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Wallace v. DTG Operations

April 17, 2009


Appeal from the United States District Court for the Western District of Missouri.

The opinion of the court was delivered by: Melloy, Circuit Judge.

Submitted: October 15, 2008

Before MELLOY, BEAM, and GRUENDER, Circuit Judges.

Defendant DTG Operations, Inc. (the "Company"), a rental car company, appeals an adverse jury verdict in favor of Plaintiff Terri Wallace, a former station manager for the Company, on her retaliation claim under the Missouri Human Rights Act (the "Act"). We affirm in all respects except as to the punitive damages award.

We reduce the punitive damages award to $120,000, which is four times the actual damages, and remand to the district court for entry of judgment consistent with this opinion.

I. Background

Taken in a light most favorable to the prevailing party, the evidence at trial established facts substantially as set forth in our prior opinion, Wallace v. DTG Operations, Inc., 442 F.3d 1112, 1113--17 (8th Cir. 2006). Briefly, the evidence showed that Wallace complained about a supervisor's behavior that she deemed to be offensive and characterized as sexually harassing. Shortly after her complaint, the Company terminated her employment.

The Company provided shifting explanations as to the reason for her termination. For example, the Company stated that poor performance was an issue. Initially, however, the Company had stated that the location where Wallace worked was overstaffed and that her termination was a consequence of a downturn in business coupled with a policy requiring layoffs to be based strictly on seniority.

In addition, at least one decisionmaker expressed anger based on Wallace's mode of reporting the alleged sexual harassment, even though she followed a recommended reporting method. Further, Wallace's termination was isolated among comparable employees, notwithstanding the Company's claims that company-wide layoffs were required at the time.

The Company also claimed to have a policy precluding reassignments of persons with certain disciplinary reports in their personnel files, but the Company did not apply the policy uniformly. For example, an employee at Wallace's location had received a transfer despite the presence of a purportedly disqualifying disciplinary report in his file. Wallace, whose personnel file did not include a disciplinary report of the same severity, did not receive a transfer although she asked for one and although there were open positions at the time of her termination.

Finally, the timing of Wallace's termination served as evidence of retaliation when viewed in light of these several other factors that supported an inference of retaliatory intent. Two decisionmakers involved with Wallace's termination made the decision to terminate Wallace fifteen days after her complaint. Also, on the day they claim to have decided to terminate Wallace, one of them consulted with the supervisor whom Wallace had accused of sexual harassment.

Wallace initially pleaded federal and state claims, but she dropped her federal claims before the district court submitted the case to the jury. As such, the jury only considered Wallace's state-law claim that the Company retaliated against her in violation of the Act. The parties hotly contested the jury instruction regarding causation. The Company argued that the federal "determinative factor" standard should apply to Wallace's state-law retaliation claim. See, e.g., Van Horn v. Best Buy Stores, L.P., 526 F.3d 1144, 1148 (8th Cir. 2008) ("To make out a retaliation claim, the plaintiff must show that the protected conduct was a determinative-not merely motivating-factor in the employer's adverse employment decision." (internal quotation omitted)). Wallace argued correctly that, in Daugherty v. City of Maryland Heights, 231 S.W.3d 814, 820 (Mo. 2007) (en banc), the Missouri Supreme Court had applied a "contributing factor" standard to define the causation element of a discrimination claim under the Act. Wallace argued that this same contributing factor standard should apply to her retaliation claim. The Company countered that the holding of Daugherty was limited to discrimination claims because minor differences in statutory language in the sections of the Act addressing discrimination and retaliation justified different causation standards. The district court determined that the contributing-factor standard applied, and the court instructed the jury accordingly.

Based on this causation instruction, the jury found in favor of Wallace and awarded her $10,000 in lost wages and benefits. The jury also awarded her $20,000 in additional compensatory damages and $500,000 in punitive damages. Finally, the district court ordered the Company to pay approximately $220,000 in attorneys' fees and expenses.

The Company moved for judgment notwithstanding the verdict or, in the alternative, a new trial or an altered or amended judgment. The district court denied the motions. In the present appeal, the Company renews its challenge to the causation instruction and argues that, regardless of the instruction, the evidence was insufficient to support the verdict or the awards of actual and punitive damages. Finally, the Company argues that the punitive damages were constitutionally excessive and that the award ...

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