Arismendez v. Nightingale Home Health Care, Inc.

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED July 26, 2007
July 23, 2007
UNITED STATES COURT OF APPEALS
Charles R. Fulbruge III
FOR THE FIFTH CIRCUIT Clerk

06-40593

MARILUZ G. ARISMENDEZ,

Plaintiff-Appellant,

v.

NIGHTINGALE HOME HEALTH CARE, INC., doing business as AAA
Medical Oxygen Supply, also known as and formerly known as
Rotech Healthcare Inc., also known as and formerly known as
Professional Respiratory Home Healthcare Inc., also known
as and formerly known as ABBA Medical Equipment Inc.,

Defendant-Appellee.

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

Before JONES, Chief Judge, BENAVIDES, and STEWART, Circuit Judges.

BENAVIDES, Circuit Judge:

The Plaintiff-Appellant, Mariluz Arismendez, brought suit

against her employer, Nightingale Home Health Care, alleging gender

discrimination pursuant to the Texas Commission on Human Rights Act

(TCHRA), Tex. Lab. Code Ann. § 21.001 et seq. The jury found that

Arismendez’s pregnancy was a motivating factor in Nightingale’s

decision to discharge her and rendered a verdict in favor of

Arismendez. The jury also found that Nightingale (1) did not make
a good faith effort to prevent gender discrimination in the

workplace and (2) engaged in the above found discriminatory

practice with malice or reckless indifference. The jury awarded

damages for back pay and compensatory damages. It also awarded

$1,000,000 in punitive damages. Arismendez moved for entry of

judgment and Nightingale objected, arguing that the proposed

judgment failed to apply a statutory cap on punitive damages. The

district court sustained Nightingale’s objection and remitted the

punitive damages to $200,000. Subsequently, finding insufficient

evidence to support the jury verdict, the district court granted

Nightingale’s motion for judgment as a matter of law. We conclude

that the district court erred in finding insufficient evidence and

reverse the district court’s judgment. Additionally, we conclude

that the district court correctly ruled that Texas statutory law

does not allow punitive damages in excess of $200,000 in this case

and direct the court to reinstate the jury’s award of damages and

remit the punitive damages to $200,000.

I. BACKGROUND

Nightingale is in the business of providing oxygen tanks and

other medical equipment to homebound patients. In February of

2002, Arismendez began working as a customer service representative

for Nightingale at its McAllen branch. McCune was the regional

manager in charge of operations in Texas. From the time Arismendez

began working in 2002 until February 2003, the McAllen branch

operated without a branch manager. During that period, Arismendez

2
often reported to Chris Cruz, the Corpus Christi branch manager.

In November 2002, Arismendez discovered she was pregnant with

her third child. She then discussed maternity leave with James

Goldstein, Nightingale’s area manager for south Texas. Veronica

Vela was hired as the McAllen branch manager in February of 2003.

Arismendez began experiencing lower abdominal pain and, on

March 24, 2003, saw her physician, who prescribed bedrest and

signed a release that excused her from work until her next

appointment on April 7. Arismendez’s husband delivered the note to

Vela at the office. McCune granted Arismendez a leave of absence

until April 8. During this time, Arismendez stayed at her home in

McAllen. Arismendez called Vela on a daily basis for the first

week of leave to assist with any questions about her work.

Arismendez also asked Vela about the short-term disability policy.

Pursuant to this conversation, Jesus Sanchez, Arismendez’s co-

worker, brought a disability form to Arismendez. Arismendez’s

physician completed the disability form on April 2. The doctor

restricted Arismendez’s physical activity until April 8, 2003.

Vela instructed Arismendez’s husband to send the completed form

directly to the corporate headquarters, and he complied with her

instructions.

On April 7, Arismendez had another doctor’s appointment. Her

physician ordered two additional weeks of bedrest and signed

another release that excused her from work until April 21. Once

again, her husband delivered the doctor’s note to Vela at the

3
office. Vela, however, claims that she did not receive this note.

During this period of leave, Arismendez’s husband was away from

home working on a job site, and Arismendez stayed at her mother’s

home in Mexico to obtain help caring for her two young children.

Her mother’s home did not have a telephone but Arismendez called

the office at least two times when Vela was out. During one of the

calls, Arismendez heard Sanchez radio Vela and ask if she needed

anything from Arismendez. Arismendez told Sanchez that she could

not be reached by phone because she was staying with her mother in

Reynosa, and Sanchez relayed that information to Vela.

On April 21, Arismendez had a doctor’s appointment, during

which he ordered fifteen more days of bedrest and signed another

work release. Arismendez attempted to deliver the doctor’s note to

Vela at the office. Vela refused to accept the note and told her

she had been terminated several weeks ago. The Employee Separation

Report was signed by Vela as the supervisor and dated April 8. The

report listed the reasons for the involuntary separation were

“excessive sick leave/ job abandonment.” Vela also told Arismendez

that although Vela knew it was illegal to fire her because she was

pregnant, Vela had a “business to run” and “could not take having

a pregnant woman in the office.”

On May 6, 2004, Arismendez brought a pregnancy discrimination

and wrongful termination suit against Nightingale in Texas state

court. Nightingale removed it to federal district court. The jury

found in favor of Arismendez, awarding $26,150 in back pay damages,

4
$10,000 in compensatory damages, and $1,000,000 in punitive

damages. Nightingale objected to the entry of judgment on the

plaintiff’s motion, asserting a Texas statutory cap on punitive

damages. The district court reduced the punitive damage award to

$200,000 pursuant to the statutory cap. Nightingale subsequently

renewed its motion for judgment as a matter of law, and the

district court granted the motion, entering judgment in favor of

Nightingale. Arismendez now appeals.

II. ANALYSIS

A. STANDARD OF REVIEW

We review the district court’s grant of judgment as a matter

of law de novo, applying the same standard as the district court.

Sobley v. Southern Natural Gas Co., 210 F.3d 561, 563 (5th Cir.

2000). Judgment as a matter of law is appropriate if “there is no

legally sufficient evidentiary basis for a reasonable jury to find

for that party on that issue.” Fed. R. Civ. P. 50(a)(1). This

Court “must draw all reasonable inferences in favor of the

nonmoving party, and it may not make credibility determinations or

weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc.,

530 U.S. 133, 150 (2000). Additionally, this Court should

disregard evidence favorable to the moving party that the jury is

not required to believe. Laxton v. Gap, Inc., 333 F.3d 572, 577

(5th Cir. 2003) (citing Russell v. McKinney Hosp. Venture, 235 F.3d

5
219, 222 (5th Cir. 2000)). We must give “credence to evidence

supporting the moving party that is uncontradicted and unimpeached

if that evidence comes from disinterested witnesses.” Id. (citing

Wallace v. Methodist Hosp. Sys., 271 F.3d 212, 219 (5th Cir.

2001)). There must be more than a mere scintilla of evidence in

the record to prevent judgment as a matter of law in favor of the

movant. Id.

B. Discrimination

Arismendez brought suit pursuant to the TCHRA, which prohibits

an employer from, among other things, discharging an employee

because of her gender. Tex. Lab. Code Ann. § 21.051. Section

21.051(1) provides that “[a]n employer commits an unlawful

employment practice if because of . . . sex . . .the employer . .

. discharges an individual, or discriminates in any other manner

against an individual in connection with . . . privileges of

employment.” The TCHRA further explains that sex discrimination

includes discrimination “because of or on the basis of pregnancy.”

§ 21.106(a).

A stated purpose of the TCHRA is to “provide for the execution

of the policies of Title VII of the Civil Rights Act of 1964.”

Tex. Lab. Code § 21.001(1); see also Quantum Chem. Corp. v.

Toennies, 47 S.W.3d 473, 476 (Tex. 2001). Accordingly, “‘analogous

federal statutes and the cases interpreting them guide’ the reading

of the statute.” Pineda v. United Parcel Serv., Inc., 360 F.3d

6
483, 487 (5th Cir. 2004) (quoting Quantum, 47 S.W.3d at 476).

However, the TCHRA and Title VII differ in their required proof of

the employer’s motivation for the unlawful employment practice.

Under the Texas statute, to establish an unlawful employment

practice, Arismendez need only prove that discrimination was “a

motivating factor” in the employer’s decision, Quantum, 47 S.W.3d

at 480, rather than a “but for” cause as Title VII requires.1

Pineda, 360 F.3d at 487. However, if an employer demonstrates that

it “would have taken the same action in the absence of the

impermissible motivating factor,” then a court may grant

declaratory or injunctive relief but may not award damages. §

21.125(b).

Here, the jury specifically found that Arismendez’s pregnancy

was a motivating factor in the employer’s decision to discharge

her. Arismendez argues that the district court erred in finding

insufficient evidence to support the verdict. She had the burden

of persuading the jury either by direct evidence of discrimination

or by an indirect method of proof, which is the pretext method set

forth in McDonnell Douglas.2 Rachid v. Jack In The Box, Inc., 376

F.3d 305, 309 (5th Cir. 2004).

1
See § 21.125(a) (“an unlawful employment practice is
established when the complainant demonstrates that race, color,
sex, national origin, religion, age, or disability was a motivating
factor for an employment practice, even if other factors also
motivated the practice. . . .”).
2
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).

7
 Nightingale responds that Arismendez failed to establish a

prima facie case of discrimination because she did not present

evidence that she was treated less favorably than employees outside

her protected class, “non-pregnant employees who missed a

comparable amount of work.” Nightingale further asserts that

Arismendez “leaps beyond her initial burden and centers her attack

instead on her second burden, presuming that this Court will ignore

the fact that she never established a prima facie case to even

reach the burden-shifting aspects of discrimination law.”

Nightingale is mistaken. Because this case was “fully tried on

the merits,” the McDonnell Douglas burden-shifting framework “drops

from the case.” United States Postal Serv. Bd. of Governors v.

Aikens, 460 U.S. 711, 713-14, 715 (1983) (internal quotation marks

and citations omitted). Indeed, after trial, “the sufficiency of

the prima facie case as such ‘is no longer relevant.’” Russell,

235 F.3d at 224 n.5 (Aikens, 460 U.S. at 715).

Arismendez argues that the comments Vela made while

terminating her constitute direct evidence of discrimination.

Arismendez testified that Vela said that she knew it was illegal to

terminate Arismendez because of Arismendez’s pregnancy.

Nonetheless, Vela said she had a business to run and could not

handle having a pregnant woman in the office.3 The district court

3
Vela denies making these comments. Nonetheless, we must
draw all reasonable inferences in favor of the nonmoving party and
may not make credibility determinations or weigh the evidence.

8
ruled that because Vela “did not exercise any authority over

McCune’s decision to terminate Plaintiff, Vela’s comments amount to

nothing more than stray remarks.” We disagree. This Court has

explained that “remarks may serve as sufficient evidence of . . .

discrimination if the offered comments are: 1) [pregnancy]

related; 2) proximate in time to the terminations; 3) made by an

individual with authority over the employment decision at issue;

and 4) related to the employment decision at issue.” Brown v. CSC

Logic, Inc., 82 F.3d 651, 655 (5th Cir. 1996).4 The only dispute

is whether Vela had the authority to terminate Arismendez.

Nightingale’s position is that McCune was the individual that had

the authority to terminate Arismendez. However, this Court looks

“to who actually made the decision or caused the decision to be

made, not simply to who officially made the decision.” Russell,

235 F.3d at 227. Thus, “if the evidence indicates that the worker

possessed leverage, or exerted influence, over the titular

decisionmaker,” the worker’s discriminatory animus may be

attributed to the employer. Id.

Here, viewing the evidence in the light most favorable to the

non-movant, the evidence is sufficient for a jury to find that Vela

Reeves, 530 U.S. at 150.
4
After the Supreme Court’s holding in Reeves, 530 U.S. 133,
“[w]e continue to apply the CSC Logic test when a remark is
presented as direct evidence of discrimination apart from the
McDonnell Douglas framework.” Laxton v. Gap, Inc., 333 F.3d 572,
583 n.4 (5th Cir. 2003).

9
exerted influence over the decision to terminate Arismendez. Vela

was Arismendez’s direct supervisor. Vela signed the papers to

terminate Arismendez’s employment. There was evidence that

Arismendez’s husband hand delivered a doctor’s note to Vela that

extended the period of bedrest. That note was not in Arismendez’s

file, and McCune was never made aware of it. McCune testified that

he would have considered the circumstances regarding Arismendez’s

bedrest if he had been made aware. McCune described Arismendez as

a superior employee and a key person in the office. Vela

communicated with Nightingale’s human resources department

regarding terminating Arismendez. McCune testified that Vela

initiated the “paperwork” to terminate Arismendez. Indeed, McCune

admitted that Vela provided all the information that he had in

order to make the termination decision. Because the jury could

therefore conclude that McCune conducted no independent

investigation, the “causal link” between Vela’s discriminatory

animus and Arismendez’s termination was not broken. Long v.

Eastfield Coll., 88 F.3d 300, 307 (5th Cir. 1996). “Whatever the

formal hierarchy of [Nightingale] might be, the jury could

reasonably find that [Vela] contributed significantly to the

termination decision officially made by [McCune].” Russell, 235

F.3d at 228.

Thus, we conclude that the remarks made by Vela at the time of

Arismendez’s termination serve as direct evidence of pregnancy

10
discrimination. This case boils down to a question of credibility,

and the jury believed Arismendez over Vela. There is more than a

mere scintilla of evidence to support the jury’s verdict that

Arismendez’s pregnancy was a motivating factor in the employer’s

decision to terminate Arismendez. Tex. Lab. Code § 21.125(a).

Nonetheless, as previously set forth, if an employer can show

that it would have taken the same action in the absence of any

discriminatory animus, then no damages may be awarded. Tex. Lab.

Code § 21.125(b). Nightingale argues that, in any event, it would

have terminated Arismendez based on either her “job abandonment” or

“excessive absenteeism.” Those terms are explained in the Employee

Handbook and are the reasons listed for Arismendez’s termination in

her Employee Separation Report.

The Employee Handbook defines “Job Abandonment” as follows:

“Failure to report an absence for three (3) consecutive days will

be considered a voluntary resignation.” It is undisputed that

Arismendez reported her absence through April 7. Indeed, it is

undisputed that McCune granted her a leave of absence until April

8. There is evidence that, on April 7, Arismendez’s husband

delivered a doctor’s note prescribing bedrest for Arismendez

through April 22. Pursuant to a hypothetical question, Vela

admitted that such a notification would be an acceptable way to

report an absence. The Employee Separation Report lists the

termination date as April 8. Drawing all reasonable inferences

from the evidence in favor of Arismendez, the evidence is legally

11
sufficient to show that Arismendez did not fail to report her

absences. Thus, Nightingale has failed to demonstrate that it

would have terminated her based on job abandonment.

With respect to the “excessive absenteeism” basis for

termination, the Employee Handbook defines an occurrence as

follows:

In most cases, each separate incident when you are
absent, tardy or leave work early. However, an absence
of consecutive workdays caused by the same reason will be
treated as a single occurrence. Any absence of 3 or more
workdays for the same medical reason will require a
return to work authorization from a doctor. Failure to
produce this note will result in each absence being
counted as a separate occurrence.

(emphasis in original). The handbook provides that if an employee

had six occurrences in a year, the employee should receive an

“Initial Counseling Warning.” It further provides that an employee

will be terminated after 9 occurrences in a 12-month period. It is

undisputed that Arismendez’s absence consisted of consecutive

workdays caused by the same reason. McCune conceded, as he had to,

that although the handbook provides that nine occurrences warrant

termination, Arismendez had one occurrence at the time she was

terminated. Thus, there is evidence that the termination was in

violation of the handbook.

In further support of its “excessive absenteeism” argument,

Nightingale states that it was operating with a skeletal staff, and

a hiring freeze prevented it from employing a temporary employee.

On the other hand, the evidence demonstrated that the McAllen

12
branch operated without a branch manager for an entire year

(February 2002 to February 2003). Nightingale also points to

evidence that the McAllen branch was experiencing additional demand

for its services because of seasonal “winter Texans.” However,

Arismendez was fired in the spring and thus the jury could

reasonably infer that the demand from the winter Texans was

abating.

Ultimately, drawing all reasonable inferences in favor of

Arismendez, we conclude that Nightingale has not demonstrated that

it would have terminated her in the absence of the discriminatory

animus. Tex. Lab. Code § 21.125(b). In the instant case, the jury

believed Arismendez, and there is more than a scintilla of evidence

to support the jury verdict. Thus, the district court erred in

granting judgment as a matter of law to Nightingale, and we reverse

and remand the judgment.

C. Punitive Damages

Arismendez contends that the district court erred in remitting

the punitive damages awarded by the jury. Applying Texas law, the

district court remitted the damages from $1,000,000 to $200,000.

Tex. Civ. Prac. & Rem. Code § 41.008. Section 41.008 provides

that:

(a) In an action in which a claimant seeks recovery of
exemplary damages, the trier of fact shall determine the
amount of economic damages separately from the amount of
other compensatory damages.

(b) Exemplary damages awarded against a defendant may
not exceed an amount equal to the greater of:

13
 (1)(A) two times the amount of economic damages;
plus

(B) an amount equal to any noneconomic damages
found by the jury, not to exceed $750,000; or

(2) $200,000.

The application of the above statute to the amount of damages

awarded Arismendez results in a cap of the punitive or exemplary

damages at $200,000. Arismendez argues that Nightingale waived any

statutory cap by failing to timely plead it. In the alternative,

she argues that the statutory cap found in the TCHRA, which allows

a total damages award of $300,000, applies to her suit. Tex. Lab.

Code § 21.2585.

(1) Waiver

Arismendez contends that the employer waived the statutory cap

by failing to properly invoke it as an affirmative defense in

district court. In a diversity action such as this, substantive

state law determines what constitutes an affirmative defense.

Lucas v. United States, 807 F.2d 414, 417 (5th Cir. 1986).

However, “the Federal Rules of Civil Procedure provide the manner

and time in which defenses are raised and when waiver occurs.”

Morgan Guar. Trust Co. of New York v. Blum, 649 F.2d 342, 344 (5th

Cir. Unit B 1981). Rule 8(c) of the Federal Rules of Civil

Procedure “requires that an affirmative defense be set forth in a

defendant’s responsive pleading. Failure to comply with this rule,

usually results in a waiver.” Lucas, 807 F.2d at 417. “‘Where the

14
matter is raised in the trial court in a manner that does not

result in unfair surprise, however, technical failure to comply

precisely with Rule 8(c) is not fatal.’” Id. (quoting Allied Chem.

Corp. v. Mackay, 694 F.2d 854, 855-56 (5th Cir. 1983)). More

specifically, a defendant does not waive an affirmative defense if

it is raised at a “‘pragmatically sufficient time, and [the

plaintiff] was not prejudiced in its ability to respond.’” Lucas,

807 F.2d at 418 (quoting Mackay, 694 F.2d at 856) (brackets in

opinion).

In Seminole Pipeline v. Broad Leaf Partners, a Texas Court of

Appeals held that the statutory cap in Chapter 41 was not an

affirmative defense. 979 S.W.2d 730, 759 (Tex. App. – Houston

[14th Dist.] 1998).5 The court explained that the cap

automatically applied and “[b]ecause the defendants had nothing to

prove, they had nothing to plead.” Id. Here, if the statutory cap

is not an affirmative defense and automatically applies,

Arismendez’s claim of waiver is without merit. However, another

Texas Court of Appeals has opined that “[w]here maximum damages are

5
Seminole Pipeline involved a former version of the instant
statutory cap, which provided that “exemplary damages awarded
against a defendant may not exceed four times the amount of actual
damages or $200,000, whichever is greater.” Wheelways Ins. Co. v.
Hodges, 872 S.W.2d 776, 783 n.8 (Tex. App. – Texarkana 1994)
(quoting Tex. Civ. Prac. & Rem. Code Ann. 41.007 (Vernon Supp.
1994)). Although the current cap involves a different calculation
for the statutory maximum amount of punitive damages, it is a
distinction without a difference. In other words, the current
version of the cap likewise requires the defendant to prove
nothing.

15
provided in statutes in Texas, and a defendant wants to rely on the

cap, it is considered a defense that must be plead and proved.”

Shoreline, Inc., v. Hisel, 115 S.W.3d 21, 25 (Tex. App.–Corpus

Christi 2003)6 (citing inter alia § 41.008).

We need not determine whether the relevant statutory caps

constitute affirmative defenses under Texas law. Assuming arguendo

that the statutory caps are affirmative defenses, Arismendez has

not shown that Nightingale waived the defense. In a Joint Pretrial

Order, Arismendez referred to a statutory cap on damages. Although

the employer did not plead a statutory cap in its answer, the

employer did raise it prior to entry of judgment. Additionally,

there were no factual issues to determine. While Arismendez

asserts that Nightingale failed to prove the number of employees it

had during the relevant time frame, that fact is irrelevant under

the cap in Chapter 41.7

Further, Arismendez has not shown how she was prejudiced by

the delay in raising the statutory cap. We conclude that the

employer raised the cap at a pragmatically sufficient time, and

6
That case in involved the statutory cap found in §
21.2585(d).
7
The number of employees would be relevant only if we
applied the TCHRA cap because it determines the maximum amount of
total damages based on the number of employees. § 21.2585(d)(1)-
(4). However, Nightingale has conceded that it has over 500
employees, which places it in the highest punitive damages cap
($300,000) under TCHRA. In any event, because we ultimately
determine that the cap in Chapter 41 applies, the number of
employees is irrelevant. See infra Part II.C.(2).

16
Arismendez was not prejudiced. The district court properly ruled

that the employer had not waived the statutory cap.

(2) TCHRA cap

In the alternative, Arismendez argues that the district court

erred in applying the cap in § 41.008; instead, she contends that

the applicable cap is found in the TCHRA. Tex. Lab. Code §

21.2585(d). Section 21.2585(d) provides that:

The sum of the amount of compensatory damages
awarded under this section for future pecuniary losses,
emotional pain, suffering, inconvenience, mental anguish,
loss of enjoyment of life, and other nonpecuniary losses
and the amount of punitive damages awarded under this
section may not exceed, for each complainant . . .

(4) $300,000 in the case of a respondent that has
more than 500 employees.

Arismendez asserts that because her suit is brought pursuant

to the TCHRA, the statutory cap found in that Act should apply.

However, Chapter 41 of the Texas Civil Practice and Remedies,

entitled “Exemplary Damages,” provides that “[t]his chapter applies

to any action in which a claimant seeks exemplary damages relating

to a cause of action.” § 41.002(a). Section 41.002(b) further

states that:

This chapter establishes the maximum exemplary damages
that may be awarded in an action subject to this chapter,
including an action for which exemplary damages are
awarded under another law of this state. This chapter
does not apply to the extent another law establishes a
lower maximum amount of exemplary damages for a
particular claim.

Accordingly, the statutory cap applied by the district court

provides that it applies to any action involving exemplary or

17
punitive damages unless another law establishes a lower cap.

Further, the statute expressly provides that it applies to all

punitive damages except for an inclusive list. § 41.002(b) (1)-

(15) and (d). That list does not exempt an action brought pursuant

to TCHRA. The statute also instructs that “in an action to which

this chapter applies, the provisions of this chapter prevail over

all other law to the extent of any conflict.” § 41.002(c)

(emphasis added).

We have found no Texas case addressing this precise question.

Arismendez, relying on Union Pac. R.R. Co. v. LOA, asserts that the

lower cap in the TCHRA ($300,000) controls over the maximum

recovery allowed in Chapter 41 ($750,000). 153 S.W.3d 162 (Tex.

App. – El Paso 2004). This case offers Arismendez no succor. In

LOA, based on the amount of compensatory damages awarded by the

jury ($800,000), the maximum amount of punitive damages allowed by

Chapter 41 was $750,000. Id. at 173. However, the maximum total

award, including punitive damages, that TCHRA ever allows is

$300,000. Thus, in LOA, the damages cap in the TCHRA was lower

than the cap in Chapter 41. Under those circumstances, Chapter 41

dictated that the lower cap found in TCHRA applied. § 41.002(b).

Although the opinion does not provide this analysis, the court came

to the correct conclusion that the lower cap in the TCHRA applied.8

8
The court stated that “[b]ecause we have ruled, however,
that the judgment is limited to the claims established by the TCHRA
which contemplates a cap of both compensatory and punitive damages

18
 In contrast, the maximum amount of punitive damages Chapter 41

allows based on the amount of economic damages awarded Arismendez

is $200,000—not $750,000. For Arismendez, the cap of $200,000 in

Chapter 41 is the lower and therefore applicable cap.9

Arismendez also contends that the applicable statutory cap

should be determined prior to the jury’s verdict to alleviate

uncertainty as to potential liability or recovery. The above-

quoted statutory scheme in Chapter 41 setting the maximum exemplary

award cannot be determined until the jury has awarded economic

damages. Once the statutory cap of Chapter 41 has been determined,

a district court can then determine if another (here TCHRA)

statutory cap is lower and therefore controlling. Arismendez’s

contention that the cap should be determined in the first instance

flies in the face of the Texas statutory scheme used to determine

the cap on a punitive damage award. It is without merit.

In light of the broad language in Chapter 41 reaching any

punitive damage awards except for certain enumerated actions not

and reformed the judgment below in conformance herewith, we do not
reach Issue No. Three.” Id. at 173.
9
Arismendez also cites Hoffmann-LA Roche, Inc., v.
Zeltwanger, 144 S.W.3d 438 (Tex. 2004), in support of the
proposition that the TCHRA cap applies. In that case, in a
footnote, the court noted that the current cap in Chapter 41
applied only to actions accruing after September 1, 1995. Id. at
442 n.4. More to the point, there was no argument regarding which
cap applied. The issue joined in that case was whether the
plaintiff could recover damages on a claim for intentional
infliction of emotional distress based on the same actions that
formed the basis of her sexual harassment damages.

19
relevant here, and the express language that Chapter 41 prevails

over all other conflicting law except when a lower maximum amount

is set, we are persuaded that the district court correctly applied

the cap found in § 41.008 to remit the punitive damage award to

$200,000.

III. CONCLUSION

For the above reasons, the district court’s judgment as a

matter of law in favor of the employer is REVERSED and REMANDED for

proceedings consistent with this opinion. Additionally, the

district court is directed to reinstate the jury’s award of damages

and remit the punitive damages to $200,000.

20