McCue v. Kansas, Department of Human Resources

                                                                    F I L E D
                                                              United States Court of Appeals
                                                                      Tenth Circuit
                                   PUBLISH
                                                                      JAN 7 1999
                  UNITED STATES COURT OF APPEALS
                                                                PATRICK FISHER
                              TENTH CIRCUIT                               Clerk



 CARYN MCCUE,

       Plaintiff-Appellee-Cross-
       Appellant,

 v.                                           Nos. 96-3412, 97-3004, 97-3238

 STATE OF KANSAS,
 DEPARTMENT OF HUMAN
 RESOURCES; JOE DICK; JOSEPH
 YBARRA; BILL MEDLOCK; BOB
 MOLANDER,

       Defendants-Appellants-Cross-
       Appellees.




          APPEAL FROM THE UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF KANSAS
                       (D.C. No. 95-2116-DES)


Deanne Watts Hay, of Sloan, Listrom, Eisenbarth, Sloan & Glassman, L.L.C.,
Topeka, Kansas, for Defendants-Appellants-Cross-Appellees.

Timothy W. Monsees, of Monsees, Miller & Defeo, Kansas City, Missouri, for
Plaintiff-Appellee-Cross-Appellant.


Before BALDOCK , MCKAY , and HENRY , Circuit Judges.
HENRY , Circuit Judge.


        During her employ as a special investigator with the Quality Control Unit

of the Kansas Department of Human Resources, plaintiff Caryn McCue was

allegedly sexually harassed by her immediate supervisor, defendant Joseph

Ybarra. After three years of alleged harassment, she filed an internal complaint,

and nearly three years later she was discharged. She filed the instant suit

approximately two years after her termination. She brought actions against the

State of Kansas, the Department of Human Resources (“Department”), and

various Department employees, alleging sexual harassment, retaliation,

defamation, and negligent infliction of emotional distress. The district court

granted defendants’ motions for summary judgment on several claims, retaining

jurisdiction only over the Title VII retaliation action against the Department. At

trial, a jury found for Ms. McCue on the retaliation claim and returned a verdict,

part advisory and part binding, of $300,000 ($50,000 emotional distress; $75,000

back pay; $175,000 front pay). The district court entered judgment in accordance

with the verdict, and subsequently granted Ms. McCue’s application for attorneys’

fees.

        The Department appeals the district court’s jury instructions, failure to

dismiss as a matter of law, admission of certain evidence, submission of the issue

of front pay to the jury, and the award of attorneys’ fees. Ms. McCue cross-

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appeals the district court’s grants of summary judgment against her claims, and

admission and exclusion of certain evidence. We affirm the district court’s

challenged jury instructions, evidentiary rulings, and its ruling on the judgment as

a matter of law; we reverse the court’s ruling on front pay; and we remand for

further action. Pursuant to Ms. McCue’s motion for voluntary dismissal and Rule

42(b) of the Federal Rules of Appellate Procedure, we dismiss Ms. McCue’s

cross-appeals.

                                 BACKGROUND

      Caryn McCue, the plaintiff, is a former employee of the Kansas Department

of Human Resources. Ms. McCue alleges that from 1986 to October, 1990, her

supervisor, defendant Joseph Ybarra, harassed her by soliciting her for sex,

making lewd comments about her, and threatening her job security should she

ever complain of his behavior.

      On October 4, 1990, Ms. McCue filed an internal discrimination complaint.

The Department subsequently had defendant Bill Medlock intervene to supervise

Ms. McCue and to prevent future contact between Ms. McCue and Mr. Ybarra.

Upon hearing of Ms. McCue’s internal complaint, Mr. Ybarra allegedly said he

was going to fire Ms. McCue. One and one half months later, Ms. McCue

received her first unsatisfactory evaluation in twelve years.

      On February 2, 1991, Ms. McCue filed a charge of discrimination with the


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EEOC and with the Kansas Commission on Civil Rights. The charge alleged Mr.

Ybarra had retaliated for her having filed an internal complaint; on April 10,

1991, Ms. McCue amended the charge to include an allegation of sexual

harassment. On January 11, 1993, the EEOC issued Ms. McCue a “right to sue”

letter indicating that she had ninety days in which to file her claim.

      The Department discharged the plaintiff on August 19, 1993, allegedly for

unsatisfactory work performance. Ms. McCue filed a second charge of

discrimination with the EEOC on September 15, 1993. She filed the instant suit

on March 9, 1995.




I.    Challenge to Jury Instructions and to the Denial of Motion for
      Judgment as a Matter of Law

      The State first challenges the district court’s instructions to the jury and the

district court’s refusal to grant its motion for judgment as a matter of law. These

challenges rest on the State’s assertion that, as a matter of law, the State cannot

intend to act absent a statutory authorization to an authorized agent allowing such

action be taken on behalf of the state. More simply, the State argues it can only

have intent as outlined in statutes or pursuant to state policy. The State thus

argues that because state policy forbids retaliation, the State cannot be liable.

      We review the district court’s decision to give or not give a particular


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instruction for abuse of discretion,     Allen v. Minnstar, Inc. , 97 F.3d 1365, 1368

(10th Cir. 1996), but such a decision is reviewed de novo when “the real question

raised by [appellant’s] proposed instructions” is whether the jury should decide

the matter at all – a question of law.    United States v. Pena , 930 F.2d 1486, 1491

(10th Cir. 1991). “We review de novo the district court's determination of a

motion for judgment as a matter of law, applying the same standard as the district

court.” Mason v. Oklahoma Turnpike Auth.           , 115 F.3d 1442, 1450 (10th Cir.

1997).

         In denying the State’s motion for judgment as a matter of law, the district

court found the State’s argument unsound in its suggestion that “intent [for

purposes of a Title VII retaliation claim] must reside in the entity with final

termination authority.”    McCue v. Kansas Dep’t of Human Resources         , No.

CIV.A95-2116-DES, 1997 WL 231044, at *1 (D. Kan. Apr. 24, 1997)

[hereinafter, “District Opinion”]. The court noted that the State provided no

support for this premise, and that were the premise true, the resulting law would

be unreasonable – “reward[ing] deceitfulness by insulating an organization from

liability for retaliatory discharge where the decision-maker is kept ignorant of its

subordinates’ scheme.”      Id.

         On appeal, the State has presented us some authority, but it is not pertinent

to our inquiry. The cases cited by the State are section 1983 cases and a Title IX


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case. See City of St. Louis v. Praprotnik      , 485 U.S. 112 (1988) (§ 1983 action);

Jett v. Dallas Indep. School Distr.     , 491 U.S. 701 (1989) (§1983 action);   Gebser v.

Lago Vista Indep. School Distr.       , 118 S.Ct. 1989 (1998) (Title IX action). There

is no basis for analogizing from the section 1983 and Title IX cases to Title VII

cases. Title VII applies specifically to “employers.” 42 U.S.C. § 2000e-2.

“Employers” are defined to include “agents” of the actual employer. See 42

U.S.C. § 2000e. As a result of this clear statutory instruction, courts have long

and consistently held that the scope of liability in Title VII actions is defined by

the law of agency.     See, e.g., Sauers v. Salt Lake County   , 1 F.3d 1122, 1125 &

n.3 (10th Cir. 1993).

       Employer liability in section 1983 actions is restricted away from agency

principles because section 1983 permits a lawsuit against a “person” in his

individual capacity.    See 42 U.S.C. § 1983. Title IX does not even include an

explicit private right of action, although the Supreme Court has implied a right of

action to enforce the general guarantee provided for by Title IX.        See Gebser , 118

S.Ct. at 1994. The distinctions in language, form, purpose, and content of the

three statutes preclude any reasonable analogies between them with regard to the

applicability of respondeat superior in actions maintained under each statute. In

fact, the Supreme Court has noted this distinction expressly when it found that

agency principles would not apply under Title IX.         See id. at 1996 (“Title IX


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contains no comparable reference [as does Title VII] to an educational

institution’s ‘agents,’ and so does not expressly call for application of agency

principles.”).

       There is simply no basis to restrict liability in Title VII retaliation actions

away from the law of agency. The plain language of the statute establishes that

agency principles control liability, as do court decisions interpreting the statute

and comparing it to other statutes. Finally, permitting such a loophole for

avoiding liability would effectively destroy any Title VII retaliation actions. The

district court erred neither in its instructions to the jury nor in its denial of the

motion for judgment as a matter of law.



II.    Evidentiary Errors

       The State identifies three evidentiary errors and one error in failure to give

a limiting instruction, the cumulative effect of which, it argues, impacted the

verdict and mandates a new trial. We review a district court’s decision to admit

or exclude evidence for abuse of discretion.       Cartier v. Jackson , 59 F.3d 1046,

1048 (10th Cir. 1995). We also review the district court’s decision to limit or

refusal to limit the scope of evidence for abuse of discretion.     Messina v. Kroblin

Trans. Sys., Inc. , 903 F.2d 1306, 1310 (10th Cir. 1990).

       We hold the district court may have erred in admitting bad character


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evidence about Mr. Medlock, and erred in failing to offer a limiting instruction on

the use of Exhibit 33. However, the potential error and error were each harmless,

and the two errors are harmless when weighed cumulatively.

A.    Admission of Evidence of Sexual Harassment in Title VII Retaliation
      Action.

      The district court dismissed Ms. McCue’s Title VII harassment claim as

time-barred on the State’s motion for summary judgment. Ms. McCue’s Title VII

retaliation claim was allowed to proceed. In the retaliation trial the district court

denied State’s motion in limine to exclude evidence of alleged sexual harassment

of Ms. McCue by her supervisor, Mr. Ybarra.

      The State objects to the evidence on the grounds that it is irrelevant and

highly prejudicial. We review the district court’s admission of evidence under

Federal Rule of Evidence 403   1
                                   for abuse of discretion.   See United States v.

Wacker , 72 F.3d 1453, 1469 (10th Cir. 1995). We affirm the district court

because we cannot say the court erred in finding the probative value of the

evidence was not substantially outweighed by its prejudicial value.

      To establish a prima facie case of retaliation, the plaintiff must show (1)



      1
        "Although relevant, evidence may be excluded       if its probative value is
substantially outweighed by the danger of unfair prejudice      , confusion of the
issues, or misleading the jury, or by considerations of undue delay, waste of time,
or needless presentation of cumulative evidence." Fed.R.Evid. 403 (emphasis
added).

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that she engaged in a protected activity, (2) that she was subjected to adverse

employment action by her employer, and (3) that a causal connection exists

between the protected activity and the adverse amployment action.      See Murray v.

City of Sapulpa , 45 F.3d 1417, 1420 (10th Cir. 1995). The protected activity in

which Ms. McCue engaged was filing an internal complaint of harassment and

subsequently filing a complaint with the EEOC. The State argues that because it

stipulated to the first element of the retaliation claim – that Ms. McCue had

engaged in protected activity – Ms. McCue was precluded from introducing

evidence of the harassment that led to that activity.

      However, a plaintiff’s presentation of a prima facie case merely shifts the

burden to the defendant to show that the adverse action was taken for a legitimate

reason. See Sorenson v. City of Aurora , 984 F.2d 349, 352 (10th Cir. 1993). The

State satisfied this burden by establishing Ms. McCue’s decreased productivity as

a legitimate reason for her dismissal. Thus, the burden returns to the plaintiff to

establish “by a preponderance of all the evidence in the case that the legitimate

reasons offered by the defendant were a pretext for discrimination.”    Id.

      Ms. McCue alleged that her decreased productivity was the direct result of

the ongoing sexual harassment, and thus the seemingly legitimate reason for

termination was no more than a pretext. Of course, to make this allegation

successfully, Ms. McCue needed to introduce evidence of the harassment. The


                                            9
jury would judge the credibility of her claim that her performance suffered as a

result of the harassment based on its judgment as to the severity of the

harassment. Only by introducing evidence of the harassment could Ms. McCue

establish its severity in the manner required to satisfy her not insubstantial burden

of establishing by a preponderance of the evidence that the proffered reason for

her termination was mere pretext. This Circuit has allowed similar evidence for a

similar purpose.      See Pitre v. Western Elec. Co. Inc.   , 843 F.2d 1262, 1270 (10th

Cir. 1988) (“Evidence of harassment . . . helps create an inference of

discrimination in [defendant’s] promotion and demotion practices.”). The district

court employed this same rationale to decide the admission of the evidence was

not error in denying the State’s motion for a new trial. We affirm the decision of

the district court.

       In affirming, however, we note our concern that this evidence is very

prejudicial. The State points out that the sexual harassment was not at issue in

the retaliation trial and thus was not compensable. However, it would be nearly

impossible to separate the damages caused by harassment from those caused by

retaliation. There is a very real danger that by permitting this evidence to be

heard, the damages will reflect an injury not at issue in the trial. That said, the

district court made a determination that the prejudice of the evidence did not

substantially outweigh its probative value. The court carefully outlined the


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reasons for admitting the evidence, and we cannot say that the district court’s

weighing of prejudice against relevance was an abuse of discretion.

      The State also objects to the district court’s omission of its proposed

instruction number 9, stating in part “[r]etaliation is the sole basis on which you

may award damages. You must not concern yourselves with . . . sexual

harassment.” Apnt’s Br. at 31. “Because [the State] did not object to the district

court's omitting the aiding and abetting instruction, we review only for plain

error.” United States v. Peach , 113 F.3d 1247, 1997 WL 282867, *6 (10th Cir.

1997) (citing Fed.R.Crim.P. 52(b)). "[A]n error in jury instructions will mandate

reversal of a judgment only if the error is determined to have been prejudicial,

based on a review of the record as a whole."    Durflinger v. Artiles , 727 F.2d 888,

895 (10th Cir.1984). Jury instruction number 11 included the following direction:

“You may award damages only for injuries that plaintiff proves were caused by

defendant’s retaliation.” Apnt. App. vol. II at 442. The inclusion of direction

like that in instruction number 11, in place of the State’s requested instruction

number 9, is not plain error.



B.    Admission of Character Evidence About Mr. Medlock.

      The State also argues error in the admission of evidence alleging Mr.

Medlock – the supervisor interposed between Ms. McCue and Mr. Ybarra after


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her initial complaint – assigned work in a sexually discriminatory manner two

years after Ms. McCue’s termination. The district court defended the admission

in denying the motion for new trial on the ground that this evidence, like the

evidence of Mr. Ybarra’s sexual harassment of Ms. McCue, served to show the

pretextual nature of the proffered reason for McCue’s termination. We hold that

even were the admission of the evidence error, it was harmless error.

      It is difficult to imagine a legitimate ground for admitting the evidence. It

cannot be admitted for impermissible use of showing action in conformity with

other bad acts. Fed. R. Evid. 404(b) (“Evidence of other . . . wrongs, or acts is

not admissible to prove the character of a person in order to show action in

conformity therewith.”). The evidence should not have been admitted –

as the plaintiff argues on appeal that it was – “to show the disparate treatment by

[the Department] of men compared to women.”      See Aple’s Br. at 29. Ms. McCue

would have the jury reason that because Mr. Medlock allegedly acted in a

sexually discriminatory manner two years after Ms. McCue’s termination, he had

the character of one who sexually discriminates. Thus, he might have

discriminated when supervising Ms. McCue. This inference is precisely the sort

proscribed by Rule 404(b); inferring character from an act, and then a different

act from that character, is impermissible.




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       Federal Rule of Civil Procedure 61 admonishes that a new trial should not

be granted for an error “unless refusal to take such action appears to the court

inconsistent with substantial justice.”   Fed. R. Civ. Pro. 61. In this case, a good

deal of evidence had correctly been admitted to show sexual harassment in Ms.

McCue’s workplace. For example, testimony had been admitted         2
                                                                        suggesting that

Mr. Ybarra asked Ms. McCue to let him take nude pictures of her, and had

repeatedly, with the use of vulgar language, asked Ms. McCue to engage in

various sexual activities with him, and threatened her job security. Aplt. App.

vol. III, at 912, 913, 914 (testimony of Ms. McCue). The district court noted that

the sexual harassment evidence “lasted for a few minutes of a week long trial.”

District Opinion at *4. The additional suggestion that two years after Ms.

McCue’s termination her supervisor may have acted in a discriminatory manner is

so relatively insignificant that it could not reasonably be expected to change the

outcome of the trial. Admission of the evidence may have been error, but looking

at the record as a whole, it is not “inconsistent with substantial justice.”

C.     Admission of the Letter, and Failure to Give Limiting Instruction.

       The State next objects to the admission of a letter from plaintiff’s counsel

to the Secretary of the Department on the ground that the letter was hearsay. The



       This evidence was admitted properly, as discussed in section II.A, supra,
       2

to show the pretextual nature of the Department’s proffered reasons for
discharging the plaintiff.

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district court reasoned the letter was not hearsay because it was not offered to

prove the truth of anything asserted therein.        See Fed. R. Evid. 801(c) (“‘Hearsay’

is a statement, other than one made by the declarant while testifying at the trial or

hearing, offered in evidence to prove the truth of the matter asserted.”). The

letter was offered “simply to counter the defense counsel’s characterization of the

letter in her opening statement and to establish that defendant had notice of the

fact and nature of Ms. McCue’s complaints.” District Opinion, at *4. Defense

counsel had characterized the letter in opening statements as saying, “If you fire

me, I’m going to sue you.” Aplt. App. vol. III, at 787. The letter was offered to

rebut this characterization. When the plaintiff sought to introduce the first

paragraph of the letter, the defense objected unless the jury could “see the whole”

of the letter. Apnt. App. vol. III, at 955. The court admitted the entire letter over

defense’s alternative hearsay objection.

       The State moved for a limiting instruction to the jury that the letter should

be used only to rebut the earlier characterization of the letter. The district court

agreed to give a limiting instruction,   see Aplt. App. vol. III, at 955, but then

failed to do so. The State does not cite to the record as to whether it called the

omission to the court’s attention before the jury retired. The district court, in the

motion for a new trial, conceded the failure to offer the instruction was error, but

refused to find that the omission “so substantially affected defendant’s rights as to


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merit a new trial.” District Opinion, at *4. We agree.

       The letter introduces very little that is not duplicative of evidence properly

admitted already. It merely suggests facts that are largely cumulative to the

evidence otherwise offered at trial. As discussed in the previous section, enough

testimony had legitimately been admitted that tended to show sexual harassment

in the Department, that the conclusory restatement of those allegations in letter

form does not cause the trial to be substantially unjust.   Fed. R. Civ. Pro. 61. The

one allegation made by the letter which is not duplicative of evidence already

before the jury is that Mr. Ybarra “physically sexually abused and harassed Ms.

McCue . . . [by] touching.” Apnt. App. vol. VI at 1804. This seems to be the

only allegation of physical harassment on the record. Again, however, we

conclude that the erroneous inclusion of one unsupported sentence, amidst a

week-long trial, is simply not sufficient ground to merit ordering a new trial.

D.     Cumulative Impact of Errors Not Sufficient to Order New Trial.

       "A cumulative-error analysis merely aggregates all the errors that

individually have been found to be harmless, and therefore not reversible, and it

analyzes whether their cumulative effect on the outcome of the trial is such that

collectively they can no longer be determined to be harmless.”     United States v.

Rivera , 900 F.2d 1462, 1470 (10th Cir. 1990) (en banc). In this case we have

found one potential evidentiary error, and one instructional error, each of which


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itself was harmless. Aggregating these errors does not raise the impact on the

trial appreciably. We hold the cumulative effect of these errors does not

necessitate a new trial.



III.   Frontpay

       The district court allowed the jury to determine the amount of front pay to

be awarded Ms. McCue. The State submits that front pay is a form of equitable

relief available under 42 U.S.C. § 2000e-5(g), to be awarded by the judge, not the

jury. We agree with the State and therefore vacate the award of front pay and

remand for the district court to determine the appropriate amount of front pay to

be awarded.

       Section 2000e-5(g) allows the court to award “equitable relief as [it] deems

appropriate,” for Title VII violations. Such relief explicitly includes back pay,

although no mention is made of front pay. 42 U.S.C. § 1981a permits the award

of punitive and compensatory damages as a matter of law for actions brought

under Title VII. However, that same section expressly excludes from the allowed

compensatory damages “backpay, interest on backpay, or any other type of relief

authorized under [42 U.S.C. § 2000e-5(g)].” Section 1981a does allow

compensatory damages for, among other things, “future pecuniary loss.”

       Damages awarded under section 2000e-5(g) are equitable relief to be


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determined by the court, while damages awarded under section 1981a are legal

damages that may be submitted to a jury. The District Court held that front pay is

included in “future pecuniary loss,” and thus is a form of legal damages to be

determined by the jury. The State contends this holding is in error, because front

pay is an “other type of relief authorized under [section 2000e-5(g)],” and thus

expressly excluded from the available relief under section 1981a.

       The District Court held that Congress knew how to expressly exclude back

pay from the available relief under section 1981a, and could have similarly

expressly excluded front pay if that were its intent. Furthermore, by including

“future pecuniary loss” among the available relief, section 1981a’s plain language

permits front pay.   This analysis fails.

       Although this issue has not been decided expressly, courts generally take it

upon themselves to calculate front pay as an equitable remedy under section

2000e-5(g). See, e.g., Kim v. Nash Finch Co. , 123 F.3d 1046, 1054 n.3 (8th Cir.

1997). As early as 1989, two years before Congress passed section 1981a, the

Tenth Circuit had indicated that front pay was included among the equitable

remedies available under section 2000e-5(g): “Reinstatement is one of the

express affirmative actions authorized under 42 U.S.C. § 2000e-5(g) and certainly

‘front pay’ would qualify as ‘other equitable relief’ the court may grant if it

deemed appropriate.”    EEOC v. General Lines, Inc.   865 F.2d 1555, 1561 (10th


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Cir. 1989). That such relief was available as “other equitable relief” under

section 2000e-5(g) in 1991 – when section 1981a was passed – establishes that it

would be included in the set of “any other type of relief authorized under [42

U.S.C. § 2000e-5(g)].”     Since courts had indicated – prior to the passage of

section 1981a – that front pay was included among the equitable relief available

under section 2000e-5(g), we hold Congress to have excluded such relief under

section 1981a.

       Relegating the duty of determining front pay relief to the trial judge is

reasonable as well as mandated by the statute, as this case shows well. In the

instant case, a substantial amount of evidence about sexual harassment was

presented to the jury. As discussed above, this evidence was not improperly

admitted, but sexual harassment was not itself at issue in the lawsuit, and the

dangers inherent in its admission were not insubstantial. It is possible that the

sexual harassment evidence improperly impacted the jury determination of front

pay; the jury awarded $175,000 in front pay. “Because of the potential for

windfall, . . . [the award of front pay] must be tempered.”   Duke v. Uniroyal Inc. ,

928 F.2d 1413, 1424 (4th Cir. 1991). The district court is best-equipped to

equitably determine the proper amount for this award.

       Concluding the district court to have erred in submitting the issue of front

pay to the jury, we vacate the award of front pay and remand the issue for


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equitable determination by the district court.



IV.     Attorneys’ Fees, Costs and Expenses

        The State urges vacating the award for attorneys’ fees, costs, and expenses

on the ground that Ms. McCue is not a prevailing party if the State prevails on

appeal. We have vacated and remanded one issue from below: the calculation of

front pay. This change does not alter Ms. McCue’s prevailing party status.

Because we have not reversed on the merits, we need not reconsider the award of

fees.



V.      Cross-Appeal

        Ms. McCue filed a cross-appeal but has since moved for voluntary

dismissal in an agreement signed by both parties pursuant to Rule 42 of the

Federal Rules of Appellate Procedure. Because we grant the motion to dismiss,

we need not consider the merits of the cross-appeal.



                                      Conclusion

        The district court did not err by not instructing the jury that state law

effectively controlled liability for Title VII actions, nor did it err in refusing to

dismiss as a matter of law. The alleged evidentiary errors were each either not


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errors or harmless, and the harmless errors considered cumulatively still did not

merit a new trial.

      Allowing the jury to determine front pay as a matter of damages was error.

Front pay remains an equitable remedy available under section 2000e-5(g) and

therefore expressly excluded from the damages available under section 1981a.

We VACATE the award and REMAND for the district court to determine the

equitable front pay award.

      As Ms. McCue remains the prevailing party, attorneys’ fees were properly

awarded.

      Ms. McCue’s cross-appeal, pursuant to the motion for voluntary dismissal,

is DISMISSED.




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