No. 92-332
IN THE SUPREME COURT OF THE STATE OF MONTANA
LEONARD E. VAINIO, as the Personal
Representative of the Estate of
HELEN MARIE VAINIO,
Petitioner and Appellant,
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CANDI BROOKSHIRE and THE MONTANA
HUMAN RIGHTS COMMISSION,
Respondents and Respondents.
APPEAL FROM: District Court of the Second Judicial District,
In and for the County of Silver Bow,
The Honorable Mark P. Sullivan, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Kevin E. Vainio, Attorney at Law,
Butte, Montana
For Respondents:
Leonard J. Haxby, Attorney at Law, Butte,
Montana (Brookshire); David Rusoff, Human
Rights Commission, Helena, Montana
Submitted on Briefs: January 14, 1993
Decided: May 13, 1993
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Appellant Leonard Vainio, acting as personal representative of
Helen Marie Vainio's estate, appeals the decision of the Second
Judicial District Court, Silver Bow County, affirming the order of
the Montana Human Rights Commission (HRC) finding that Helen
vainio's employee/supervisor committed sexual harassment against
respondent Candi Brookshire, and the HRC's damage award of $20,000
to Brookshire for emotional distress.
We affirm.
Appellant presented 11 issues for this Court's consideration.
We rephrase and consolidate the issues as follows:
1. Does § 49-2-506(1)(b), MCA, of the Montana Human Rights
Act violate the Montana Constitution because the Act's procedural
provisions do not allow for a jury trial?
2. Does 5 49-2-506(1) (b), MCA, constitute an unlawful
delegation of judicial and legislative powers?
3. Did the District Court err in finding that Helen Vainio
was properly notified of the complaint?
4. Did the District Court err in finding Helen Vainio liable
on the basis of respondeat superior?
5. Did the District Court err in upholding the HRC's ruling
striking part of appellant's witnesses and exhibits?
6. Did the District Court err in holding that the Workers'
Compensation Act does not provide a remedy for sexual harassment?
7. Did the District Court err in affirming the HRC's award of
$20,000 in emotional distress damages?
8. Did the District Court err in affirming the HRC'S
decision not to allow the HRC1sinvestigative report into evidence?
On September 2, 1988, rook shire filed a complaint with the
HRC against Harvey Phillips and the Silver Slipper, a lounge and
casino located in Butte. On September 19, 1988, Brookshire amended
her complaint, alleging that she was sexually harassed by Phillips
during her employment at the silver Slipper prior to being fired on
June 2, 1988. During the time of the sexual harassment, the Silver
Slipper Bar was owned by Helen vainio, who is now deceased. The
Silver Slipper has since been sold to Silver Slipper, Inc.
On September 5, 1989, the matter was certified for hearing and
Phillips, Brookshire, and Silver Slipper, Inc., were all properly
served with notice. On April 12, 1990, a contested case hearing
was held in Butte. In her findings of fact, and conclusions of
law, and order, the hearing examiner concluded that Phillips
unlawfully sexually harassed Brookshire and that Helena Vainio, as
owner of the Silver Slipper, was liable for the harassment. Silver
Slipper, Inc., was found not liable. Appellant filed exceptions
with the HRC to the hearing examiner's findings. On March 29,
1991, the HRC issued its order affirming the hearing examiner's
order. Appellant appealed the HRC's opinion and order to the
District Court. A hearing was held on December 30, 1991, and on
May 12, 1992, the District Court issued its order affirming the
HRC. Appellant appeals from the District Court order.
Appellant did not file a transcript of the contested case
hearing for this Court to review, but did provide this Court with
a transcript of the District Court's hearing.
I.
Does 5 49-2-506(1)(b), MCA, of the Montana Human Rights Act
violate the Montana Constitution because the Act's procedural
provisions do not allow for a jury trial?
Appellant contends 5 49-2-506(1)(b), MCA, unconstitutionally
denied Helena Vainio's right to a jury trial. A legislature's
enactment is presumed constitutional. Ingraham v. Champion
International (lggO), 243 Mont. 42, 47, 793 P. 2d 769, 7 7 2 . A party
challenging the constitutionality of a statute has the burden of
proving it unconstitutional beyond a reasonable doubt. Romero v.
J & J Tire (1989), 238 Mont. 146, 149, 777 P.2d 292, 294.
We have held that the Montana Human Rights Act does not
unconstitutionally deny persons the right to a trial by jury.
Romero, 777 P.2d at 296. Prior to enactment of the Civil Rights
Act of 1991, which creates a statutory right to a trial by jury
under Title VII where there is a claim for compensatory or punitive
damages, there was no right to trial by jury under Title VII.
Slack v. Havens (9th Cir. 1975), 522 F.2d 1091, 1094. In Romero,
we stated that legislative bodies may assign adjudication of
statutory rights to administrative agencies in which a jury trial
would be incompatible without violating the Seventh Amendment.
Romero, 777 P.2d at 296. Through its enforcement of the Human
Rights Act, the HRC protects the State's interest in eliminating
discrimination. Appellant failed to prove beyond a reasonable
doubt that the administrative contested case procedures under the
Human Rights Act unconstitutionally denied Helen Vainiotsright to
a jury trial. We hold that Helen Vainio was not unconstitutionally
denied a jury trial.
11.
Does 9 49-2-506(1) (b), MCA, constitute an unlawful delegation
of judicial and legislative powers?
Appellant asserts that 9 49-2-506(1) (b), MCA, which allows the
HRC to award damages in discrimination cases, constitutes an
unconstitutional delegation of authority by the legislature.
Appellant asserts that the HRC has 'Iunbridled authorityu to award
damages. Section 49-2-506(1)(b), MCA, grants the HRC the
discretion to award tvreasonable"
damages. Parties to contested
cases before the HRC have the right to judicial review of all final
HRC orders pursuant to 9 2-4-702, MCA. The HRC damage awards must
be reasonable and they are reviewable in district court under an
abuse of discretion standard. The HRC does not have unbridled
authority to award damages. We hold that 9 49-2-506(1)(b), MCA,
does not constitute an unlawful delegation of judicial and
legislative powers.
111.
Did the District Court err in finding that Helen Vainio was a
party to the action?
Appellant asserts that Brookshire failed to name Helen Vainio
in her complaint to the HRC as required by § 49-2-501(1), MCA, and
24.9.209(2), ARM. Section 49-2-501(1), MCA, states the following
requirements for bringing an action against a party:
A complaint may be filed by or on behalf of any person
claiming to be aggrieved by any discriminatory practice
prohibited by this chapter. The complaint must be in the
form of a written, verified complaint stating the name
and address of the person ...
alleged to have engaged
in the discriminatory practice and the particulars of the
alleged discriminatory practice.
The complaint listed Phillips and the Silver Slipper as
respondents and stated the proper address and telephone number of
the Silver Slipper. The complaint alleged unlawful discriminatory
practices occurring throughout Brookshire's employment at the
Silver Slipper. There is no requirement that a complaint filed
under this statute name the individual owner of a business.
Appellant also contends that Helen Vainio was not promptly
served with Brookshire's harassment complaint. Section 49-2-504,
MCA, requires the HRC to informally investigate discrimination
complaints filed with the Commission. Helen Vainio was aware of
Brookshire's complaint three months after Brookshire was fired.
Appellant has not provided this Court with additional evidence to
show otherwise. Helen Vainio was properly served in this instance.
We hold that the District Court did not err in finding that Helen
Vainio was properly notified of Brookshire's complaint and was a
party to this action.
IV.
Did the District Court err in finding Helen Vainio liable on
the basis of respondeat superior?
Section 49-2-303(1) (a), MCA, provides that it is unlawful for
an employer to discriminate based on sex. Unlike the comparable
federal law, Title VII of the Civil Rights Act of 1964, the Montana
Human Rights Act does not include an agent of the employer in the
definition of "ernpl~yment.'~Section 49-2-101(8), MCA; 42 U.S.C.
5 2000e(b) (1964). In employment discrimination proceedings before
the HRC, only the employer is potentially liable for discriminatory
acts of its agents. The Equal Employment Opportunity Commission
has exclusive jurisdiction under Title VII over any claim against
a manager. Under the theory of respondeat superior, employers are
liable for the intentional sexual harassment in which supervisory
personnel engage in the course of their employment. E.E.O.C. v.
Hacienda Hotel (9th Cir. 1989), 881 F.2d 1504, 1515. As a result
of respondeat superior liability, a sexual harassment complaint
need not specify acts committed personally by the employer. All
that is needed to make Helen Vainio subject to the administrative
proceeding is for Brookshire to allege that Phillips, an agent of
Helen Vainio, committed unlawful sexual discrimination. We hold
that the District Court did not err in concluding that Helen Vainio
was liable on the basis of respondeat superior.
v.
Did the District Court err in upholding the HRC1s ruling
striking part of appellant's witnesses and exhibits?
Administrative Rule 24.9.317(4), permits the hearing examiner
or HRC to limit the prosecution or defense of a contested case if
a party fails to comply or engage in discovery. This Court has
7
held that the imposition of sanctions for failure to comply with
discovery is regarded with favor. Huffine v. Boylan (1989), 239
Mont. 515, 517, 782 P.2d 77, 78. An appropriate sanction is the
limitation of proof to matters disclosed through discovery. Vehrs
v. Piquette (1984), 210 Mont. 386, 393, 684 P.2d 476, 480. Any
last minute tender of relevant documents will not cure the
discovery problem. Dassori v. Roy Stanley Chevrolet Co. (1986),
224 Mont. 178, 728 P.2d 430. We will not overturn a trier of fact
decision as to the determination of an appropriate sanction absent
an abuse of discretion. Dassori, 728 P.2d at 432.
According to the minute entry of the hearing examiner, during
a prehearing conference on March 21 and 22, 1990, the attorneys in
this case were ordered to exchange their list of witnesses,
contentions, and copies of exhibits, and revise a final prehearing
order. Previous to this prehearing conference, appellant's counsel
failed to participate in the preparation of the prehearing
memorandum or file any separate addendum for the March 21, 1990,
conference. The conference was continued to the following day to
give appellant's counsel the opportunity to prepare his additions
and discuss them with Brookshire's counsel. Brookshire's counsel
did not receive appellant's witness or exhibit lists until April 9,
1990, and did not receive copies of appellant's proposed exhibits
until April 11, 1990. Appellant's counsel hand-delivered his
documents to the HRC offices on Monday, April 9, 1990, at 5: 05 p.m.
Based on appellant's failure to disclose the proper documents and
witnesses, the hearing examiner struck the items from the final
8
prehearing order. We hold that the District Court did not err in
upholding the HRC's ruling striking part of appellant's defense.
VI .
Did the District Court err in holding that the Workers'
Compensation Act does not provide a remedy for sexual harassment?
Appellant argues that Brookshire's exclusive remedy for
damages for emotional pain and suffering is under the Workers'
Compensation Act, and not under the Montana Human Rights Act. The
Workers' Compensation Act provides the exclusive remedy for
physical injuries on the job. Section 39-71-119, MCA, defines
injuries covered by the Act. The statute provides that personal
injuries covered by the Act include "internal or external physical
harm to the body . . . caused by an accident.I1 Section
39-71-119(1)(a) and (2), MCA. Brookshire's complaint did not
allege internal or external physical injuries to her body. Sexual
harassment is an intentional act not arising from an accident. We
hold that the Workers1 Compensation Act is not an exclusive remedy
for Brookshire1s claim.
VII.
Did the District Court err in affirming the HRC's award of
$20,000 in emotional distress damages?
Section 49-2-506(1) (b), MCA, delineates the forms of relief
which the HRC may order if it finds that a person has engaged in
unlawful discriminatory practices. The order issued by the HRC
may:
[Rlequire anv reasonable measure to correct the
discriminatory practice and to rectify any harm.
pecuniary or otherwise, to the person discriminated
against .... [Emphasis added.]
Section 49-2-506 (b)(I), MCA.
Appellant contends that the HRC's award of $ 2 0 , 0 0 0 for
emotional distress was clearly erroneous. We do not agree. The
District Court found that Phillips's conduct toward Brookshire
included, among other things, brushing his body against her
buttocks, putting his hand up her skirt, grabbing her breasts, and
requesting Brookshire to have sex with him. The statute provides
that the HRC may order any reasonable measure to correct or rectify
any harm. This includes emotional distress damages. The HRC1s
award of $20,000 in emotional distress damages was not clearly
erroneous. We hold that the District Court did not err in
upholding the HRC's award of $20,000 in emotional distress damages.
VIII.
Did the District Court err in affirming the HRC's decision not
to allow the HRC's investigative report into evidence?
Finally, appellant contends that there was evidence contained
in the HRC's investigative file which would establish that Helen
Vainio was not made a party to the action. As we stated
previously, Helen Vainio was properly noticed and is a party to
this action.
We affirm the decision of the District Court.
Justices
Justice Terry N. Trieweiler, concurring in part and dissenting in
part:
I concur with the majority's conclusions under Issues I1
through VIII of the majority opinion. However, because I conclude
that compensatory damages for emotional distress are recoverable
under 3 49-2-506(1)(b), MCA, I also conclude that either party had
a right to demand a jury trial of that issue pursuant to
Article 11, 5 26, of the Montana Constitution, which provides in
part that "[tlhe right of trial by jury is secured to all and shall
remain inviolate."
We have previously held that *'[t]he right to trial by jury in
this state is the same as that guaranteed by the Seventh Amendment
[to the United States Constitution].
'I (Citation omitted.) Linder
v Smith (1981), 193 Mont. 20, 23, 629 P.2d 1187, 1189. While I do
.
not agree that the right to trial by jury under Montana's
Constitution should be limited by federal interpretations of the
United States Constitution, I conclude that even on the basis of
those decisions, appellant had a right to a jury trial of the
damage issue in this case.
The majority relies on our prior decision in Romero v. J & J Tire
(1989), 238 Mont. 146, 777 P.2d 292. However, in that case
compensatory damages were not at issue, and the court correctly
looked to federal case law interpreting Title VII of the Civil
Rights Act of 1964 to determine whether a jury trial was guaranteed
under Montana's Human Rights Act. In that case, we held that:
This Court has stated that in discrimination cases under
the Human Rights Act, it is helpful to look to federal
law under Title VII of the C i v i l Rights Act of 1964,
codified at 42 U.S.C. ZOOOe, et seq, Snellv.Montalza-
Dakota UtihiesCo. (1982), 198 Mont. 56, 62, 643 P.2d 841,
844. ...
When Congress creates new statutory 'public
rights,* it may assign their adjudication to an
administrative agency with which a jury trial would be
incompatible, without violating the Seventh Amendment's
injunction that jury trial is to be 'preserved* in suits
at common law.'"
However, our holding in Romero must be reexamined for several
reasons, First of all, compensatory or legal damages for pain and
suffering were not an issue in Romero. Second, the federal case
law relied upon in Romero was decided before the 1991 amendments to
Title VII of the civil Rights Act of 1964. Prior to those
amendments, the only relief provided for under the enforcement
provisions of the Federal Civil Rights Act was equitable relief.
See Cub v. Loether (1974)~415 U.S. 189, 94 S. ct. 1005, 39 L. ~ d .
2d
260. The District Court could enjoin the conduct complained of,
order reinstatement of the effected employee, with or without back
pay, or grant any other equitable relief that the court deemed
appropriate. Curlk, 415 U.S. at 197. However, in 1991, 42 U.S.C.
'5 1981a(a) (I) was added to the Federal Civil Rights Act to provide:
In an action brought by a complaining party under
section 706 or 717 of the Civil Rights Act of 1964 E42
U.S.C. 2000e-5, 2000e-161 against a respondent who
engaged in unlawful intentional discrimination . .
, and
provided that the complaining party cannot recover under
section 1981 of this title, the complaining party may
recover compensatory and punitive damages as allowed in
subsection (b) of this section, in addition to any relief
authorized by section 706(g) of the Civil Rights Act of
1964 [42 U.S.C. 2000e-5(g), 2000e-163, from the
respondent.
When the Act was amended to allow for compensatory or punitive
damages, it was also amended to provide that:
If a complaining party seeks compensatory or
punitive damages under this section --
(1) any party may demand a trial by jury ....
42 U.S.C. I 1981a(c) (1991).
Because the Federal Civil Rights Act did not provide for
general compensatory damages prior to 1991, the federal cases
decided prior to the amendment that were relied upon by the
majority are no longer instructive, A more helpful decision on
this issue is the United States Supreme Court's decision in Cub.
In that case, the Supreme Court was asked to decide whether parties
had a right under the Seventh Amendment to trial by jury of claims
brought pursuant to Title VIII of the Civil Rights Act of 1968 (42
U.S.C. 5 3612 (1968)). The fair housing provisions of that Act
allowed federal courts to grant relief, including actual damages
and punitive damages. In that case, the petitioner sought actual
and punitive damages based on her allegation that the respondents
had refused to rent an apartment to her because of her race.
Respondents made a timely demand for jury trial. However, the
district court held that a jury trial was not authorized under
Title VIII of the Civil Rights Act, and neither was it required by
the Seventh Amendment. The Seventh Circuit Court of Appeals
reversed on the issue of respondents' right to a trial by jury, and
the Supreme Court affirmed. In doing so, the Court held that:
But when Congress provides for enforcement of statutory
rights in an ordinary civil action in the district
courts, where there is obviously no functional
justification for denying the jury trial right, a jury
trial must be available if the action involves rights and
remedies of the sort typically enforced in an action at
law.
We think it is clear that a damages action under
5 812 is an action to enforce "legal rights1Iwithin the
meaning of our Seventh Amendment decisions. See, e.g.,
Rossv. Bemhard, [396 u.S. 531,] 533, 542; Dairy Queen, Inc. v
.
Wood, [369 U.S. 469,] 476-477. A damages action under
the statute sounds basically in tort--the statute merely
defines a new legal duty, and authorizes the courts to
compensate a plaintiff for the injury caused by the
defendant's wrongful breach. As the Court of Appeals
noted, this cause of action is analogous to a number of
tort actions recognized at common law.
More important, the relief sought here--actual and
punitive damages--is the traditional form of relief
offered in the courts of law.
C r i , 415 U.S. at 195.
uts
The Court then went on to distinguish between actions brought
pursuant to Title VIII, which provided for actual and punitive
damages, and actions brought pursuant to Title VII, which at that
time allowed only reinstatement and back pay which the Court
characterized as equitable remedies.
As in C r i , the rights enforced by Brookshire in this case
uts
were ultimately enforceable in a court of law. See 49-2-505(4),
MCA; 5 49-2-508, MCA; § 49-2-509 (1)(a) and (b), (3), (5) and (6),
MCA .
This issue has been previously decided by the State of Alaska
in Loomis Electronics Protection, Inc. v Schaefer (Ala. 1976), 549 P.2d 1341.
.
In that case, Schaefer sued Loomis for discriminatory hiring
practices. Loomis moved for a jury trial, which was denied. The
Alaska Supreme Court observed that tie constitutional guarantee of
trial by jury in Alaska was similar to that found in the Seventh
Amendment to the Constitution of the United States. Furthermore,
it found that the statutory prohibition against discriminatory
hiring practices in Alaska was similar to Title VII of the Civil
Rights Act of 1964. It acknowledged that federal cases at that
time had concluded that the relief provided for under Title VII of
the Federal Act was equitable in nature and that there was,
therefore, no right under the United States Constitution to trial
by jury of those claims. However, it distinguished the Alaska
statute in the following manner, which is relevant to this case:
Title VII of the Federal Act contemplates On@ equitable
relief. No such limitation is found in the language of
.
AS 22.10.020 (c) After authorizing the superior court to
enjoin illegal activities, through the application of its
traditional powers of equity, the legislature of Alaska
went on to authorize the court to order any other relief;
including thepayment of money. The language of the statute is
clearly intended to provide a litigant complete relief in
an appropriate case. ... We believe the broad language
of AS 22.10.020(c) indicates a legislative intent to
authorize an award of compensatory and punitive damages
for violations of AS 18.80, in addition to the equitable
remedies such as enjoining illegal employment activities
and ordering back pay as a form of restitution.
After discussing the U.S. Supreme Court's decision in Curtis,
the Alaska Supreme Court went on to conclude that:
Similarly, in the instant case, where part of the
relief sought is compensatory and punitive damages, we
believe that Article I, 5 16, of the Constitution of
Alaska, guarantees the parties the right to a jury trial.
Accordingly, the order of the superior court, striking
petitioner's demand for a trial by jury, should not have
been entered.
Likewise, the damages authorized by § 49-2-506(1) (b) , MCA, and
awarded in this case are the traditional form of relief offered in
courts of law. Whether claiming such damages or defending against
a claim for damages, the Montana Constitution, in Article 11, 26,
and the Seventh Amendment to the United States Constitution,
guarantee the right of either party to trial by jury. If such a
fundamental constitutional right can be evaded by simply delegating
the initial determination of such damages to a state agency other
than a district court, then the constitutional right to trial by
jury is rendered meaningless. And, if the right to trial by jury
is rendered meaningless for the employer in this case, then no
one's right to trial by jury is secure from legislative
interference in the future. This result was never intended by the
authors of the Montana Constitution, nor the founding fathers when
they drafted the Bill of Rights to the United States Constitution.
The right to trial by jury is the most fundamental protection
in our state and in our country against tyranny by judges,
legislators, bureaucrats, and other governmental officials. I
conclude that, under the facts in this case, appellant was denied
that constitutional right and that Brookshire's claim, while
otherwise fully supported by the record, should be remanded for a
jury trial on the issue of compensatory damages.
/
I Il Justice
May 13, 1993
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
KEVIN E. VAIN10
Attorney at Law
27 West Park Street
Butte, MT 59701
Leonard J. Haxby
Attorney at Law
P.O. Box 3008
Butte, MT 59702-3008
DAVID M. RUSOFF
Human Rights Commission
P.O. Box 1728
Helena, MT 59624
ED SMITH
CLERK OF THE SUPREME COURT
STATE ,PF MONTANb