United States Court of Appeals
                             FOR THE EIGHTH CIRCUIT
       ___________

       No. 99-2853
       ___________

Sheri Sawyer Madison,                    *
                                         *
             Appellee,                   *
                                         *
  v.                                     *
                                         *
IBP, Inc.,                               *
                                         *
             Appellant.                  *
                                         *
       ___________
                                              Appeals from the United States
       No. 99-2859                            District Court for the
       ___________                            Southern District of Iowa.

Sheri Sawyer Madison,                 *
                                      *
          Plaintiff-Appellant,        *
                                      *
United States of America,             *
                                      *
          Intervenor Below-Appellee, *
                                      *
   v.                                 *
                                      *
IBP, Inc.                             *
                                      *
          Defendant-Appellee.         *
                                 ___________

                              Submitted: December 14, 2000

                                  Filed: June 25, 2001 (corrected 7/2/01)
                                     ___________

Before McMILLIAN and MURPHY, Circuit Judges, and BOGUE,1 District Judge.
                          ___________

MURPHY, Circuit Judge.

       Sheri Sawyer Madison, a Caucasian women married to an African American
man, brought this case against IBP, Inc. (IBP) for sex and race discrimination and
harassment, retaliation, and constructive demotion, under Title VII of the Civil Rights
Act of 1964, 42 U.S.C. § 2000e, et. seq.; 42 U.S.C. § 1981; and the Iowa Civil Rights
Act (ICRA), Iowa Code § 216. Her claims grow out of her employment at IBP's
meatpacking plant in Perry, Iowa.

       After a four week trial, the jury returned a verdict in favor of Madison, awarding
her backpay, benefits, and compensatory and punitive damages. The district court
applied 42 U.S.C. § 1981a(b)(3) to reduce the damage award, and both Madison and
IBP filed post judgment motions. The district court denied Madison's motions for
restoration of her damage award, front pay, and other equitable relief; it granted her
motions for reallocation of damages, attorney fees, costs, and interest. The court
denied IBP's motions for judgment as a matter of law, to alter or amend the judgment,
and for a new trial. It then ordered the entry of an amended judgment against IBP.

       Both parties appeal. IBP does not contend that Madison failed to present
sufficient evidence of racial and sexual harassment, discrimination, retaliation,
constructive demotion, or vicarious liability, but it contests the amount of emotional
distress damages, the award of punitive damages, the admission of evidence of
discrimination and harassment of other employees, the jury instructions on the period
for which Madison could recover damages, and the way in which the district court
applied § 1981a(b)(3). On her cross appeal, Madison challenges the court's reduction


      1
       The Honorable Andrew W. Bogue, United States District Judge for the District
of South Dakota, sitting by designation.
                                         -2-
of the amount awarded by the jury and the constitutionality of § 1981a(b)(3). The
United States intervened in the district court to uphold the statute and does so again in
this court. We affirm the award of backpay, benefits, and compensatory damages, but
we vacate the award of punitive damages and remand.

                                           I.

        IBP, the world's largest producer of beef and pork products, opened a hog
processing plant in Perry, Iowa in 1989 and hired Sheri Sawyer Madison as a
meatcutter. The Perry plant is divided into three sections: the kill floor, where hogs
are killed; the cut floor, where workers split the hog carcasses; and the converting
floor, where workers trim the meat and bones from the carcasses. The sections are
organized into numerous production lines, each of which is responsible for a different
facet of hog processing. The lines are composed of line workers, utilities, and trainers.
Utilities and trainers must be familiar with all aspects of the line jobs since utilities
substitute for absent workers and trainers teach new workers how to perform various
line functions. A utility position is usually the first step towards promotion to such
management support jobs as trainer. The lines are managed by front line supervisors
and general supervisors. A training coordinator supervises the trainers. Supervisors
are managed by plant superintendents, who are responsible for all production functions,
and by the plant manager, who is the highest level manager in the plant. The Perry
plant also employs a personnel director who is responsible for addressing employee
grievances, conflicts, and disciplinary matters. The authority to terminate employees
is vested in the plant manager and the personnel director.

       Madison went to work in 1989 as a meatcutter on the cut floor's jowl line, where
her responsibilities included trimming meat from the neck and jowls of hogs. At the
time she started, she was dating James Madison, an African American man who was
also employed at the Perry plant. The couple married in 1996 and have two children,
James Jr. and Whitney. The uncontroverted evidence of her coworkers and supervisors
indicates that Madison had excellent knife skills, produced a quality meat product, and
was a reliable worker.
                                          -3-
       Madison presented a great deal of evidence at trial to show that she was
subjected to a continuing pattern of racial and sexual harassment during her
employment and that supervisors and managers failed to take action in response to her
complaints. There was also evidence that supervisors often witnessed acts of
harassment towards Madison and that some of them participated in these acts.
Madison also introduced evidence from which the jury could find that in making
promotion decisions IBP had discriminated against her because of her gender and
because she was involved with an African American man and had biracial children. In
addition, she produced evidence that she was retaliated against and was forced to take
more than one constructive demotion in order to escape discrimination and harassment.

        From the evidence the jury could and did find that IBP maintained at the Perry
plant a hostile work environment for women and for workers in interrracial
relationships and that Madison's civil rights were regularly violated up to, and even
after, the time she filed this action in 1996. There was evidence that Madison was
physically harassed on many occasions -- that other workers grabbed her buttocks,
rubbed up against her, and picked her up and carried her around. Line workers
frequently made vulgar remarks about women in her presence and were almost never
disciplined for them, even though many of the remarks were made in front of
supervisors. General supervisor Larry Sippel referred to female employees as "whores"
and "dykes" and stated that "women don't belong in packinghouses." Coworker Bill
Teeples questioned why she was "with a fucking nigger" and said that "niggers and
whites should stay with their own." Fellow line worker Gary Laird made racist
comments about Madison's relationship and her two children. Gary asked Madison
what she was "doing with a fucking nigger having fucking nigger babies," and told her
that she had "ruined herself" by having children with an African American man. Gary's
brother Gordy was a general supervisor, and Gary often made these racial comments
in the presence of Gordy and general supervisor Sippel. Neither supervisor intervened
in any way to stop the verbal harassment, even when Gary's comments caused Madison
to leave the line crying. Gary continued to harass Madison and her family whenever
he saw them until as late as 1998.

                                         -4-
        The jury could and did find that the promotion system was controlled by biased
decisionmakers who discriminated against Madison because she was a woman and
because she was involved in an interracial relationship. Although supervisors do not
directly make promotion decisions, most decisions are based on their recommendations.
There was evidence that many of Madison's supervisors had negative views about the
ability of women to work on the line and that they interfered with her attempts to learn
different jobs in order to improve her chances for promotion. General supervisor Larry
Sippel told Madison that women "can't do physical jobs," and another general
supervisor, Gordy Laird, told Madison that she could not learn to skin hams because
"that's a man's job." Madison nevertheless learned how to skin hams and testified at
trial that this job was one of her favorites. When Madison asked to switch assignments
to learn shank boning, supervisors John McNamara and Eugene Jackson told her that
shank boning was a "man's job" and that women were not capable of doing it. They
only permitted her to switch jobs if she were certified by a trainer. Certification was
not typically required of male workers, and she experienced a substantial delay in
receiving a pay increase because she was required to go through a certification process.

        Line workers can advance at IBP to utility, trainer, and higher management jobs
by applying for open positions. After gaining expertise on the line, Madison expressed
interest in being promoted. She applied for, and was denied, at least nine different
promotions by December 1993. She was often passed over in favor of male employees
with less job knowledge and seniority. In November 1993, Madison applied for a
utility position which was eventually awarded to a male coworker. Supervisor
McNamara approved the appointment of the male employee without investigating the
personnel files of both candidates, proceeding instead on the basis of recommendations
by Jackson and other supervisors. Madison was told that her coworker received the
job because he had better knife skills, more seniority, a better attendance record, and
greater job knowledge. She subsequently filed a sex discrimination grievance with the
union. When management reviewed both personnel files in response to the grievance,
it discovered that the male employee actually had a significant discipline and absentee
record. The manager who resolved the grievance found that Madison was qualified for
the job and recommended that she receive the next vacant trainer position.
                                          -5-
       In December 1993, Madison applied for and received the next open trainer
position and became the plant's first female trainer on the cut floor. Eugene Jackson
was her supervisor on this job. Jackson, an African American man, told her that he did
not believe "the races should mix" and that she should not expect to receive favorable
treatment from him because she was dating an African American. Jackson regularly
assigned Madison to less desirable jobs on the line and refused to let her perform her
trainer duties. Madison reported Jackson's actions to Training Coordinator Mike Miller,
to Assistant Personnel Director Sue Menhusen, and to Personnel Director Alberto
Olguin. Olguin testified at trial that Jody Schick, Madison's line supervisor, had told
him that he had heard that Jackson did not like Madison because of her interracial
relationship. Jackson denied the truth of Schick's report, and no disciplinary action was
taken against him and management did not retain records to reflect any investigation
by Olguin.

       In her work as a trainer, Madison was physically and verbally harassed by line
workers on a daily basis, often in the presence of floor supervisors Jackson and Schick.
Line workers repeatedly referred to Madison as "bitch" and "whore" and asked her to
perform sexual acts on them. Some physically grabbed her, shoved her, and rubbed
their bellies and genitals up against her. Despite Madison's repeated complaints to line
supervisors and her requests for their assistance, they did nothing to stop the abuse.

       Madison complained to Training Coordinator Mike Miller about the harassment
and the lack of response from her supervisors. Miller spoke to the line workers about
their conduct, but he did not discipline any of them or see that references to her
complaints were recorded in their personnel files. Miller later expressed his view to
general supervisor John McNamara that Madison had willingly engaged in horseplay
and "grab ass" with the line workers. Miller acknowledged at trial that he himself had
never seen her do anything of the sort, but that line worker Lisa Renmark had said she
did. Miller admitted that he never questioned Madison about Renmark's remarks, nor
did he ever investigate whether Madison had actually engaged in such horseplay.
When floor supervisors Jackson and Schick learned that Madison had complained to

                                          -6-
Miller, they became angry and threatened that they could "make her life miserable" if
she made further reports.

       Madison continued to experience harassment and to report it without any
responsive action by supervisors or managers. In February 1994, Madison informed
the general supervisor that a line worker had shoved her, screamed an obscenity at her,
and refused to return to his work station. The floor supervisor did nothing in response
other than to tell her that she needed to "take care of [herself]" and that dealing with
these incidents was just "part of being a trainer." Later that year Madison reported to
Training Coordinator Mike Miller that three male line workers were repeatedly
touching her in an offensive way and that her line supervisors had seen another worker
grab her buttocks on numerous occasions but had done nothing to stop it or to
discipline him. Miller took no action in response to these complaints, but Jackson
made Madison perform utility tasks instead of her trainer duties when he learned she
had complained.

       Madison went to Personnel Director Alberto Olguin, the person with overall
responsibility in the IBP plant for investigating employee complaints, and reported that
she was being harassed and discriminated against because of her sex and her interracial
relationship. She requested a transfer to the day shift. Although Olguin and Training
Coordinator Miller were both aware that Madison was seeking the transfer because she
was being harassed in her current job, the only investigation they conducted was to ask
Jackson, one of those accused, whether Madison had been harassed or discriminated
against and whether she should be transferred. Jackson denied that there were any such
problems but said that Madison should be allowed to transfer. Management did no
further investigation of Madison's harassment complaints.

      Madison's transfer request was approved, and she was assigned to work on the
day shift under supervisor Gordy Laird. Although Madison believed that she would be
performing trainer duties on this shift, Laird informed her that he did not want her
working as a trainer. He instead assigned her to utility duties on the cut line, where she
was verbally harassed on a daily basis, often in front of supervisors. When Madison
                                          -7-
complained about the constant abuse to the general supervisor, he told her that if "you
want to be a supervisor, this is what you've got to put up with sometimes." He also
suggested that she might be "intimidating" to Asian male workers, that she should defer
to them in training, and that she should keep in mind that women walk behind men in
Asian cultures. Assistant Personnel Director Sue Menhusen told Madison to act
"respectful" to Hispanic males because they might not have had much experience in
receiving instructions from a woman.

       Madison continued to bid for open management support jobs, but she was passed
over in favor of male employees, including one who had been fired three years earlier
for excessive absenteeism. In December 1994, Madison asked to downbid to a lower
paying utility position on the cut floor, citing constant harassment and lack of support
from her supervisors. Her general supervisor told her that he would never promote her
again if she relinquished her trainer job. Although Madison informed Personnel
Director Olguin and Plant Manager Larry Moser that she was downbidding because of
sexual harassment, there was no evidence that IBP investigated her allegations.

       Evidence showed that coworker harassment continued after Madison
constructively demoted to the cut floor, as did management's failure to stop it. From
December 1994 until at least March 1996, line workers regularly threw hog clots at her,
grabbed her buttocks and breasts, rubbed up against her, and called her derogatory
names. She complained directly to the workers and also to her supervisors, who did
nothing to intervene. Line worker Marcelino Alarcon frequently picked her up against
her will and carried her around the work area. When Madison asked her supervisors
to "get him away from me," they only told Alarcon to stop the "horseplay" and took no
other action. On another occasion, her supervisor just laughed when Madison asked
him to stop Alarcon's physical harassment. Alarcon was never disciplined for his
conduct. General supervisor Gordy Laird told Madison that if she continued to
complain about harassment by line workers, he would discipline her for having started
it. He also told her that he would write up a disciplinary report against her for every
complaint she made against a male worker and that this would eventually result in her
termination. Madison complained in 1996 to Plant Manager Moser that Alarcon was
                                          -8-
picking her up against her will and carrying her around. Moser responded that the
world was not perfect and that she would have to "deal" with such behavior if she
wanted to be a manager.

        In addition to being sexually harassed, Madison also experienced harassment
based on race after she downbid in 1994 and began working again with Gary Laird.
Gary continued to harass Madison about her children. He asked how she could "take
them fucking niggers to the grocery store" and stated that he would "be embarrassed
toting them fucking niggers around." He called her children derogatory names and
suggested to other coworkers that they could care for Madison's children by "lick[ing]
their lips and stick[ing] them on the wall" and "let[ting] them jump on the bed and
put[ting] velcro on the ceiling." He talked this way to Madison, and her family and
friends told her about similar comments that he made to them.

        Madison and two coworkers complained about Gary's conduct to her supervisors
and to Personnel Director Olguin. No action was taken to discipline Gary or to stop
his behavior. According to IBP, Gordy Laird told Gary in 1995 to stay away from
Madison and her family, but no reference to such an instruction was placed in Gary's
personnel file until after his deposition was taken by Madison's counsel in 1998.
Management also never followed up to determine if Gary had in fact ceased the
harassment. In his 1998 deposition, Gary admitted that he had continued to make
racist remarks to Madison and her family right up until the date of the deposition. In
addition to calling her children derogatory names, he also expressed his belief that
"niggers are only good for welfare and prison." Madison often left the line in tears as
a result of Gary's behavior.

      In January 1995, Madison filed a civil rights complaint with the Iowa Civil Right
Commission (ICRC), alleging sexual discrimination and harassment. She amended the
complaint in April 1996 to include racial discrimination and harassment. The ICRC
hosted a mediation session in an attempt to resolve Madison's complaint. High ranking
members of IBP management, including plant Personnel Director Olguin and corporate
EEO Coordinator Bernielle Ott, were present at the meeting. Although Madison
                                          -9-
described numerous incidents of discrimination and harassment to which she had been
subjected at IBP, the managers who were present did not undertake an investigation of
her allegations. There was evidence that even after Madison filed her ICRC complaint,
she was repeatedly and unfairly disciplined by her supervisors.

        Meanwhile, Madison continued to bid unsuccessfully for vacant supervisory
positions. There was evidence that the posts were usually awarded to males with less
seniority, less experience, and poor personnel records. The various reasons
management gave for not promoting her were that she had a bad attitude, that she
complained too much, and that she was not bilingual. After Madison complained in
June 1995 about being passed over for a trainer position in favor of a male worker with
less seniority and job knowledge, Plant Manager Moser told her that enduring racial
and sexual harassment was part of being a manager. After her ICRC mediation session,
Madison bid unsuccessfully for four more supervisory and management positions. One
of these jobs was given to a male utility worker who had previously been on probation
for attendance problems. She eventually stopped applying for promotions in July 1997,
by which time she had unsuccessfully applied for at least 23 promotions. At the time
of trial, Madison held the position of box room forklift operator. She had
constructively demoted herself to this position in order to escape from the production
line environment and because Training Coordinator Mike Miller had not allowed her
to return to the night shift, despite his earlier assurance that she could.

       Madison was subjected to unwanted physical and verbal harassment at least up
until the time she filed this case in 1996. She was regularly grabbed, fondled, and
called derogatory names, and her subsequent complaints to management were not
investigated. In 1996 Madison went with two female coworkers and a union steward
to report to Personnel Director Olguin that three male workers were harassing her and
other women. Madison told Olguin that the men were calling the women vulgar names,
grabbing them, molding hog fat in the shape of male sex organs and sending the pieces
down the line, and starting rumors that several of the women were romantically
involved with supervisor Godfrey. Olguin gave the three men verbal warnings for
starting rumors about Godfrey. In 1997, Alarcon forcibly thrust Madison over a vat
                                         -10-
and simulated an act of sodomy on her. Madison reported this assault to her
supervisors, but they did nothing in response.

        Madison presented evidence that the discrimination and harassment she faced
at work resulted in severe emotional distress. She lost weight, broke out in hives,
suffered from frequent headaches, and had trouble sleeping. Her relationship with her
husband suffered, and the couple separated several times. She testified that the
harassment and taunting made her feel hurt, humiliated, and degraded and that she often
left the line in tears. Keith Ratliffe, a pastor and relative who had counseled her on at
least four occasions, described Madison as depressed and emotionally drained.

      IBP introduced evidence that it had a corporate policy prohibiting racial and
sexual discrimination and harassment. The policy was explained to new employees
during their orientation to the company. Each year the company EEO coordinator
hosted a two hour training session for plant managers on the "Legal Aspects of
Supervision." This session dealt with such issues as the corporate discrimination policy
and how to address harassment complaints. IBP also maintained an affirmative action
plan.

        There was evidence that despite the existence of this policy, IBP maintained
promotion and disciplinary procedures which discriminated against women and which
failed to protect victims from harassment. Managers were instructed to send employees
who complained of sexual harassment to the human resources department for
counseling. Personnel Director Olguin stated that pursuant to IBP policy, he always
informed an alleged harasser of the identity of the complainant, even though the
company was aware that this could lead to retaliation. Labor Relations Manager
Lonnie Jepson testified that he judged complaints by women workers about offensive
conduct or language by whether the complainant had responded to the situation in the
manner in which his wife would have. According to Jepson, women should "just walk
away" if they are assaulted by a male coworker. Managers consistently told
complainants to "just stay away" from their harassers or to "quit playing around."

                                          -11-
Promotion decisions were made on the basis of recommendations by many individuals
who, the evidence showed, were biased against women and racial minorities.

        From approximately February 1994 until the time of Madison's trial in 1999,
employees who complained of unlawful discriminatory treatment or harassment were
asked to sign a form that resulted in a "counseling for sexual harassment" notation
being placed in the disciplinary part of their personnel file.2 Disciplinary reports are
a factor in promotion decisions. The evidence showed that investigative reports about
discrimination or harassment complaints were filed under either the complainant's name
or the year, not under the name of the accused perpetrator. The company did not
therefore have a readily available record of employees who had been accused of
harassing other workers. The record also indicates that on at least fourteen occasions,
a worker accused of offensive conduct was "counseled" for harassment, but nothing at
all was recorded in his file.

       Several other female employees testified that they too had been physically and
verbally harassed by male coworkers and that supervisors had failed to investigate their
complaints. Several women stated at trial that after they reported incidents of sexual
harassment, they were unfairly disciplined and sometimes terminated. For example,
Patricia Flannery complained in December 1996 that a coworker was harassing her.
Ten days after she complained, Flannery was written up for insubordination by
Personnel Director Olguin. She was fired three days later. Her supervisor stated on
her termination report that there were "[t]oo much [sic] problems out of this employee."




      2
       Rex Hofer, Personnel Director at the Perry plant from April 1992 to February
1994, testified that he did not ask complainants to sign the sexual harassment form or
put counseling notations in their files because he believed that such procedures
discouraged employees from submitting complaints. IBP reinstated its previous
procedure after Hofer left his position.
                                         -12-
       Several African American employees testified about racist remarks made by
coworkers and supervisors. The men's locker room contained graffiti, including gang
signs, Ku Klux Klan signs, swastikas, and racially derogatory epithets. Madison
worked for a time in the laundry room adjoining the locker room, and she complained
in 1996 to a supervisor about the racially offensive graffiti there. The supervisor took
no action to remove it.

                                          II.

      Madison filed a sex discrimination charge against IBP with the Iowa Civil Rights
Commission and the Equal Employment Opportunity Commission (EEOC) on January
13, 1995. She amended her charge on April 3, 1996, to include race discrimination.

       On September 18, 1996, after receiving a right to sue letter from the EEOC,
Madison filed this action. She claimed that IBP had maintained a hostile work
environment in which she had been harassed because of her gender and her association
with her husband and children. She also alleged that she had been discriminated
against on the basis of sex and race, that she had been denied promotions to positions
for which she was qualified, and that IBP had retaliated against her for complaining
about discrimination and harassment by unfairly disciplining and refusing to promote
her. Finally, Madison claimed that IBP had deliberately made her working conditions
so intolerable that she had been forced to take constructive demotions in the attempt
to escape the discrimination and harassment.

       After a four week trial, the jury returned a verdict in February 1999 in favor of
Madison. The jury awarded her a total of $76,667 in backpay and benefits,3 $266,750
for past emotional distress,4 and $2,069,000 in punitive damages.5 The jury did not

      3
      The backpay and benefits award included $50,688 for sex discrimination,
$25,000 for retaliation, and $979 for constructive demotion.
      4
       The compensatory damage award for past emotional distress included $110,000
for sex discrimination and harassment, $155,000 for race discrimination and
                                    -13-
award any damages for future emotional distress or for past emotional distress for
retaliation. It also did not award backpay and benefits for harassment or for race
discrimination.

       Before issuing an order for entry of judgment, the court received briefing and
argument from the parties on the applicability of the Title VII damages limitation. That
provision, 42 U.S.C. § 1981a(b)(3)(D), sets $300,000 as the maximum amount of Title
VII damages that can be awarded against a defendant of IBP's size. The district court
decided to apply the limitation provision to the jury awards for sex discrimination and
harassment, reducing those damages from a total of $1,074,000 to $300,000.6 The
court rejected IBP's contention that the Title VII damages cap should also be applied
to Madison's retaliation and constructive demotion claims. The court concluded that
Madison had presented sufficient evidence to establish liability for retaliation and
constructive demotion under either § 1981 or Title VII and that it therefore did not need
to apply the latter statute's limitation provision to these awards. The court then ordered
entry of judgment in Madison's favor in the amount of $1,638,417.7

      Both sides filed timely post judgment motions. Madison asked the court to
amend the judgment by restoring the full amount of damages awarded her by the jury,
arguing that the Title VII damages limitation is unconstitutional. In the alternative, she



harassment, and $1750 for constructive demotion.
      5
       The punitive damage award included $964,000 for sex discrimination and
harassment, $930,000 for race discrimination and harassment, $150,000 for retaliation,
and $25,000 for constructive demotion.
      6
       42 U.S.C. § 1981a(b)(2) specifically excludes backpay and benefits from
damages subject to the statutory limitation, and the court did not include them in its
reduction calculation.
      7
       This total included $300,00 reduced damages on Madison's sex claims, $76,667
in backpay and benefits on all claims, and $1,261,750 in compensatory and punitive
damages on her race claims (including retaliation and constructive demotion).
                                          -14-
asked the court to apply the Title VII cap separately to each individual act of
discrimination and retaliation or to allocate the compensatory damages for sex
discrimination and harassment to her claims under ICRA. She also asked the court for
interest, attorney fees, front pay and additional equitable relief.8 IBP moved for
judgment as a matter of law, to alter and amend the judgment, and for a new trial based
on alleged errors in evidentiary rulings, instructions to the jury, and damage issues. The
United States successfully moved to intervene on the issue of the constitutionality of
the damages limitation provision in Title VII.

       After hearings on the post judgment motions, the court denied almost all of the
motions, but it did grant Madison's request to allocate the $110,000 compensatory
damage award for sexual discrimination and harassment to her state law claims, thereby
avoiding the Title VII damages limitation. The court also awarded Madison attorney
fees, costs, and interest. An amended judgment was then entered against IBP in the
amount of $1,748,417,9 and these appeals followed.

                                           III.

      The parties raise many issues on appeal. IBP contends that the court erred in
admitting evidence of discrimination and harassment involving other employees, in


      8
        The equitable relief Madison sought included an order requiring IBP to make
substantial changes in its training program, including 1) annual distribution of a court
approved written policy against sexual harassment, discrimination, and retaliation for
at least ten years; 2) at least 100 hours of court approved, equal opportunity training
for personnel directors in each plant for ten years, and 40 hours for the following ten
years; and 3) 40 hours annual training for Grade 10 managers for ten years. She also
asked for the establishment of a first response team of mentors and an equal access
committee, a permanent injunction ordering IBP to cease its discriminatory practices,
and retention of federal jurisdiction for ten years to monitor IBP's compliance.
      9
       Because of the reallocation to Madison's state law claims of $110,000 in
compensatory damages for sex discrimination and harassment, the amended judgment
was larger by that amount than the original.
                                          -15-
submitting punitive damages to the jury, in instructing the jury on the period for which
Madison could recover damages and on the standard for punitive damages, and in its
application of the Title VII damages limitation. IBP also asserts that the emotional
distress damages and punitive damages were excessive. It asks that the judgment be
vacated, the punitive damage claims dismissed, and a new trial granted. In the
alternative, IBP asks that damages be reduced.

       Madison argues in her cross appeal that the Title VII limitation on damages is
unconstitutional and asks that the punitive damages be restored to the amount awarded
by the jury. She argues in the alternative that if the damages limitation is constitutional,
it should be applied separately to every act of discrimination and retaliation that
occurred after she filed her administrative complaint. The United States and IBP argue
in opposition that the damages limitation provision is constitutional and that it applies
to the total amount of Title VII damages.

                                            A.

       Although IBP asserted numerous evidentiary errors in its post judgment motion
in the district court, it challenges only one type of evidentiary ruling on appeal. IBP
contends that the trial court erred in admitting evidence of harassment and
discrimination directed at other employees, arguing that it was irrelevant, confusing,
and prejudicial. We review questions of admission of evidence for abuse of discretion.
See Easley v. American Greetings Corp., 

, 976 (8th Cir. 1998). Trial
courts are afforded "wide discretion in ruling on the admissibility of proffered
evidence." 

whether a hostile work environment existed, evidence concerning
"all circumstances" of the complainant's employment must be considered. Harris v.
Forklift Sys., Inc., 

, 22-24 (1993). "[E]vidence of a hostile environment
must not be compartmentalized, but must instead be based on the totality of the
circumstances of the entire hostile work environment." Delph v. Dr. Pepper Bottling

                                           -16-
Co. of Paragould, Inc., 

, 355 (8th Cir. 1997) (citations omitted). Here,
Madison introduced evidence that other women and African American employees were
also discriminated against and harassed. This evidence was relevant as to whether IBP
maintained a hostile work environment, whether it intended to harass and discriminate
against women and African Americans, and whether IBP's justifications for its refusal
to discipline Madison's harassers or to promote her were pretextual. See Jackson v.
Quanex Corp., 

, 661 (6th Cir. 1999) (racist conduct directed at other
employees probative since "[w]hat may appear to be a legitimate justification for a
single incident of alleged harassment may look pretextual when viewed in the context
of several other related incidents") (citations omitted). Moreover, IBP made such
evidence relevant by claiming that it maintained effective corporate policies prohibiting
racial and sexual harassment. Madison was entitled to present evidence showing that
IBP had consistently failed to prevent illegal conduct and to correct it promptly. See
Burlington Indus., Inc. v. Ellerth, 

, 765 (1998). This evidence supported
Madison's contention that IBP failed to discipline harassers and to ensure that the civil
rights of its employees were not violated.

       The evidence relating to other employees was not extensive compared to the
amount of evidence about conduct directed at Madison herself, and the court correctly
instructed the jury on the limited purposes for which it was offered.10 The instructions

      10
           The court instructed the jury that:

                [i]n determining whether discriminatory or harassing conduct
                was sufficiently severe or pervasive enough to create a hostile
                work environment for Madison, you may consider conduct
                towards her co-workers, so long as she was aware of that conduct
                and her own well-being was affected by that conduct. You may
                consider harassment that Madison was unaware of, in determining
                intent, and whether the harassment was a part of the pattern and
                practice of harassment against her.

This is an accurate statement of the law. See Carter v. Chrysler Corp., Inc., 

, 701 fn. 7 (8th Cir. 1999) (evidence of racist graffiti which plaintiff knew about
                                            -17-
sufficiently advised the jury that Madison could only recover for damages she herself
suffered. After carefully examining the record, we conclude that the evidence was
relevant and neither prejudicial nor confusing. The district court did not abuse its
discretion in admitting the limited evidence of harassment or discrimination involving
other employees.

                                           B.

      IBP attacks the punitive damages awarded. It contends first that the question
should not have been submitted to the jury because the evidence did not meet the
standard of Kolstad v. American Dental Association, 

(1999) (decided
after Madison's trial, but before judgment). IBP also maintains that the jury was
incorrectly instructed on the governing standard and on the time period for recovery
and that the award was excessive. IBP argues that the punitive damages claim should
be dismissed, a new trial provided, or the award reduced.

                                           1.

       The Supreme Court explained in Kolstad that punitive damages may be
recovered for employment discrimination if "the employer has engaged in intentional
discrimination and has done so with malice or with reckless indifference to the federally
protected rights of an aggrieved individual." 

(citations
omitted). In order for punitive damages to be assessed against an employer, the
plaintiff must show that "an employee serving in a managerial capacity committed the
wrong while acting in the scope of employment." 

(citations omitted). An
employer may escape vicarious liability for punitive damages, however, if the


"relevant [to] whether a hostile environment existed and whether [plaintiff] reasonably
perceived other conduct to be hostile or abusive"). The court also cautioned the jury
that even though it had "heard evidence relating to harassment and/or discrimination of
other employees," Madison "cannot recover, and does not claim, actual damages for
anyone other than herself."
                                          -18-
discriminatory actions of managerial agents were contrary to the employer's "good faith
efforts to comply with Title VII." 

(citations omitted). IBP contends that
under this standard, punitive damages should not have been submitted to the jury
because IBP had made good faith efforts to comply with anti discrimination laws and
because no employees with managerial capacity acted with malice or reckless
indifference to Madison's federally protected rights. Whether there was sufficient
evidence to submit damages to the jury is reviewed de novo. See Henderson v.
Simmons Foods, Inc., 

, 618 (8th Cir. 2000).

        Kolstad incorporated existing law into its discussion of the standard for
submitting punitive damages in employment discrimination cases, citing language from
Title VII and Smith v. Wade, 

(1983) in its definition of "malice" and
"reckless indifference." 

The Supreme Court had previously ruled that
involvement of managers in discriminatory conduct could make employers liable, see
Faragher v. City of Boca Raton, 

(1998) and Burlington Indus., Inc. v.
Ellerth, 

(1998), and that an affirmative defense was available to
employers who exercised reasonable care to prevent violations of the law and to correct
them promptly. This affirmative defense was only available, however, where no
tangible employment action had been taken and the employee had unreasonably failed
to take advantage of any preventive or corrective opportunities. See 

, 

. Kolstad built on these concepts in clarifying that
liability for punitive damages could be avoided if the employer established that its
managers' actions were contrary to its "good-faith efforts to comply with Title VII."

(citations omitted). Kolstad also clarified that a plaintiff
need not show "egregious misconduct" on the part of an employer in order to submit
punitive damages. 

        Madison presented a great deal of evidence from which the jury could find that
IBP employees in a managerial capacity acted with malice or reckless disregard to her
civil rights in failing to protect her from illegal conduct or to promote her. The
evidence indicated that supervisors and managers were among those who harassed and

                                          -19-
abused her. High level employees such as Personnel Director Alberto Olguin and Plant
Manager Larry Moser, both of whom had authority to terminate employees, ignored her
complaints about illegal harassment and discrimination, failed to investigate whether
her civil rights were being violated, and did not document illegal behavior or discipline
perpetrators. The company's EEO Coordinator, Bernielle Ott, was present at a
mediation session at which Madison told Ott and other IBP representatives that she was
being physically and verbally harassed almost daily and that she had been repeatedly
denied promotions because of her sex. Neither Ott nor any other company
representative took action to investigate these allegations or to ensure that Madison's
civil rights were not being violated.

        IBP contends that it should escape liability for punitive damages because it made
good faith efforts to comply with federal employment laws. The company presented
evidence at trial that it had a corporate policy prohibiting racial and sexual
discrimination and harassment, that it maintained an affirmative action plan, and that
it put on an annual two hour training session for plant managers on the "Legal Aspects
of Supervision." There was also evidence, however, that the written corporate policies
were not carried out at the Perry plant and that the company did not make good faith
efforts to comply with federal civil rights laws.

       Employers have an "affirmative obligation" to prevent civil rights violations in
the workplace. 

. There was evidence that IBP did not have
effective procedures in place to encourage employees to come forward with
employment complaints or to protect them from retaliation. Madison and other
employees complained to management on many occasions that their civil rights were
being violated, but management did not take reasonable care to investigate or stop such
behavior. There was evidence that Personnel Director Olguin, the manager charged
with addressing employee grievances, conflicts, and disciplinary matters, did not
investigate many complaints of harassment and discrimination. On at least fourteen
occasions, an employee was counseled for engaging in harassing conduct, but nothing
was recorded in his personnel file. Training Coordinator Mike Miller ignored

                                          -20-
Madison's reports that male line workers were grabbing and fondling her, did nothing
to discipline her harassers, and relied on an unsubstantiated report from one line worker
that Madison had willingly engaged in horseplay on the line. When Madison informed
Assistant Personnel Director Sue Menhusen that she was being harassed, Menhusen's
response was that many of the Hispanic males working at the plant "haven't been in the
country for very long" and "don't take direction very well from females." There was
also evidence that IBP maintained policies which actually served to punish victims and
discourage them from reporting illegal behavior, such as telling an alleged harasser the
identity of a complainant and putting "counseling for sexual harassment" notations in
the personnel files of any complaining employee.

      We conclude that there was sufficient evidence under Kolstad to submit the issue
of punitive damages to the jury.

                                             2.

        IBP argues that even if there was sufficient evidence to submit punitive damages,
it is entitled to a new trial because the district court erred in instructing the jury on the
time period11 for which Madison could recover punitive damages on her Title VII and
§ 1981 claims. Although Madison pled violations of both state and federal
discrimination laws, she could only recover punitive damages under federal law
because Iowa does not provide for punitive damages in employment discrimination
cases. See City of Hampton v. Iowa Civil Rights Comm'n, 

, 537
(Iowa 1996).




       11
         The district court and the parties refer to the period for which Madison was
entitled to recover damages as the statute of limitations period, but it may be more
precisely termed the damages recovery period. The issue here is the time for which
Madison may collect damages, rather than the deadline by which she had to file her
lawsuit.
                                            -21-
       IBP maintains that the district court erred in instructing the jury that "[p]unitive
damages are limited to conduct occurring after January 13, 1993," or two years before
she filed her administrative complaint. It contends that Madison can recover under §
1981 only for race based violations after September 18, 1994 (two years before she
filed her federal lawsuit) and under Title VII only for sex based violations committed
after March 19, 1994 (300 days before she filed her administrative charge). Madison
asserts that she was entitled to a two year period for her sex claims under Title VII and
a four year period for her race, retaliation, and constructive demotion claims under §
1981. She acknowledges, however, that she agreed to a uniform two year limitations
period at trial in order to simplify issues for the jury, and she does not now challenge
the court's use of that date. The district court's statutory interpretation is a legal
conclusion which is reviewed de novo. See United States v. Vig, 

, 447
(8th Cir. 1999).

      In the Eighth Circuit plaintiffs may only recover damages on their federal
employment discrimination claims for acts committed during the statute of limitations
period, even if there was a continuing violation. See Kline v. Kansas City Fire Dept.,

, 665 (8th Cir. 1999). This means that the damages recovery period for
federal employment discrimination claims in this circuit is the same as the period in
which a plaintiff must file her claim. Other circuits permit a plaintiff to recover under
federal law for the period of any continuing violation.12 The rationale for the Eighth
Circuit rule is that it "strikes a reasonable balance between permitting redress of an



      12
         See, e.g., Bonner v. Guccione, 

, 583-84 (2d Cir. 1999) (Title VII
plaintiff can recover for conduct that occurred outside 300 day limitation period if she
can demonstrate that she was subject to continuous policy and practice of
discrimination); Provencher v. CVS Pharmacy, Div. of Melville Corp., 

, 14
(1st Cir. 1998) (continuing violation doctrine allows plaintiff to receive damages on
otherwise time barred acts); Rush v. Scott Specialty Gases, Inc., 

, 481
(3d Cir. 1997) (employee who demonstrates continuing Title VII violation may recover
damages for entire continuing violation, and 300 day filing period will not bar
recovery).
                                           -22-
ongoing wrong and imposing liability for conduct long past." Ashley v. Boyle's Famous
Corned Beef Co., 

, 167-68 (8th Cir. 1995) (en banc).

       Because Title VII has a 300 day limitations period, the district court should have
instructed the jury that Madison could only recover damages under Title VII for illegal
acts occurring within the 300 day period prior to the filing of her administrative charge.
See Gipson v. KAS Snacktime Co., 

, 229 (8th Cir. 1996). Since Madison
filed her charge on January 13, 1995, she was entitled to recover damages under Title
VII only for acts of discrimination or harassment occurring after March 19, 1994. The
court therefore erred in instructing the jury that she could recover punitive damages
under Title VII for illegal acts occurring after January 13, 1993.

       Because § 1981 does not have its own statute of limitations, courts employ the
limitations period provided by state law for personal injury cases. See Goodman v.
Lukens Steel Co., 

, 660-62 (1987). The Iowa limitations period for
personal injury actions is two years. See Iowa Code § 614.1(2) (Supp. 1999). IBP
contends that this two year recovery period should be applied to Madison's § 1981
claims and that it should not be triggered by the date of her administrative complaint
because § 1981 does not require exhaustion. IBP says that the recovery period should
be determined from the date she filed this action, September 18, 1996. Madison argues
that the four year statute of limitations in 28 U.S.C. § 1658 controls the period for
recovery under § 1981, but she acknowledges that she agreed to no more than a two
year uniform recovery period.

        Section 1658 became law in December 1990 and provides that "a civil action
arising under an Act of Congress enacted after the date of the enactment of this section
may not be commenced later than 4 years after the cause of action accrues." Madison
contends that her civil action arises under an enactment subsequent to the passage of
this statute because the Civil Rights Act of 1991 amended § 1981 to permit lawsuits




                                          -23-
for racially discriminatory conduct subsequent to the formation of a contract.13 The
district court believed that § 1658 would apply if Madison had not "agreed to a more
restrictive statute of limitations period."

     Subsequent to the final judgment in this case, the Third Circuit considered
whether the § 1658 four year statute of limitations applies to claims under the 1991
amendments to § 1981, and it decided that § 1658 does not apply. See Zubi v. AT&T
Corp., 

(3d Cir. 2000). The Zubi court reasoned that "when Congress
amends a preexisting statute it does not create a 'new act,' and claims arising under the
statute as amended continue to arise under the preexisting statute." 

It is
"only when Congress establishes a new cause of action without reference to preexisting
law that § 1658 applies." 

The court concluded that the 1991 amendments
to § 1981 did not create a new cause of action, and that the four year statute of
limitations in § 1658 was not applicable to cases brought under § 1981. 

       We agree with the reasoning articulated in Zubi. The words used by Congress
are significant. The phrase "an Act of Congress enacted" after 1990 is not equivalent
to the phrase "an Act of Congress enacted or amended" after that year. Furthermore,
the legislative history of the Civil Rights Act of 1991 indicates that Congress intended
that the applicable state statutes of limitations for personal injury claims would continue
to apply to § 1981 claims. See H.R.Rep. No. 102-40(I), at 63 (1991), reprinted in
1991 U.S.C.C.A.N. 549, 601 (discussing proposed amendment to Title VII limitations
period). We conclude that the Civil Rights Act of 1991 was not the type of enactment
Congress intended to include in the § 1658 four year limitations period and that the


      13
        This legislation was passed in reaction to the Supreme Court's decision in
Patterson v. McLean Credit Union, 

(1989), that the "make and enforce
contracts" language in § 1981 prohibited discriminatory hiring but not subsequent
discrimination. One of the amendments added wording to clarify that the statue also
prohibited discrimination in the "performance, modification and termination of
contracts" and protected "the enjoyment of all benefits, privileges, terms and conditions
of the contractual relationship." 42 U.S.C. § 1981(b).
                                           -24-
Iowa two year statute therefore applies to Madison's § 1981 claims. Since Madison
filed her federal complaint on September 18, 1996, she was only entitled to recover
under § 1981 for illegal acts occurring after September 18, 1994. The district court
therefore erred by instructing the jury that January 13, 1993 was the cutoff date for
damages on Madison's § 1981 claims.

       Since the jury was not correctly instructed on the period for which Madison
could recover punitive damages under either Title VII or § 1981, the punitive damages
award must be vacated and remanded for a new trial. It is therefore unnecessary to
address any remaining issues raised by IBP related to punitive damages.

                                            C.

       IBP also attacks the emotional distress damages awarded. It contends that the
district court erred in instructing the jury on the time period for which Madison could
recover emotional distress damages. It also argues that the emotional distress award
was excessive and that the district court erred in its allocation of these damages.

                                            1.

      IBP contends that the district court erred in instructing the jury on the time period
for which Madison could recover emotional distress damages. Madison asserted at oral
argument that even if the court erred in instructing on the recovery period under Title
VII and § 1981, her entire compensatory damage award was recoverable under ICRA.
We review de novo the district court's legal conclusions regarding the statutes. See
United States v. Vig, 

, 447 (8th Cir. 1999).

      The jury was instructed that Madison could not "recover for any unlawful
incidents or damages prior to January 13, 1993," which was two years before the date
on which she filed her administrative charge. IBP argues that Madison cannot recover
damages under ICRA for any acts of sex based illegal behavior before July 17, 1994

                                           -25-
(180 days prior to her filing an administrative charge) or for any acts of race based
illegal behavior before October 6, 1995 (180 days prior to amendment of the
administrative charge to include race). See Iowa Code § 216.15(12) (Supp. 2000)
(discrimination charge must be filed within 180 days of alleged unlawful employment
practice).

       Madison argues that she suffered a continuing violation of her civil rights while
at IBP, and that under Iowa law she is entitled to recover damages on her ICRA claims
for the entire period her rights were violated. See Hy-Vee Food Stores, Inc. v. Iowa
Civil Rights Comm'n, 

, 530-31 (Iowa 1990). She acknowledges,
however, that she agreed to a uniform two year recovery period and cannot now
recover beyond that date.

       Madison's complaint alleged violations under both federal and state law. ICRA
and Title VII both prohibit employment discrimination and harassment on the basis of
either race or sex. See Iowa Code § 216.6(1)(a) and 42 U.S.C. § 2000e, et. seq.
Section 1981 provides that "[a]ll persons within the jurisdiction of the United States
shall have the same right in every State and Territory to make and enforce contracts,
to sue, be parties, give evidence, and to the full and equal benefit of all laws and
proceedings for the security of persons and property as is enjoyed by white citizens."
42 U.S.C. § 1981.

       The elements of liability under these statutes are the same for federal and state
claims. See Montgomery v. John Deere & Co., 

, 558 n. 3 (8th Cir. 1999)
(discrimination claims under ICRA are analyzed in same manner as their federal law
counterparts); Moschetti v. Chicago, Cent. & Pacific R.Co., 

, 709 n. 2
(8th Cir. 1997) (analysis of retaliation claims is the same under Title VII and ICRA);
Henderson v. Heartland Press, Inc., 

, 999 (N.D. Iowa 1999) (prima
facie case for actionable hostile work environment the same under both ICRA and Title
VII); Schwarz v. Northwest Iowa Comm. Coll., 

, 1338 (N.D. Iowa
1995) (test for constructive discharge); Naylor v. Georgia-Pacific Corp., 875 F.Supp.

                                         -26-
564, 573 (N.D. Iowa 1995). The jury was given one set of liability and damage
instructions for all of Madison's claims, and it was not asked to differentiate among the
statutes when awarding damages. The claims were therefore "effectively fungible," and
we conclude that Madison's damage award for emotional distress is recoverable under
ICRA. Passatino v. Johnson & Johnson Consumer Prod., Inc., 

, 509 (9th
Cir. 2000).

       Although Iowa requires that a discrimination charge be filed within 180 days, it
does not limit the period for which damages can be recovered when there has been
proof of a continuing violation. Iowa permits recovery of damages for the entire period
that a plaintiff's rights were violated. See Hy-Vee Food Stores, Inc. v. Iowa Civil
Rights Comm'n, 

(Iowa 1990). In Hy-Vee, the Iowa Supreme Court
affirmed an award of back pay for a seven year period for which the plaintiff had
shown a continuing violation, reasoning that an award for the full period was
"consistent with the ultimate goal of compensating an injured person: to place the
injured person in the position the person would have been in had there been no injury."

The Hy-Vee court also held that "the alleged discrimination must be
ongoing" to be considered a continuing violation. See 

.
See also Rorie v. United Parcel Service, Inc., 

, 761 (8th Cir. 1998) (if
plaintiff can show "an ongoing pattern or practice of discrimination rather than one
isolated instance, the alleged violation shall be deemed continuing") (citations omitted).
Evidence of a hostile work environment can constitute a continuing violation. See
Kimzey v. Wal-Mart Stores, Inc., 

, 573 (8th Cir. 1997).

       IBP contends that this court should apply the circuit limitations rule for federal
damages to Madison's ICRA claims. It argues that Hy-Vee is inconsistent with our
cases holding that a federal employment discrimination plaintiff may only recover
damages for acts which took place during the statute of limitations period, even where
there was a continuing violation. See, e.g., Ashley v. Boyle's Famous Corned Beef Co.,

, 167-68 (8th Cir. 1995) (en banc).



                                          -27-
      The Iowa Supreme Court has declared its own rule for the damages recovery
period under ICRA, however, and it has not repudiated its reasoning in Hy-Vee or
adopted the Ashley damages recovery rule, a rule unique among the federal circuits.
As the Iowa Supreme Court has explained, Iowa courts "traditionally turn to federal
law for guidance in evaluating the ICRA, [but f]ederal law . . . is not controlling."
Vivian v. Madison, 

, 873 (Iowa 1999) (citations omitted). We
conclude that ICRA should be interpreted in accordance with expressed Iowa law.

       Madison produced a great deal of evidence that she had experienced a continuing
violation of Iowa law against racial and sexual discrimination and harassment. The
record reveals an ongoing pattern and practice of illegal behavior, not just isolated
instances. Almost from the time she started work at the IBP plant in 1989, Madison
was subjected to continuous and pervasive discrimination and harassment. Beginning
in the early 1990s, supervisors told her that women did not "belong in packinghouses"
and refused to let her learn what they considered to be "men's jobs." Other supervisors
refused to intervene when a coworker told her that she had "ruined herself" by "having
fucking nigger babies." Coworkers consistently called her derogatory names, made
hurtful comments about the race of her husband and children, and offensively grabbed
and touched her. When Madison reported this conduct to management, she was
retaliated against for complaining and was eventually forced to take a constructive
demotion to escape the offensive work environment. This illegal behavior continued
up to the filing of her lawsuit. Moreover, Madison applied for at least 23 promotions
between April 1991 and July 1997, and the evidence indicated that she was denied
these positions because IBP management was biased against women and workers
involved in interracial relationships.

       We conclude that Madison proved a continued violation of her civil rights from
the time she began working at IBP in 1988 until she filed her federal lawsuit in 1996.
Under Iowa law, this would have entitled her to recover damages for the entire period
of that continuing violation. Because she agreed to a uniform limitations date at trial,
however, Madison may only recover damages for illegal acts occurring after

                                         -28-
January 13, 1993. Madison presented evidence that she experienced many serious acts
of discrimination, harassment, and retaliation, as well as constructive demotion after
that date – sufficient evidence of illegal acts during that time period to justify the
amount of compensatory damages. We conclude that the district court was not required
to limit her recovery under ICRA to a 180 day period and that it did not err in
instructing the jury that she could recover under ICRA for a two year period.

                                             2.

       IBP contends that the district court erred by granting Madison's post judgment
motion to allocate the $110,000 compensatory damage award for sexual discrimination
and harassment to her state law claims, thereby avoiding the Title VII damages
limitation provision. According to IBP, the Title VII damages cap of $300,000 should
have been applied to all of the damages awarded on Madison's sex claims. Madison
responds that the award was properly allocated. The district court generally has
discretion regarding how to allocate a damage award, but we apply de novo review to
the extent an allocation decision rests on an interpretation of a statute. See 

(8th Cir. 1999).

        In granting Madison's motion for reallocation of her sex based damages, the
district court observed that the verdict had not tied the question of damages to a
particular statute, that the standard of liability under all three statutes was the same, and
that allocation would permit Madison to recover more of the damages awarded by the
jury. Appellate courts have approved the allocation of damages between state and
federal claims in cases such as this where the standards of liability are the same and the
jury has not been asked to distinguish between statutes in assessing damages. The
D.C. Circuit concluded in a similar situation that there was no reason why the plaintiff
could not recover her judgment under the local Human Rights Act, "since the local law
contains the same standards of liability as Title VII but imposes no cap on damages."
Martini v. Federal National Mortgage Ass'n, 

, 1349 (D.C. Cir. 1999)
The Martini court noted that the standards of liability for the plaintiff's local and federal

                                            -29-
claims were the same, and it reasoned that if courts were not permitted "to treat
damages under federal and local law as fungible where the standards of liability are the
same, [it] would effectively limit the local jurisdiction's prerogative to provide greater
remedies for employment discrimination than those Congress has afforded under Title
VII." 

       The Ninth Circuit has also approved allocation of compensatory damages to a
plaintiff's state law claims where the verdict form permitted the jury to award damages
on state and federal civil rights claims without specifically distinguishing them. See
Passatino v. Johnson & Johnson Consumer Products, Inc., 

(9th Cir.
2000). Since "the jury had awarded damages without differentiating between the
claims, the awards were effectively fungible, and the district court's action was entirely
within its discretion and consistent with the jury's verdict." 

       We find the reasoning in Martini and Passatino persuasive and consistent with
federal policy. Title VII states that nothing in its provisions "shall be deemed to
exempt or relieve any person from any liability, duty, penalty, or punishment provided
by any present or future law of any State . . ." 42 U.S.C. § 2000e-7. To prohibit courts
from allocating damages after a jury verdict finding liability under both federal and state
law would conflict with the statutory framework of Title VII and the congressional
policy to deter discrimination and harassment. See 

("no
language in Title VII indicat[es] that its upper limit is to be placed on awards under
state anti-discrimination statutes"). The jury in this case found for Madison on both her
state and federal sexual harassment and discrimination claims, and no persuasive reason
has been shown why she should be prevented from receiving her award for
compensatory damages under ICRA instead of under the federal statutes. The trial
court did not err in its allocation of Madison's compensatory damages for sex based
violations to her state law claims.

                                            3.



                                           -30-
      Finally, IBP argues that the jury award of $266,750 for emotional distress
damages was excessive and that the trial court erred by denying its motion to reduce
it. We review the denial of IBP's motion for abuse of discretion, and we "will reverse
a denial of remittitur only when in rare circumstances we are pressed to conclude that
the verdict represents a monstrous or shocking injustice." Kientzy v. McDonnell
Douglas Corp., 

, 1061-62 (8th Cir. 1993) (citations omitted).

       Madison presented voluminous evidence that she suffered severe emotional
distress as a result of the harassment and discrimination she endured after January 13,
1993. She was subjected to egregious and humiliating conduct which wreaked havoc
on her emotional health and caused her great anguish which manifested itself
physically. The taunting and harassment made her feel humiliated, hurt, and degraded.
The undisputed evidence indicated that Madison was made so distraught by the
behavior of fellow employees and managers that she often left her work station in tears.
Her family life was affected by what went on in the plant. Her working conditions
strained her relationship with her husband and nearly caused the breakup of their
marriage. The couple separated several times during the course of her employment at
IBP. Madison also testified that as a result of her stressful work environment, she lost
weight, had trouble sleeping and frequent headaches, and broke out in hives. The
evidence about the physical and emotional effects on Madison was corroborated by her
family and several coworkers. Keith Ratliffe, a minister who counseled Madison on
at least four occasions during these events, described her as depressed and emotionally
drained because of her experiences at IBP.

       This award is not excessive in light of the evidence or when compared to awards
in similar cases. In Wilmington v. J.I. Case Co., 

, 922 (8th Cir. 1986), a
$400,000 jury award for emotional distress was affirmed where "[the plaintiff's]
testimony as well as that of other witnesses tended to show a deterioration in his health,
mental anxiety, humiliation, and emotional distress resulting from the conditions under
which he worked . . . and from his discharge." See also Ross v. Douglas Cty., 

, 397 (8th Cir. 2000) ($100,000 award for emotional distress not excessive

                                          -31-
where victim of race discrimination suffered emotional and financial strain after
leaving hostile work environment where he was taunted with racial epithets); Passatino
v. Johnson & Johnson Consumer Prod., Inc., 

, 503, 513-14 (9th Cir. 2000)
(affirming $1 million emotional distress award for sexual harassment where plaintiff
"worried, cried, and felt trapped and upset," spent less time with her family, suffered
stomach problems, rashes and headaches, and sought counseling with her pastor).

       The evidence distinguishes this case from others such as Delph v. Dr. Pepper
Bottling Co. of Paragould, 

, 357-58 (8th Cir. 1997), in which an emotional
distress award was reduced from $150,000 to $50,000 where the race discrimination
plaintiff suffered "vague and ill-defined" emotional and physical problems. 

58. Madison suffered more serious and better documented symptoms of emotional
distress than the plaintiff in Delph. She was also subjected to a more severe and
continuous pattern of harassment. A careful review of the record convinces us that the
jury's award "was not a plain injustice, or a monstrous or shocking result."

. The district court did not abuse its discretion in denying
IBP's motion for remittur of the damages for emotional distress.

       In conclusion, we hold that the district court did not err in instructing the jury on
the time period for which Madison could recover compensatory damages and did not
abuse its discretion in denying IBP's motion to remit the damage award for
excessiveness. Nor did the court err in allocating the $110,000 compensatory damage
award for sex based illegal acts to her state law claims. We therefore affirm the award
of compensatory damages in its entirety.

                                            D.

      IBP claims that the district court erred in concluding that Madison could recover
her damages for retaliation and constructive demotion under § 1981 rather than Title
VII because she did not produce sufficient evidence of race based retaliation or
constructive demotion. The jury awarded $150,000 in punitive damages on Madison's

                                           -32-
retaliation claim and $25,000 in punitive damages and $1750 in past emotional distress
damages on her constructive demotion claim. According to IBP, the Title VII damages
cap of $300,000 should have been applied to the damages awarded on these claims.
Madison responds that she produced sufficient evidence of race based retaliation and
constructive demotion and is entitled to recover these damages under § 1981. The
district court's resolution of this issue is reviewed de novo. See 

(8th Cir. 1999).

         The instructions for her retaliation claim permitted the jury to find liability if her
complaints of either racial or sexual discrimination or harassment were a motivating
factor in IBP's decision to discipline her or not to promote her. The instructions for her
constructive demotion claim similarly permitted the jury to find liability if her demotion
resulted from either race or sex based behavior. The trial court concluded that there
was sufficient evidence to submit these claims under all three statutes, and we agree.
We also agree that Madison produced sufficient evidence for the jury to predicate its
retaliation and constructive demotion verdicts on either illegal race or sex based
actions. The record shows that Madison was unfairly disciplined and denied
promotions in large part because she regularly complained to management that she was
being subjected to racial discrimination and harassment. She also took a constructive
demotion to a lower paying job in December 1994 to escape racial harassment from
supervisor Eugene Jackson, who was aware of her interracial relationship and who told
her that he did not believe that "the races should mix." Jackson regularly made
Madison perform utility tasks instead of her trainer duties and refused to intervene
when other employees physically and verbally harassed her. The fact that the jury
awarded Madison very large damages on her race claims, see footnotes 4-5, indicates
that it found her evidence of race based violations persuasive.

       We conclude that the district court did not err in determining that Madison's
retaliation and constructive demotion claims were recoverable under § 1981 and that
it was not necessary to apply the Title VII damages cap to these claims. The $1750
award for past emotional distress on Madison's constructive demotion claim is

                                             -33-
recoverable under ICRA as well as § 1981, and that award is affirmed. The punitive
damages for retaliation and constructive demotion must be vacated and remanded,
however, because of the faulty instructions on the period for which Madison could
recover.

                                            E.

       In her cross appeal, Madison contends that 42 U.S.C. § 1981a(b)(3)14 is
unconstitutional, and she also argues that the district court erred in applying it. She
seeks restoration of the full amount awarded by the jury. In the alternative, she asks
that the limitation provision be applied separately to each distinct illegal discriminatory
and retaliatory action perpetrated against her, rather than to her entire action. Both the
United States and IBP respond that the limitation provision does not violate the
Constitution.

      Madison maintains that the Title VII limitation provision violates the Seventh
Amendment right to trial by jury, that it legislatively usurps the court's role in reviewing
damage awards, and that it violates equal protection guarantees because it limits
recovery by women while racial and ethnic minorities might recover more under 42
U.S.C. § 1981. She also claims that the provision violates the due process clause
because it does not bear a "real and substantial relation to protecting public health and
welfare." She argues alternatively, without supporting legal authority, that the damages


       14
            42 U.S.C. § 1981a(b)(3)(D) provides that:

                The sum of the amount of compensatory damages awarded
                under [Title VII] for future pecuniary losses, emotional pain,
                suffering, inconvenience, mental anguish, loss of enjoyment of
                life, and other nonpecuniary losses, and the amount of punitive
                damages awarded under this section, shall not exceed, for each
                complaining party--(D) in the case of a respondent who has more
                than 500 employees in each of 20 or more calendar weeks in the
                current or preceding calendar year, $300,000.
                                             -34-
limitation, if constitutional, must be separately applied to each distinct illegal act
directed at her after she filed her administrative complaint. The district court's
resolution of these issues is reviewed de novo. See United States v. Crawford, 

, 1400 (8th Cir. 1997) and Braswell v. City of El Dorado, 

, 957
(8th Cir. 1999).

        We conclude that § 1981a(b)(3) passes constitutional muster. Congress created
the Title VII cause of action and has the power to set limits for recovery under it. The
statute does not violate the Seventh Amendment because it does not impinge upon the
jury's fact finding function. In applying the provision, a court does not "reexamine" the
jury's verdict or impose its own factual determination as to what a proper award might
be. Rather, it implements the legislative policy decision by reducing the amount
recoverable to that deemed to be a reasonable maximum by Congress. See Davis v.
Omitowoju, 

, 1162 (3d Cir. 1989). The statute does not violate the
separation of powers because it is the province of the legislative branch to pass laws
and that of the courts to interpret and apply them to particular cases. See Plaut v.
Spendthrift Farm, 

, 222-25 (1995). As the Sixth Circuit explained in
rejecting a similar challenge, "Congress created Title VII, and Congress may designate
the remedies under Title VII." Pollard v. E.I. DuPont de Nemours Co., 

,
945-46 (6th Cir. 2000), rev'd on other grounds, 

(U.S.Tenn.). In
creating a statutory right, Congress "clearly has the discretion . . . to prescribe
remedies." Northern Pipeline Construction v. Marathon Pipe Line Co., 

,
83 (1982). "The fact that the judicial branch is limited [by the provision] in the amount
of damages which it may award does not mean that its ability to decide cases is being
impaired by Congress" or that the provision violates the separation of powers principle.

.

       We also reject Madison's argument that the statutory provision violates the
implied equal protection clause of the Fifth Amendment. The provision makes no
distinction on the basis of gender or any other impermissible classification and is
therefore analyzed under the rational basis test. See Duke Power Co. v. Carolina Envtl.

                                          -35-
Study Group, Inc., 

, 83-84 (1978). As Pollard and other cases have
recognized, the provision easily satisfies this test because it bears a rational relationship
to a legitimate and articulated governmental purpose. See 

.
Congress instituted the damages limitation in order to deter frivolous lawsuits and to
protect employers from financially crippling awards, and the limitation is rationally
related to these legitimate purposes. See Luciano v. Olsten Corp., 

, 221
(2d Cir. 1997) (citing Congressional Record). Madison's due process argument fails
for similar reasons, and she cites no cases to support it.

       Madison argues in the alternative that the trial court should have applied the
damages limitation to each individual act of discrimination and retaliation against her
after she filed her administrative complaint, rather than to the whole award under Title
VII. This argument is unsupported by the statutory language or case law. We agree
with the other circuits which have rejected similar arguments. See Baty v. Williamette
Indus., Inc., 

, 1245-46 (10th Cir. 1999) (limitation applies to entire Title
VII award) and Smith v. Chicago Sch. Reform Bd. of Trustees, 

, 1150
(7th Cir. 1999) (same).

                                            IV.

       Madison produced an abundance of evidence that she was subjected to a
pervasively hostile work environment at IBP and was discriminated against because of
her sex and her biracial relationship and that management itself was implicated in these
illegal acts. She also showed that she was retaliated against for complaining to
management and for filing an administrative complaint. As a result of these illegal acts,
she was constructively demoted and suffered emotional distress.

       After thoroughly reviewing the lengthy record, we affirm the award to Madison
of $343,417 in backpay, benefits, and compensatory damages. We also affirm the
ruling that the damages limitation set by Congress in 42 U.S.C. § 1981a(b)(3) is not
unconstitutional. We vacate the entire punitive damages award because of errors in the

                                            -36-
jury instructions on the recovery period, and we remand for a new trial on punitive
damages. The award for attorney fees, costs, and interest is also vacated and those
issues are remanded for further consideration by the district court at an appropriate
time.15

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




      15
          The district court awarded Madison a total of $444,691.33 in attorney fees and
costs, as well as pre and post judgment interest. The extent to which Madison will
ultimately prevail is not yet known and will depend upon further proceedings in the
district court and its evaluation of the relevant factors. See Hensley v. Eckerhart, 

, 433 (1983). It is also not clear at this point how the interest issues may be
impacted.
                                            -37-