of the ADA, which is sufficient to satisfy the plain error standard.
3. Evidence That Ray Was Employed in a Managerial Capacity and Acted
Within the Scope of That Employment
Punitive damages are “available against a principal only when, inter alia,
an agent employed in a managerial capacity acts in the scope of employment.”38
Smith questions the sufficiency of the evidence that it employed Ray in a

35
See generally Sommers Drug Stores Co. Emp. Profit Sharing Trust v. Corrigan, 883
F.2d 345, 350 (5th Cir. 1989) (“A trial court is accorded substantial latitude in fashioning jury
instructions and if, considering the totality of a charge, the instructions are ‘comprehensive,
balanced, fundamentally accurate, and not likely to confuse or mislead the jury, the charge
will be deemed adequate.’” (quoting Bode v. Pan Am. World Airways, Inc., 786 F.2d 669, 671-72
(5th Cir. 1986)).
36
See Flowers v. S. Reg’l Physician Servs., Inc., 247 F.3d 229, 238 (5th Cir. 2001).
37
Id.
38
Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d 278, 282 (5th Cir. 1999) (a
post-Kolstad Title VII case).

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No. 11-10262

managerial capacity and that Ray acted within the scope of his employment
when he refused to consider Moncada. It argues that Ray had no discretion to
decide who would be allowed to apply for a position, which was the “operative
discriminatory act, not any failure to hire.”
We review de novo the district court’s denial of Smith’s motion for
judgment as a matter of law, but the standard with respect to a jury verdict is
“especially deferential.”39 Reversal is warranted only if “‘no reasonable jury
could have arrived at the verdict.’”40
With regard to managerial capacity, “‘[u]nfortunately, no good definition
of what constitutes a “managerial capacity” has been found.’”41 In deciding
whether an employee serves in a managerial capacity, courts consider “‘the type
of authority that the employer has given to the employee, the amount of
discretion that the employee has in what is done and how it is accomplished.’”42
Smith’s highest-ranking employee, Joe Roberts, testified that Ray was the
account manager when Moncada sought employment. Roberts also testified that
account managers have the authority to make hiring decisions and are the
immediate supervisors for employees working for Smith’s clients. From
Roberts’s testimony, the jury could reasonably have found that Ray had the
authority to hire and supervise employees and was therefore acting in a
managerial capacity.

39
Brown v. Bryan Cnty., Okla., 219 F.3d 450, 456 (5th Cir.), reh’g denied, 235 F.3d 944
(5th Cir. 2000), cert. denied, 532 U.S. 1007 (2001).
40
Rogers v. McDorman, 521 F.3d 381, 391 (5th Cir. 2008) (quoting Miss. Chem. Corp.
v. Dresser-Rand Co., 287 F.3d 359, 365 (5th Cir. 2002)).
41
Kolstad v. Am. Dental Ass’n, 527 U.S. 526, 543 (1999) (quoting 2 JAMES D. GHIARDI
& JOHN J. KIRCHER, PUNITIVE DAMAGES: LAW AND PRACTICE § 24.05 (1998)).
42
Id. (quoting 1 LINDA L. SCHLUETER & KENNETH R. REDDEN, PUNITIVE DAMAGES §
4.4(B)(2)(a) (3d ed. 1995)).

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No. 11-10262

Smith also challenges the sufficiency of the evidence that Ray was acting
within the scope of his employment when he refused Moncada’s attempt to apply
for a job, arguing that Ray acted in violation of a Smith policy43 and therefore not
within the scope of his employment. But misapplying a claimed policy is not
necessarily a bar to finding that an employee acted within the scope of his
employment.44 Courts look to whether the act is of the kind the employee is
employed to perform, whether the discrimination occurred substantially within
authorized time and space limits, and whether the act was actuated, at least in
part, by a desire to serve the employer.45 The evidence demonstrates that Ray’s
job duties as account manager included hiring employees, and a reasonable jury
could find that blocking someone from entering the applicant pool, while on the
job, is within the scope of that duty, even if it violates a Smith policy.46
4. Excessiveness
The district court suggested, and the EEOC accepted, a remittitur of the
jury’s punitive damages award. The remittitur reduced the award from
$150,000 to twice the compensatory damages and back pay, $68,800. Smith now
argues that “the award of remitted punitive damages is still excessive, given the
non-egregious nature of this one isolated incident.”

43
Roberts testified at trial that Smith’s policy is to give an application to anyone
seeking one, unless that person has a felony conviction.
44
See Kolstad, 527 U.S. at 544.
45
See id. at 543.
46
We note that Kolstad recognized a good-faith exception that Smith does not argue
should apply here. Under Kolstad, “liability [for punitive damages] may not be imputed when
the managerial agent’s within the scope actions are ‘contrary to the employer’s good faith
efforts to comply with’” the antidiscrimination law at issue (in that case, Title VII).
Deffenbaugh-Williams, 188 F.3d at 282 (quoting Kolstad, 527 U.S. at 545); see also Rubinstein
v. Adm’rs of the Tulane Educ. Fund, 218 F.3d 392, 405 (5th Cir.) (recognizing the exception in
another Title VII case), reh’g en banc denied, 232 F.3d 212 (5th Cir. 2000), cert. denied, 532
U.S. 937 (2001). Because Smith did not make this argument, we consider it waived. See Jones
v. Wells Fargo Bank, N.A., 666 F.3d 955, 960-61 (5th Cir. 2012) (per curiam).

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This Court reviews the grant of a remittitur for abuse of discretion,47 and
“[w]here the trial court already has invoked its discretion in granting a
remittitur, our scope of review is even narrower than usual.”48
The district court engaged in a careful and thorough analysis of this issue,
examining (1) the degree of reprehensibility of Smith’s conduct, (2) whether the
punitive damages bore a reasonable relationship to the compensatory damages
awarded, and (3) how the punitive damages award in this case compared to
awards in similar cases.49 The district court’s analysis is considered, fair, and
in no way an abuse of discretion.
VI.
Smith makes three challenges to the district court’s imposition of
injunctive relief: (1) that the district court erred as a matter of law by placing a
burden of proof on Smith to demonstrate “by clear and convincing evidence that
there is no reasonable probability that it will violate the ADA in the future,” (2)
that there was an “absence of any evidence” to support the EEOC’s request for
injunctive relief, and (3) that the relief granted exceeded the EEOC’s request and
“makes both compliance and enforcement unreasonably difficult.”
This Court reviews the first challenge de novo.50 Smith does not dispute
that “the question of whether to award injunctive relief is generally within the
trial court’s discretion,” but it maintains that it should not have borne the
burden of showing, essentially, that it would not violate the ADA in the future.
Smith argues that “[t]he EEOC had the burden to support its request for

47
See Consol. Cos. v. Lexington Ins. Co., 616 F.3d 422, 435 (5th Cir. 2010).
48
Stapleton v. Kawasaki Heavy Indus., Ltd., 608 F.2d 571, 574 n.7 (5th Cir. 1979).
49
The court applied the three-factor test for excessiveness from Deffenbaugh-Williams
v. Wal-Mart Stores, Inc., 156 F.3d 581, 595-96 (5th Cir. 1998), vacated, Williams v. Wal-Mart
Stores, Inc., 169 F.3d 215 (5th Cir. 1999) (en banc), reinstated in relevant part, 182 F.3d 333
(5th Cir. 1999) (en banc).
50
See Rathborne Land Co. v. Ascent Energy, Inc., 610 F.3d 249, 255 (5th Cir. 2010).

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No. 11-10262

injunctive relief by demonstrating that Smith might again engage in prohibited
conduct in the future.” Smith makes this argument in the teeth of two Fifth
Circuit precedents.51 In any event, Smith’s argument only raises the question
whether the district court was required to provide injunctive relief, not whether
it had the discretion to do so, which it unquestionably did.
Because any burden was on Smith, we need not address Smith’s second
challenge, that there was an “absence of any evidence” to support the EEOC’s
request for injunctive relief.
This Court reviews the third challenge—that the relief granted exceeded
the EEOC’s request and “makes both compliance and enforcement unreasonably
difficult”—for abuse of discretion.52 Smith argues that the district court abused
its discretion by requiring it to notify the EEOC, “in perpetuity,” of any instance
in which an employee complains of disability discrimination. The EEOC had
requested a notification requirement that would extend two years past the date
of judgment. Although the district court’s order did not specify a date on which
Smith’s reporting obligations would conclude, we do not read the order as
extending to the infinite horizon. The EEOC maintains on appeal that a two-
year reporting period is appropriate, and to the extent that the district court’s

51
James v. Stockham Valves & Fittings Co., 559 F.2d 310, 354 (5th Cir. 1977)
(reiterating the Circuit rule that “absent clear and convincing proof of no reasonable
probability of further noncompliance with the law a grant of injunctive relief is mandatory”),
cert. denied, 434 U.S. 1034 (1978); EEOC v. Rogers Bros., Inc., 470 F.2d 965, 966-67 (5th Cir.)
(per curiam) (noting that “we may hold on these facts that injunctive relief is mandatory
unless the District Court finds on the basis of clear and convincing proof that there exists no
reasonable probability of further noncompliance,” and specifying further that “[t]he burden of
negating that probability lies with the defendants”), cert. denied, 409 U.S. 1059 (1972).
52
See McClain v. Lufkin Indus., Inc., 519 F.3d 264, 283 (5th Cir.) (“We review a district
court’s fashioning of injunctive relief for abuse of discretion.”), cert. denied, 555 U.S. 881
(2008).

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order left the time period unclear, we clarify that the requirement terminates
two years from the date of judgment.53
VII.
We AFFIRM the district court in full, its reporting requirement
terminating January 11, 2013, two years from the date of judgment below.

53
Smith also complains that the district court order did not “include any specifics on
making the required notification,” thereby making “both compliance and enforcement
unreasonably difficult.” Smith does not point to any authority to substantiate its argument
that these alleged deficiencies in the district court’s order constitute an abuse of discretion,
and we do not find it persuasive.

20