Thursday, March 2, 2006
C.A. Cuts Punitive Awards in Sexual Harassment Case Against Grocer
By a MetNews Staff Writer
Punitive damage awards totaling $20 million in a sexual harassment suit against Ralphs Grocery Company were cut to $1.5 million yesterday by the Fourth District Court of Appeal, which said that anything above that amount would exceed constitutional limits.
Div. One overturned a trial judge’s ruling that would have allowed each of the four plaintiffs, who recovered a total of $250,000 in compensatory damages, to choose between a new trial on punitive damages and an award of 15 times compensatory damages. But the panel also rejected Ralphs’ contention that any award in excess of three times compensatory damages would be unconstitutional.
The case was before the Court of Appeal for the third time. The plaintiffs in the decade-long litigation were six women who worked at the Ralphs store in Escondido and claimed that their store director, Roger Misiolek, engaged in inappropriate touching, used profanity, made inappropriate comments on some of the plaintiffs’ sex lives, and threw various objects at some of them.
Misiolek settled, leaving Ralphs as the sole defendant at trial. The jury found that Ralphs failed to take reasonable steps to protect the plaintiffs and awarded damages ranging from $50,000 to $200,000 per plaintiff.
Jurors also found that Misiolek was a managing agent and that the company either ratified his conduct or continued to employ him in conscious disregard of the rights and safety of others. Those findings led to a second phase of the trial, on punitive damages, resulting in awards ranging from $150,000 to $1.3 million per plaintiff, for a total of $3.3 million.
The trial judge threw out the awards, however, ordering a new trial, limited to punitive damages, based on juror misconduct.
In its first ruling, in May 2000, the Court of Appeal said that Misiolek was not a managing agent for purposes of punitive damage liability, but said the finding of conscious disregard was supported by sufficient evidence. The panel upheld the new trial order.
On retrial, the jury awarded each plaintiff $5 million, but the judge granted remittiturs, which two plaintiffs—who received the largest compensatory awards, $100,000 and $200,000 each—accepted. (Ralphs paid the reduced amounts.) The remaining plaintiffs opted for new trials, and Ralphs appealed again.
In its second ruling, the Court of Appeal affirmed. Ralphs sought review, and the Supreme Court sent the case back to the Court of Appeal for reconsideration in light of its ruling last year that cut a $1.7 million punitive damages award to $50,000, which was 10 times the compensatory award in that case.
That ruling was based on State Farm Mut. Auto Ins. Co. v. Campbell (2003) 538 U.S. 408, in which the high court said that the limits on punitive damages should generally be set somewhere between three and nine times compensatory damages, based on such factors as the egregiousness of the defendant’s conduct.
In his opinion for the Court of Appeal yesterday, Justice James A. McIntyre placed Ralphs’ conduct in the middle of the egregiousness scale.
The company has to bear heavy responsibility for allowing Misiolek to serve as a store director when they knew he had been abusive to employees, particularly women, at two stores where he had worked previously, the justice said.
But the court also had to take into consideration the fact that Ralphs acted promptly to investigate the plaintiffs’ complaints and to remove Misiolek from the store where they worked, as well as the fact that the abuse suffered by the plaintiffs was in the form of verbal abuse and inappropriate touching, as opposed to serious physical abuse or threats that would warrant a higher ratio of compensatory to punitive damages, McIntyre said.
The case is Gober v. Ralphs Grocery Company, 06 S.O.S. 1085.
Copyright 2006, Metropolitan News Company