When determining punitive damages, courts generally rely on applicable statutes and recent court rulings to determine a limit to the punitive damages. However, in one recent discrimination and sexual harassment case, the court was left to consider, not only the absolute limit on the punitive damages, but also how large a ratio between nominal damages is allowed by the Constitution.
The case involves a female former employee of ASARCO, a copper mining facility. The employee, Angela Aguilar, alleged that she was subjected to sexual harassment in the workplace and that, when she complained, she was subjected to retaliation and constructive discharge. The harassment allegedly included a daily proposition by her male supervisor, who allegedly refused to help or train her when she refused his advances. Aguilar also alleges that this supervisor often stood so close to her that she feared for her safety. Aguilar alleges that she complained repeatedly of this treatment to the Human Resources department, but she was allegedly told that there was nothing that ASARCO could do and that she would just have to “handle it [herself]”. She eventually transferred to another work crew where she had to deal with harassment from another male coworker. This one allegedly told her “your ass is mine”, yelled at her, told her to “watch herself”, snapped his fingers at her, and threatened to fire her. Furthermore, Aguilar was the only female employee in a facility without any ladies’ restrooms. She used a portable facility which she alleged was covered in pornographic graffiti which was aimed at her. When she complained, the “porta-potty” was replaced, only to have the pornography repeated on the new facility.
The trail court found ASARCO guilty of discrimination and sexual harassment, but not retaliation or constructive discharge. The jury decided not to award Aguilar any compensatory damages, but it did award $1 in nominal damages and $868,750 in punitive damages. The judge reduced that award to $300,000, stating that, under the relevant statute, $300,000 was the maximum punitive damages that could be awarded for an employer of ASARCO’s size.
ASARCO appealed, arguing that the punitive award was still too large to be upheld under the Constitution, and the case moved to the Ninth Circuit Court of Appeals.
In ruling in this case, the appellate court first considered “the degree of reprehensibility of the defendant’s conduct”. To determine this, the Supreme Court has laid out ground rules for the lower courts to follow when ruling in cases of discrimination. These rules include considering whether “the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard for the safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.”
ASARCO argued that the lack of damages awarded by the lower court “indicates that [ASARCO’s] conduct caused no harm, much less any physical harm.” The court rejected that argument though, stating that ” ‘intentional discrimination’ is a ‘serious affront to personal liberty’ and should be considered high on the reprehensibility scale.”
The Court also determined that ASARCO’s conduct was indeed repeated and had demonstrated “indifference or reckless disregard for Aguilar’s health and safety.” The court further found that the company acted “with malice … [or] with reckless indifference to the federally protected rights of [Aguilar].” With this in mind the court decided that ASARCO’s actions justified substantial damages and a very large punitive award. The court further pointed out that, although the Supreme Court had noted that “courts must ensure that the measure of punishment is both reasonable and proportionate”, the Court had not provided a specific ratio which must be used. However, Court did state that a high ratio may be “justified when ‘a particularly egregious act has resulted in only a small amount of economic damages.’ ” The appellate court stated that it found ASARCO’s acts to be particularly egregious.”
The court therefore reviewed similar cases of discrimination across the country and found that the highest ratio in existence was 125,000 to 1. In keeping with this ruling by the Fifth Circuit Court of Appeals, the Ninth Circuit Court lowered the award for punitive damages from $300,000 to $125,000.
You can view the Court’s opinion here.