Concept_Check-Too Much_11462441LargeIn a prior post, I explained why the proper approach in Arizona v. ASARCO is to compare ASARCO’s conduct to conduct in other Title VII cases and then select a punishment—from zero to $299,999—commensurate with where ASARCO’s conduct stands on the spectrum of punishable conduct.

In this post, I will undertake to show why the Ninth Circuit panel and district court were mistaken in concluding that ASARCO’s conduct was reprehensible enough to warrant either (i) the highest punitive award ever imposed when compensatory damages were $1—$125,000—as the panel majority held, or (ii) the maximum permissible under Title VII—$299,999—as the dissenting member of the panel and the district court held.

The fundamental mistake of all of these judges was their belief that they were required to evaluate this run-of-the-mine (no pun intended) hostile-environment case under the five reprehensibility factors identified in State Farm, however ill-fitted those factors may be for this kind of case.

State Farm, of course, was an insurance bad-faith case, and it drew its factors largely from the Court’s discussion of the reprehensibility guidepost in BMW, a case involving alleged fraud in the sale of an automobile.  In neither case did the Court suggest that the factors it had identified are exclusive or that courts must apply each of them in every case.   Nor did the Court have occasion to discuss the factors that might be pertinent in employment cases.

To be sure, some of the State Farm factors may be relevant in particular employment cases.  For instance, some employment cases might involve acts of violence perpetrated by a supervisor (as defined in Vance v. Ball State University) or owner of the business.  And other cases might involve a pattern of discrimination.

But by and large, the State Farm factors don’t fit employment cases particularly well—a problem that can sometimes lead judges assessing reprehensibility in these cases to simply note that discrimination is a serious matter and move on.  Other factors not mentioned in State Farm would be more generally applicable in employment cases and would give judges better tools for determining where a particular employment-discrimination case falls on the reprehensibility spectrum.

For example, as the Seventh Circuit held in the Hennessy case mentioned in my previous post, so-called quid pro quo sexual-harassment cases rise higher on the spectrum of reprehensibility than cases involving only offensive sexual banter.  Similarly, cases in which supervisors actively perpetrated or encouraged acts of harassment often entail materially greater reprehensibility than cases in which the harassment is perpetrated by co-workers and liability lies against the company for failing to do more to prevent or stop the harassment.  And reprehensibility is higher when management knowingly spurns its obligation to implement an effective anti-harassment policy than when the company has adopted one in good faith, but management in a particular plant simply fails to adhere to it.

When all relevant circumstances are taken into account, it seems to me highly misguided to treat ASARCO’s conduct in this case as being among the most egregious for which punishment can be imposed under Title VII.  Most importantly, there appears to be no evidence that a supervisor, as defined in Vance, perpetrated any of the acts of harassment at issue.  It is not even clear that a supervisor could be blamed for the quality of the response to Aguilar’s complaints.

In addition, the jury awarded Aguilar no damages for emotional distress, which is a significant indication that the harassment itself was not severe, especially as compared to harassment in other cases.  It also found that ASARCO neither retaliated against Aguilar nor constructively discharged her; indeed, Aguilar was repeatedly promoted.  Needless to say, harassment accompanied by retaliatory conduct or constructive discharge rises higher on the reprehensibility spectrum than harassment that does not lead to any adverse job consequences for the employee.  There also is no evidence of a consistent pattern of harassment at the Arizona facility where Aguilar worked, much less at ASARCO generally.

There was evidence that one other woman was subjected to unwelcome advances by the same co-worker about whom Aguilar complained and that pornographic graffiti had been found in a men’s restroom years earlier.  But this hardly qualifies as the kind of consistent pattern of hostile conduct that is found in many cases in which punitive damages are awarded.

In short, to treat this case as bad enough to warrant a punishment in the middle or high end of the permissible range would result in ASARCO being punished more heavily than defendants that engaged in more reprehensible conduct that caused substantial emotional distress and other compensable harm.  As the Seventh Circuit observed in Hennessy, Congress could not have intended that anomalous outcome.

A punishment in the mid-five figures would be more in line with the degree of reprehensibility of ASARCO’s conduct—even accepting that it was egregious enough to warrant any punishment at all—and ensure that higher amounts of punitive damages are reserved for cases involving more abhorrent conduct.