Table of Contents | Features | News & Trends | Departments | Experts | Classifieds

News & trends
March 2008 | Volume 44, Issue 3

Stand-alone punitive award in Title VII case cleared by Fifth Circuit

Rebecca Porter, Associate Editor

Clarifying its own “mixed case law” on the question, the Fifth Circuit has held that a jury’s award of punitive damages in a Title VII case can stand even without an accompanying award of compensatory damages. Such an award does not violate the defendant’s due process rights because the statute includes a punitive damages cap, the court concluded. (Abner v. Kan. City S. R.R. Co., 2008 WL 40106 (5th Cir. Jan. 2, 2008).)

The court had previously held that “there is no established federal common law rule that precludes the award of punitive damages in the absence of an award of compensatory damages.” (La. ACORN Fair Housing v. LeBlanc, 211 F.3d 298 (5th Cir. 2000).)

Reviewing its own decisions on the issue, the court noted that it had upheld punitives in cases with no compensatory awards and without finding that the plaintiffs’ constitutional rights had been violated, “while skirting the underlying constitutional question of whether such awards are permissible.”

The Fifth Circuit had been following the general rule that punitives can stand alone if the defendant has violated the Constitution. But “if there was no constitutional violation, the question becomes more difficult,” Judge Patrick Higginbotham wrote for the three-judge panel.

The plaintiffs in the case, eight African-American employees of the Kansas City Southern Railroad Co., sued the railroad under Title VII and §1981 for creating a racially hostile work environment. A jury found the company liable but did not compensate the plaintiffs financially; however, it awarded each plaintiff punitive damages that fell within a statutory limit. The judge did not ask the jury to determine whether the plaintiffs’ constitutional rights had been violated.

Perhaps attempting to ward off a challenge to the award, the district court added $1 in nominal damages to the verdict. The railroad appealed, arguing that in this particular instance the jury verdict should be overturned because there was no award of compensatory damages.

In its opinion, the Fifth Circuit noted that courts have taken varied lines of reasoning on this question. The Second and Seventh circuits have awarded punitive damages without accompanying compensatory damages or back pay in Title VII cases, and the First and Third circuits have approved awarding punitives with nominal damages in §1981 cases. The First Circuit has overturned awards of punitive damages in cases where no compensatory or nominal damages were awarded.

In Abner, the Fifth Circuit found that the language of Title VII and its legislative history showed that Congress didn’t require actual damages to accompany punitive damages.

The defendant argued that the punitive damages award violated its due process rights. The award, it argued, didn’t pass the Supreme Court’s test for determining the constitutionality of punitive damages established in BMW of North America v. Gore. (517 U.S. 559 (1996).)

The Fifth Circuit recognized that cases involving statutes capping punitive damages present special issues. For example, unlike the Fair Housing Act, which requires actual damages to accompany punitives, Title VII specifically provides for punitive damages and for a cap on them.

The court found that Congress has effectively set “a tolerable proportion” with the cap on punitive damages, and the BMW analysis would be required only if the statutory cap itself offended due process. It does not, the court ruled, so a ratio-based inquiry “becomes irrelevant.” It noted that the evidence of discrimination in this case justified the award.

“As we see it, the combination of the statutory cap and high threshold of culpability for any award confines the amount of the award to a level tolerated by due process,” the court wrote.

It added that the “ceremonial anchor” of nominal damages was not required because damages awards are capped under Title VII.

Table of Contents | Features | News & Trends | Departments | Experts | Classifieds
Frequently Asked Questions about TRIAL | Past Issues of TRIAL

Send your comments and questions about the online version of TRIAL to us at trial@justice.org