Isolated Keys on White with Clipping PathMcPadden v. WalMart Stores East, L.P., No. 14-cv-475, awarded more than $31 million to a former Wal-Mart employee who had worked for the company as a pharmacist.  The plaintiff sued for discrimination and retaliation after she was terminated as discipline for losing a pharmacy key.  As is common in these cases, the news stories were technically accurate but left a misleading impression of what happened.First, the news stories reported that the award included $15 million in punitive damages, but did not point out that the punitive award is subject to a statutory cap.  The punitive damages were awarded under Title VII, which caps compensatory and punitive damages at $300,000 for an employer of Wal-Mart’s size.  Since the jury also awarded the plaintiff $500,000 in compensatory damages concurrently under Title VII and state law, the punitive damages should be substantially reduced if not eliminated.

Second, the news stories didn’t report that the $31 million award also includes another $15 million in “enhanced compensatory damages” for gender discrimination in violation of New Hampshire state law.  New Hampshire law prohibits punitive damages, but allows the augmentation of compensatory damages in certain cases in which the wrongdoer’s actions were especially egregious.  “Enhanced damages” are not punitive damages, but are intended to compensate the plaintiff “for the vexation and distress caused the plaintiff by the character of defendant’s conduct.” Vratsenes v. N.H. Auto, Inc., 289 A.2d 66, 72 (N.H. 1972). The jury here was instructed that “enhanced damages, unlike punitive damages, may not be awarded in an effort to punish the defendant.” But the jury apparently did just that when it awarded “enhanced compensatory damages” in an amount equal to the punitive damages.  Because these damages are grossly excessive and were self-evidently awarded for an improper purpose—to punish the defendant—Wal-Mart will have excellent arguments for a new trial or a dramatic remittitur.

Assuming that the case doesn’t settle, we’ll post an update when the district court rules on Wal-Mart’s post-trial motions, which are due on March 1 and probably won’t be resolved until at least a few months after that.