Thursday, June 15, 2006
Ruling Cutting Punitive Damages to Grocery Workers Left Standing
By a MetNews Staff Writer
A Fourth District Court of Appeal ruling cutting punitive damage awards in a suit against Ralphs Grocery Company was left standing yesterday by the California Supreme Court.
No justice at the court’s weekly conference yesterday voted to hear the plaintiffs’ appeal in Gober v. Ralphs Grocery Company, decided by Div. One March 1.
A San Diego Superior Court jury awarded $5 million in punitive damages to each of six women who claimed they were harassed while working at a Ralphs store in Escondido. After the judge granted Ralphs’ motion for remittitur, two of the plaintiffs accepted reduced awards of $3 million and $1.5 million respectively, but the others elected new trials rather than accept awards totaling $3.75 million.
Ralphs appealed only as to the plaintiffs who asked for new trials, and the Court of Appeal ruled that the four had to accept a total of $1.5 million in order to keep the punitive damages within federal constitutional limits, prompting the plaintiffs to seek review.
The case went to the Court of Appeal three times. The plaintiffs in the decade-long litigation 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 plaintiffsówho received the largest compensatory awards, $100,000 and $200,000 eachóaccepted. 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.
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 consider 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.
Copyright 2006, Metropolitan News Company