Deffenbaugh-Williams v. Wal-Mart Stores, Inc.

                          UNITED STATES COURT OF APPEALS
                               FOR THE FIFTH CIRCUIT
                                ____________________

                                   No. 97-10685
                               ____________________

                           JULIE DEFFENBAUGH-WILLIAMS,

                                          Plaintiff-Appellee-Cross-Appellant,

                                      versus

                      WAL-MART STORES, INC., Et Al.,

                                                                        Defendants,

                              WAL-MART STORES, INC.,

                                          Defendant-Appellant-Cross-Appellee.

_________________________________________________________________

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

                                 August 31, 1999

Before JOLLY, SMITH, and BARKSDALE, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

     Our en banc court, 1999 WL 528486, having reinstated our prior

opinion, 156 F.3d 581 (1998), except for part II. C. (punitive

damages),     id.    at    592-98,   at    issue    on   remand   is    whether   the

recently-clarified standard for such Title VII damages, Kolstad v.

American Dental Association, 119 S. Ct. 2118 (1999), requires a new

trial on that issue or supports the district court’s judgment as a

matter   of    law    for     Wal-Mart.        We    REVERSE      and   REMAND    for
reinstatement of the punitive damages award for Julie Deffenbaugh-

Williams (Deffenbaugh), but reduced to $75,000.

                                I.

     The relevant facts, 156 F.3d at 585-86, are established by the

reinstated affirmance of the jury verdict for Deffenbaugh on

liability and compensatory damages.

     Dale Gipson, district manager over the shoe and jewelry

departments in six Wal-Mart stores, left uncontradicted, during an

August 1993 lunch meeting between him, Deffenbaugh, and two other

Wal-Mart managers, the statement by Deffenbaugh’s prior supervisor

(a district manager) that Deffenbaugh would “never move up with the

company being associated with a black man”.      Subsequently, Gipson

became Deffenbaugh’s supervisor. He pursued a series of pretextual

disciplinary actions against Deffenbaugh, finally terminating her

in January 1994 on fabricated workplace-policy grounds.

     Signs in Wal-Mart stores encouraged employees with grievances

to contact higher management.          Subsequent to one of the pre-

termination disciplinary episodes, Deffenbaugh complained to Wal-

Mart regional manager David Norman that her supervisors were “out

to get” her because of, inter alia, her interracial relationship.

Norman responded that her dating a black man was not a problem and

that he would “check into it”.           But, Norman did not contact

Deffenbaugh about any follow-up.




                                   2
       Deffenbaugh filed suit under Title VII, 42 U.S.C. § 2000e, et

seq., and 42 U.S.C. § 1981.            On 25 July 1996, four days before her

trial, Patterson v. P.H.P. Healthcare Corp., 90 F.3d 927 (5th Cir.

1996), was rendered.            It addressed in some detail what level of

management must participate in an action in order to assess Title

VII punitive damages against an employer, particularly stressing

the    relevance     and   importance     of     a   properly-functioning         anti-

discrimination policy for an employer’s lack of “malice or ...

reckless indifference to the federally protected rights of an

aggrieved individual”, the 42 U.S.C. § 1981a(b)(1) Title VII

punitive-damages touchstones.

       However, Patterson went unmentioned during the trial, held

from 29 to 31 July, including during the charge conference, held 31

July.    Wal-Mart rested on 31 July without presenting any evidence

(Wal-Mart     personnel,        including       Gipson,      had   been      called   by

Deffenbaugh).

       The   jury    found      that   Wal-Mart      had    discriminated       against

Deffenbaugh      based     on    her   race;     and,      pursuant     to   bare-bones

instructions on corporate vicarious liability and the § 1981a(b)(1)

criteria (unobjected to by Wal-Mart), that Wal-Mart had done so

with    malice      or   with    reckless       indifference       to   Deffenbaugh’s

federally protected rights.            The jury awarded $19,000 compensatory

and $100,000 punitive damages.




                                            3
       While Wal-Mart’s post-verdict motion for judgment as a matter

of    law   (JMOL)   or    for   a   new    trial     was   pending,    Patterson’s

applicability was finally raised. Following supplemental briefing,

and relying on Patterson, the district court granted a JMOL to Wal-

Mart on punitive, but not compensatory, damages.

       Wal-Mart and Deffenbaugh each appealed.                 In June 1998, just

prior to oral argument, Burlington Industries, Inc. v. Ellerth, 118

S. Ct. 2257 (1998), and Faragher v. Boca Raton, 118 S. Ct. 2275

(1998), clarified vicarious liability in the context of Title VII

sexual harassment; our panel ordered post-argument briefing on

these cases’ effect.

       Our first opinion, in September 1998, affirmed liability and

the    compensatory       damages,    rejecting,       inter    alia,       Wal-Mart’s

contention that discrimination on the basis of an interracial

relationship is not Title VII race discrimination.                      156 F.3d at

586-91. We reversed the post-verdict JMOL on punitive damages, id.

at 592-94, but found the jury’s award excessive, and ordered a

remittitur to $75,000, id. at 594-98.

       In November 1998, the Supreme Court granted certiorari in

Kolstad to consider when punitive damages may be awarded under

Title VII, the principal focus being whether, despite its plain

terms, § 1981a(b)(1) could be satisfied only if the discriminatory

conduct was also “egregious”.              119 S. Ct. 401 (1998); id. at 2127

(1999); id.     at    2132-33    (Stevens,      J.,    concurring      in    part   and

                                            4
dissenting in part).     Concomitantly, our en banc court granted

rehearing in this case in February 1999, 169 F.3d 215, and ordered

additional briefing on the punitive damages issue and Kolstad’s

possible effect.      The EEOC participated in briefing and oral

argument.   Prior to, and at, the en banc oral argument in May 1999,

Deffenbaugh stipulated to accepting the reduced punitive damages.1

     Kolstad was rendered in June 1999.      As discussed infra, after

rejecting an egregiousness element, the Court addressed imputing

liability to an employer, if its employee was found to have acted

with the requisite malice or reckless indifference.        119 S. Ct. at

2126.   Four Justices dissented from the Court’s reaching the

imputation issue. Id. at 2130 (Stevens, J., concurring in part and

dissenting in part).

     Kolstad having lighted the way for when Title VII punitive

damages liability can be imputed to the employer, our en banc

court, in short order, reinstated our prior panel opinion, except

its punitive damages section, and remanded to our panel to consider

Kolstad’s   impact.    1999   WL   528486.    Therefore,   the   $19,000

compensatory damages award has again been affirmed.         We directed

the parties, and invited the EEOC (it accepted), to brief the




    1
     In her post-remand, supplemental brief, however, Deffenbaugh
requests a new trial on punitive damages should we reinstate the
remittitur but should she then refuse it. No authority need be
cited that, on grounds of judicial estoppel, among other bases, she
is bound by her earlier stipulation.

                                    5
effect of Kolstad, particularly whether a new trial on punitive

damages is necessary.

                                 II.

     In the post-Kolstad briefing, Deffenbaugh and the EEOC urge

that such remand is not necessary; that the JMOL again be reversed.

Wal-Mart takes a different procedural course: it urges remand;

alternatively, that the JMOL be affirmed.

                                 A.

     Kolstad explains, first, that no “egregiousness” requirement

exists for § 1981a(b)(1) punitive damages beyond the statutory

“malice” or “reckless disregard” regarding actions’ legality under

Title VII.    119 S. Ct. at 2123-26.        Second, Kolstad adopts

Restatement (Second) of Agency § 217C for imputing liability for

punitive damages; they are available against a principal only when,

inter alia, an agent employed in a managerial capacity acts in the

scope of employment.    119 S. Ct. at 2126-29.   But, pursuant to an

exception crafted by the Court to the Restatement rule, such

liability 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 Title VII”. Id. at 2129 (quotation omitted).2




    2
     This good faith defense is designed “to avoid undermining the
objectives underlying Title VII”; the statute’s “primary objective
is a prophylactic one” — “not to provide redress but to avoid
harm”. Kolstad, 119 S. Ct. at 2129 (quotation omitted).

                                  6
     Of course, Supreme Court decisions apply retroactively and

prospectively to all cases on direct appeal whenever applied to the

litigants before the Court.       Harper v. Virginia Dept. of Taxation,

509 U.S. 86, 97 (1993).        When law changes in unanticipated ways

during an appeal, however, this court will generally remand for a

new trial to give parties the benefit of the new law and the

opportunity to present evidence relevant to that new standard. The

motivation of this rule is fairness: to prevent injustice to a

party who had no reason to expect a changed rule at the time of

trial.   See Hill v. International Paper Co., 121 F.3d 168, 176-77

(5th Cir. 1997) (remand appropriate “in fairness to the court and

the parties”, where “law has changed — rather dramatically” causing

“mid-course    change   in   Mississippi       law”);   Vicknair      v.   Formosa

Plastics Corp.,      Louisiana,   98    F.3d    837,    839   (5th    Cir.   1996)

(“supervening jurisprudential ‘sea change’” justified remand);

Millipore Corp. v. Travelers Indemnity Company, 115 F.3d 21, 34

(1st Cir. 1997) (“significant intervening clarification of the law”

required allowing parties opportunity to present new evidence);

E.E.O.C. v. Westinghouse Elec. Corp., 925 F.2d 619, 633 (3d Cir.

1991) (no remand for new evidence where “the need, or certainly the

helpfulness,    of   such    evidence       [was]   reasonably       apparent   to

ordinarily prudent counsel” at time of trial).

     Accordingly, we must consider the law of this circuit at the

time of Deffenbaugh’s trial to determine whether fairness requires


                                        7
affording Wal-Mart the opportunity to present new evidence under

Kolstad.     In this regard, we are principally guided by Patterson,

released the week before trial and available electronically on the

same   day   on   the   Fifth   Circuit’s      Electronic   Dissemination     of

Opinions Service (EDOS) bulletin-board system (listed under the

subcategory “Civil Rights - Damages”), and within two days on

Westlaw.     (Opinions are now released electronically on the Fifth

Circuit’s World Wide Web site.)

       At the outside, Patterson was within the reach of an informed

attorney     several    days    before       Wal-Mart’s   decision   to     rest.

Moreover,    in   that,   post-verdict,        the   district   court     ordered

briefing on the effect of Patterson and relied upon it in rendering

the JMOL, the district court charged the parties with knowledge of

Patterson in earlier presenting their evidence at trial.

       Patterson involved a bench trial under 42 U.S.C. § 1981 and

Title VII. Regarding punitive damages against the employer, PHP

Healthcare, the opinion stated:

             [T]he imposition of punitive damages under §
             1981   and  Title   VII  requires   that  the
             discrimination be malicious or done with
             reckless indifference.    Jones [v. Western
             Geophysical Co.], 761 F.2d [1158,] 1162 [(5th
             Cir. 1985)]; and see 42 U.S.C. § 1981a. All
             of the discriminatory acts in this case were
             solely acts of Kennedy.    Kennedy was not a
             corporate officer of PHP Healthcare but was a
             “project manager” of the Fort Hood office.
             PHP Healthcare provided a handbook which
             expressly established a policy of non-
             discrimination and explained how employees

                                         8
          could complain about discriminatory practices
          to the company. Further, the vice president
          of human resources ... testified that memos
          were distributed throughout the Fort Hood
          facility which also set out the procedures for
          making complaints to headquarters.          No
          evidence suggests that [plaintiffs] Brown or
          Patterson followed these procedures in an
          attempt to notify PHP Healthcare’s corporate
          office that Kennedy was discriminating against
          black employees.     The record is completely
          void of evidence showing that PHP Healthcare
          took part in any discriminatory conduct much
          less any “malicious” or “reckless” conduct.
          The existence of the employment handbook
          setting forth a policy of non-discrimination
          is at least prima facie evidence of awareness
          on the part of PHP Healthcare of the federally
          protected rights of [plaintiffs] Brown and
          Patterson; and there is nothing in this record
          which purports to show that PHP Healthcare
          took any action which was inconsistent with
          that policy. Similarly, there is nothing in
          the   record  which    would  show  that   PHP
          Healthcare   had    knowledge   of   Kenendy’s
          malicious or reckless conduct, or authorized,
          ratified, or approved Kennedy’s actions. See
          Fitzgerald [v. Mountain States Telephone &
          Telegraph], 68 F.3d [1257,] 1263 [(10th Cir.
          1995)] (refusing to impose punitive damages
          under § 1981 where employer took no part in
          the intentional discrimination).      Although
          Kennedy was the project manager of PHP
          Healthcare’s Fort Hood facility, his actions
          alone, without some evidence showing that PHP
          Healthcare knew or should have known of
          Kennedy’s malicious or reckless conduct, are
          insufficient to cause punitive damages to
          attach directly to PHP Healthcare.

90 F.3d at 944 (emphasis added).    A footnote, quite relevant for

our purposes, followed:

          We have affirmed a district court’s refusal to
          impose punitive damages based on evidence that
          a defendant had taken steps to eliminate

                                9
           racial discrimination and the ambiguous nature
           of the evidence at the district court. Jones
           v. Western Geophysical Co., 761 F.2d [1158,]
           1162 [(5th Cir. 1985)]. When prompt remedial
           measures were taken by the employer, the
           evidence “did not compel the conclusion that
           the [defendant] had behaved maliciously.” Id.
           at 1162. Similarly, the evidence in this case
           does not compel the conclusion that PHP
           Healthcare behaved in a manner which warranted
           the imposition of punitive damages.

Id. at 944 n.15 (emphasis added). Consistent with the rule adopted

three years later in Kolstad, Patterson thus put Wal-Mart 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.

     Alternatively, even if, in fairness, we could not expect the

parties, at the time of trial, to have been aware of Patterson, the

authorities on which it (and Kolstad) relied had been available

long earlier.    Reasoning from 42 U.S.C. § 2000e(b)’s definition

that “employer” includes “agents”, Meritor Savings Bank, FSB v.

Vinson,   477   U.S.   57,   72   (1986),   referred   generally   to   the

Restatement (Second) of Agency as the source of “agency principles”

to guide Title VII.     Moreover, the Restatement, adopted in 1957,

has roots in such old cases as Lake Shore & M.S. R. Co. v.

Prentice, 147 U.S. 101, 110 (1893) (punitive damages available only

if an act is “brought home to the corporation”); see Kolstad, 119

S. Ct. at 2127 (describing roots of Restatement view).



                                    10
     Section 1981a, Title VII’s punitive damages provision, was

based on §§ 1983 and 1981 standards.         See, e.g., Patterson, 90 F.3d

at 941 (citing explicit, unambiguous legislative history of Civil

Rights Act of 1991); Kolstad, 119 S. Ct. at 2124 (noting that §

1981a’s language was taken directly from the § 1983 case Smith v.

Wade, 461 U.S. 30 (1983)).      Restatement § 217C (or the identical

Restatement (Second) of Torts § 909) has also been long applied to

punitive damages under 42 U.S.C. § 1981.             E.g., Fitzgerald v.

Mountain States Telephone & Telegraph Co., 68 F.3d 1257, 1263 (10th

Cir. 1995) (as noted, cited in Patterson, 90 F.3d at 944); Mitchell

v. Keith, 752 F.2d 385, 389-90 (9th Cir. 1985).

     Several courts have used “good faith” in this context as the

natural converse to malice or reckless indifference. E.g., Hopwood

v. Texas, 78 F.3d 932, 959 (5th Cir. 1996) (damages under § 1981);

Barber v. Nabors Drilling U.S.A., Inc., 130 F.3d 702, 710 (5th Cir.

1997) (damages under ADA); see also BLACK’S LAW DICTIONARY 693 (6th ed.

1990) (“good faith” includes, among other things, “absence of

malice”);     cf.   Meritor,   477    U.S.     at   72   (“policy   against

discrimination” is “plainly relevant” to employers’ Title VII

liability).

     In short, Kolstad’s imputation holding was not such a sudden

shift as to require, in fairness, giving Wal-Mart an opportunity to




                                     11
present additional evidence.        Therefore, we consider the JMOL in

the light of Kolstad.3

                                      B.

        As noted, Wal-Mart offered no jury instructions relating

specifically     to   agency   or   punitive   damages.   The   jury   was

instructed that

             [a] corporation may only act through natural
             persons, who are known as its agents.      In
             general, any agent or representative of a
             corporation possessing adequate authority may
             bind   the    corporation    by   his   acts,
             declarations, and omissions.

(Emphasis added.)      Beyond this brief statement, the jury was left

on its own to decide whose actions (Gipson’s or Norman’s, for

instance) to impute to Wal-Mart, or what constituted “adequate

authority”.     The jury was asked whether, all things considered,

“Wal-Mart” acted with malice or reckless indifference.4 Obviously,


    3
     This conclusion is consistent with post-Kolstad opinions from
other courts, none of which have required a new trial under its
standards after a jury considered the issue pre-Kolstad.       See,
e.g., Kimbrough v. Loma Linda Development, — F.3d —, —, 1999 WL
493275, *2 (8th Cir. 1999) (affirming punitive damage award);
Blackmon v. Pinkerton Sec. & Investigative Services, — F.3d —, —,
1999 WL 437218, *7 (8th Cir. 1999) (reversing district court’s JMOL
on punitive damages and remanding for reinstatement, finding, inter
alia, employer’s remedial response inadequate).
        4
         The § 1981a-based instruction stated:

          If you find that [Deffenbaugh] has proved by a
          preponderance of the evidence that Wal-Mart
          discriminated against her based on race, then
          you may consider whether also to award her
          punitive damages. The purpose of punitive
damages is to punish a wrongdoer forextraordinary misconduct, and

                                      12
if a more specific instruction had been requested, Kolstad (as

would have the law then extant) would support the propriety of its

being granted.   But, Wal-Mart did not question the instructions

either at trial or on appeal.5 We note that the Patterson and

agency issues in Wal-Mart’s FED. R. CIV. P. 50(b) post-verdict

renewed motion for JMOL were not raised in its FED. R. CIV. P. 50(a)

motion for JMOL at the close of evidence; regarding punitive

damages, the first motion merely asked the court to “find as a

matter of law that Wal-Mart may not be found liable for punitive



to warn others against engaging in similar conduct. In this case
you have discretion to award punitive damages if you find by a
preponderance of the evidence that Wal-Mart discriminated against
[Deffenbaugh]:

               (1) with malice, that is, out of ill
          will, spite or for the purpose of causing
          injury to [Deffenbaugh]; or

               (2)   with  reckless   indifference   to
          [Deffenbaugh’s]   right  to   be  free   from
          discrimination based on race.

     5
      Needless to say, failure to request a jury instruction does
not preclude a later JMOL. Boyle v. United Technologies Corp., 487
U.S. 500, 513-14 (1988).      In this regard, we note that the
Patterson and agency issues in Wal-Mart’s FED. R. CIV. P. 50(b)
post-verdict renewed motion for JMOL were not raised in its FED. R.
CIV. P. 50(a) JMOL motion at the close of evidence.       Regarding
punitive damages, the pre-verdict motion merely asked the court “as
a matter of law [to] find that Wal-Mart may not be found liable for
punitive damages if the jury finds liability”. Rule 50(b) motions
may not, of course, raise issues not raised under Rule 50(a),
Morante v. American General Financial Center, 157 F.3d 1006, 1010
(5th Cir. 1998); but, new grounds may be considered where, as here,
the non-movant does not object, Thompson and Wallace of Memphis,
Inc. v. Falconwood Corp., 100 F.3d 429, 435 (5th Cir. 1996).

                                13
damages if the jury finds liability”. [5 R 141] Rule 50(b) motions

may not, of course, raise issues not raised under Rule 50(a),

Morante v. American General Financial Center, 157 F.3d 1006, 1010

(5th Cir. 1998), but new grounds may be considered where, as here,

the non-movant does not object, Thompson and Wallace of Memphis,

Inc. v. Falconwood Corp., 100 F.3d 429, 435 (5th Cir. 1996).

     A JMOL is reviewed de novo, e.g., King v. Ames, 179 F.3d 370,

373 (5th Cir. 1999), under the well-known standard of Boeing Co. v.

Shipman, 411 F.2d 365, 374-75 (5th Cir. 1969) (en banc), overruled

on other grounds, Gautreaux v. Scurlock Marine, Inc., 107 F.3d 331

(5th Cir. 1997) (en banc):

          On motions for [JMOL] the Court should
          consider all of the evidence–not just that
          evidence   which  supports   the   non-mover's
          case–but in the light and with all reasonable
          inferences most favorable to the party opposed
          to the motion. If the facts and inferences
          point so strongly and overwhelmingly in favor
          of one party that the Court believes that
          reasonable men could not arrive at a contrary
          verdict, granting of the motions is proper.
          On the other hand, if there is substantial
          evidence opposed to the motions, that is,
          evidence of such quality and weight that
          reasonable and fair-minded men in the exercise
          of impartial judgment might reach different
          conclusions, the motions should be denied, and
          the case submitted to the jury.        A mere
          scintilla of evidence is insufficient to
          present a question for the jury. The motions
          for [JMOL] should not be decided by which side
          has the better of the case, nor should they be
          granted only when there is a complete absence
          of probative facts to support a jury verdict.
          There must be a conflict in substantial
          evidence to create a jury question. However,

                                14
            it is the [Seventh Amendment] function of the
            jury as the traditional finder of the facts,
            and not the Court, to weigh conflicting
            evidence and inferences, and determine the
            credibility of witnesses.

(Emphasis added.)
                                   1.

     The district court, applying Patterson, concluded that only

Norman   (regional   manager),    not   Gipson   (district   manager   for

departments in six stores), was sufficiently high in the Wal-Mart

hierarchy for possibly imputing punitive damages to Wal-Mart.

However, under Kolstad, sufficient evidence to survive JMOL exists

that Gipson was a requisite “managerial agent”. He had supervisory

authority over Deffenbaugh, terminated her on his own authority,

and was, as noted, in charge of departments at six stores.              As

Kolstad noted, whether an agent is a manager is a “fact-intensive”

inquiry.    119 S. Ct. at 2128.     “[A]n employee must be important,

but perhaps need not be the employer's top management, officers, or

directors, to be acting in a managerial capacity.” Id. (quotations

omitted).

     One of the Kolstad-cited treatises notes:

            The key ... in determining whether an agent
            acts in a managerial capacity is to look at
            what the individual is authorized to do by the
            principal and to whether that agent has
            discretion as to both what is done and how it
            is done. Job titles ... should be of little
            importance in the determination.




                                   15
2 J. GHIARDI & J. KIRCHNER, PUNITIVE DAMAGES: LAW   AND   PRACTICE § 24.05, at

15 (1998) (cited by Kolstad, 119 S. Ct. at 2128).            Another Kolstad-

cited treatise echoes these remarks and adds that, “[u]ltimately,

the court or jury will have to decide this issue on the particular

facts of the case”.        L. SCHLUETER & K. REDDEN, PUNITIVE DAMAGES §

4.4(B)(2)(a), at 181-82 (3d ed. 1995) (cited by Kolstad, 119 S. Ct.

at 2128).     Fitzgerald, cited by Kolstad (again, cited also by

Patterson), refers in assessing § 217C manager status to the

“typical discretion of a manager, such as the power to make

independent decisions regarding personnel matters or determine

policy”. 68 F.3d at 1263-64.

     Gipson, of course, had authority to make personnel decisions

regarding Deffenbaugh and others in her department and in those of

five other stores. In sum, substantial evidence existed from which

a jury could reasonably find that Gipson was a managerial agent,

acting in the scope of employment.6

      6
      In its en banc brief, but not its post-Kolstad brief, Wal-
Mart contended that Gipson acted outside the scope of his
employment, relying on the statement in Ellerth, 118 S. Ct. at
2266-67, that “unlawful discrimination” typically falls outside the
scope of employment. (In its post-Kolstad brief, Wal-Mart disavows
Ellerth, in the light of Kolstad, as being “pertinent or applicable
authority in the punitive damages analysis”.)       Assuming that,
despite Kolstad, Wal-Mart continues to press this point, it is laid
to rest by Kolstad. 119 S. Ct. at 2128 (“even intentional torts are
within the scope of an agent’s employment if the conduct is the
kind the employee is employed to perform, occurs substantially
within the authorized time and space limits, and is actuated, at
least in part, by a purpose to serve the employer”; such action is
within the scope “even if the employee ... uses forbidden means of
accomplishing results”) (quotation omitted). In this light, for

                                    16
                                   2.

     In rejecting an “egregiousness” requirement, Kolstad, 119 S.

Ct. at 2124-26, leaves intact our previous conclusion, 156 F.3d at

593-94, that Gipson’s actions manifested the requisite malice or

reckless disregard of Deffenbaugh’s federal rights.

                                   3.

     Concerning the good-faith defense, Wal-Mart’s only evidence

(elicited in cross-examining Deffenbaugh) was that it (Wal-Mart)

encourages employees to contact higher management with grievances.

Plainly, such evidence does not suffice to establish, as a matter

of law, Wal-Mart’s good faith in requiring its managers to obey

Title VII.     Wal-Mart presented no evidence either of its response

to Deffenbaugh’s complaint, or of any specific Title VII efforts;

nor did it explain, for JMOL purposes, how a Wal-Mart manager’s

comment   on    her   perceived   Wal-Mart   corporate   hostility   to

interracial relationships could pass unrebutted at a meeting with

two other Wal-Mart managers present.

     Deffenbaugh, on the other hand, presented substantial evidence

that Wal-Mart failed to respond effectively to her complaints about

Gipson’s racial animus: despite Norman’s promise to check into her

complaint of hostility to her interracial relationship, she was

fired the next month on pretextual grounds.        Wal-Mart’s minimal


imputing Title VII punitive damages to Wal-Mart, Gipson acted
within the scope of his employment in disciplining and terminating
Deffenbaugh.

                                   17
presentation left the jury wide latitude to infer that any Wal-Mart

policy     against       discrimination         was   too   poorly    enforced     to

distinguish Wal-Mart’s actions from Gipson’s.                   For JMOL purposes,

the   evidence     of    Wal-Mart’s   antidiscrimination          good    faith   was

certainly not so overwhelming that reasonable jurors could not

conclude otherwise.

                                           C.

      No intervening authority affects our concerns, 156 F.3d at

594-98, regarding the size of the jury’s punitive damages award.

Consideration      of     the   relative    reprehensibility         of   Wal-Mart’s

conduct,     the     punitive/compensatory            damages    ratio,    and    the

similarity to other awards led us to order a remittitur to $75,000;

we do so again.         Because of Deffenbaugh’s stipulation to accepting

the reduced award, we need only remand for entry of judgment.

                                       III.

      For the foregoing reasons, the judgment as to punitive damages

is REVERSED and this case REMANDED for reinstatement of punitive

damages for Deffenbaugh, in the reduced amount of $75,000.7

                                                        REVERSED and REMANDED




      7
      As noted, pursuant to the partially reinstated prior panel
opinion, the balance of the judgment, including the compensatory
damages award, has already been AFFIRMED.

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