Citation 47 Cal. 4th 686, 219 P.3d 749, 101 Cal. Rptr. 3d 773
Roby v. McKesson Corp.
Filed 11/30/09
IN THE SUPREME COURT OF CALIFORNIA
CHARLENE J. ROBY,
Plaintiff and Respondent,
S149752
v.
Ct.App. 3 C047617/C048799
MCKESSON CORPORATION et al.,
Yolo County
Defendants and Appellants.
Super. Ct. No. CV01573
A jury found that plaintiff employee, Charlene J. Roby, was wrongfully
discharged based on her medical condition and related disability. The jury found
both harassment and discrimination, and it awarded $3,511,000 in compensatory
damages and $15 million in punitive damages against the employer, as well as
$500,000 in compensatory damages and $3,000 in punitive damages against the
supervisor who was responsible for the harassment. Defendants appealed.
The Court of Appeal concluded that some of the noneconomic damages
awards overlapped one another, and that the evidence was insufficient to establish
harassment. It ordered the trial court to enter judgment in favor of the supervisor,
and it ordered the trial court to modify the judgment against the employer to
reflect a reduction of compensatory damages to $1,405,000. The court further
concluded that the award of punitive damages against the employer exceeded the
federal constitutional limit, and it ordered a reduction of punitive damages to
$2 million. The Court of Appeal then affirmed the judgment as modified.
1
We granted plaintiff‟s petition for review, which raised three issues. First,
did the Court of Appeal err in concluding that some of plaintiff‟s noneconomic
damages awards overlapped one another? Second, did the Court of Appeal err in
allocating plaintiff‟s evidence between her harassment claim and her
discrimination claim, and, based on that allocation, in finding insufficient evidence
to support the harassment verdict? Third, did the Court of Appeal err in
concluding that the punitive damages against the employer exceeded the federal
constitutional limit?
With respect to the first issue, we conclude that the jury‟s noneconomic
damages awards are hopelessly ambiguous. In a letter to this court and again at
oral argument, plaintiff‟s counsel stated that plaintiff preferred to concede this
issue rather than face a new trial, and defendants accepted this concession.
Therefore, the validity of the Court of Appeal‟s conclusion that some of the
noneconomic damages awards overlapped one another is no longer in dispute.
With respect to the second issue, we conclude that the Court of Appeal erred in
allocating the evidence between the harassment claim and the discrimination
claim, and we reject its determination that the record included insufficient
evidence to support the harassment verdict. With respect to the third issue, we
agree with the Court of Appeal that the punitive damages exceeded the federal
constitutional limit, but we disagree with the Court of Appeal on the amount of
this limit. We hold that in the circumstances of this case the amount of
compensatory damages sets the ceiling for the punitive damages.
I
A
This matter is before us on appeal from a judgment in favor of plaintiff
Charlene J. Roby, after a jury trial. In summarizing the facts, we view the
2
evidence in favor of the judgment. (Bickel v. City of Piedmont (1997) 16 Cal.4th
1040, 1053.)
Roby worked for defendant McKesson Corporation from 1975 until 2000.
McKesson is a distributor of pharmaceutical and health care products, supplying
both hospitals and pharmacies. At the end of her career with McKesson, Roby
was a customer service liaison at a local distribution center, processing forms and
handling customer problems related to product delivery. She did her job well and
received favorable performance reviews. Starting in 1997, Roby began
experiencing “panic attacks” that temporarily (and on short notice) restricted her
ability to perform her job. During a panic attack, Roby suffered heart palpitations,
shortness of breath, dizziness, trembling, and excessive sweating.
In 1998, McKesson instituted a complex attendance policy. The policy put
particular emphasis on 24-hour advance notice for all absences, including medical
absences. An absence without notice that lasted more than half the scheduled
workshift was denominated an “occasion,” and two incidents of tardiness or early
departure also counted as an “occasion,” but the term “occasion” referred to a
period of absence that began without the required 24-hour notice, not to each day
of absence. For example, if an employee suddenly became ill and was absent
(without 24-hour advance notice) for three consecutive workdays, the three-day
absence would be deemed a single occasion.
McKesson imposed progressive levels of discipline based on the number of
occasions an employee accrued in any 90-day period. The discipline proceeded in
a “3-3-2-2 sequence.” Three occasions in any 90-day period would result in an
oral warning, and an additional three occasions in any subsequent 90-day period
would result in a written warning. After the written warning, two more occasions
within any 90-day period would result in a final written warning. After the final
3
written warning, two more occasions within any 90-day period would result in
termination of employment.
An employee would repeat a level in the sequence (rather than progressing
to the next, more severe disciplinary level) if the employee became eligible for
discipline but had received no discipline during the preceding six months. If the
employee became eligible for discipline but had received no discipline during the
preceding 12 months, the level of discipline would be one level below the level
last imposed (though the minimum discipline was always an oral warning). For
example, if an employee received a final written warning but then received no
discipline for six months before becoming again eligible for discipline, a second
final written warning would be issued. If the same employee had received no
discipline for 12 months before becoming again eligible for discipline, there would
be a written warning (nonfinal), rather than a final written warning.
McKesson‟s attendance policy operated to the disadvantage of employees
who, like Roby, had disabilities or medical conditions that might require several
unexpected absences in close succession. Roby accrued a large number of
occasions in a relatively short time span, and most of them were directly or
indirectly related to her panic attacks. Roby‟s supervisors — including defendant
Karen Schoener — were aware that Roby suffered from these unpredictable panic
attacks and that many, if not all, of her absences without notice resulted from this
condition.
Roby struggled to overcome her disability and to improve her attendance
record, but after Schoener took over as Roby‟s immediate supervisor, Roby‟s
frequent absences resulted in tension between them. Compounding this problem,
Roby‟s medication caused her body to produce an unpleasant odor, and in
connection with her panic attacks she also developed a nervous disorder that
caused her to dig her fingernails into the skin of her arms, producing open sores.
4
Schoener made negative comments in front of other workers about Roby‟s
body odor, although Schoener knew from Roby that medication was causing the
odor. Schoener also called Roby “disgusting” because of the sores on her arms
and her excessive sweating. Schoener openly ostracized Roby in the office,
refusing to respond to Roby‟s greetings and turning away when Roby tried to ask
questions, and Schoener made a facial expression of disapproval when Roby took
rest breaks because of her panic attacks.
Schoener also ignored Roby at staff meetings, and she overlooked Roby
when handing out specialty food items, holiday gifts, and travel trinkets, although
Schoener regularly gave these small gifts to the other employees on her staff.
Schoener effectively excluded Roby from office parties by designating her to
cover the office telephones. In addition, Schoener frequently reprimanded Roby
in front of her coworkers. She spoke about Roby in a demeaning manner and
openly belittled Roby‟s contribution to the company, calling her job a “no
brainer.” According to the testimony of one coworker, when Roby would
telephone the office in the morning to report that she would be absent, Schoener
“would always make this announcement that was degrading; say, „Charlene‟s
absent again‟ — you know — that type of response.” Roby‟s complaints to more
senior managers about Schoener‟s conduct went unanswered.
In early 1999, Roby accrued three occasions within a 90-day period.
Although Roby told her then supervisor (not Schoener) that these absences were
due to her medical condition, she nevertheless received an oral warning on April
2, 1999. By June 8, 1999, Roby had accumulated three and a half more occasions.
She again informed her supervisors (who at this time included Schoener) that her
absences were because of her medical condition, but she nevertheless received a
written warning.
5
Roby then had two more occasions — July 27-28, 1999 and October 18,
1999. She gave her supervisors (including Schoener) a note, signed by her
psychiatrist, stating that her July 27-28 absence was necessitated by a medical
condition that was not contagious. Nevertheless, on October 22, 1999, Roby
received a final written warning. She responded by telling Schoener that all her
absences were because of her panic disorder.
After the final written warning, Schoener told Roby that if she had no
further occasions before January 2000, she would have a “new start.” Roby
interpreted that statement to mean that she would clear her poor attendance record
if she succeeded in having no occasions between then and January. Roby met that
goal and went to Schoener to express her delight, but Schoener said nothing.
In 2000, Roby had two more occasions, one on February 25, because of
laryngitis, and the second on April 11, because of a panic attack. On April 13,
2000, two of McKesson‟s local managers (including the head of the distribution
center where Roby worked) met with Roby and told her that she had abused the
company‟s attendance policy and was subject to termination. Roby protested,
explaining that in 1999 Schoener had assured her a “new start” if she lasted until
January 2000 without any occasions. Roby also asserted that McKesson had
applied the attendance policy unevenly, overlooking instances when other
employees were absent without notice. Roby requested that her occasions be
retroactively reclassified as protected medical leave under the Family and Medical
Leave Act of 1993 (29 U.S.C. § 2601 et seq.) (FMLA), but the documentation she
relied upon in support of this reclassification was limited to the brief medical notes
that were already in her personnel file. These notes stated only that Roby “has
been diagnosed with panic disorder,” that it is “not contagious,” and that the
“[p]anic episodes have been stabilized [with medication].” The notes did not
6
describe the panic disorder, and they did not connect any of Roby‟s absences to
the panic disorder.
McKesson suspended Roby pending an investigation. The main focus of
the investigation was to confirm that the number of Roby‟s occasions had been
calculated correctly, that nothing in her personnel file excused these occasions,
and that the frequency of the occasions justified termination under the attendance
policy. During this investigation, Schoener reported that Roby had misunderstood
her statement about a “new start”; in making the statement, Schoener had meant
only that, after the beginning of the new year, Roby would be able to use newly
accrued vacation leave to take days off.
On April 14, 2000, McKesson terminated Roby by telephone, and it sent a
followup letter on April 17, 2000. On April 24, 2000, Roby submitted a “Request
for Action” contesting McKesson‟s decision and asserting that her absences were
because of her disability. McKesson reaffirmed Roby‟s termination on May 10,
2000.
After the termination, Roby was devastated emotionally and financially.
She depleted her savings and lost her medical insurance, which led her to forgo
necessary treatment. She developed agoraphobia (anxiety in public places) and
became suicidal. In 2001, the United States Social Security Administration found
Roby to be completely disabled.
B
In 2001, Roby sued employer McKesson and supervisor Schoener. The
matter proceeded to trial, with the jury instructions outlining the following theories
of recovery: wrongful termination in violation of public policy (against
McKesson only); harassment in violation of the California Fair Employment and
7
Housing Act (FEHA) (Gov. Code, § 12940, subd. (j))1 (against McKesson and
Schoener); discrimination in violation of the FEHA (§ 12940, subd. (a)) (against
McKesson only); and failure to accommodate in violation of the FEHA (§ 12940,
subd. (m)) (against McKesson only).
Three of the claims against McKesson — wrongful termination in violation
of public policy, discrimination in violation of the FEHA (§ 12940, subd. (a)), and
failure to accommodate in violation of the FEHA (§ 12940, subd. (m)) — were
based, at least in part, on Roby‟s termination, and therefore the damages for these
causes of action necessarily overlapped. The trial court instructed the jury that if it
found liability on more than one of these theories, it should determine the total
economic damages resulting from Roby‟s termination and insert that total figure
as the economic damages for each of the separate theories of recovery. The court
emphasized that the jury should not divide the total economic damages into parts
and distribute those parts among the separate theories of recovery; the court
assured the jury that the court would count the economic damages only one time
no matter how many times the jury inserted the same dollar amounts on the special
verdict form.2 As to noneconomic damages, however, the trial court instructed the
1
All further statutory references are to the Government Code unless
otherwise indicated.
2
Specifically, the trial court instructed the jury: “If you find the defendant
liable on two of the verdicts, for example, and you are then moving onto the dollar
amounts here, the economic loss will be identical for those two. [¶] . . . [Y]ou
would put the same number there, past economic loss and future economic loss, on
those lines [of the verdict form]. [¶] . . . [¶] . . . [S]o you‟re saying, [for example]
well, we think that she ought to get a guilder for economic loss. [¶] . . . [B]ut
we‟re finding it on different ones, because we‟re going to put half in this verdict,
and half in the other. Don‟t do that. You figure out what it is. [¶] You put it in
there . . . . [W]hatever your amount is, whatever the dollars are. [¶] . . . If you
bring back a verdict that has dollar amounts in two separate parts of the verdict
form, I will know that I only can order judgment for that amount[] [o]nce[.] It‟s
(footnote continued on next page)
8
jury that damages could vary for each of the three theories of recovery and that the
jury should therefore determine the appropriate amount applicable for each
theory.3
In closing argument, plaintiff‟s counsel told the jury that plaintiff was
seeking a total of $1.5 million in noneconomic damages on all causes of action,
and no more.
When the jury first reported that it had reached a verdict, an irregularity
appeared. The portion of the verdict that the trial court read specified $1.5 million
in damages for each of the four damages categories listed on the special verdict
form (past and future economic damages, and past and future noneconomic
damages) and then specified $1.5 million as the total of these amounts. At that
point, the trial court stopped reading the verdict. The court instructed the jury
further, and the jury resumed its deliberations. The court‟s additional instructions
restated what it had explained earlier, again making clear that, in calculating the
total judgment, the court would not add together the economic damages for the
(footnote continued from previous page)
not going to be that, oh it‟s one guilder for one and two and three, and I‟m going
to stack[.]”
3
The trial court stated: “When it comes to non-economic loss . . . , this is a
little different. [¶] You may find that the defendants have acted wrongly, and that
there‟s been . . . non-economic loss. And so you will say, well, for that particular
wrongdoing, how much is that worth? [¶] Then you‟ll come up with an amount,
if any. Then you get to the next one. You say, oh, we find that there‟s wrong
conduct here as well. [¶] . . . That had a different amount . . . caused a different
amount of non-economic loss . . . . [¶] For example, one of these verdict forms is
for wrong[ful] discharge; another one is for disparate treatment in the
workplace. . . . [¶] . . . [S]o you would put in for that particular one what you
think the amount is.”
9
three termination-related causes of action, but it would add together the
noneconomic damages for those same three causes of action.4
The jury found in favor of Roby on all causes of action. Its special verdict
stated these damages:
Wrongful termination in violation of public policy — McKesson
Economic losses
Past
$605,000
Future
$706,000
Noneconomic losses
Past
$250,000
Future
$250,000
Discrimination — McKesson
Economic losses
Past
$605,000
Future
$706,000
Noneconomic losses
Past
$200,000
Future
$100,000
Failure to accommodate — McKesson
Economic losses
Past
$605,000
Future
$706,000
Noneconomic losses
Past
$400,000
Future
$400,000
Harassment — McKesson
4
The trial court stated: “Now, with the economic loss . . . , as I said, if
you‟ve picked one number in one of the verdict forms, then that number will just
transfer for that same line [on] all the other verdict forms. That‟s not necessarily
the case for the mental suffering, loss of . . . enjoyment of life, and a jury could
possibly find that while, for example, starting with wrongful discharge [in]
violation of public policy, that led to a certain amount of mental suffering, and it‟s
worth a certain amount of money, that when you . . . then go to the next verdict
form, you can say that caused a different amount of suffering and that‟s worth a
different amount of money . . . . [¶] . . . [¶] . . . [I]f you think . . . it was a different
amount [for] each, then you need to figure out how much goes with one claim,
how much goes with another, that sort of thing . . . .”
10
Noneconomic losses
Past
$300,000
Future
$300,000
Harassment — Karen Schoener
Noneconomic losses
Past
$250,000
Future
$250,000
The special verdict indicates that the jury followed the trial court‟s
instructions as to the three termination-related causes of action (wrongful
termination, discrimination, and failure to accommodate). For all three of these
causes of action, the jury listed the same amounts for economic losses, but it listed
different amounts for noneconomic losses.
The trial court rendered judgment of $3,511,000 against McKesson and
$500,000 against Schoener. The judgment of $3,511,000 against McKesson was
consistent with the court‟s jury instructions in that the court counted the economic
losses for the three termination-related causes of action ($605,000 and $706,000)
only once, but the court treated the jury‟s findings of noneconomic losses for these
same causes of action cumulatively.
In a separate verdict, the jury found punitive damages of $15 million
against McKesson and $3,000 against Schoener. The trial court rendered
judgment accordingly.
The trial court later denied defendants‟ motions for a new trial and for
judgment notwithstanding the verdict. But on stipulation of the parties the court
reduced the compensatory damages judgment against McKesson by $706,000,
resulting in a net judgment of $2,805,000. This adjustment corrected an apparent
jury error in the award of economic losses.5
5
The amounts the jury listed for past and future economic losses ($605,000
and $706,000, respectively) corresponded almost exactly to amounts that Roby‟s
(footnote continued on next page)
11
C
Both defendants appealed. The Court of Appeal determined that the awards
of noneconomic damages for the three termination-related causes of action
(wrongful termination, discrimination, and failure to accommodate) overlapped
one another. Accordingly, the court upheld only the highest of these three awards.
This led to an $800,000 reduction in the total compensatory damages award
against employer McKesson, resulting in a net compensatory damages award of
$2,005,000 for Roby.
In addition, the Court of Appeal held that the evidence was insufficient to
support the jury‟s harassment verdict. The court focused on our statement in Reno
v. Baird (1998) 18 Cal.4th 640 (Reno) that “ „commonly necessary personnel
management actions . . . do not come within the meaning of harassment.‟ ” (Id. at
pp. 646-647, quoting Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55,
64-65 (Janken).) The Court of Appeal viewed that statement as indicating a sharp
distinction that not only placed discrimination and harassment claims into separate
legal categories but also barred a plaintiff from using personnel management
actions as evidence in support of a harassment claim. The Court of Appeal
(footnote continued from previous page)
expert witness had mentioned in his testimony, but in selecting these figures the
jury apparently misunderstood the expert‟s use of the terms “future losses” and
“present value.” Roby‟s expert witness had testified that Roby‟s total past and
future losses in income were $706,299, and he determined the present value of this
amount to be $604,657. The jury apparently rounded off the $604,657 figure as
the basis for its award of $605,000 for “past economic loss,” and it apparently
rounded off the $706,299 figure as the basis for its award of $706,000 for “future
economic loss,” resulting in a total economic loss of $1,311,000. In short, the jury
duplicated the economic losses by adding the present value of the losses to the
aggregate future amount of the same losses.
12
therefore disregarded every act of defendants that could be characterized as
personnel management, and, looking only at the remaining evidence, the court
found it insufficient to support the jury‟s harassment finding.
Having rejected the jury‟s harassment finding, the Court of Appeal
deducted an additional $600,000 from the award of compensatory damages against
employer McKesson, and it vacated both the compensatory and punitive damages
awards against supervisor Schoener. This $600,000 reduction (along with the
$800,000 already deducted) resulted in a compensatory damages award against
McKesson of $1,405,000. With respect to the $15 million award of punitive
damages against McKesson, the Court of Appeal concluded that a significant
portion of that award was “no doubt strongly influenced” by the jury‟s harassment
finding (which the court had vacated). The court also noted that the compensatory
damages were substantial (even after the reductions) and included “ „outrage‟
components that are, to a large extent, duplicated by the punitive damage verdict.”
After considering employer McKesson‟s substantial net worth and Roby‟s
financial vulnerability, the Court of Appeal concluded that $2 million in punitive
damages (approximately 1.42 times the reduced compensatory damages award of
$1,405,000) was the federal constitutional maximum for this case.
The Court of Appeal saw no purpose in remanding the matter for a new
trial on the question of punitive damages; instead, it ordered the trial court to
modify the judgment against employer McKesson to reflect the reduction of
compensatory damages from $2,805,000 to $1,405,000 and the reduction of
punitive damages from $15 million to $2 million; it then affirmed the judgment as
modified. As to the jury‟s verdict against supervisor Schoener for harassment, the
Court of Appeal ordered the trial court to render judgment in her favor. The court
later denied Roby‟s petition for a rehearing.
We granted Roby‟s petition for review.
13
II
A. Did the Court of Appeal Err in Concluding That Three of Roby’s
Noneconomic Damages Awards, All of Which Were Related to
Some Extent to Her Termination, Overlapped One Another?
In her petition for review, Roby asserted that the Court of Appeal erred
when it struck, as duplicative, the jury‟s $500,000 award of noneconomic damages
for wrongful termination in violation of public policy. Roby, however, did not
challenge the Court of Appeal‟s decision to strike the $300,000 award of
noneconomic damages for discrimination in violation of the FEHA.
In Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1158-1159, we explained:
“Regardless of the nature or number of legal theories advanced by the plaintiff, he
is not entitled to more than a single recovery for each distinct item of compensable
damage supported by the evidence. [Citation.] Double or duplicative recovery for
the same items of damage amounts to overcompensation and is therefore
prohibited. [Citation.] [¶] . . . [¶] In contrast, where separate items of
compensable damage are shown by distinct and independent evidence, the plaintiff
is entitled to recover the entire amount of his damages, whether that amount is
expressed by the jury in a single verdict or multiple verdicts referring to different
claims or legal theories.”
As mentioned earlier, Roby alleged three termination-related causes of
action against McKesson. Specifically, the special verdict form asked the jury to
render a verdict as to wrongful termination in violation of public policy,
discrimination in violation of the FEHA (§ 12940, subd. (a)), and failure to
accommodate Roby‟s disability in violation of the FEHA (§ 12940, subd. (m)).
The central assertion of a claim of wrongful termination in violation of public
policy is that the employer‟s motives for terminating the employee are so contrary
to fundamental norms that the termination inflicted an injury sounding in tort.
14
(See Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 176 (Tameny).)
Therefore, Roby‟s wrongful termination claim necessarily focused exclusively on
the termination itself. The FEHA discrimination and failure-to-accommodate
claims also depended to a large extent on Roby‟s termination, but both these
claims were broader in scope, covering official employment actions that preceded
the termination (such as duty assignments and the various disciplinary warnings
that McKesson gave Roby).
Roby does not assert that any employment action that preceded her
termination caused her to incur out-of-pocket losses. Therefore, in terms of
economic damages, the three termination-related causes of action all overlapped
one another, which explains why the trial court told the jury to insert the same
amounts in the spaces on the special verdict form in which the jury was asked to
state economic damages for these three causes of action. The court also made
clear to the jury that it would not “stack” these awards of economic damages; in
other words, the court would count the award of economic damages only once
when calculating the judgment.
The noneconomic damages for each of these three termination-related
causes of action present a more difficult problem, however. The verdict form
defined noneconomic damages as including “mental suffering, loss of enjoyment
of life, grief, anxiety, humiliation, emotional distress, and fear, anger, worry.” In
assigning a monetary value to this emotional injury, the jury might have found,
with respect to the two termination-related FEHA causes of action (discrimination
and failure to accommodate), that a significant portion of the injury occurred
before the termination. That is, the jury might have reasonably found that each
individual act of discrimination leading up to Roby‟s termination inflicted a
separate emotional injury, and it might have found likewise with respect to each
failure to accommodate her disability.
15
Recognizing that noneconomic damages might vary as to each of the three
termination-related claims, the trial court instructed the jury to assess
noneconomic damages individually for each cause of action. The court then
proceeded to calculate the total award by adding together the several individual
awards of noneconomic damages. This procedure, however, could only be
justified if the awards of noneconomic damages for each of the three termination-
related causes of action were all mutually exclusive. If they overlapped in part,
then to the extent of the overlap, adding the awards together had the effect of
compensating Roby multiple times for the same injury.
Roby argues that the awards of noneconomic damages for the three
termination-related causes of action did not overlap at all. Conversely, McKesson
argues that the awards overlapped completely, the smaller two of these awards
being included in the largest. On this basis McKesson argues in favor of the Court
of Appeal‟s decision to affirm only the largest of the three awards ($800,000 for
failure to accommodate), while treating the other two ($500,000 for wrongful
termination and $300,000 for discrimination) as duplicative. We find it
impossible to determine to a reasonable degree of certainty which of these
interpretations of the verdict the jury intended.
Roby‟s cause of action for wrongful termination in violation of public
policy necessarily focused exclusively on the termination, and the jury awarded
$500,000 in noneconomic damages for that cause of action. Moreover, the
termination was a factual component of all three termination-related causes of
action. McKesson therefore argues that each of the three awards of noneconomic
damages should logically include this $500,000 in damages flowing from the
termination itself plus any additional amount necessary to compensate Roby for
injurious employment actions that preceded the termination. On this basis,
McKesson asserts that the three awards overlap.
16
When, however, this logic is applied to the jury‟s verdict, an inconsistency
appears. The jury awarded only $300,000 in noneconomic damages for the FEHA
discrimination cause of action. As a matter of law, it cannot be that the same
termination caused $500,000 in noneconomic damages when litigated as a
wrongful termination in violation of public policy, but that it caused only
$300,000 in noneconomic damages when litigated as an instance of discrimination
in violation of the FEHA, and this discrepancy is especially odd as the FEHA
discrimination claim was, as a legal matter, the broader of the two claims — that
is, it covered both the termination itself and events that preceded the termination.
Roby asserts that the jury actually found three “different wrongs,” each of
which “caused a different amount of suffering.” In other words, Roby argues that
the three noneconomic damages awards were intended to be mutually exclusive,
compensating her for different events. Roby, however, concedes that there is no
evidence of an act of discrimination that is separate from her failure-to-
accommodate and wrongful-termination claims, and on that evidentiary basis she
agrees with McKesson that the $300,000 discrimination award was properly struck
as duplicative.
But Roby does not explain, with respect to her failure-to-accommodate
claim, how the noneconomic damages could be based solely on events that
preceded the termination when, as a legal matter, the same claim also
encompassed the termination itself. Roby‟s assertion would require us to conclude
that the termination caused no noneconomic damages when litigated as a failure to
accommodate in violation of the FEHA, but that it caused $500,000 in
noneconomic damages when litigated as a wrongful termination in violation of
public policy. These discrepancies suggest that the jury did not really understand
the various categories of damages listed on the special verdict form.
17
In addition, it seems highly unlikely that the jury found that Roby suffered
60 percent greater emotional injury from events that preceded the termination (the
award of $800,000 for failure to accommodate) than from the termination itself
(the award of $500,000 for wrongful termination). This finding is especially odd
because the evidence showed that, before the termination, Roby was coming to
work regularly and coping with a difficult situation reasonably well, whereas after
the termination she became agoraphobic, suicidal, and completely disabled for
purposes of employment. Of course, we do not set aside a verdict simply because
we deem its factual findings to be highly unlikely or odd, but these points further
suggest that the jury did not understand the various categories of damages, making
any effort to divine its intent as to its ambiguous verdict difficult at best.6
“[A]n appellate court will interpret the verdict if it is possible to give it a
correct interpretation,” but will reverse if the verdict is “hopelessly ambiguous.”
(Woodcock v. Fontana Scaffolding & Equip. Co. (1968) 69 Cal.2d 452, 457
(Woodcock).) Here, no explanation of the verdict is satisfactory. Therefore, we
solicited additional letter briefs addressing whether “the jury‟s compensatory
damages verdicts [are] so ambiguous . . . as to require a remand to the trial court
for a new trial limited to determining the amount of compensatory and punitive
damages.” Roby‟s letter brief stated she preferred to concede the question of
6
Other problems — already noted — give us additional concern about the
jury‟s understanding of the various damages categories. First, the jury initially
awarded $1.5 million in damages for each of the damages categories listed on the
special verdict form and also specified $1.5 million as the total of these amounts.
(See, ante, p. 9.) It is, of course, highly unlikely that the termination would result
in exactly the same damages for each of the damages categories. Second, the jury
apparently misunderstood the terms “future losses” and “present value” and
therefore duplicated the economic losses by adding the present value of the losses
to the aggregate future amount of the same losses. (See, ante, p. 11, fn. 5.)
18
overlapping noneconomic damages awards rather than face a new trial;
McKesson‟s letter brief agreed to this proposal, similarly expressing a desire to
avoid a new trial. At oral argument, Roby‟s counsel confirmed that this continues
to be Roby‟s preference.
Because the jury‟s intent in making its noneconomic damages awards
cannot be determined to a reasonable certainty, a remand for a new trial on
damages would ordinarily be appropriate. (See Woodcock, supra, 69 Cal.2d at
p. 457.) Instead, we will accept Roby‟s concession, by which she agreed to
withdraw her challenge to this part of the Court of Appeal‟s decision.
Accordingly, the validity of the Court of Appeal‟s conclusion that the three
termination-related noneconomic damages awards fully overlapped one another is
no longer in dispute.
B. Did the Court of Appeal Err in Allocating Roby’s Evidence
Between Her Harassment Claim and Her Discrimination Claim,
and Based on That Allocation, Finding Insufficient Evidence to
Support the Harassment Verdict?
Roby challenges the Court of Appeal‟s conclusion that there was
insufficient evidence to support the jury‟s harassment verdict. Specifically, she
argues that, under the FEHA, the Court of Appeal should not have excluded
personnel management actions as evidence in support of her harassment claim.
We agree.
In the FEHA, the terms “discriminate” and “harass” appear in separate
provisions and define distinct wrongs. (See Reno, supra, 18 Cal.4th at pp. 645-
647; see also State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th
1026, 1040.) As relevant here, subdivision (a) of section 12940 makes it
“unlawful” (subject to certain exceptions) “[f]or an employer, because of the . . .
physical disability, mental disability, [or] medical condition . . . of any person . . .
to discriminate against the person in compensation or in terms, conditions, or
19
privileges of employment.” (Italics added.) Subdivision (j)(1) of the same statute
makes it unlawful (again subject to certain exceptions) “[f]or an employer . . . or
any other person, because of . . . physical disability, mental disability, [or] medical
condition . . . to harass an employee . . . .” (§ 12940, subd. (j)(1), italics added.)
Because the FEHA treats harassment in a separate provision, there is no
reason to construe the FEHA‟s prohibition against discrimination broadly to
include harassment.7 Hence, our case law makes clear that the FEHA‟s
discrimination provision addresses only explicit changes in the “terms, conditions,
or privileges of employment” (§ 12940, subd. (a)); that is, changes involving some
official action taken by the employer. (Reno, supra, 18 Cal.4th at pp. 645-647.) In
the case of an institutional or corporate employer, the institution or corporation
itself must have taken some official action with respect to the employee, such as
hiring, firing, failing to promote, adverse job assignment, significant change in
compensation or benefits, or official disciplinary action.
By contrast, harassment often does not involve any official exercise of
delegated power on behalf of the employer. We explained this point in Reno:
“ „Courts have employed the concept of delegable authority as a test to distinguish
conduct actionable as discrimination from conduct actionable as harassment. We
adopt this approach to find that the exercise of personnel management authority
properly delegated by an employer to a supervisory employee might result in
7
Title VII of the federal Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.)
(hereafter Title VII) has no express provision addressing workplace harassment,
but courts have construed Title VII‟s prohibition against discrimination to include
harassment that is sufficiently severe or pervasive to alter the conditions of
employment. (See Meritor Savings Bank, FSB v. Vinson (1986) 477 U.S. 57, 64-
67.)
20
discrimination, but not in harassment.‟ ”8 (Reno, supra, 18 Cal.4th at p. 646,
quoting Janken, supra, 46 Cal.App.4th at p. 64, italics added.) Thus, harassment
focuses on situations in which the social environment of the workplace becomes
intolerable because the harassment (whether verbal, physical, or visual)
communicates an offensive message to the harassed employee.
Because a harasser need not exercise delegated power on behalf of the
employer to communicate an offensive message, it does not matter for purposes of
proving harassment whether the harasser is the president of the company or an
entry-level clerk, although harassment by a high-level manager of an organization
may be more injurious to the victim because of the prestige and authority that the
manager enjoys. When the harasser is a supervisor, the employer is strictly liable
for the supervisor‟s actions. (State Dept. of Health Services v. Superior Court,
supra, 31 Cal.4th at pp. 1040-1041.) When the harasser is a nonsupervisory
employee, employer liability turns on a showing of negligence (that is, the
employer knew or should have known of the harassment and failed to take
appropriate corrective action). (§ 12940, subd. (j)(1).)
These distinctions place discrimination and harassment in separate categories
in regard to application of the FEHA; as explained above, discrimination refers to
bias in the exercise of official actions on behalf of the employer, and harassment
8
Notwithstanding this statement in Reno, we have in the past categorized
quid pro quo sexual harassment (in which a job benefit is conditioned upon sexual
favors and therefore an actual or potential exercise of delegated authority is at
issue) as a type of harassment. (See, e.g., Hughes v. Pair (2009) 46 Cal.4th 1035,
1043; Miller v. Department of Corrections (2005) 36 Cal.4th 446, 461 (Miller).)
This conclusion follows the California Code of Regulations, which defines sexual
harassment as including “[s]exual favors, e.g., unwanted sexual advances which
condition an employment benefit upon an exchange of sexual favors.” (Cal. Code
Regs., tit. 2, § 7287.6, subd. (b)(1)(D).)
21
refers to bias that is expressed or communicated through interpersonal relations in
the workplace. This conclusion is consistent with our analysis of the FEHA in
Reno. There, we said: “ „[H]arassment consists of conduct outside the scope of
necessary job performance, conduct presumably engaged in for personal
gratification, because of meanness or bigotry, or for other personal
motives. . . . [¶] . . . [¶] . . . [C]ommonly necessary personnel management
actions . . . do not come within the meaning of harassment. . . . These actions may
retrospectively be found discriminatory if based on improper motives, but in that
event the remedies provided by the FEHA are those for discrimination, not
harassment. . . . This significant distinction underlies the differential treatment of
harassment and discrimination in the FEHA.‟ ”9 (Reno, supra, 18 Cal.4th at
pp. 645-647, quoting Janken, supra, 46 Cal.App.4th at pp. 63-65.)
The FEHA‟s distinction between discrimination and harassment does not
mean that harassment claims are relegated to a lower status. The FEHA does not
differentiate in terms of wrongfulness between discrimination and harassment;
both are “unlawful employment practice[s]” (§ 12940), and in both cases an
aggrieved employee can obtain full compensation for any resulting injury. In
addition, we can discern no reason why an employee who is the victim of
discrimination based on some official action of the employer cannot also be the
victim of harassment by a supervisor for abusive messages that create a hostile
working environment, and under the FEHA the employee would have two separate
claims of injury.
Our decision in Miller, supra, 36 Cal.4th at pages 460-466, further clarifies
the FEHA‟s distinction between discrimination and harassment. Although
9
See page 21, footnote 8, ante.
22
discrimination and harassment are separate wrongs, they are sometimes closely
interrelated, and even overlapping, particularly with regard to proof. In Miller, we
considered whether evidence of widespread sexual favoritism in the workplace
could constitute sexual harassment against the nonfavored employees. We
concluded that it could, provided that the favoritism was so severe or pervasive as
to alter the working conditions. (Id. at p. 466.) Significantly, the favoritism at
issue in Miller took the form of official employment actions, including promotions
and favorable job assignments given to female employees involved in sexual
relationships with a particular male supervisor. (Id. at pp. 452-459.) The Miller
plaintiffs, however, were not subject to any demands for sexual favors. (Ibid.) In
concluding that the plaintiffs had nevertheless stated a prima facie case of
harassment in violation of the FEHA, we stated that widespread sexual favoritism
could convey a “demeaning message . . . to female employees that they are viewed
by management as „sexual playthings‟ or that the way required for women to get
ahead in the workplace is to engage in sexual conduct with their supervisors or the
management.” (Miller, at p. 451; see also id. at p. 464.) This demeaning message,
we held, could give rise to an actionable hostile work environment. (Id. at p. 451.)
Thus, in Miller the immediate source of the plaintiffs‟ alleged injuries was
the offensive sex-biased message that the supervisor conveyed, not a demotion or
an unfavorable job assignment, and therefore the plaintiffs‟ cause of action was for
harassment, not for discrimination. Nevertheless, official employment actions
constituted the evidentiary basis of the harassment cause of action, because the
supervisor used those official actions as his means of conveying his offensive
message. Our decision in Miller is wholly consistent with Reno, supra, 18 Cal.4th
at pages 645-647, because it confirms that harassment is generally concerned with
the message conveyed to an employee, and therefore with the social environment
of the workplace, whereas discrimination is concerned with explicit changes in the
23
terms or conditions of employment. Miller, however, makes clear that in some
cases the hostile message that constitutes the harassment is conveyed through
official employment actions, and therefore evidence that would otherwise be
associated with a discrimination claim can form the basis of a harassment claim.
Moreover, in analyzing the sufficiency of evidence in support of a harassment
claim, there is no basis for excluding evidence of biased personnel management
actions so long as that evidence is relevant to prove the communication of a hostile
message.
Here, Roby‟s discrimination claim sought compensation for official
employment actions that were motivated by improper bias. These discriminatory
actions included not only the termination itself but also official employment
actions that preceded the termination, such as the progressive disciplinary
warnings and the decision to assign Roby to answer the office telephones during
office parties. Roby‟s harassment claim, by contrast, sought compensation for
hostile social interactions in the workplace that affected the workplace
environment because of the offensive message they conveyed to Roby. These
harassing actions included Schoener‟s demeaning comments to Roby about her
body odor10 and arm sores, Schoener‟s refusal to respond to Roby‟s greetings,
Schoener‟s demeaning facial expressions and gestures toward Roby, and
10
The Court of Appeal suggested that supervisor Schoener‟s demeaning
comments about Roby‟s body odor were necessary personnel management actions,
not acts of harassment, because Schoener needed to take action in response to the
complaints of other employees. (See Hannoon v. Fawn Eng’g Corp. (8th Cir.
2003) 324 F.3d 1041, 1047 [Title VII case].) Here, however, the evidence
supports the jury‟s conclusion that Schoener handled the matter in a way that was
unnecessarily demeaning, including reprimanding Roby in front of coworkers and
telling Roby “to take more showers.” It was the demeaning manner in which
Schoener addressed this issue that constituted the harassment.
24
Schoener‟s disparate treatment of Roby in handing out small gifts. None of these
events can fairly be characterized as an official employment action. None
involved Schoener‟s exercising the authority that McKesson had delegated to her
so as to cause McKesson, in its corporate capacity, to take some action with
respect to Roby. Rather, these were events that were unrelated to Schoener‟s
managerial role, engaged in for her own purposes.
Miller, however, makes clear that some official employment actions done
in furtherance of a supervisor‟s managerial role can also have a secondary effect
of communicating a hostile message. This occurs when the actions establish a
widespread pattern of bias. (Miller, supra, 36 Cal.4th at p. 466.) Here, some
actions that Schoener took with respect to Roby are best characterized as official
employment actions rather than hostile social interactions in the workplace, but
they may have contributed to the hostile message that Schoener was expressing to
Roby in other, more explicit ways. These would include Schoener‟s shunning of
Roby during staff meetings, Schoener‟s belittling of Roby‟s job, and Schoener‟s
reprimands of Roby in front of Roby‟s coworkers. Moreover, acts of
discrimination can provide evidentiary support for a harassment claim by
establishing discriminatory animus on the part of the manager responsible for the
discrimination, thereby permitting the inference that rude comments or behavior
by that same manager was similarly motivated by discriminatory animus.
Therefore, discrimination and harassment claims can overlap as an
evidentiary matter. The critical inquiry when a court is deciding whether the
evidence is sufficient to uphold a verdict finding both discrimination and
harassment is whether the evidence indicates violations of both FEHA
prohibitions, but nothing prevents a plaintiff from proving these two violations
with the same (or overlapping) evidentiary presentations.
25
Here, the Court of Appeal allocated Roby‟s evidence between her
discrimination claim and her harassment claim, and on that basis found the
evidence of harassment insufficient. The court said: “[M]ost of the alleged
harassment . . . was conduct that fell within the scope of Schoener‟s business and
management duties. Acts such as selecting Roby‟s job assignments, ignoring her
at staff meetings, portraying her job responsibilities in a negative light, or
reprimanding her in connection with her performance, cannot be used to support a
claim of hostile work environment. While these acts might, if motivated by bias,
be the basis for a finding of employer discrimination, they cannot be deemed
‘harassment’ within the meaning of the FEHA.” (Italics added and deleted.)
The Court of Appeal concluded that, after this “business and management”
evidence was “sifted out,” there was little evidence that supervisor Schoener‟s
hostility toward Roby was based on Roby‟s disability rather than mere rudeness.
The remaining evidence was limited to Schoener‟s demeaning comments and
gestures, Schoener‟s refusal to respond to Roby‟s greetings, and Schoener‟s failure
to give Roby gifts. According to the Court of Appeal, “th[is] evidence showed
that Schoener obviously disliked Roby, shunned her, and showed no compassion
for her condition,” but it did not establish that Schoener‟s rude treatment of Roby
was “because of . . . physical disability, mental disability, [or] medical condition.”
(§ 12940, subd. (j)(1), italics added.)
In allocating the evidence between Roby‟s discrimination and harassment
claims and then ignoring the discrimination evidence when analyzing the
harassment verdict, the Court of Appeal erred. As discussed above, the FEHA
treats discrimination and harassment as distinct categories, but nothing in the
FEHA requires that the evidence in a case be dedicated to one or the other claim
but never to both. Here, the evidence is ample to support the jury‟s harassment
verdict. The evidence included not only Schoener‟s rude comments and behavior,
26
which occurred on a daily basis, but also Schoener‟s shunning of Roby during
weekly staff meetings, Schoener‟s belittling of Roby‟s job, and Schoener‟s
reprimands of Roby in front of Roby‟s coworkers. This evidence was sufficient to
allow the jury to conclude that the hostility was pervasive and effectively changed
the conditions of Roby‟s employment. (Lyle v. Warner Brothers Television
Productions (2006) 38 Cal.4th 264, 278-279.)
Moreover, the jury could infer, based on the discrimination evidence, that
supervisor Schoener‟s hostility was “because of . . . [Roby‟s] medical condition.”
(§ 12940, subd. (j)(1), italics added.) Specifically, the jury could draw this
inference from the evidence that Schoener — who knew about Roby‟s medical
condition — applied employer McKesson‟s attendance policy without making any
accommodation or even inquiring if an accommodation was possible. The jury
could also draw this inference from the degrading manner in which Schoener
would announce to the office that Roby was “absent again” and from the
demeaning comments, gestures, and facial expressions Schoener made in response
to Roby‟s body odor and arm sores. Viewed together, the evidence is sufficient to
support the jury‟s conclusion that Schoener harassed Roby in violation of the
FEHA.
McKesson concedes that the same evidence can be used in support of both
a discrimination claim and a harassment claim. But, citing our decision in Reno,
supra, 18 Cal.4th at pages 645-647, McKesson asserts that “nonabusive actions by
a supervisor acting in the course of his or her managerial duties” may not support
a harassment claim. Whether or not McKesson accurately describes the law,
discrimination is by its nature an abusive action, not a “nonabusive action.”
Therefore, from the evidence that Schoener discriminated against Roby based on
Roby‟s medical condition, the jury could reasonably infer that Schoener‟s constant
27
hostility toward Roby was also based on her medical condition, thus constituting
harassment in violation of the FEHA. (§ 12940, subd. (j)(1).)
It is appropriate, therefore, to reinstate the jury‟s harassment verdict against
employer McKesson and supervisor Schoener, and it is also appropriate to
reinstate the jury‟s $3,000 punitive damages award against supervisor Schoener.
This conclusion, however, raises two issues that the Court of Appeal did not reach.
First, is the $600,000 harassment award against McKesson based in large part on
McKesson‟s vicarious liability for the harassing acts of its supervisor (see State
Dept. of Health Services v. Superior Court, supra, 31 Cal.4th at pp. 1040-1041),
and does it therefore duplicate the $500,000 harassment award against Schoener?
Second, assuming that the $600,000 award against McKesson includes as its major
component McKesson‟s vicarious liability for the $500,000 award against
Schoener, what evidence if any justifies the additional $100,000 in harassment
damages that the jury awarded against McKesson? At oral argument, Roby‟s
counsel said that, to avoid a remand to the Court of Appeal, Roby would stipulate
to a lower award of $500,000 against McKesson, and McKesson‟s counsel
accepted this proposed solution of the issue. In other words, Roby conceded that
the two harassment awards fully overlapped one another, and that there was
insufficient evidence to support a harassment award against McKesson that was
independent of the award against Schoener. Accordingly, we will direct the Court
of Appeal to modify the trial court‟s judgment to provide for a single harassment
award of $500,000 against both McKesson and Schoener. (See § 12940, subd.
(j)(1), (3); see also State Dept. of Health Services v. Superior Court, supra, 31
Cal.4th at pp. 1040-1041.)
28
C. Did the Jury’s Award of Punitive Damages Against McKesson
Exceed the Amount Permitted Under the Federal Constitution?
In a civil case not arising from the breach of a contractual obligation, the
jury may award punitive damages “where it is proven by clear and convincing
evidence that the defendant has been guilty of oppression, fraud, or malice.” (Civ.
Code, § 3294, subd. (a).) “Malice” is defined as intentional injury or “despicable
conduct which is carried on by the defendant with a willful and conscious
disregard of the rights or safety of others.” (Id., § 3294, subd. (c)(1).)
“Oppression” is defined as “despicable conduct that subjects a person to cruel and
unjust hardship in conscious disregard of that person‟s rights.” (Id., § 3294, subd.
(c)(2).) Employer McKesson did not petition this court for review of the Court of
Appeal‟s decision, and therefore it has effectively conceded that the evidence here
supports an award against it of punitive damages. The question remains, however,
whether the $15 million award against McKesson is consistent with federal
constitutional constraints. The Court of Appeal held that in this case $2 million
marked the uppermost constitutional limit for punitive damages. Roby asserts on
review that the jury‟s entire $15 million award falls within the constitutional limit
and therefore should be reinstated. We agree with the Court of Appeal that the
$15 million award exceeds the federal constitutional limit, but we disagree with
the Court of Appeal that in this case the appropriate limit is $2 million.
The due process clause of the Fourteenth Amendment to the United States
Constitution places constraints on state court awards of punitive damages. (See
State Farm Mut. Auto Ins. Co. v. Campbell (2003) 538 U.S. 408, 416-418 (State
Farm); BMW of North America v. Gore (1996) 517 U.S. 559, 568 (BMW).) We
recently explained the basis of these constraints: “The imposition of „grossly
excessive or arbitrary‟ awards is constitutionally prohibited, for due process
entitles a tortfeasor to „ “fair notice not only of the conduct that will subject him to
29
punishment, but also of the severity of the penalty that a State may impose.” ‟
[Citation.]” (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159,
1171 (Simon).)
In State Farm, the high court articulated “three guideposts” for courts
reviewing punitive damages: “(1) the degree of reprehensibility of the defendant‟s
misconduct; (2) the disparity between the actual or potential harm suffered by the
plaintiff and the punitive damages award; and (3) the difference between the
punitive damages awarded by the jury and the civil penalties authorized or
imposed in comparable cases.” (State Farm, supra, 538 U.S. at p. 418; see also
BMW, supra, 517 U.S. at p. 575.) We discuss each below.
1. Degree of reprehensibility
Of the three guideposts that the high court outlined in State Farm, supra, 538
U.S. at page 418, the most important is the degree of reprehensibility of the
defendant‟s conduct. On this question, the high court instructed courts to consider
whether “[1] the harm caused was physical as opposed to economic; [2] the tortious
conduct evinced an indifference to or a reckless disregard of the health or safety of
others; [3] the target of the conduct had financial vulnerability; [4] the conduct
involved repeated actions or was an isolated incident; and [5] the harm was the
result of intentional malice, trickery, or deceit, or mere accident.” (Id. at p. 419.)
With respect to the first of these reprehensibility factors, the harm to Roby
was “physical” in the sense that it affected her emotional and mental health, rather
than being a purely economic harm. (State Farm, supra, 538 U.S. at p. 419.)
With respect to the second reprehensibility factor, it was objectively reasonable to
assume that employer McKesson‟s acts of discrimination and harassment toward
Roby would affect her emotional well being, and therefore McKesson‟s “conduct
evinced an indifference to or a reckless disregard of the health or safety of others.”
30
(Ibid.) The third reprehensibility factor is likewise present here: Roby was a
relatively low-level employee who quickly depleted her savings and lost her
medical insurance as a result of her termination, and therefore it appears that she
“had financial vulnerability.” (Ibid.)
The fourth reprehensibility factor of the high court‟s State Farm test,
however, is not present here. Supervisor Schoener‟s wrongful conduct was
certainly repeated, as she subjected Roby to a series of discriminatory disciplinary
actions and harassed Roby on an almost daily basis. But there is no indication of
repeated wrongdoing by employer McKesson, as discussed below.
With respect to the discrimination claim, employer McKesson‟s
wrongdoing was limited to its one-time decision to adopt a strict attendance policy
that, in requiring 24-hour advance notice before an absence, did not reasonably
accommodate employees who had disabilities or medical conditions that might
require several unexpected absences in close succession. McKesson‟s act of
discharging Roby (including the perfunctory investigation that accompanied it)
was simply an application of this attendance policy in accordance with its terms.
The jury found that McKesson‟s adoption of this flawed attendance policy
constituted “oppression” or “malice,” justifying an award of punitive damages.11
(Civ. Code, § 3294, subd. (a).) Nevertheless, McKesson‟s adoption of this
attendance policy was a single corporate decision.
With respect to the harassment claim, McKesson‟s corporate wrongdoing
was also a single event. In considering this issue, it is important to keep in mind
11
The jury‟s finding was necessarily based on the reasonableness of the
accommodation that Roby required in light of the specific circumstances of her
employment at McKesson and McKesson‟s legitimate business needs. We do not
mean to suggest that in all FEHA discrimination cases involving attendance
policies like the one at issue here an award of punitive damages is warranted.
31
that a corporate defendant cannot be punished for harassment merely because one of
its employees has harassed another employee in the workplace; rather, the focus of
the punitive damages inquiry must be on the corporation‟s institutional
responsibility, if any, for that harassment. This principle is codified in Civil Code
section 3294, subdivision (b), which provides: “An employer shall not be liable for
[punitive] damages . . . , based upon acts of an employee of the employer, unless the
employer had advance knowledge of the unfitness of the employee and employed
him or her with a conscious disregard of the rights or safety of others or authorized
or ratified the wrongful conduct . . . . With respect to a corporate employer, the
advance knowledge and conscious disregard, authorization, [or] ratification . . . must
be on the part of an officer, director, or managing agent of the corporation.” (Italics
added.) In White v. Ultramar, Inc. (1999) 21 Cal.4th 563 (White), we construed the
latter statement as requiring the officer, director, or managing agent to be someone
who “exercise[s] substantial discretionary authority over decisions that ultimately
determine corporate policy.” (Id. at p. 577.)
In this case, the Court of Appeal concluded that the jury could reasonably
have found supervisor Schoener to be a “managing agent” of employer McKesson.
On that basis, the court concluded that the jury‟s award of punitive damages could
be justified based on Schoener‟s actions alone, regardless of whether more senior
managers at McKesson were informed of Schoener‟s actions. We disagree.
At the time of Roby‟s termination, McKesson had over 20,000 employees;
Schoener worked at a local distribution center supervising four of them. When we
spoke in White about persons having “discretionary authority over . . . corporate
policy” (White, supra, 21 Cal.4th at p. 577), we were referring to formal policies
that affect a substantial portion of the company and that are the type likely to come
to the attention of corporate leadership. It is this sort of broad authority that
justifies punishing an entire company for an otherwise isolated act of oppression,
32
fraud, or malice. The record here does not support the conclusion that Schoener
exercised that sort of broad authority or that she was a “managing agent” for
purposes of awarding punitive damages under Civil Code section 3294,
subdivision (b). Therefore, in assessing the reprehensibility of employer
McKesson‟s conduct, we must look to what McKesson‟s more senior managers
knew and did.
The record only weakly supports the jury‟s finding that a “managing agent”
of employer McKesson was informed of Schoener‟s unlawful harassment of Roby
and ratified it, either expressly or by inaction. It is true that Roby complained
more than once to the manager of her distribution center about her ongoing
conflicts with Schoener, but personality clashes in the workplace are not
uncommon, and Roby‟s complaints did not link these conflicts to her medical
condition and therefore did not put McKesson on specific notice that Schoener
was violating Roby‟s FEHA rights. Nevertheless, the evidence indicates that
Roby once met with two midlevel managers (the head of Roby‟s distribution
center and the regional human resources director) and told them of Schoener‟s
ongoing harassment, expressly linking that harassment to her medical condition.
Roby testified as follows about this meeting: “I told them that, yes; that I was
being harassed once again by . . . Schoener . . . . She had made derogatory
remarks that day that was upsetting, and it was public. [¶] . . . [¶] . . . [I]t had to do
with the head sweats that I had, and I was digging at my arms again.”
McKesson does not argue that the midlevel managers at this meeting were
not “managing agent[s]” for purposes of awarding punitive damages under Civil
Code section 3294, subdivision (b), and therefore we will assume for purposes of
this appeal that at least one of them was a managing agent. Hence, Roby‟s
statement at this meeting, combined with the more general complaints that Roby
made, constituted sufficient evidence to support the jury‟s inference that a
33
McKesson managing agent eventually became aware of Schoener‟s unlawful
harassment of Roby. That McKesson thereafter continued to employ Schoener as
Roby‟s supervisor without taking any corrective measures indicates “conscious
disregard of the rights or safety of others” (Civ. Code, § 3294, subd. (b)), thus
warranting punitive damages.
Nevertheless, the evidence establishing corporate wrongdoing in regard to
supervisor Schoener‟s unlawful harassment of Roby does not indicate any
repeated corporate misconduct. There is no evidence, for example, that
Schoener‟s actions toward Roby were the product of a corporate culture that
encouraged similar supervisorial conduct. Rather, they appear to be the isolated
actions of a single supervisor, combined with the one-time failure on the part of
employer McKesson to take prompt responsive action when these events came to
its attention.
With respect to the fifth reprehensibility factor listed in the high court‟s
State Farm decision, in awarding punitive damages against McKesson the jury
here necessarily determined that McKesson acted with “conscious disregard” of
the rights of others (Civ. Code, § 3294, subd. (c)(1), (2)); therefore, the conduct at
issue was certainly not “mere accident” (State Farm, supra, 538 U.S. at p. 419).
Nevertheless, the corporate conduct falls short of “intentional malice.” (Ibid.)
The evidence does not suggest that employer McKesson adopted the attendance
policy in question — and in particular the requirement of 24-hour advance notice
for all absences — with a purpose or motive to discriminate. Rather, McKesson‟s
apparent purpose in requiring 24-hour advance notice was to enable advance
planning by its supervisors and thus ensure adequate staffing levels on a daily
basis. McKesson‟s wrongdoing was more a failure to prevent the foreseeable
discriminatory consequences flowing from its otherwise appropriate attendance
policy than it was an act rooted in “intentional malice.”
34
We focus here on McKesson‟s adoption of the attendance policy and not on
the conduct of McKesson‟s midlevel managers who applied the policy in
reviewing Roby‟s grievance and determining to uphold her termination. For
reasons stated above (see p. 33, ante), we will assume for purposes of this appeal
that at least one of these midlevel managers was a “managing agent” under Civil
Code section 3294, subdivision (b). But there is no evidence that they were
empowered, when reviewing Roby‟s grievance, to make an on-the-spot
accommodation in abrogation of the terms of McKesson‟s attendance policy. To
the contrary, the evidence indicated that they were required to enforce the policy
strictly. At most, they could have retroactively reclassified some of Roby‟s
occasions as protected medical leave under the FMLA (29 U.S.C. § 2601 et seq.),
but Roby failed to submit adequate documentation to support such a
reclassification, even after being told that this was necessary.
We need not decide whether McKesson‟s managers were required to do
more than they did to assist Roby in establishing FMLA eligibility, because in any
case their conduct was not so “despicable” (Civ. Code, § 3294, subd. (c)) as to
support a finding that they acted with “oppression, fraud, or malice” (id., § 3294,
subd. (a)), warranting an award of punitive damages. Roby had missed work
without notice 11 times in a period of about 15 months, and these abrupt absences
had continued despite progressive disciplinary warnings. During these months,
Roby had never asked that her absences be treated as FMLA leave, although she
had taken FMLA leave for other absences. In addition, although Roby‟s
supervisors were generally aware of her panic attacks, Roby‟s own understanding
of her medical condition evolved over time, and therefore her reports about this
condition to her supervisors lacked specificity regarding the accommodations she
might need. She never submitted a medical report relating her absences to her
panic disorder, and the only medical documents in her personnel file that even
35
mentioned the panic disorder stated that it was “not contagious” and that it was
“stabilized” with medication. These brief medical notes nowhere suggested that
the panic disorder interfered with Roby‟s ability to work or constituted a “serious
health condition” (29 U.S.C. § 2611(11)) justifying FMLA leave. For these
reasons, the conduct of the midlevel managers who reviewed and approved Roby‟s
termination does not provide an independent basis for awarding punitive damages
against McKesson.
In regard to employer McKesson‟s failure to take responsive action once it
learned of supervisor Schoener‟s unlawful harassment of Roby, we again see no
indication of a corporate purpose to cause injury to Roby. Rather, McKesson‟s
failure to take appropriate action is better characterized as managerial
malfeasance. This failure is not excusable, but it is partly explainable by the
somewhat vague nature of Roby‟s complaints. As noted earlier, the record
indicates only a single instance when Roby‟s complaint to midlevel managers
linked the ongoing harassment to a medical condition. This complaint should
have alerted McKesson to respond, and hence the jury‟s punitive damages award
against McKesson finds sufficient support in the evidence. But McKesson‟s
conduct, although wrongful, does not rise to the kind of oppressive, fraudulent, or
malicious conduct that has in the past justified large punitive damages awards.
(See, e.g., Romo v. Ford Motor Co. (2003) 113 Cal.App.4th 738 [the defendant
mass-produced and sold a vehicle it knew to be designed in a way that was
inherently dangerous to human life; three people died; three others were injured;
punitive damages: $23,723,287]; Rufo v. Simpson (2001) 86 Cal.App.4th 573 [the
defendant maliciously stabbed and killed two people; punitive damages:
$25 million]; Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128 [a partner
of the defendant law firm put his hand in the breast pocket of his secretary‟s
blouse, made a grabbing gesture toward her breasts, touched her buttocks, and
36
made sexually harassing statements; the defendant law firm was aware of
numerous prior incidents of severe sexual harassment involving the same partner;
punitive damages: $3.5 million].)
Taking into account all five reprehensibility factors that the high court set
forth in State Farm, supra, 538 U.S. at page 419, we conclude that employer
McKesson acted wrongfully and in a manner warranting civil penalties;
nevertheless, the reprehensibility of McKesson‟s conduct was at the low end of the
range of wrongdoing that can support an award of punitive damages under
California law, notwithstanding the seriousness of Roby‟s emotional injury and
her financial vulnerability.
2. Disparity between actual harm and punitive damages
The second guidepost that the United States Supreme Court articulated in
State Farm for assessing the constitutionality of a punitive damages award is “the
disparity between the actual or potential harm suffered by the plaintiff and the
punitive damages award.” (State Farm, supra, 538 U.S. at p. 418.) Here, the trial
court reduced the jury‟s award of $3,511,000 in compensatory damages against
employer McKesson to $2,805,000. The Court of Appeal further reduced this figure
to $1,405,000. But our conclusion in part IIB, ante, requires reinstatement of the
jury‟s $500,000 harassment award against supervisor Schoener, for which employer
McKesson is also liable (see p. 28, ante), resulting in a total compensatory damages
award of $1,905,000. Only $605,000 of this sum was for Roby‟s economic losses;
the remaining $1.3 million in compensatory damages was awarded solely for
Roby‟s physical and emotional distress and may have reflected the jury‟s
indignation at McKesson‟s conduct, thus including a punitive component. Pertinent
here is this statement from our decision in Simon, supra, 35 Cal.4th at page 1189:
“[D]ue process permits a higher ratio between punitive damages and a small
37
compensatory award for purely economic damages containing no punitive element
than [it does] between punitive damages and a substantial compensatory award for
emotional distress; the latter may be based in part on indignation at the defendant‟s
act and may be so large as to serve, itself, as a deterrent.”
In State Farm, the high court suggested that a ratio of one to one might be
the federal constitutional maximum in a case involving, as here, relatively low
reprehensibility and a substantial award of noneconomic damages: “When
compensatory damages are substantial, then a lesser ratio, perhaps only equal to
compensatory damages, can reach the outermost limit of the due process
guarantee.” (State Farm, supra, 538 U.S. at p. 425, italics added.)
3. Civil penalties authorized in comparable cases
Finally, we consider “the difference between the punitive damages awarded
by the jury and the civil penalties authorized or imposed in comparable cases,” the
last of the three guideposts the high court set forth in State Farm, supra, 538 U.S.
at page 418, to assess the constitutionality of punitive damages awards. If in this
case Roby had pursued her FEHA claims administratively before the California
Fair Employment and Housing Commission, the commission could have assessed
a fine against employer McKesson in addition to awarding compensatory
damages. (§ 12970, subds. (a), (c), and (d).) This administrative fine cannot
exceed $150,000 (§ 12970, subd. (a)(3)), which of course is tiny by comparison to
the jury‟s punitive damages award here of $15 million against employer
McKesson. Obviously, this guidepost weighs in favor of a lower constitutional
limit in this case.
4. Summary
After applying the test that the high court articulated in State Farm, supra,
538 U.S. at page 418, we conclude that a one-to-one ratio between compensatory
38
and punitive damages is the federal constitutional limit here. We base this
conclusion on the specific facts of this case. We note in particular the relatively
low degree of reprehensibility on the part of employer McKesson and the
substantial compensatory damages verdict, which included a substantial award of
noneconomic damages.
The concurring and dissenting opinion asserts that a higher ratio — two to
one — is appropriate here because of McKesson‟s wealth, among other things.
(See conc. and dis. opn. of Werdegar, J., post, at p. 5.) It is certainly relevant for a
reviewing court to consider the wealth of a defendant when applying federal
constitutional limits to an award of punitive damages, thereby ensuring that the
award has the appropriate deterrent effect, but the punitive damages award must
not punish the defendant simply for being wealthy. (Simon, supra, 35 Cal.4th at
pp. 1185-1186.) As the high court said in State Farm, wealth “provides an open-
ended basis for inflating awards” (State Farm, supra, 538 U.S. at pp. 427-428) and
“ „cannot justify an otherwise unconstitutional punitive damages award‟ ” (id. at
p. 427, quoting BMW, supra, 517 U.S. at p. 591 (conc. opn. of Breyer, J.)). In
applying the federal Constitution here, we have taken McKesson‟s wealth into
consideration, and more to the point we have taken into consideration the deterrent
effect that is appropriate in light of McKesson‟s wrongdoing. We nevertheless
conclude that punitive damages in an amount equal to compensatory damages
marks the constitutional limit in this case and still provides the appropriate
deterrence. The concurring and dissenting opinion concedes that the jury‟s award
of $15 million in punitive damages against McKesson far exceeds what the federal
Constitution permits. (See conc. and dis. opn. of Werdegar, J., post, at p. 1.) The
only disagreement is whether the constitutional limit in this case is equal to the
compensatory damages award of $1,905,000, as we hold, or whether it is double
that amount, as the concurring and dissenting opinion contends. Based on the
39
relatively low degree of reprehensibility and the substantial award of noneconomic
damages, we conclude that $1,905,000 is the maximum punitive damages that may
be awarded against employer McKesson in this case in light of the constraints
imposed by the federal Constitution. Instead of ordering a retrial on the question
of punitive damages, we simply direct a reduction of those damages to the
$1,905,000 maximum. (See Simon, supra, 35 Cal.4th at pp. 1187-1188.)
DISPOSITION
The Court of Appeal‟s judgment is reversed, and the matter is remanded to
that court with directions (1) to reinstate a single harassment award of $500,000
against both employer McKesson and supervisor Schoener; (2) to reinstate the
jury‟s $3,000 punitive damages award against supervisor Schoener; and (3) to
modify the punitive damages award against employer McKesson to $1,905,000.
The Court of Appeal is directed to affirm the judgment of the trial court as so
modified.
KENNARD, J.
WE CONCUR:
GEORGE, C. J.
BAXTER, J.
CHIN, J.
CORRIGAN, J.
40
CONCURRING AND DISSENTING OPINION BY WERDEGAR, J.
I fully concur in parts II.A. and II.B. of the majority opinion. I dissent from
part II.C., in which the majority concludes a punitive damages award of
$1,905,000, the same amount plaintiff is to recover in compensatory damages, is
the maximum award consistent with federal due process. While I agree with much
of the majority‟s analysis of this issue and with its conclusion the jury‟s $15
million punitive award was constitutionally excessive, I believe the evidence
strongly suggests a significantly higher degree of reprehensibility on the corporate
defendant‟s part than the majority acknowledges. In light of that interpretation of
the evidence and other relevant factors, I disagree that the punitive award must be
reduced to a one-to-one ratio with the compensatory award. Our task here is only
to determine the maximum permissible award under the Constitution, which is not
necessarily the same award we would reach as jurors. (Simon v. San Paolo U.S.
Holding Co., Inc. (2005) 35 Cal.4th 1159, 1188 (Simon).) Keeping that limited
role in mind, I would locate the constitutional limit at a two-to-one ratio between
compensatory and punitive awards, yielding a maximum punitive damages award
of $3.8 million.
As the majority explains (maj. opn., ante, at p. 30), the United States
Supreme Court has directed state courts to review punitive damages awards for
constitutional excessiveness by examining three “guideposts”: the degree of
reprehensibility shown in the defendant‟s misconduct, the relationship of the award
1
to the amount of harm or potential harm done to the plaintiff, and the civil penalties
available in similar cases. (State Farm Mut. Automobile Ins. Co. v. Campbell
(2003) 538 U.S. 408, 418; see Simon, supra, 35 Cal.4th at pp. 1172-1174.)
Our assessment of reprehensibility in this context is undertaken de novo, or
independently, in that we do not defer to findings implied from the jury‟s award.
(Simon, supra, 35 Cal.4th at pp. 1172-1173.) Making such culpability assessments
independently on the basis of a detailed factual record is, to say the least, an
unusual task for an appellate court. While appellate judges commonly use their
own judgments of comparative culpability to formulate general rules for categories
of factual situations, their appraisal of the facts in a particular case is usually
directed at deciding whether the evidence supports a finding made by the jury or
the trial court. Moreover, an appellate court, relying on a cold record rather than
hearing the testimony live, is not as well situated as the jury or trial court to make a
fine-tuned culpability judgment about conduct that has been the subject of a trial.
While some form of independent assessment is necessary to the constitutional
review we are required to conduct, therefore, it should be performed modestly and
with caution. As this court unanimously observed in Simon, “[i]n enforcing federal
due process limits, an appellate court does not sit as a replacement for the jury but
only as a check on arbitrary awards.” (Id. at p. 1188.)
The majority assigns a relatively low degree of reprehensibility to the
conduct of defendant McKesson Corporation (McKesson) toward plaintiff
Charlene Roby. (Maj. opn., ante, at p. 37.) As to McKesson‟s wrongdoing in
regards to the harassment supervisor Schoener inflicted on Roby, I tend to agree.
As to discrimination and failure to accommodate Roby‟s medical condition,
I disagree.
Concerning McKesson‟s culpability for discrimination with regard to its
attendance policy, the majority observes that the evidence does not suggest
2
McKesson adopted the policy with a purpose to discriminate, and thus concludes
McKesson‟s wrongdoing was “more a failure to prevent the foreseeable
discriminatory consequences flowing from” the policy than an act rooted in
“ „intentional malice.‟ ” (Maj. opn., ante, at p. 34.) What the majority overlooks is
that in McKesson‟s rigid application of the policy, the record suggests a greater
degree of corporate culpability than mere failure to foresee. As the Court of
Appeal below observed, the evidence surrounding application of the attendance
policy — the company‟s failure to accommodate Roby‟s medical condition,
leading to her termination — supported a conclusion McKesson‟s conduct
“consisted of more than a careless failure to investigate absences, and was rather a
deliberate plan to rid itself of the inconvenience of accommodating a mentally
disabled employee.”
McKesson‟s managers, including the head of the distribution center in
which Roby worked and the regional director of human resources, knew of Roby‟s
chronic medical condition, knew she was under treatment for it, and were informed
it was the cause of at least some of the absences they counted as “occasions” under
the attendance policy. They also knew that employees cannot be punished for
taking medical leave to which they are entitled under state and federal law.
The responsible McKesson managers twice purported to investigate Roby‟s
attendance record to determine if her termination was proper, once while she was
suspended and then again when she appealed her termination, yet in doing so they
never tried to determine, other than by looking for paperwork in the file, whether
she was entitled to have some of the “occasions” consolidated or excused as due to
a medical condition requiring accommodation. Their explanations for this
limitation on their investigation suggested they regarded it as the employee‟s
burden to expressly and specifically seek accommodation under one or more laws.
3
Even so, they failed to respond to Roby‟s oral request that some of her absences be
classified, retroactively, as medical leave under federal law.
McKesson‟s managers were also aware that Roby alleged her supervisor had
deceived her about application of the attendance policy by falsely promising a
“new start” if she had no more unanticipated absences for a certain period of time,
and that the attendance policy had been applied less strictly to other employees
than to her. Although the managers apparently did not determine these claims were
false, they did not consider them in making the decision to terminate Roby because
of her absences.
The record thus could reasonably be read as showing, if not an intent to
injure Roby by denying her accommodation, certainly a pattern of willful blindness
to the likelihood she was entitled to accommodation for her medical condition. In
corporate managers exercising decisive power over the career of a financially and
emotionally vulnerable employee, such conscious indifference to the employee‟s
rights and health would reflect considerable culpability. While this may not be the
only reasonable way to read the record, it is one reasonable reading. Without
having heard the live testimony of Roby and McKesson‟s managers and observed
their demeanor under examination, we should not reject this reading as a basis for
assessing reprehensibility. As we said in Simon, an appellate court‟s due process
analysis must allow “some leeway for the possibility of reasonable differences in
the weighing of culpability.” (Simon, supra, 35 Cal.4th at p. 1188.)
To the extent labels are important in this context, I would judge McKesson‟s
reprehensibility as moderate rather than low, even relative to the range of conduct
warranting exemplary damages under California law. Beyond this difference over
appraisal of reprehensibility, two other points lead me to diverge from the
majority‟s determination as to the constitutionally permissible award.
4
First, while I agree with the majority that a large noneconomic damages
award may reflect the jury‟s indignation at the defendant‟s conduct and thus
contain a punitive component (maj. opn., ante, at pp. 37-38), I would not assume
this was true in the present case. As the majority acknowledges, Roby presented
evidence she was “devastated emotionally and financially” by her termination,
becoming agoraphobic and suicidal as well as completely disabled from
employment. (Id. at p. 7.) The jury was certainly indignant at McKesson‟s
conduct, as shown by their award of $15 million in punitive damages, but they also
could have believed that only a sizeable compensatory award could make Roby
whole from the noneconomic injuries she sustained.
Second, the majority fails to adequately consider McKesson‟s financial
condition in determining the constitutional maximum. As we explained in Simon,
California law has long recognized the importance of the defendant‟s wealth in the
use of exemplary damages for deterrence, a function the federal high court has
endorsed. (Simon, supra, 35 Cal.4th at p. 1185.) Thus, “[b]ecause a court
reviewing the jury‟s award for due process compliance may consider what level of
punishment is necessary to vindicate the state‟s legitimate interests in deterring
conduct harmful to state residents, the defendant‟s financial condition remains a
legitimate consideration in setting punitive damages.” (Ibid.) In 2000, the year it
fired Roby, McKesson ranked number 38 on Fortune Magazine‟s list of the 500
largest American corporations, reportedly having a market value of more than
$5 billion, more than $30 billion in revenues, and almost $85 million in profits.
(See <http://money.cnn.com/magazines/fortune/fortune500_archive/snapshots/200
0/850.html> [as of Nov. 30, 2009].) While McKesson‟s wealth alone cannot
justify a high award, a somewhat larger award may be warranted in order to
effectively deter such a large and profitable corporation from repeating its (at the
least) conscious disregard of employees‟ rights.
5
Again, a court reviewing punitive damages for consistency with due process
must keep in mind that its “constitutional mission is only to find a level higher than
which an award may not go; it is not to find the „right‟ level in the court‟s own
view.” (Simon, supra, 35 Cal.4th at p. 1188.) Our constitutional determination,
though independent of the jury‟s judgment on the appropriate amount of exemplary
damages, should at the same time be conducted with an awareness that reasonable
views may differ on the degree of reprehensibility involved, the amount of harm
done or threatened, and the likely deterrent effect of any particular award in light of
the defendant‟s financial condition.
The fixing of a constitutional maximum under the federal high court‟s due
process analysis is a lamentably inexact enterprise, and I cannot demonstrate that
the majority reaches a legally incorrect result or that mine is precisely correct. But
assessing reprehensibility with an eye to the appropriate “leeway” for differing
judgments based on the evidence (Simon, supra, 35 Cal.4th at p. 1188), viewing the
compensatory award without the unsupported assumption it contains a punitive
element, and considering defendant McKesson‟s financial condition at the time of
its culpable conduct, I conclude an exemplary damages award twice the
compensatory award, around $3.8 million, would not be so grossly excessive as to
violate defendant‟s constitutional right to due process of law.
WERDEGAR, J.
I CONCUR:
MORENO, J.
6
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Roby v. McKesson Corporation
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 146 Cal.App.4th 63
Rehearing Granted
__________________________________________________________________________________
Opinion No. S149752
Date Filed: November 30, 2009
__________________________________________________________________________________
Court: Superior
County: Yolo
Judge: Timothy L. Fall
__________________________________________________________________________________
Attorneys for Appellant:
Howard Rice Nemerovski Canady Falk & Rabkin, Jerome B. Falk, Jr., Linda Q. Foy, Dipanwita Deb
Amar, Jason M. Habermeyer; Fitzgerald, Abbott & Beardsley and Sara E. Robertson for Defendants and
Appellants.
Paul, Hastings, Janofsky & Walker, Paul W. Cane, Jr., Katherine C. Huibonhoa, Laura Scher and Heather
N. Mitchell for California Employment Law Council as Amicus Curiae on behalf of Defendants and
Appellants.
Wilson Sonsini Goodrich & Rosato, Fred W. Alvarez and Michael J. Nader for Employers Group as
Amicus Curiae on behalf of Defendants and Appellants.
__________________________________________________________________________________
Attorneys for Respondent:
Christopher H. Whelan; The deRubertis Law Firm, David M. deRubertis, David A. Lesser; Pine & Pine,
Norman Pine; Riegels Campos & Kenyon and Charity Kenyon for Plaintiff and Respondent.
Law Offices of Jeffery K. Winikow and Jeffrey K. Winikow for California Employment Lawyers
Association as Amicus Curiae on behalf of Plaintiff and Respondent.
Claudia Center for Legal Aid Society- Employment Law Center, Disability Rights Education and Defense
Fund, the Impact Fund, the Disability Rights Legal Center, Equal Rights Advocates, California Women‟s
Law Center, Protection and Advocacy, Inc., and Disability Rights Advocates as Amici Curiae on behalf of
Plaintiff and Respondent.
Sharon J. Arkin for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiff and
Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Jerome B. Falk, Jr.
Howard Rice Nemerovski Canady Falk & Rabkin
Three Embarcadero Center, 7th Floor
San Francisco, CA 94111-4024
(415) 434-1600
David M. deRubertis
The deRubertis Law Firm
21800 Oxnard Street, Suite 1180
Woodland Hills, CA 91367
(818) 227-8605
Jeffrey K. Winikow
Law Offices of Jeffery K. Winikow
1801 Century Park East, Suite 1520
Los Angeles, CA 90067
(310) 479-0070
2
Petition for review after the Court of Appeal reversed in part and modified and affirmed in part the judgment in a civil action. This case presents the following issues: (1) In an action for employment discrimination and harassment by hostile work environment, does Reno v. Baird (1998) 18 Cal.4th 640 require that the claim for harassment be established entirely by reference to a supervisor's acts that have no connection with matters of business and personnel management, or may such management-related acts be considered as part of the totality of the circumstances allegedly creating a hostile work environment? (2) May an appellate court determine the maximum constitutionally permissible award of punitive damages when it has reduced the accompanying award of compensatory damages, or should the court remand for a new determination of punitive damages in light of the reduced award of compensatory damages?
Opinion Information
| Date: | Citation: | Docket Number: | Category: | Status: |
| Mon, 11/30/2009 | 47 Cal. 4th 686, 219 P.3d 749, 101 Cal. Rptr. 3d 773 | S149752 | Review - Civil Appeal | submitted/opinion due |
Parties
| 1 | Roby, Charlene J. (Plaintiff and Respondent) Represented by Charity Kenyon Kenyon Yeates, LLP 3400 Cottage Way, Suite K Sacramento, CA |
| 2 | Roby, Charlene J. (Plaintiff and Respondent) Represented by Norman Pine Pine & Pine 14156 Magnolia Boulevard, Suite 200 Sherman Oaks, CA |
| 3 | Roby, Charlene J. (Plaintiff and Respondent) Represented by Christopher H. Whelan Attorney at Law 11246 Gold Express Drive, Suite 100 Gold River, CA |
| 4 | Roby, Charlene J. (Plaintiff and Respondent) Represented by David Michael deRubertis The DeRubertis Law Firm 21800 Oxnard Boulevard, Suite 1180 Woodland Hills, CA |
| 5 | McKesson HBOC (Defendant and Appellant) Represented by Sarah E. Robertson Fitzgerald Abbott & Beardsley 1221 Broadway, 21st Floor Oakland, CA |
| 6 | McKesson HBOC (Defendant and Appellant) Represented by Jerome B. Falk Howard, Rice, Nemerovski, Canady, Falk & Rabkin Three Embarcadero Center, 7th Floor San Francisco, CA |
| 7 | Schoener, Karen (Defendant and Appellant) Represented by Linda Quan Foy Howard, Rice, Nemerovski, Canady, Falk & Rabkin Three Embarcadero Center, 7th Floor San Francisco, CA |
| 8 | Schoener, Karen (Defendant and Appellant) Represented by Jason Mark Habermeyer Howard, Rice, Nemerovski, Canady, Falk & Rabkin Three Embarcadero Center, 7th Floor San Francisco, CA |
| 9 | Schoener, Karen (Defendant and Appellant) Represented by Jerome B. Falk Howard, Rice, Nemerovski, Canady, Falk & Rabkin Three Embarcadero Center, 7th Floor San Francisco, CA |
| 10 | California Employment Law Council (Amicus curiae) Represented by Paul W. Cane Paul Hastings et al., LLP 55 Second Street, 24th Floor San Francisco, CA |
| 11 | California Employment Law Council (Amicus curiae) Represented by Katherine Consuelo Huibonhoa Paul Hastings et al., LLP 55 Second Street, 24th Floor San Francisco, CA |
| 12 | California Employment Law Council (Amicus curiae) Represented by Heather Nicole Mitchell Paul Hastings et al., LLP 55 Second Street, 24th Floor San Francisco, CA |
| 13 | California Employment Lawyers Association (Amicus curiae) Represented by Jeffrey Keith Winikow Attorney at Law 1801 Century Park East, Suite 1520 Los Angeles, CA |
| 14 | Consumer Attorneys Of California (Amicus curiae) Represented by Christine D. Spagnoli Greene Broillet et al. 100 Wilshire Boulevard, 21st Floor Santa Monica, CA |
| 15 | Consumer Attorneys Of California (Amicus curiae) Represented by Don Alan Ernst Attorney at Law 1020 Palm Street P.O. Box 1327 San Luis Obispo, CA |
| 16 | Disability Rights & Womens Rights Advocacy Groups (Amicus curiae) Represented by Claudia Center Employment Law Center 600 Harrison Street, Suite 120 San Francisco, CA |
| 17 | Employers Group (Amicus curiae) Represented by Fred W. Alvarez Wilson Sonsini et al. 650 Page Mill Road Palo Alto, CA |
| 18 | Horvitz & Levy, LLP (Pub/Depublication Requestor) Represented by Curt C. Cutting Horvitz & Levy, LLP 15760 Ventura Boulevard, 18th Floor Encino, CA |
| Opinion Authors | |
| Opinion | Justice Joyce L. Kennard |
| Concur | Chief Justice Ronald M. George, Justice Carol A. Corrigan, Justice Marvin R. Baxter, Justice Ming W. Chin |
| Dissent | Justice Kathryn M. Werdegar |
| Dockets | |
| Jan 26 2007 | Request for publication filed (initial case entry) Horvitz & Levy LLP (non party) |
| Feb 5 2007 | Petition for review filed Respondent, Charlene J. Roby Attorney Christopher H. Whelan, retained. |
| Feb 5 2007 | Association of attorneys filed for: Respondent Charlene Roby for Attorney Norman Pine of Pine & Pine |
| Feb 7 2007 | Record requested |
| Feb 8 2007 | Received Court of Appeal record C047617-one doghouse - also - C048799-one doghouse |
| Feb 23 2007 | Answer to petition for review filed McKesson HBOC defendants and appellants by Jerome B. Falk, Jr. of Howard, Rice, Nemerovski et all, retained. |
| Mar 6 2007 | Reply to answer to petition filed Charlene J. Roby, plaintiff and respondent by Christopher H. Whelan, retained CRC 8.25 |
| Mar 22 2007 | Time extended to grant or deny review to and including May 4, 2007 |
| Apr 18 2007 | Letter sent to: to all counsel enclosing a copy of the grant order and the form for certification of interested entities and persons. |
| Apr 18 2007 | Petition for review granted (civil case) George, C.J., was absent and did not participate. Votes: Moreno, ACJ., Kennard, Werdegar, and Corrigan, JJ. |
| Apr 20 2007 | Note: |
| Apr 20 2007 | 2nd record request for balance of both records C047617 and C048789. |
| Apr 23 2007 | Received Court of Appeal record |
| Apr 26 2007 | Order filed The order filed on April 18, 2007, granting the petition for review is amended to include the second Court of Appeal number reflected above. |
| May 7 2007 | Certification of interested entities or persons filed Jerome B. Falk of Howard Rice Nemerovski et al., counsel for appellants (McKesson HBOC et al.) |
| May 16 2007 | Request for extension of time filed to file opening brief/merits Respondent Charlene J. Roby asking to 07-18-07 |
| May 21 2007 | Note: |
| May 22 2007 | Extension of time granted On joint application and stipulation of counsel for extensions of time, and good cause appearing, it is ordered that the time to serve and file Respondent Roby's Opening Brief on the Merits is extended an additional sixty (60) days to and including July 18, 2007. It is further ordered that the time to serve and file Appellants McKesson and Schoener's Answer Brief on the Merits is extended eighty (80) days, to and including November 5, 2007. |
| Jul 16 2007 | Request for extension of time filed to September 18, 2007, to file Respondent Roby's Opening Brief on the Merits and, to January 11, 2008, to file appellants' Answer Brief on the Merits. |
| Jul 19 2007 | Extension of time granted On application of Respondent Roby and good cause appearing it is ordered that the time to serve and file the Respondent's Opening Brief on the Merits is extended to and including September 18, 2007. It is further ordered that the time to serve and file Appellants McKesson and Schoener's Answer Brief on the Merits is extended to and including January 11, 2008. |
| Sep 13 2007 | Request for extension of time filed to October 2, 2007, to file Respondent Roby's Opening Brief on the Merits and, to January 25, 2008 to file Appellants' Answer Brief on the Merits. |
| Oct 2 2007 | Extension of time granted On application of respondent and good cause appeairng, it is ordered that the time to serve and file the Respondent's Opening Brief on the Merits is extended to and including October 2, 2007. It is further ordered that Appellants McKesson and Schoener's Answer Brief on the Merits is extended to and including January 25, 2008. |
| Oct 3 2007 | Opening brief on the merits filed Charlene Roby, respondent Christopher Whelan, Norman Pine, David deRubertis, Charity Kenyon, counsel (timely-CRC 8.25) |
| Oct 18 2007 | Received: Corrected Respondent's (Roby) Opening Brief on the Merits by David M. deRubertis, counsel [ See letter dated 10-17-2007 -- The sole correction is the addition of an omitted word ("not") in the last sentence of the first full paragraph on page 76.] |
| Oct 19 2007 | Opening brief on the merits filed Corrected Respondent's Opening Brief on the Merits, plaintiff and respondent David M. deRubertis, The deRubertis Law Firm, counsel (Filed with permission) |
| Jan 25 2008 | Application filed to file oversize (20,801 words) Appellants Answer Brief on the Merits by Jerome B. Falk, Jr., Howard Rice Nemerovski et al., counsel |
| Jan 25 2008 | Received: Appellants Appendix of Authorities cited in the Answer Brief on the Merits |
| Jan 31 2008 | Order filed The applicaton of Appellants McKesson HBOC et al. for permission to file Oversized Answer Brief on the Merits containing 20,801 words that exceeds the 14,000 word limit prescribed by California Rules of Court, rule 8.520(c) by 6,801 words is hereby granted. |
| Jan 31 2008 | Answer brief on the merits filed Appellants' McKesson HBOC et al., and Appellants' Appendix of Authorities Lodged by Jerome B. Falk, Jr., Howard Rice et al., counsel |
| Feb 8 2008 | Request for extension of time filed for an additional sixty days to and including April 21, 2008, to file Respondent Roby's Reply Brief on the Merits |
| Feb 14 2008 | Extension of time granted On application of respondent and good cause appearing, it is ordered that the time to serve and file Respondent's Reply Brief on the Merits is extended to and including April 21, 2008. |
| Apr 14 2008 | Request for extension of time filed to file reply brief/merits to May 19, 2008 respondent Charlene J. Roby |
| Apr 15 2008 | Extension of time granted On application of Respondent Charles J. Roby and good cause appearing, it is ordered that the time to serve and file the Respondent's Reply Brief on the Merits is extended to and including May 19, 2008. |
| May 15 2008 | Request for extension of time filed to file respondent's reply brief/merits May 30, 2008 |
| May 22 2008 | Extension of time granted On application of respondent, Charles J. Roby, and good cause appearing, it is ordered that the time to serve and file respondent's reply brief on the merits is hereby extended to and including May 30, 2008. |
| May 30 2008 | Application to file over-length brief filed of 13,641 words for Respondent Roby's Reply Brief on the Merits by David M.deRubertis, counsel |
| May 30 2008 | Reply brief filed (case fully briefed) Charlene J. Roby, respondent by David M. deRubertis, counsel (Filed with permission) |
| May 30 2008 | Order filed The application of Respondent Roby for permission to file Oversized Reply Brief on the Merits containing 13,641 words that exceeds the 4,200 word limit prescribed by California Rules of Court rule 8.520(c) by 9,441 words is hereby granted. |
| Jun 30 2008 | Received application to file Amicus Curiae Brief of the Employers Group in support of appellants by Fred W. Alvarez, Wilson Sonsini Goodrich & Rosati, counsel |
| Jun 30 2008 | Received application to file Amicus Curiae Brief California Employment Law Council in support of appellants by Paul W. Cane, Jr., Paul Hastings Janofsky & Walker, LLP, counsel |
| Jun 30 2008 | Received application to file Amicus Curiae Brief Disability Rights and Women's Rights Advocacy Groups in support of Respondent Roby by Claudia Center, The Legal Aid Society - Employment Law Center, counsel by Claudia Center, counsel |
| Jun 30 2008 | Received application to file Amicus Curiae Brief California Employment Lawyers Association in support of respondent (Roby) by Jeffrey K. Winikow, counsel (Received in the Los Angeles Office) |
| Jun 30 2008 | Request for extension of time to file amicus curiae brief to and including July 10, 2008, to file the amicus application and brief of Consumer Attorneys of California in support of respondent by Don A. Ernst, President, Consumer Attorneys of California CRC 8.25(b) |
| Jul 2 2008 | Extension of time granted On application of amicus curiae Consumer Attorneys of California and good cause appearing, it is ordered that the time to serve and file its amicus curiae brief in support of Respondent Charlene Roby is hereby extended to and including July 10, 2008. |
| Jul 8 2008 | Permission to file amicus curiae brief granted The application of California Employment Lawyers Association for permission to file an amicus curiae brief in support of Respondent Roby is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief. |
| Jul 8 2008 | Amicus curiae brief filed California Employment Lawyers Association in support of Respondent Roby by Jeffrey K. Winikow, counsel |
| Jul 8 2008 | Permission to file amicus curiae brief granted The application of Employers Group for permission to file an amicus curiae brief in support of Appellants McKesson HBOC et al. is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief. |
| Jul 8 2008 | Amicus curiae brief filed Employers Group in support of Appellants McKesson HBOC et al. by Fred W. Alvarez and Michael J. Nader, Wilson Sonsini Goodrich & Rosati, counsel |
| Jul 8 2008 | Permission to file amicus curiae brief granted The appilcation of Disability Rights and Women's Rights Advocacy Groups for permission to file an amicus curiae brief in support of Respondent Roby is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief. |
| Jul 8 2008 | Amicus curiae brief filed Disability Rights and Women's Rights Advoacy Groups in support of Respondent Roby by Claudia Center, The Legal Aid Society - Employment Law Center, counsel |
| Jul 8 2008 | Request for judicial notice filed (granted case) Amicus Curiae California Employment Law Council by Paul W. Cane, Jr., Paul Hastings Janofsky & Walker, LLP |
| Jul 8 2008 | Permission to file amicus curiae brief granted The appilcation of California Employment Law Council for permission to file an amicus curiae brief in support of appellants is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief. |
| Jul 8 2008 | Amicus curiae brief filed California Employment Law Council in support of appellants by Paul W. Cane, Jr., Paul Hastings Janofsky & Walker LLP |
| Jul 10 2008 | Request for extension of time filed by Appellants McKesson HBOC et al. to file a single response to all amici curiae briefs, and an additional 20 days from the time the last amicus curiae brief is filed by Amicus Curiae Consumer Attorneys of California. |
| Jul 10 2008 | Request for extension of time filed to and including July 18, 2008, to file the Amicus Curiae Brief by Don A. Ernst and Christine D. Spagnoli, counsel. |
| Jul 14 2008 | Extension of time granted On application of Amicus Curiae Consumer Attorneys of California and good cause appearing, it is ordered that the time to serve and file the amicus curiae brief is extended to and including July 18, 2008. |
| Jul 14 2008 | Extension of time granted On application of Appellants McKesson HBOC and Karen Schoener and good cause appearing, it is ordered that the time to serve and file a single response to all amici curiae briefs is extended to twenty days from the date that the last amicus curiae brief is filed. |
| Jul 18 2008 | Request for extension of time filed Respondent Roby to file a single response to all amicus curiae briefs, 20 days after the last amicus curiae brief is filed. by David M. deRubertis, counsel |
| Jul 18 2008 | Received: applcation to file single response to amicus briefs submitted together with extension of time to file response 20 days after filing of the last amicus brief Charlene J. Roby, respondent |
| Jul 24 2008 | Extension of time granted On application of Respondent Roby and good cause appearing, it is ordered that the time to serve and file a single response to all amicus curiae briefs is extended to twenty days from the date that the last amicus curiae brief is filed. |
| Jul 29 2008 | Received application to file Amicus Curiae Brief (late) Amicus Curiae Brief of Consumer Attorneys of California in support of Respondent Roby by Sharon J. Arkin, counsel. |
| Aug 6 2008 | Permission to file amicus curiae brief granted The application of Consumer Attorneys of California for permission to file an amicus curiae brief in support of Respondent Roby is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief. |
| Aug 6 2008 | Amicus curiae brief filed Consumer Attorneys of California in support of Respondent Roby by Sharon J. Arkin, counsel |
| Aug 21 2008 | Request for extension of time filed Joint application of Respondent Roby and Appellants McKennson HBOC and Karen Schoener to September 10, 2008, for all parties to file their respective response briefs to amicus curiae briefs. by David M. deRubertis, Christopher H. Whelan, Inc., Pine & Pine, Rigels Campos & Kenyon LLP. |
| Aug 27 2008 | Extension of time granted On joint application of all parties and good cause appearing, it is ordered that the time to serve and file their respective response briefs to amicus curiae briefs is extended to and including September 10, 2008. |
| Sep 4 2008 | Request for extension of time filed Joint Request by all parties: Respondent Charlene Roby and Appellants McKesson HBOC and Karen Schoener for a (8) day extension to file their repective responses to amicus curiae brief filed in this matter. |
| Sep 5 2008 | Request for extension of time filed Joint application for an extension of time to and including September 18, 2008, for all parties to file their respective response to amici curiae briefs by David M. deRubertis, counsel (Filed in Los Angeles) |
| Sep 9 2008 | Extension of time granted On joint application of all parties and good cause appearing, it is ordered that the time for all parties to file their respective response briefs to the amici curiae briefs is extended to and including September 18, 2008. |
| Sep 16 2008 | Request for extension of time filed Application for Mutual 4-day extension to 9-22-08 |
| Sep 17 2008 | Extension of time granted On application for a mutual four (4) day extension of time, it is ordered that the time for all parties to serve and file their respective response briefs to the amici curiae briefs is extended to and including September 22, 2008. |
| Sep 19 2008 | Request for extension of time filed Application for Mutual 4-day extensio to 9-26-08. David M. DeRubertis, for respondent |
| Sep 29 2008 | Received: late response to amici curiae briefs Mckesson HBOC, et al., appellants by Jerome B. Falk, Jr., counsel |
| Sep 29 2008 | Received: counsel for resp. oversized response to amicus brief. |
| Sep 29 2008 | Application to file over-length brief filed counsel for resp. (Charlene Roby) |
| Sep 30 2008 | Application for relief from default filed for late response to amici curiae briefs McKesson HBOC, et al., appellants by Jerome B. Falk, Jr., counsel |
| Sep 30 2008 | Received: Amended proof of service from McKesson HBOC, et al., appellants by Jerome B. Falk, Jr., counsel |
| Oct 6 2008 | Response to amicus curiae brief filed (with permission) Respondent's Consolidated Answer Brief to Employer-side Amici Curiae Briefs by David M. DeRubertis, counsel |
| Oct 6 2008 | Response to amicus curiae brief filed (with permission) Appellants McKesson HBOC et al.to amici curiae briefs by Jerome B. Falk, Jr., counsel |
| Oct 7 2008 | Received: Letter from Attorney Jerome B. Falk, Jr., dated October 6, 2008, requesting that oral argument not be scheduled during the following periods due to prior commitments: February 6 through February 26, 2009, May 21 through June 19, 2009, and September 10 through October 5, 2009. |
| Oct 9 2008 | Change of contact information filed for: Charity Kenyon, Kenyon Yeates LLP, counsel for Respondent Roby. |
| Feb 3 2009 | Received: letter from attorney Norman Pine [prev. faxed] re: oral argument scheduling Respondent Charlene J. Roby |
| Apr 15 2009 | Supplemental briefing ordered The court requests each party to serve and file, on or before April 27, 2009, in the San Francisco office of the clerk, a supplemental letter brief, no longer than 5600 words, addressing this question: "Are the jury's compensatory damages verdicts so ambiguous as to whether there is overlapping recovery as to require a remand to the trial court for a new trial limited to determining the amount of compensatory and punitive damages? (See Woodcock v. Fontana Scaffolding & Equip. Co. (1968) 69 Cal.2d 452, 457.)" On or before May 4, 2009, the parties may serve and file, in the San Francisco office of the clerk, simultaneous supplemental letter briefs in reply, no longer than 2800 words. |
| Apr 22 2009 | Case ordered on calendar to be argued Thursday, May 28, 2009, at 9:00 a.m., in San Francisco |
| Apr 23 2009 | Received: Letter dated 4-23-2009 from Steven L. Mayer, writing on behalf of Jerome B. Falk, Jr., lead counsel for McKesson HBOC, requesting the Court to continue oral argument to the next available calendar after Mr. Falk returns to the country on June 19, 2009. |
| Apr 27 2009 | Supplemental brief filed Plaintiff and Respondent: Roby, Charlene J.Attorney: David Michael deRubertis (Supplemental Letter Brief) |
| Apr 27 2009 | Supplemental brief filed Defendant and Appellant: McKesson HBOCAttorney: Jerome B. Falk (Supplemental Letter Brief) |
| Apr 29 2009 | Argument rescheduled To be called and continued from late May session to a future calendar. |
| May 4 2009 | Supplemental brief filed Defendant and Appellant: McKesson HBOCAttorney: Jerome B. Falk Supplemental Reply Letter Brief. |
| May 4 2009 | Supplemental brief filed Plaintiff and Respondent: Roby, Charlene J.Attorney: David Michael deRubertis Reply supplemental brief |
| May 18 2009 | Received: Letter dated May 15, 2009 from David M. deRubertis, advising that he and Norman Pine have long-standing out-of-town commitments on September 3 and 4, 2009. |
| May 28 2009 | Cause called and continued |
| Jul 9 2009 | Received: Letter from Attorney for Defendant and Appellant, regarding the decision of the Court of appeal, Third Appellate District in Scott v. Phoenix Schools, Inc., (No CO58539), decided June 30, 2009 (and reported at 2009 DJDAR 9800). |
| Jul 14 2009 | Received: Letter from Jerome B. Falk, Jr. Attorney for Defendant and Appellant, dated July 14, 2009, regarding oral argument. Counsel will not be available the week of the September oral argument calendar. |
| Jul 17 2009 | Received: Letter dated 7-16-2009 from David M. deRubertis, counsel for Respondent Roby, in response to appellant's letter brief dated 7-9-2009. |
| Jul 31 2009 | Case ordered on calendar to be argued Wednesday, September 2, 2009, at 9:00 a.m., in San Francisco |
| Aug 11 2009 | Filed: Respondent Roby's application to divide oral argument between party and amicus; asking to share 10 minutes of time with amicus curiae California Employment Lawyers Association. David M. deRubertis, counsel. |
| Aug 12 2009 | Order filed The request of counsel for respondent in the above-referenced cause to allow two counsel to argue on behalf of respondent at oral argument is hereby granted. The request of respondent to allocate to amicus curiae California Employment Lawyers Association 10 minutes of respondent's 30-minute allotted time for oral argument is granted. |
| Aug 26 2009 | Filed: Application for Permission to File copy of oral argument from the Court of Appeal, Third Appellate District, as judicial notice by counsel for respondent. |
| Sep 2 2009 | Cause argued and submitted |
| Nov 23 2009 | Request for judicial notice filed (Grant or AA case) Plaintiff and Respondent: Roby, Charlene J.Attorney: David Michael deRubertis Copy of Oral Argument from the Court of Appeal, Third Appellate District. |
| Nov 25 2009 | Notice of forthcoming opinion posted To be filed on Monday, November 30, 2009 @10 a.m. |
| Briefs | |
| Oct 3 2007 | Opening brief on the merits filed |
| Oct 19 2007 | Opening brief on the merits filed |
| Jan 31 2008 | Answer brief on the merits filed |
| May 30 2008 | Reply brief filed (case fully briefed) |
| Jul 8 2008 | Amicus curiae brief filed |
| Jul 8 2008 | Amicus curiae brief filed |
| Jul 8 2008 | Amicus curiae brief filed |
| Jul 8 2008 | Amicus curiae brief filed |
| Aug 6 2008 | Amicus curiae brief filed |
| Oct 6 2008 | Response to amicus curiae brief filed |
| Oct 6 2008 | Response to amicus curiae brief filed |
| May 4, 2010 Annotated by jntonme | Facts: In an action for wrongful discharge, the jury found for plaintiff under the theories of 1) wrongful termination, 2) discrimination, 3) failure to accommodate, and 4) harassment, all of which stemmed from the defendant's response to plaintiff's medical condition. Under theories (1), (2), and (3), the jury awarded joint economic damages of $1,511,000, individual noneconomic damages summing to $1.6 million, and $600,000 for harassment (4) against defendant employer McKesson. The jury also awarded an additional $15 million in punitive damages against McKesson. The jury awarded harassment damages of $600,000 and punitive damages of $3,000 against plaintiff's supervisor. Procedural Posture: Firstly, the court reasoned that the lower court's factual support for harassment were "personnel management actions" not applicable to a harassment claim under Reno v. Baird, 957 P.2d 1333, (Cal. 1998) ("[N]ecessary personnel management actions . . . do not come within the meaning of harassment." (quoting Janken v. GM Hughes Electronics) (citation omitted)). Disregarding this evidence, the court ruled the harassment claim insufficiently founded and entered a judgment notwithstanding the verdict for the defendants on harassment and related punitive damages. Secondly, the court, holding that the noneconomic damages under wrongful termination, discrimination, and failure to accommodate overlapped, retained the highest of the three awards—the smaller two being included in the largest—and dismissed the rest, reducing the award from $1.6 million $800,000. Thirdly, the court found that the punitive damages against McKesson were insufficiently supported without the harassment claim, duplicative of the compensatory damages, and consistent with federal constitutional restrictions on damages and reduced the award from $15 million to $2 million. Opinion (J. Kennard): First, the court reinstated the harassment damages against both defendants on the grounds that the Court of Appeals improperly disregarded the supervisor’s conduct towards the plaintiff in considering the harassment claim. Discrimination refers to bias in the exercise of official actions and harassment refers to bias, expressed through interpersonal communications, that makes the workplace social environment intolerable. Miller v. Dept. of Corrections, 115 P.3d 77 (2005). While they overlap in proof, both claims can be sustained by same pool of evidence in this situation: the supervisor conducted official acts of demotion and hostile social interactions not strictly within her management role. Second, the court held that the noneconomic damages awarded by the jury were hopelessly ambiguous, calling for a new trial under law. Woodcock v. Fontana Scaffolding & Equip. Co., 445 P.2d 881 (1968). The court reasoned that lack of consistency between the degree and timing of emotional harm suffered under each theory of relief on one hand and the amount awarded on the other suggests that the jury did not understand the various categories of damages. The court ruled that verdict should be reversed and remanded for a new trial determining damages because untangling the jury's intent would be impracticable and their awards were problematic. The court, however, opted to modify the noneconomic damages instead of ordering a new trial pursuant to an agreement between the plaintiff and McKesson. Third, the court lowered the Court of Appeals' award of punitive damages because the award of $2 million violated the due process clause constraints on state awards of punitive damages. State Farm Mut. Auto Ins. Co. v. Campbell 538 U.S. 408 (2003). The court weighed the 1) degree of reprehensibility of McKesson's misconduct, 2) disparity between the new compensatory award of $1,905,000 and $2 million in damages, and 3) penalties in comparable cases. (1) While McKesson management's failure to correct plaintiff's abuse and mistreatment shows conscious disregard for her rights and safety and calls for punitive damages, there was no evidence of corporate purpose to injure the plaintiff or institutional culpability for her supervisor’s abuse. In addition, the court found that McKesson managing agents had limited knowledge of plaintiff's mistreatment due to her medical condition, which mitigates their conscious disregard for her injuries. As such, there was limited reprehensible conduct. The court held that (1) limited reprehensibility, (2) $1,905,000 in actual damages and (3) the size of comparable awards called for a penalty ceiling of $1,905,000—a one-to-one ratio with compensatory damages—instead of $2 million. The court ordered a modification of the Court of Appeals' punitive award to this amount. Concurrence (C.J. George, JJ. Baxter, Chin, and Corrigan) Concurrence and dissent (J. Werdegar): While the dissent agreed with the majority's first two rulings and its finding that the $15 million in punitive damages was excessive, it concluded that the majority did not recognize the full extent of the McKesson's reprehensibility. First, it was that the court's responsibility to review McKesson's reprehensibility de novo. Second, if they did, they should have found that McKesson management's rigid application of its absence policy to penalize and eventually terminate an employee who they knew to be absent due to illness was reprehensible. The dissent did not propose an amount of punitive damages, but recommended that the ceiling on penalty damages imposed by the due process clause be higher. Annotation by Jacques Ntonme Tags: compensatory, damages, discharge, discrimination, failure to accommodate, FEHA, harassment, medical condition, noneconomic, punitive, termination, tort, wrongful |
