USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 95-1597
CHARISSA MCKINNON AND BEATRICE POULIN,
Plaintiffs - Appellees,
v.
KWONG WAH RESTAURANT, ET AL.,
Defendants - Appellants.
____________________
No. 95-1635
CHARISSA MCKINNON AND BEATRICE POULIN,
Plaintiffs - Appellants,
v.
KWONG WAH RESTAURANT, ET AL.,
Defendants - Appellees.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Morton A. Brody, U.S. District Judge]
___________________
____________________
Before
Torruella, Chief Judge,
___________
Coffin and Rosenn,* Senior Circuit Judges.
_____________________
_____________________
____________________
* Of the Third Circuit, sitting by designation.
Daniel L. Lacasse for Kwong Wah Restaurant, et al.
_________________
Catherine R. Connors, with whom Fall Ferguson and Pierce,
_____________________ _____________ _______
Atwood, Scribner, Allen, Smith & Lancaster were on brief for
_____________________________________________
Charissa McKinnon and Beatrice Poulin.
____________________
May 1, 1996
____________________
-2-
ROSENN, Circuit Judge. This appeal and cross-appeal
ROSENN, Circuit Judge.
______________
present several procedural issues as well as substantive issues
relating to damages arising out of alleged acts of sexual
harassment in violation of Title VII, 42 U.S.C. 2000e et seq.
__ ____
Charissa McKinnon and Beatrice Poulin brought suit in the United
States District Court for the District of Maine against their
former employer, the Kwong Wah Chinese Restaurant ("Kwong Wah"),
its owners, and several current and former employees. The
plaintiffs alleged that they suffered sexual harassment while
working as waitresses at Kwong Wah, in violation of Title VII;
the Maine Human Rights Act, 5 M.R.S.A. 4572; and state tort
law.1
The court entered default judgment against the
defendants, and awarded back pay, compensatory damages and
attorneys' fees to both plaintiffs. The defendants filed a
Motion to Lift the Default and File Late Answer, which the court
denied. McKinnon and Poulin appeal the district court's damages
awards. Specifically, they assert that the court erred in its
failure to award punitive damages, and in its calculation of
compensatory damages. The defendants appeal the court's denial
of their motion to lift default and file late answer. Further,
____________________
1 In their Complaint, the plaintiffs alleged the following:
Count I--sexual harassment in violation of Title VII; Count II--
further violations of Title VII for discriminating against
McKinnon for her pregnancy; Counts III and IV--violations of the
Maine Human Rights Act; Count V--Intentional Infliction of
Emotional Distress; Count VI--Negligent Retention or Supervision;
Count VII--Assault and Battery; and Count VIII--Invasion of
Privacy.
-3-
-3-
they assert that the district court lacked jurisdiction over some
of the named defendants, because plaintiffs failed to name the
individual defendants before the Equal Employment Opportunity
Commission ("EEOC"). We affirm, except we remand for
clarification by the district court with respect to punitive
damages.
I.
I.
Both plaintiffs commenced employment as waitresses at
the Kwong Wah Restaurant in Calais, Maine in July 1991.
Plaintiffs testified that the owners and employees at Kwong Wah
subjected them to repeated offensive sexual harassment, both
verbal and physical. Plaintiff McKinnon further alleged that
they subjected her to additional discrimination because she was
pregnant while employed at Kwong Wah. McKinnon testified that
one of the restaurant owners tried to force her to sign a release
exempting the Kwong Wah from liability if she was injured on the
job, and that the Kwong Wah cut back her working hours in
retaliation for her refusal to sign the release. The plaintiffs
alleged that they were constructively discharged in July 1992.
Plaintiffs filed timely charges of discrimination with
the Maine Human Rights Commission ("MHRC") and the federal Equal
Employment Opportunity Commission. The MHRC determined that
reasonable grounds existed to believe that unlawful
discrimination had occurred. After failed attempts at a
conciliation agreement, the MHRC authorized suit, and the EEOC
issued a right to sue letter.
-4-
-4-
Plaintiffs filed a complaint on June 28, 1994, and an
amended complaint with minor changes on July 7, 1994. Thus,
pursuant to Fed. R. Civ. P. 12(a)(1)(A), Kwong Wah's Answer was
due on August 18, 1994. The defendants, however, did not respond
by the due date. One week after the answer was due, the
defendants moved for an enlargement of time to respond to the
complaint. The district court extended the due date to September
28, 1994. Again, the defendants did not file an answer. On
September 27, 1994, the defendants moved for an additional
extension; the court denied the motion. The defendants took no
action subsequent to the denial. The clerk of the court entered
default against the defendants on October 11, 1994. The
defendants again took no action. On October 24, 1994, the
plaintiffs moved for the entry of default judgment; the court
granted the motion the next day. One month later, November 25,
1994, defendants moved to lift the default judgment.
In their motion to lift the default, the defendants
claimed that they had difficulty in retaining counsel; that
counsel did not keep them informed of their obligations to file a
timely answer; and that their inability to understand the
complaint rendered them unable to respond. In reply, the
plaintiffs asserted that the defendants hired and fired counsel
as a delaying tactic. The plaintiffs further alleged that
defendants' counsel contacted defendants by phone and letter
alerting them to their obligation to file a timely answer. The
court held a hearing on the issue, and found that the defendants
-5-
-5-
did not meet their burden of showing good cause to set aside the
default. See Fed. R. Civ. P. 55(c) (court may set aside default
___
for good cause).
In addition, the defendants moved to dismiss the
plaintiffs' Title VII claims against the individual defendants
named in the suit. The defendants asserted that the court lacked
jurisdiction to hear the matter because the plaintiffs failed to
include the named defendants in the charges they had filed with
the MHRC and EEOC. The court denied the motion, holding that
Title VII's charging requirements were nonjurisdictional. The
court found that the defendants waived their right to raise the
charging issue by their default.
The district court held a hearing without a jury to
determine damages, and awarded $13,094.84 to McKinnon, and
$13,189.45 to Poulin, plus attorneys' fees. The award included
135 weeks of back pay (adjusted for mitigation) and $2,500 per
plaintiff in compensatory damages. The court declined to award
front pay, punitive damages, or prejudgment interest.
II.
II.
The defendants claim that the district court erred in
denying their motion to lift default judgment and file late
answer. We must review the court's denial of the motion for an
abuse of discretion. See The General Contracting & Trading Co.
___ ______________________________________
v. Interpole, 899 F.2d 109, 112 (1st Cir. 1990) (motions to set
__________
aside default judgments are left to "the sound discretion of the
district court"). This court may not reverse unless the district
-6-
-6-
court's decision is clearly wrong. Id. at 112.
___
Fed. R. Civ. P. 55(c) provides:
(c) Setting Aside Default. For good
(c) Setting Aside Default.
cause shown the court may set aside an
entry of default and, if a judgment by
default has been entered, may likewise
set it aside in accordance with Rule
60(b).2
The parties in the instant case offer differing
accounts of the events leading up to the default judgment. The
plaintiffs filed their amended complaint in July 1994. They
contend that the defendants ignored the first due date for their
answer, requested and were granted a thirty day extension, and
then ignored the second due date. The plaintiffs further contend
that the defendants ignored the court's rejection of their
request for a second extension; ignored the plaintiffs' motion
for default judgment; ignored the entry of default judgment; and
waited until November 25, 1994 to file a motion to lift the
default judgment. According to the plaintiffs, the defendants
switched attorneys on several occasions beginning with the
administrative proceedings before the MHRC. Finally, the
plaintiffs contend that the evidence shows that defendants were
fully aware of all due dates. In sum, the plaintiffs argue that
the defendants neglected the suit with full awareness of the
legal consequences. In contrast, the defendants claim that they
were unable to retain suitable counsel, and that they were not
____________________
2 Fed. R. Civ. P. 60(b) provides, in relevant part, relief from
judgment or order for mistake, inadvertence, surprise, or
excusable neglect.
-7-
-7-
aware of the due dates or the consequences of missing the due
dates.
At an evidentiary hearing, the district court found
that the defendants did not demonstrate the necessary "good
cause" pursuant to Fed. R. Civ. P. 55(c). In addressing the
defendants' counsel at the hearing, the court asserted:
What the defendants have done in their
actions, Mr. Lacasse, speaks so loudly
that I have difficulty hearing your voice
today in this proceeding. There simply
has not been a showing of good cause
pursuant to Federal Rule 55C to set aside
the entry of default. There has been no
reasonable excuse presented for the
default. There have been a lot of
explanations as to the defendants'
inability to understand what's going on
and the fact that they haven't had any --
that they didn't have any funds and the
result of all the testimony and the
affidavits and the presentation to the
court leaves the court with the clear
understanding that the defendants did not
act reasonably even under these
circumstances.
The defendants assert that the record does not support the
court's decision: thus, the court abused its discretion.
Although in Coon v. Grenier, 867 F.2d 73 (1st Cir.
____ _______
1989), this court observed that "good cause" is a mutable
standard, varying from situation to situation, it is "not so
elastic as to be devoid of substance." Id. at 76. No precise
___
formula is suggested, for each case necessarily turns on its own
unique facts. Nonetheless, this court found some general
guidelines that appear to have universal application and warrant
consideration by a district court in determining whether a
-8-
-8-
default judgment should be lifted: (1) whether the default was
willful; (2) whether setting it aside would prejudice the
adversary, (3) whether a meritorious defense is presented; (4)
the nature of the defendant's explanation for the default; (5)
the good faith of the parties; (6) the amount of money involved;
and (7) the timing of the motion. Id. at 76. The court then
___
noted that in reviewing the district court's weighing of these
factors for an abuse of discretion, judicial discretion has
limitations:
Judicial discretion is necessarily broad-
-but it is not absolute. Abuse occurs
when a material factor deserving
significant weight is ignored, when an
improper factor is relied upon, or when
all proper and no improper factors are
assessed, but the court makes a serious
mistake in weighing them.
Id. at 78 (quoting Independent Oil & Chemical Workers v. Proctor
___ __________________________________ _______
&
__
Gamble Mfg. Co., 864 F.2d 927, 929 (1st Cir. 1988)).
_______________
The record shows that the plaintiffs served each named
defendant with the complaint. Further, the record reflects that
at least some of the defendants were aware of pending legal
problems through their participation in the administrative
proceedings before the MHRC. Additionally, it appears that the
defendants hired and fired at least three attorneys during the
administrative process. The defendants' attorney for the instant
appeal at one time represented the defendants before the MHRC.
In the Commission's correspondence with the attorney, it stated:
Would you please inform Kwong Wah
officials that I will under no
-9-
-9-
circumstances accept further postponement
of this matter? I do not wish to appear
harsh towards you. The history with this
case, however, has been that each time we
approach a critical point . . . they hire
a new Attorney. You may or may not be
aware that you are the third person I
have dealings with to date.
Thus, it appears that the defendants were aware of a pending
legal problem, were capable of retaining legal counsel, but were
uncooperative with their counsel and administrative officials.
The firm of Eaton, Peabody, Bradford and Veague entered
an appearance on behalf of all the defendants, and applied for
the extensions of the defendants' filing deadlines. The record
contains several letters from Eaton, Peabody urging the
defendants to contact counsel and notifying them of the need to
file an answer with the court by the end of the month.3
Thad Zmistowski, an associate with Eaton, Peabody,
testified to his attempts, on several occasions, to reach the
corporate contact at Kwong Wah by phone. He finally reached Judy
Canniff, his contact, on the day before the second deadline for
filing an answer. Canniff allegedly informed Zmistowski that the
defendants did not have the money to retain Eaton, Peabody, and
would proceed on their own. Eaton, Peabody filed a second Motion
to Extend the Deadline, and moved the court to withdraw from its
____________________
3 The letters evidence the attorneys' frustration in trying to
pin down the client. Apparently, Eaton, Peabody was concerned
that Kwong Wah's insurance would not cover a sexual harassment
suit. Thus, the firm requested a $25,000 retainer. The firm was
trying to get a commitment from the defendants as to whether they
wished to proceed with Eaton, Peabody as counsel.
-10-
-10-
representation of the defendants. The court denied the
defendants' second request to extend the time of filing on
October 5, 1994. As previously stated, the defendants did not
respond until November 25, 1994, when they moved to lift the
default judgment.
The record fully supports the district court's finding
that the defendants were aware of the pending legal problem, but
hoped that it "would all go away." Thus, the court found that
the defendants did not exhibit the good faith necessary to
justify the court's lifting of the default judgment. Under the
standard set forth in Coon, supra, the district court did not
____ _____
abuse its discretion in its denial of the defendants' motion to
lift default judgment. After hearing the testimony, the court
was not convinced of the defendants' explanation of the default
or of their good faith. The court's finding that the defendants
defaulted willfully is well supported. Further, the defendants
did not move to rectify the situation in a timely manner.
Litigants must act punctually and not casually or indifferently
if a judicial system is to function effectively. This court must
uphold the district court's decision absent an abuse of
discretion. We conclude that the district court exhibited
patience and concern for the rights of the parties and did not
abuse its discretion in denying the defendants' motion to lift
default judgment.
III.
III.
The defendants next assert that the district court
-11-
-11-
lacked jurisdiction over the Title VII claim against all
defendants except the Kwong Wah Restaurant because the plaintiffs
failed to name the individual defendants in the proceedings
before the EEOC.4 The district court's finding that the
charging requirement of Title VII is nonjurisdictional is subject
to plenary review. See In re Extradition of Howard, 996 F.2d
___ ____________________________
1320, 1327 (1st Cir. 1993).
There are several requirements that a plaintiff must
meet, pursuant to Title VII, prior to filing suit in federal
court. See 42 U.S.C. 2000e-5. For example, a plaintiff must
___
file a timely EEOC charge against the discriminatory party, and
receive notice of a right to sue. Id. In addition, a plaintiff
___
generally may not maintain a suit against a defendant in federal
court if that defendant was not named in the administrative
proceedings and offered an opportunity for conciliation or
voluntary compliance. 42 U.S.C. 2000e-5(f) ("civil action may
be brought against the respondent named in the charge").
In the instant case, the plaintiffs named only the
Kwong Wah Restaurant in the complaint before the MHRC and the
EEOC. The defendants contend that the court must dismiss the
Title VII charges against all individual defendants (not the
__________
Kwong Wah Restaurant) because the plaintiffs failed to name these
defendants in the administrative complaint.
____________________
4 The plaintiffs filed their Complaint in federal court against:
the Kwong Wah Restaurant (a Maine corporation); Sarah Elgendi
(co-owner of Kwong Wah); Danny Chan (co-owner of Kwong Wah); Joe
Lam (supervisor); Karen Landry (head waitress); Karen Wong
(Manager); Ming Chen (cook); and Shun Cheung (cook).
-12-
-12-
In Curran v. Portland Super. Sch. Committee, 435 F.
______ _______________________________
Supp. 1063 (D. Maine 1977), the district court held that an
employer may not be named in a civil suit unless it was charged
before the EEOC. Id. at 1073. The court noted that the
___
administrative charging requirement ensures that the defendant
has notification of the pending proceedings, and that the
requirement furthers the goal of voluntary compliance with Title
VII. Id. at 1074. The Curran opinion noted, however, that the
___ ______
charging requirement is not absolute:
[S]everal exceptions have been recognized
as sufficient to confer jurisdiction over
defendants in a civil action who were not
named in the EEOC charges. These
exceptions are: (1) if there was
"substantial identity" between the
respondent named in the EEOC charges and
defendants in the civil action; (2) if
the named respondent acted as the "agent"
of the defendant sought to be included in
the civil action, at least when the
latter defendant had notice of and
participated in the conciliation
proceedings; and (3) if the defendant is
an "indispensable party" under Fed. R.
Civ. P. 19 in order to accord complete
relief to the parties.
Id. at 1074; see also Glus v. G.C. Murphy Co., 562 F.2d 880, 888
___ ___ ____ ____ _______________
(3d Cir. 1977) (in determining if a plaintiff may proceed against
parties not named before EEOC, the court should consider whether
the plaintiff could ascertain the role of the unnamed party at
the time of the EEOC filing; whether the interests of unnamed
party are similar to interests of named party; the prejudice to
the unnamed party; and whether the unnamed party has represented
to the plaintiff that its relationship with the plaintiff is
-13-
-13-
through the named party.)
In determining whether the defendants waived their
right to raise the charging issue, the district court in the
instant case found that the requirement was nonjurisdictional.
See Fed. R. Civ. P. 12(H)(3) (court shall dismiss action if
___
lacking jurisdiction). If the charging requirement is merely a
conciliation or compliance procedure prior to filing suit in
federal court, it is subject to waiver, estoppel and equitable
tolling. See Zipes v. Trans World Airlines, Inc., 455 U.S. 385,
___ _____ __________________________
392 (1982).
In Zipes, the Supreme Court held that the timely filing
_____ _____________
of an EEOC charge is not jurisdictional. Id. at 392. The Court
_________________ ___
reasoned that the filing requirement is listed in a separate
section of Title VII than the section that grants jurisdiction to
the district courts. This court has not ruled directly on the
charging requirement. It has held, however, that Section 2000e-
5(f)(1) is nonjurisdictional. See Rice v. New England College,
___ ____ ____________________
676 F.2d 9, 10 (1st Cir. 1982) (requirement that plaintiff file
complaint within 90 days of receipt of right to sue letter is
nonjurisdictional). The charging requirement is found in Section
2000e-5(f)(1). Although generally a plaintiff must name a
defendant in the proceedings before the EEOC in order to proceed
against that defendant in federal court under Title VII, this
charging requirement is subject to exceptions. We conclude that
the charging requirement is nonjurisdictional, thus subject to
waiver, estoppel and equitable tolling. See Zipes, 455 U.S. at
___ _____
-14-
-14-
392; see also Greenwood v. Ross, 778 F.2d 448, 450 (8th Cir.
___ ____ _________ ____
1985) (Title VII conditions precedent, including charging
requirement, are nonjurisdictional); Liberles v. County of Cook,
________ ______________
709 F.2d 1122, 1125 (7th Cir. 1983) (same); Jackson v. Seaboard
_______ ________
Coast Line R. Co., 678 F.2d 992, 1010 (11th Cir. 1982) (same).
_________________
To avoid waiver, a defendant must assert all
affirmative defenses in the answer. See Fed. R. Civ. P. 8(a);
___
see also Knapp Shoes v. Sylvania Shoe Mfg. Corp., 15 F.3d 1222,
___ ____ ____________ ________________________
1226 (1st Cir. 1994) ("Affirmative defenses not so pleaded are
waived."). The defendants in the instant case, through their
default, waived their right to raise the issue that they were not
named in the complaint to the Commission.5 We perceive no error
in the district court's denial of the defendants' motion to
dismiss on jurisdictional grounds.
IV.
IV.
The plaintiffs appeal the district court's grant of
$2500 in compensatory damages. In general, this court will not
override a damage determination unless the award is unsupported
by the evidence, grossly excessive, or shocking to the conscious.
See Brown v. Freedman Baking Co., 810 F.2d 6, 11 (1st Cir. 1987);
___ _____ ___________________
see also Hall v. Ochs, 817 F.2d 920, 927 (1st Cir. 1987). In the
___ ____ ____ ____
____________________
5 In addition, the plaintiffs' Complaint before the Commission
alleged "At all relevant times, Defendants Kwong Wah, Danny Chan,
Sarah Elgendi, Joe Lam, Karen Wah and Karen Landry were
employers, and the plaintiffs employees, covered by and within
the meaning of Title VII. "When a court enters a default
judgment against a defendant, all allegations in the complaint
must be taken as true." See Brockton Savings Bank v. Peat,
___ ______________________ _____
Marwick, Mitchell & Co., 771 F.2d 5, 13 (1st Cir. 1985).
_______________________
-15-
-15-
instant case, the plaintiffs assert that the court below did not
use the correct legal standard in its determination of damages.
Questions of law are subject to plenary review. See In re
___ ______
Extradition of Howard, 996 F.2d at 1327.
_____________________
The damages provisions of 42 U.S.C. 1981a, part of
the Civil Rights Act of 1991, provide for the availability of
compensatory damages to victims of intentional discrimination in
violation of Title VII. Pursuant to the statute, compensatory
damages include "future pecuniary losses, emotional pain,
suffering, inconvenience, mental anguish, loss of enjoyment of
life, and other non-pecuniarylosses." See 42 U.S.C. 1981(b)(3).
___
Prior to Congress's enactment of Section 1981a, victims
of intentional gender or religious discrimination were only
entitled to equitable relief under Title VII. Victims of race
discrimination, however, are entitled to compensatory and
punitive damages under 42 U.S.C. 1981. Section 1981a ensures
that victims of intentional employment discrimination on the
basis of gender or religion are entitled to compensatory, and in
certain egregious cases, punitive damages. See H.R. Rep. No.
___
40(I), 102d Cong., 1st Sess. at 64-65 (1991). Equitable relief
continues to be the sole remedy available under Title VII in
disparate impact cases.
At the conclusion of the testimony in the instant case,
the court asserted that it was "persuaded" that the plaintiffs
suffered emotionally as a result of persistent and extremely
offensive sexual harassment at Kwong Wah. Thus, the court found
-16-
-16-
appropriate an award to the plaintiffs of compensatory damages.
With respect to emotional distress, a plaintiff must
demonstrate that an ordinarily sensitive person could have
suffered the alleged harm. If the plaintiff meets this burden,
then the defendant must "take the victim as he finds her,
extraordinarily sensitive or not." See Theriault v. Swan, 588
___ _________ ____
A.2d 369 (Me. 1989). See also Gammon v. Osteopathic Hospital of
___ ____ ______ _______________________
Maine, Inc., 534 A.2d 369 (Me. 1989). The court may find,
____________
however, that some of the plaintiffs' damages stem from a prior
"injury." See Lovely v. Allstate Ins. Co, 658 A.2d 1091 (D. Me
___ ______ ________________
1995).6 The burden is on the defendant to establish a causal
relationship between the prior injury and the damages claimed by
the plaintiffs. Id. at 1092. If the court finds it impossible
___
to apportion the damages, then the defendants are liable for the
entire amount. Id.
___
The testimony in the instant case revealed that both
plaintiffs were suffering from emotional distress caused by
sources independent from their employment at Kwong Wah.
Plaintiff McKinnon separated from her boyfriend (now husband)
during her employment at the restaurant, after discovery of her
____________________
6 Lovely addressed a claim for compensatory damages arising from
______
physical injuries. The accident at issue in the case aggravated
a pre-existing injury to the plaintiff's elbow. The defendant
insurance company asserted that it should not be responsible for
medical bills and loss of income resulting from the injured
elbow. The court found that it was the defendant's burden to
establish a causal relationship between the earlier injury and
the damages claimed by the plaintiff.
-17-
-17-
unplanned pregnancy. Plaintiff Poulin testified to having been
sexually abused by her stepfather from when she was five years
old until she was age seventeen. She commenced employment at the
Kwong Wah at the age of twenty. In weighing the evidence the
court found it difficult to distinguish between the emotional
suffering caused by the defendants' behavior, and the suffering
caused by prior independent sources. The court reasoned:
Because the causal connection between the
harassment and Plaintiffs' emotional
trauma is complicated by other factors
similarly causing such suffering, the
Court finds an award of $2500 in
compensatory damages for each Plaintiff
appropriate.
Although the district court encountered some difficulty
in distinguishing between the plaintiffs' trauma caused by the
defendants' harassment and that arising from other causes, it
nonetheless found $2500 to be an appropriate sum to compensate
each plaintiff. We conclude that despite the difficulty, the
trial court was able to determine the damages attributable to the
harassment caused by the defendants. The trial court had the
opportunity to see and hear the plaintiffs, and no doubt took
into account their demeanor as well as other factors, such as
their ages, nature of employment, and earnings, in setting the
damages amount. Apparently, the court carefully considered the
amounts it awarded and, without substantial reasons to the
contrary, it would be particularly inappropriate and injudicious
for an appellate court to set aside the trial court's judgment
under these circumstances. See Freedman Baking Co., 810 F.2d at
___ ___________________
-18-
-18-
11. We see no error in the district court's $2500 award of
compensatory damages to each of the plaintiffs.
V.
V.
The plaintiffs also contend that the district court
erred in its failure to award punitive damages. The plaintiffs
assert that the district court relied heavily on an incorrect
legal standard in refusing to award punitive damages. The
court's legal interpretations are subject to plenary review. See
___
In re Extradition of Howard, 996 F.2d at 1327.
___________________________
The plaintiffs rely for their claim to punitive damages
on the amendment to Section 706(g) of Title VII, 42 U.S.C.
1981a. The damage provisions of this amendment provide that a
court may award punitive damages to a prevailing party in a Title
VII action if the defendant "engaged in a discriminatory practice
. . . with malice or with reckless indifference to the federally
protected rights of an aggrieved individual." See 42 U.S.C.
___
1981a(b)(1). The amendatory provision permits courts to award
damages in cases of intentional discrimination resulting in
actual injury or loss in the same circumstances as such awards
are permitted under 42 U.S.C. 1981 for race discrimination.
See H.R. No. 40(1), 102d Cong., 1st Sess. at 74 (1991).
___
Although compensatory damages are available to victims
of intentional discrimination under Title VII, a plaintiff must
demonstrate that the defendant acted with malice or reckless
-19-
-19-
indifference before he or she can receive punitive damages.
Id.7 The legislative history of the Section notes:
___
Plaintiff must first prove intentional
discrimination, then must prove actual
injury or loss arising therefrom to
recover compensatory damages, and must
_________
meet an even higher standard
_________________________________________
(establishing that the employer acted
_________________________________________
with malice or reckless or callous
_________________________________________
indifference to their rights) to recover
_________________________________________
punitive damages.
_________________
H.R. Rep. No. 40(I), 102d Cong., 1st Sess. at 72 (1991) (emphasis
added).
Because plaintiffs' claims arise out of a federal
statute designed to protect federal rights, federal rules of
damages control. "The rule of damages, whether drawn from
federal or state sources, is a federal rule responsive to the
needs whenever a federal right is impaired." Sullivan v. Little
________ ______
Hunting Park, 396 U.S. 229, 240 (1969).
____________
After hearing the testimony in the instant case, the
district court declined to award punitive damages. The court
found that the plaintiffs had not sustained their burden of
demonstrating that the defendants had acted maliciously or
recklessly or callously indifferent to plaintiffs' rights. In so
finding, the court explained:
____________________
7 The court's analysis is the same for the state causes of
action. In Maine, punitive damages are available in a tort
action when the defendant acts with malice. See F.D.I.C. v. S.
___ ________ __
Prawer & Co., 829 F. Supp. 439, 453 (D. Me. 1993); see also
_____________ ________
Tuttle v. Raymond, 494 A.2d 1353, 1361 (Me. 1985).
______ _______
-20-
-20-
There is no question that Defendants'
repeated sexual harassment was offensive.
In fact, in many cases, this behavior
might be strong evidence of malice or, at
least, reckless indifference to
Plaintiffs' rights. In this case,
however, the Court believes that, the
behavior of at least some Defendants was
influenced by language, cultural, and
educational barriers. With this
consideration and all of the other
evidence in mind, the Court concludes
that Defendants were not acting with
either malice or reckless indifference to
Plaintiffs' rights. No award of punitive
damages is therefore appropriate.
There was no jury in the instant case, and, of course,
the trial judge obviously gave no erroneous instructions. The
plaintiffs, however, contend that the court nonetheless committed
error as a matter of law because it based its decision not to
award punitive damages on an erroneous legal predicate -- "that
the ethnic background [of most of the defendants] is an excuse
negating malice or reckless indifference under Section 1981a."
Moreover, the plaintiffs argue that even if the judge's legal
predicate were correct, there is no evidence whatsoever of record
that the defendants suffered from any ignorance of their duty to
cease their offensive acts as a result of their ethnic
background. As to this alleged deficiency of record, the
standard of review is clearly erroneous. See Reich v.
___ _____
Cambridgeport Air Systems, Inc., 26 F.3d 1187, 1188 (1st Cir.
_________________________________
1994).
That the defendants' acts "were patently offensive" and
repeated, as the plaintiffs argue, may provide cause for
-21-
-21-
compensatory damages but do not necessarily mandate a finding of
punitive damages. Unlike compensatory damages, which are a
matter of right to an injured party once liability is found,
punitive damages are awarded or rejected in a particular case at
the discretion of the fact-finder, in this instance the trial
judge. See Lee v. Southern Home Sites Corp., 429 F.2d 290, 294
___ ___ _________________________
(5th cir. 1970). There is no vested right to punitive damages on
the part of the plaintiff and where allowed, they are awarded as
a matter of public policy to punish outrageous conduct by the
defendant or to deter similar conduct in the future. A key
feature of punitive damages is that "they are never awarded as of
right no matter how egregious the defendant's conduct." Smith v.
_____
Wade, 461 U.S. 30, 52 (permitting jury to assess punitive damages
____
in action under 1983 when defendant's conduct is shown to be
motivated by evil intent or involves reckless or callous
indifference to the federally protected rights of others).
Punitive damages are assessed as punishment or as an
example and warning to others. They are therefore not favored in
the law and are allowed only with caution and within normal
limits. Lee, 439 F.2d at 294; Aladdin Manufacturing Co. v.
___ __________________________
Mantle Lamp Co., 116 F.2d 708, 717 (1st Cir. 1941).
_______________
The allowance of such damages
inherently involves an evaluation of the
nature of the conduct in question, the
wisdom of some form of pecuniary
punishment, and the advisability of a
deterrent. Therefore, "the infliction of
such damages, and the amount thereof are
of necessity within the discretion of the
trier of the fact."
-22-
-22-
Lee, 439 F.2d at 294 (citations omitted).
___
In Rowlett v. Anheuser-Busch, Inc., 832 F.2d 194 (1st
_______ ____________________
Cir. 1987), this court dealt at length with the appropriateness
of a jury award of punitive damages. Writing for this court,
Judge Torruella held that even in a jurisdiction which authorizes
punitive damages in cases requiring proof of intentional
wrongdoing, this does not mean that punitive damages are
appropriate in every such case. Rather, "in each case the trier
of the fact has the discretion to determine whether punitive
damages are necessary, to punish [the defendant] for his
outrageous conduct and deter him and others like him from similar
conduct in the future." Id. at 205 (citations omitted). The
___
court therefore reduced the punitive damages award in a Section
1983 case by 90 percent. Id. at 207.
___
In Hern ndez-Tirado v. Artau, 874 F.2d 866 (1st Cir.
________________ _____
1989), this court vacated entirely the district court's award of
punitive damages in a Section 1983 case. The court carefully
analyzed the Supreme Court's decision in Smith v. Wade, 461 U.S.
_____ ____
30, where the Court made clear that a jury "may" award punitive
damages in Section 1983 cases when a defendant has shown
"reckless or callous indifference to the federally protected
rights of others," as well as when his conduct is "motivated by
evil motive or intent." This court observed, however, that in so
holding, the Supreme Court did not say that the fact-finder must
award punitive damages in every single Section 1983 case that
does involve an intentional tort. The court concluded that the
____
-23-
-23-
defendants' intentional misconduct did not rise to the level
calling for punishment and deterrence over and above that
provided by the compensatory award. It therefore vacated the
award of punitive damages observing that "neither the common law,
nor the Supreme Court in Smith, allows a jury to assess punitive
_____
damages in every single instance where it finds an intentional
tort; rather, they require conduct that is 'outrageous' either
because of a person's 'evil motive' or because of his 'reckless
indifference' to the rights of others." Hern ndez-Tirado, 874
________________
F.2d at 869.
In sum, the law does not require the fact-finder to
award punitive damages in every case under Section 1981a that
involves an intentional tort. The plaintiff must show that the
defendant acted with malice or reckless indifference to the
plaintiff's rights. We believe, however, that heavy reliance on
cultural and educational factors is inappropriate in the instant
case. Ignorance of the law or of local custom is not a defense
under Section 1981a to the alleged offensive conduct of the
defendants.
A defendant's cultural background is not irrelevant in
evaluating the appropriateness of punitive damages. In certain
circumstances, a defendant's background will likely have an
impact on his consciousness of wrongdoing. In the instant case,
however, the district court's only explicit reason for denying
punitive damages was the cultural, ethnic, and educational
background of the defendants, and this is not the dispositive
-24-
-24-
factor. The court did not point to any evidence in the record to
support its assumption that the defendants were not acting with
reckless indifference to the plaintiffs' rights. In the context
of this case and on this record, primary reliance on cultural and
educational background is tenuous and appears unsupported.
Although the court also considered "all the other evidence," it
is not clear from the record what "other evidence" the court
considered.
Accordingly, we will remand to the district court for
further clarification and explanation as to what evidence
supported its decision to deny the plaintiffs punitive damages.
VI.
VI.
In sum, we conclude that the district court properly
denied the defendants' motion to lift default and file late
answer. Through their default, the defendants waived their right
to challenge the plaintiffs' Title VII claim on the basis that
the plaintiffs failed to name the individual defendants before
the EEOC or the MHRC. Thus, the order of the district court
denying the defendants' motions is affirmed.
We also conclude that the district court did not abuse
its discretion in arriving at a $2500 compensatory damage award
for each plaintiff and this judgment is affirmed. On the issue
of punitive damages, the matter is remanded to the district court
for clarification and explanation, within thirty days, as to what
evidence the court relied upon in declining to award the
plaintiffs punitive damages. This court will retain jurisdiction
-25-
-25-
of the case pending the district court's clarification.
-26-
-26-
