Punitive Damages Upheld in Four Recent Appellate Cases ...

• Product Liability: Rogers v. Ingersoll-Rand Co., 144 F.3d 841 (D.C. Cir. 1998).
• Age-Related Hostile Work Environment: Daka Inc., v. Breiner, 711 A.2d 86 (D.C. 1998)
• Intentional Infliction of Emotional Distress: Homan v. Goyal, 711A.2d 812 (D.C. 1998).
• Mortgage Fraud: Chedick v. Nash and Capital City Mortgage Corp., __ F.3d __ (D.C. Cir. 1998) (to be featured in October 1998 report)

Higher Standard for Punitives Created in Employment Title VII cases: Kolstad v. American Dental Ass'n, 139 F.3d 958 (D.C. Cir. 1998)

Negligent Spoliation of Evidence Is an Independent Tort: Holmes v. Amerex Rent-A-Car, 701A.2d 846 (D.C. 1998).

National Standard of Care: Phillips v. District of Columbia, __ A.2d __ (D.C. 1998).

Arbitration of HMO Medical Malpractice -- Round One to Plaintiff: George Washington Univ. v. Scott, 711 A.2d 1257 (D.C. 1998)

Product Liability: Good Warning Can't Make Up for a Defective Design

Rogers v. Ingersoll-Rand Co., 144 F.3d 841 (D.C. Cir. 1998). Opinion by Sentelle, joined by Wald and Randolph.

FACTS: An asphalt milling machine, which strips layers of asphalt from the road, backed up and crushed the plaintiff as she stood with her back to the machine, directing traffic around it. Operator didn't see her because she stood in the machine's blind spot, and she didn't hear the machine because backup alarm was working only erratically. Plaintiff sued manufacturer alleging three design defects: lack of mirrors to eliminate blind spot, lack of guards on the machine's rolling pinch points, and lack of a reliable backup alarm. Machine had sign that warned people to stay 10 feet away, and operating manual had instruction to same effect, plus instruction to operator to verify that backup alarm was working and to look out for people in line of travel. Manufacturer then offered jury instruction that if it had provided adequate warning which if followed would have prevented the injury, then machine was not defective. Court rejected instruction, and jury found for plaintiff.

OUTCOME: Verdict AFFIRMED.

HOLDING: (1) A warning alone doesn't substitute for a reasonably safe design in all cases, although sometimes a manufacturer might not be required to do more than give an adequate warning. Here, it was reasonable for the jury to conclude that the foreseeable risks to someone like the plaintiff gave the manufacturer a heightened duty to add more safety features. Warnings are only part of the "risk-utility analysis" that determines if a product is unreasonably dangerous.

(2) A prior accident with the same machine is relevant on issue of notice even though victim in that case was found to be partly at fault for the event.

QUOTE: "It is thus not correct that a manufacturer may, under the law of the District of Columbia, merely slap a warning onto its dangerous product, and absolve itself of any obligation to do more."

COMMENT: Court quotes new Restatement (Third) of Torts: Products Liability (1997) § 2, comment 1, on warnings issue.

Hostile Work Environment Theory Applies to Age Discrimination Too; Punitive Verdict 39 Times Compensatory Award Is OK

Daka Inc., v. Breiner, 711 A.2d 86 D.C. 1998). Opinion by Terry, joined by Reid, Steadman dissenting in part.

FACTS: Plaintiff Breiner ran cafeteria at Museum of American History for defendant Daka, which had food service contract. Breiner's boss started ridiculing plaintiff at weekly meetings in front of other managers, calling him "old fogey," "over the hill," and "couldn't get it up any more." Boss also refused to discipline lower level employees who joined in the age-related taunts. Boss then fired plaintiff, one month after giving him a raise and a bonus. Breiner sued for wrongful termination and for a hostile work environment based on age discrimination. Jury found against him on termination charge but awarded $10,000 compensatory damages and $390,000 punitives on age-related hostile work environment claim. Employer appealed on numerous issues.

OUTCOME: Verdict for plaintiff AFFIRMED.

HOLDING: (1) D.C. Human Rights Act, D.C. Code § 1-2501, applies to age-based hostile work environment just as much as to sex-based hostile environment.

(2) Evidence supported punitive verdict, and award 39 times higher than compensatory award is not excessive, in light of testimony that defendant made $8.5 million annual income from its Smithsonian food service facilities. (Steadman dissents on this issue.)

Sicking a Known Stalker onto an Innocent Third Party Qualifies as Intentional Infliction of Emotional Distress

Homan v. Goyal, 711A.2d 812 (D.C. 1998). Opinion by Schwelb, joined by Steadman and Ruiz.

FACTS: Defendant Goyal was a CPA who briefly employed the estranged wife of a man named DaSilva. DaSilva began calling the defendant as often as twenty times a day insisting he reveal where his wife was. DaSilva also threatened the CPA. Defendant reacted by giving DaSilva the phone numbers of a number of third parties, including plaintiff Homan, whom he did not know, suggesting that these persons might know where DaSilva could find his wife. DaSilva then started calling and stalking the plaintiff, several times threatening to kill him. Plaintiff tried to find out why CPA had given his phone number and address to the deranged man. CPA avoided his calls. Plaintiff moved to a new address and obtained unlisted phone number to avoid stalker. Plaintiff then sued CPA for intentional infliction of emotional distress. Jury found for plaintiff but trial judge granted JNOV on grounds that defendant's conduct wasn't outrageous enough or intentional enough to qualify for intentional infliction of emotional distress.

OUTCOME: Judgment JNOV for defendant REVERSED and verdict reinstated.

HOLDING: Telling a deranged person to "stalk him, not me" qualifies as intentional infliction of emotional distress. Recklessness, not intent to harm, is enough to satisfy intent portion of the tort. Outrageousness is fulfilled by having provided the stalker not just the phone number but also the home address of the plaintiff, under circumstances where the defendant knew that the stalker was likely to repeat harassment that defendant himself had endured consisting of a hundred personal visits and thousands of telephone calls.

Punitive Damages in Title VII: Plaintiff Must Show "Egregious Conduct" Beyond Intentional Discrimination

Kolstad v. American Dental Ass'n, 139 F.3d 958 (D.C. Cir. 1998) (en banc). Opinion by Williams, joined by Silberman, Ginsburg, Sentelle, Henderson and Randolph; dissent by Tatel, joined by Edwards, Wald, Rogers and Garland.

FACTS: Kolstad sued her employer under Title VII for sex discrimination after being passed over for promotion to one of ADA's top Washington jobs in favor of a man who had worked for ADA only one year. At trial she proved to jury's satisfaction that the formal process of filling the job was a pretext and that top ADA officials had already selected the man. Jury awarded back pay for unlawful sex discrimination. Judge refused to allow punitive damages claim to go to jury and also denied attorney's fees. Panel of appellate court reversed both findings. En banc court then took case on punitive issue.

OUTCOME: Refusal to instruct jury on punitive damages AFFIRMED.

HOLDING: (By 6-5 en banc court) When Congress amended Title VII in 1991 to allow for both compensatory and punitive damages, 42 U.S.C. § 1981(a), it intended to require more than mere "intentional discrimination" to qualify for punitive damages. Plaintiff must show "egregious conduct" beyond "mere intent to discriminate."

COMMENT: Dissent would stick to statutory language for punitives of "reckless indifference to rights," under which an employer found guilty of intentional discrimination could nonetheless escape punitive damages if it showed it acted in good faith and tried to comply with the law and thus wasn't recklessly indifferent to plaintiff's rights. Dissent says majority's "egregious conduct" standard is amorphous and says there was enough evidence of reckless indifference to plaintiff's federally protected rights for the punitive damages issue to reach jury.

Negligent Spoliation of Evidence Is an Independent Tort

Holmes v. Amerex Rent-A-Car, 701A.2d 846 (D.C. 1998). Opinion by Gallagher, joined by Schwelb and Farrell.

FACTS: Plaintiff was injured in a head-on collision while driving the defendant's rental car. Plaintiff asked defendant to hold the car for inspection for a possible crashworthiness claim against the manufacturer. Defendant held the car for a short time and agreed to sell the wreckage to the plaintiff, but then defendant sold it to a salvage yard, where the car was cut up and ruined for accident reconstruction purposes. Plaintiff sued rental company for negligently spoliating evidence. Trial court held that even if D.C. recognized such a tort, it would hold against plaintiff on proximate cause. Plaintiff appealed, and U.S. Court of Appeals certified questions to D.C. Court of Appeals.

HOLDING: (1) On certified question, court announces that it recognizes tort of negligent spoliation of evidence where the defendant has a special relationship with plaintiff giving rise to a duty to preserve the evidence. Duty established here by defendant's contract to sell the wrecked car to the plaintiff.

(2) To prove proximate causation for negligent spoliation, plaintiff "must show, based on reasonable inferences derived from both existing and spoliated evidence, that the underlying lawsuit was significantly impaired, that the spoliated evidence was material to that impairment, and that the plaintiff enjoyed a significant possibility of success in the underlying claim."

(3) Damages for the tort should be based on what the plaintiff likely would have recovered in the underlying case, discounted for plaintiff's risk of losing the underlying case even if evidence hadn't been spoliated. (Thus if plaintiff was found to have a 60 percent chance of winning the underlying case with all evidence intact, damages in spoliation case should be 60 percent of damages in underlying case.)

COMMENT: In an aside (fn. 3), panel says it would be a good idea to adopt comparative negligence doctrine and says this "ideally would be a subject for comprehensive consideration by the legislature."

National Standard of Care: Not Necessary to Cite Other Specific Institutions

Phillips v. District of Columbia, __ A.2d (D.C. 1998). Opinion by Schwelb, joined by Farrell and Mack.

FACTS: Man was arrested for carrying pistol without license. Judge ordered him detained at D.C. Jail pending forensic examination. Contrary to written procedure, he was housed in the open population instead of the mental health unit where prisoners were to be placed who had "forensic" written on their commitment papers, as his did. The next morning he was agitated and begged to be released from his cell. Later he was found dead, having hanged himself with a bedsheet. Log books contained no entries in an 80-minute time span. At trial, plaintiff's expert testified that prison officials violated standard of care both for observing mentally ill prisoners and for observing general prison population. Trial judge granted directed verdict for failure to prove a national standard of care.

OUTCOME: Judgment as a matter of law REVERSED and new trial ordered.

HOLDING: Plaintiff failed to prove that prison guards should have known that prisoner was mentally ill and therefore failed to prove breach of standard of care for treatment of mentally ill prisoners. But plaintiff did adequately prove a national standard of care that inmates in general population needed to be observed at least once every 30 minutes, despite expert's failure to cite specific institutions that observed such a standard. Expert did refer to a specific American Correctional Association standard.

QUOTE: "We certainly agree that the plaintiff's case would have been stronger if her counsel had elicited such information [about other specific institutions following the 30-minute rule] and if her expert witness had provided it. We do not believe, however, that this omission was fatal."

COMMENT: Case quotes Clark v. D.C., 708 A.2d 632, 635 (D.C. 1997) as establishing two alternative lines of proof for the standard of care: "the practices in fact generally followed by other comparable governmental facilities or ... some standard nationally recognized by such units."

Parents Have No Liability for Teenager's Reckless Driving Outside the Scope of Task They Gave Him

Athridge v. Rivas, 141 F.3d 357 (D.C. Cir. 1998). Opinion by Henderson, joined by Ginsburg and Randolph.

FACTS: Mother sent her 16-year-old son to cousin's house to mow the lawn while the cousins were out of town. Son climbed in window of cousin's house and took keys to cousin's VW Jetta, which he drove away to a shopping mall to meet with some friends. Later that day, at a friend's house, the son drove Jetta at high speed toward a pedestrian friend who wanted to get his books out of the Jetta's back seat. At last second, car veered one way and pedestrian jumped same way. Resulting collision left plaintiff pedestrian with brain damage. Plaintiff sued driver, driver's parents and cousins. Court dismissed all parties but driver and found for plaintiff against driver on last-clear-chance theory.

OUTCOME: Summary judgment for parents AFFIRMED.

HOLDING: (1) Tort of lack of parental supervision requires proof of prior conduct by child showing a special need for parents to supervise. Here, plaintiff didn't show that parents even knew that their son had driven at all before the day of the accident, much less that he had driven recklessly.

(2) Negligent entrustment theory failed because there was no proof that parents controlled access to the cousin's car which the son took.

(3) Liability on a theory that the son was acting as parents' employee failed because Restatement of Torts (2nd) § 317 (governing master's liability for torts of servant committed outside servant's scope of employment) required that tort occur either (a) on property controlled by master, or (b) with a chattel owned by master, or (c) if master has reason to know of special need to control employee.

Arbitration of Medical Malpractice Claims against HMOs

George Washington Univ. v. Scott, 711 A.2d 1257 (D.C. 1998). Opinion by King, joined by Farrell and Ruiz.

FACTS: Alleged medical malpractice against family member of GWU health plan subscriber occurred in December 1994. In January 1995, family automatically renewed membership in health plan. Contract from health plan that took effect in January 1995 said that "Any claims for damages for personal injury ... or wrongful death arising out of the rendition or the failure to render services under this contract must be submitted to binding arbitration." Suit was filed in 1995. Health plan moved to dismiss in favor of arbitration. Trial court refused to dismiss.

OUTCOME: Denial of arbitration AFFIRMED.

HOLDING: Since the arbitration clause made a major change in the conditions of the insurance policy, it could not be treated as a continuation of the same contract, but instead was a new contract that only applied to claims "arising out of" the new contract, i.e., care that occurred after the effective date of the change.

COMMENT: Court doesn't decide issue of whether arbitration clause would be enforced for care occurring after the addition of the arbitration clause to the policy. But it hints that if a policyholder has "knowingly and affirmatively" agreed to such a provision, then the court would enforce it.

Should Jury Instructions be "Field-Tested" for Comprehensibility? Two Court of Appeals Judges Say Yes

On March 26, 1998, the en banc D.C. Court of Appeals adopted a new standard instruction for proof "beyond a reasonable doubt." See Smith v. United States, 709 A.2d 78 (D.C. 1998). (1) The event occasioned concurring opinions from two judges about the need to ask jurors what they find understandable or not in an instruction.

Judge Schwelb: "If a model decree is to be adopted, I should think that it ought to have an experiential basis founded upon field-tested information regarding the kind of phraseology which is mot readily understandable to lay jurors. As appellate judges, our expertise is in the law, rather than in communicating with citizens who are not trained in our craft. The disciplines of law and communication are quite different from one another, and when a choice is being made between legally acceptable formulations of reasonable doubt, the most useful thing to know is which one will best enlighten the jury."

Judge Ruiz: "My sole reservation is that we have not gone far enough to seek the views of jurors themselves in order to understand what terms in the current instruction are problematic, and become better informed as to what substitute language would be most helpful in conveying the core but slippery concept, 'beyond a reasonable doubt.' In truth, it is difficult for an appellate court, in the context of an appeal, to obtain this kind of information. It would have been possible in this case, however, just as we requested that amicus consult with trial judges, to request that jurors be consulted, or that data and recommendations be obtained from expert individuals or organizations with the appropriate juror testing and sampling techniques to provide us with necessary information on what jurors think and would prefer."

BRIEFS

Plaintiff Intervenes Successfully to Obtain Sealed Documents from Another Case

EEOC v. National Children's Center, Inc., 146 F.3d 1042 (D.C. Cir. 1998). Plaintiff lost summary judgment against the employer of a bus driver who allegedly sexually assaulted her daughter while driving her home. Plaintiff later discovered that driver's employer had entered consent decrees of a lawsuit alleging sexual harassment and hostile work environment. Plaintiff got judge in her own case to vacate summary judgment. Then plaintiff moved to intervene in the EEOC case, pursuant to Fed. R. Civ. P. 24(b)(2), to obtain documents and depositions that had been sealed in that case. Trial court denied intervention. Court of Appeals reversed for abuse of discretion, holding that Rule 24(b) was the proper device to try to obtain documents from the sealed record of another case, and further holding that since trial judge had let some former employees of the defendant intervene to obtain documents for their own sexual harassment cases, it should have let this plaintiff intervene too even though the allegations were different.

Plaintiff's Failure to File Proof of Service in 60 days Isn't Fatal to Case

Wagshal v. Rigler, 711 A.2d 112 (D.C. 1998). Plaintiff served his complaint on all defendants within 60 days of filing the suit, as required by Rule 4(m). But because plaintiff also failed to file proof of service within the same 60 days, the clerk dismissed the case. Trial judge refused to vacate dismissal. Court of Appeals REVERSES dismissal, holding that a plaintiff does not necessarily have to show good cause for failing to file the service document within 60 days as long as he shows good cause why the case should not be dismissed, which is a broader standard that looks to the prejudice to the plaintiff and to the defendant from vacating dismissal. See also Debose v. Ramada Renaissance Hotel, 710 A.2d 880 (D.C. 1998), also reversing a trial court for refusing to reinstate a complaint that was dismissed by the clerk for failing to file proof of service within 60 days.

Emergency Police Car Run: Speeding 5-10 mph above Posted Limit and Failing to Slow for a Red Light Don't Amount to Gross Negligence

District of Columbia v. Henderson, 710 A.2d 874 (D.C. 1998). On a rainy winter evening just after dusk, two police cars responding to a motorist distress call were driving on Bladensburg Road with their flashing lights and sirens on, along with high-beam headlights. The first police car, contrary to traffic regulation, failed to slow for a red light ahead where vehicles were stopped until he was at the crosswalk. He also violated a police general order requiring a vehicle on an emergency run to make a full stop before proceeding through a red light. His car collided with a car crossing the intersection on the green. Court of Appeals REVERSES verdict for plaintiff, holding that failure to slow or stop amounts to mere negligence and cannot amount to gross negligence since the officer did have sirens and flashing lights plus high beams on, and did brake just before intersection. Court quotes from its recent case of District of Columbia v. Walker, 689 A.2d 40 (D.C. 1997), that gross negligence requires a showing of "such an extreme deviation from the ordinary standard of care as to support a finding of wanton, willful and reckless disregard or conscious indifference for the rights and safety of others ... conduct so extreme as to imply some sort of bad faith ... [or if not bad faith, a risk] so obvious that [the actor] must be taken to be aware of it and so great as to make it highly probable that harm would follow."

Exposure to Second-Hand Smoke in Prison Isn't Cruel and Unusual Punishment

Scott v. District of Columbia, 139 F.3d 940 (D.C. Cir. 1998). District court granted injunction to prisoners ordering District of Columbia to provide each of them with smoke-free environment, on grounds that second-hand smoke at Lorton constituted cruel and unusual punishment in violation of the Eighth Amendment. Court of Appeals REVERSES for lack of evidence that there was such an unreasonable level of tobacco smoke in Lorton that it posed a serious risk to their health. Plaintiff didn't try to quantify level of smoke and had only sketchy evidence that plaintiff's physical ailments were aggravated by smoke. Plaintiff also failed to prove "deliberate indifference" inasmuch as government officials testified that they tried to enforce a no-smoking policy.

Employment Discrimination: Bias by Supervisor Is Relevant Even If Supervisor Lacks Firing Authority. Griffin v. Washington Convention Center, F.3d (D.C. Cir. 1998). Griffin brought a Title VII suit after she was fired as an electrician at convention center. Trial judge excluded evidence that plaintiff's immediate supervisor didn't like women working as electricians, on grounds that the supervisor lacked firing authority. Court of Appeals REVERSES and holds supervisor's bias is relevant to alleged sex discrimination since he participated at every stage of the process that led to the firing. Court also holds that defendant "opened the door" to bias testimony since the supervisor gave self-serving testimony on direct examination of his lack of discriminatory intent.

1. The new instruction states, in part:

"Reasonable doubt, as the name implies, is a doubt based upon reason -- a doubt for which you have a reason based upon the evidence or lack of evidence in the case. If, after careful, honest, and impartial consideration of all the evidence, you cannot say that you are firmly convinced of the defendant's guilt then you have a reasonable doubt. Reasonable doubt is the kind of doubt that would cause a reasonable person, after careful and thoughtful reflection, to hesitate to act in the graver or more important matters in life. However, it is not an imaginary doubt, nor a doubt based on speculation or guesswork; it is a doubt based upon reason. The government is not required to prove guilt beyond all doubt, or to a mathematical or scientific certainty. Its burden is to prove guilt beyond a reasonable doubt."