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Full Opinion
This is an appeal from an amended judgment of the United States District Court for the Western District of New York (William M. Skretny, Chief Judge) filed February 5, 2013, on a multimillion-dollar jury award (reduced by the district court on remittitur) for compensatory and punitive damages for violations of state and federal anti-discrimination statutes, and for intentional infliction of emotional distress under New York law. The case before us on appeal involves a pattern of extreme racial harassment in the workplace.
The plaintiff, a longtime steelworker at a plant in Lackawanna, New York, endured an extraordinary and steadily intensifying drumbeat of racial insults, intimidation, and degradation over a period of more than three years. The demeaning behavior of the plaintiffs tormentors included insults, slurs, evocations of the Ku Klux Klan, statements comparing black men to apes, death threats, and the placement of a noose dangling from the plaintiffs automobile.
The defendants appeal from this judgment and award. They do not seriously dispute the gravity of the underlying conduct, but they raise several procedural and substantive objections to the district courtâs findings on liability and to its damages award. We reject most of these challenges, finding no error in the district courtâs judgment concerning liability on the common-law and statutory claims or compensatory damages. We do, however, conclude that the punitive damages award, even after the remittitur in the district court, is excessive in light of the principles set forth in the prior case law of the Supreme Court and of this Circuit.
We are required to police closely the size of awards rendered in the trial courts within our Circuit. In recent opinions, w.e have addressed at length the individual and social harms associated with excessive awards of compensatory and punitive damages, many of which are relevant to this case.
After completing that review on the facts in the record before us, we conclude, first, that the juryâs award for compensatory damages was permissible in light of the nature of the plaintiffs claims. Second, we conclude that the punitive damages were excessive. We will remand to the district court for imposition of a remittitur, requiring a new trial on the issue unless the plaintiff accepts an award to be calculated by the district court. The resulting damages, which will remain substantial, will be appropriate and sufficient to remedy the plaintiffs injury and to impose civil punishment on the defendants for their misbehavior.
BACKGROUND
Elijah Turley was hired at the Buffalo-area Lackawanna Steel Plant in 1995, and remained in this job despite intense racial harassment until his employment was terminated when the plant closed its doors in 2009. During the period relevant to this litigation, the Lackawanna plant changed hands several times in a series of mergers and acquisitions that followed the 2003 liquidation of Bethlehem Steel, its longtime owner. For purposes of this appeal, it is sufficient to note that the plant was owned successively by three Delaware-based corporations (referred to here as âthe employerâ or âLackawannaâ) whose names reflected those of three successive corporate parents (hereinafter âthe parent compa
The Pattern of Racial Harassment
From 1997 onward, Turley worked as a process operator in the Lackawanna plantâs âpickierâ
Throughout the remainder of his employment, Turleyâs co-workers frequently subjected him to racist epithets, degrading treatment, and, from time to time, outright threats. Co-workers declined to speak to him or interact with him socially on the job, by, for example, joining him for lunch. Jaworski, Turley testified, continually referred to him as âboy.â 3 Trial Tr. 4-5. Another witness estimated that thirty percent of the workers in the department referred to Turley as âthat [fucking nigger].â
.Turleyâs workstation became a stage for repeated intimidation and harassment. Sometime in December 2005, he arrived at work to find a sign hanging from his workstation, printed with the words âdancing gorilla.â Joint Stmt, of the Case ¶ 20(a). Days later, the initials âKKâ were spray-painted on the wall near his workstation, and the phrases âKing Kongâ and
Although many employees harassed and threatened Turley, a coworker, Frank Pele, was responsible for some of the more extreme conduct. He addressed Turley as âyou fucking black bitch,â and âyou fucking black piece of shit.â 3 Trial Tr.26. Pele would make monkey sounds when Turley tried to speak to him. Id. A worker who replaced Turley at his workstation at shift changes testified that, on a daily basis, the door handles and controls that Turley used would be covered with thick, black motor grease. When the worker complained about this to co-workers, Pele said, âIt must be that [â]boon thatâs doing it,â referring to Turley. 2 Trial Tr. 166. In May 2006, the same sort of grease was smeared all over Turleyâs chair in the processor booth. Once, Pele told Turley: â[W]hen I see your black nigger ass on the outside, Iâm going to fucking shoot you.â 3 Trial Tr.28. When Turley reported the threat to management, â[t]hey laughed it off.â Id.
The campaign of racial harassment intensified from 2005 into 2008. In one incident, on December 3, 2007, Turley was told to go check on his car, which had been vandalized several times in the past. Upon arriving, Turley found, dangling from his side-view mirror, a stuffed toy monkey with a noose around its neck.
Supervisors â Actions
Because Turley brings this claim against his immediate employer, its corporate parent, and three individually named plant managers, rather than against the persons most directly involved in the daily abuse, his claim depends on the adequacy of the supervisorsâ response, or on their direct involvement in the harassment. Among the named defendants, Thomas Jaworski managed the pickier department from May 2003 to January 2007. Gerald Marchand was the plantâs manager of human resources from May 2003 until March 2007. And Larry Sampsell was the plant manager of labor relations and security during the entire relevant time period.
Management was not wholly unresponsive to Turleyâs complaints. A foreman removed the âdancing gorillaâ sign, and managers painted over some graffiti. After the âdancing gorillaâ and âKing Kongâ incidents, Jaworski stated at a crew meeting that such conduct would not be tolerated. The situation nonetheless continued to worsen. Plant managers interviewed employees after many of Turleyâs complaints. After the 2007 incident with the stuffed monkey, the company hired a lawyer to conduct an investigation. And defendant Larry Sampsell, the manager of labor relations and security, installed lights in the parking lot. Sampsell also once arranged for a private investigator to pose as a contractor working in the pickier department in order to gather information, but the plan failed when employees discovered that the investigator was taking photographs.
On other occasions, however, supervisors were apparently unresponsive; to the contrary, they appeared to encourage some of the behavior. For example, a coworker accosted Turley while he was meeting with Sampsell and Marchand, shouting, âShut up you fucking black cry
During the multiyear period in which this harassment took place, only two employees were disciplined for their roles in the abuse. Frank Pele was suspended for three days for painting the âKing Kongâ graffiti in January 2006, and for another two days the following month for threatening to âdeal with [Turley] on the outside.â 4 Trial Tr. 19. In 2007, another employee received a five-day suspension for asking, in reference to Turley, âDo I have to work with that black man?â 2 Trial Tr. 110-11. The defendants have contended that their efforts to root out further culprits were frustrated by a âcode of silenceâ among the workers, 1 Trial Tr.231, but they have not explained why employees such as Pya-nowski went unpunished for hostile acts of which the supervisors were aware.
Several witnesses testified that management seemed uninterested in addressing the ongoing harassment. Turley testified that multiple calls to the companyâs complaint telephone line, âAlertline,â met with no response or investigation. Company managers, including Sampsell, also were unresponsive to the efforts of local police to investigate the continuing course of threats and harassment. Detective Daniel Cardi testified that he repeatedly asked Sampsell and other plant managers for access to surveillance video and other records of the companyâs investigations. Each time, managers told Cardi that they would have to check with the companyâs legal department, and failed to follow up.
Sampsell did, however, begin to monitor Turley closely after the complaints started. After Turley had filed suit in federal court, Sampsell surreptitiously installed two cameras trained on Turleyâs workstation. Although Sampsell testified that the cameras were meant to detect the persons responsible for harassing Turley, it is undisputed that he did not inform Turley as to their presence; indeed, he initially denied it. After cameras were removed, a spray-painted eyeball appeared on the wall where one of the cameras had been.
Sampsell also retained a private investigator to run a background check on Tur-ley. At trial, Turleyâs counsel reminded Sampsell that, in an earlier, deposition, he had testified that he ran the background check because he was looking for a felony or other offense in Turleyâs history. Sampsell did not deny saying this, and admitted that his recollection would have been better at the time of the deposition than it was at the time of trial. The defendants did not object to this exchange, and it therefore became part of the record that the jury could consider.
Effects on Turley
At trial, the union representative testified that between 2006 and 2008, inclusive, Turley, âwas losing it.â 1 Trial Tr. 191. Turleyâs psychologist noted that Turley suffered serious panic attacks and engaged in other abnormal behavior. The psychologist diagnosed Turley with a short-term adjustment disorder, depression, and a panic disorder. A psychiatrist further di
According to the district court:
When Turley began work at the steel plant, he enjoyed his job and was a man full of confidence; he possessed a colorful and animated personality. He came in, as one witness put it, displaying his feathers like a ârooster.â But the unyielding harassment took its toll. And by the time he left, he was broken and dispirited. The company had, again in the words of this witness, âcut the head off the rooster.â
Turley v. ISG Lackawanna, Inc., 960 F.Supp.2d 425, 434-35 (W.D.N.Y.2013) (internal citations omitted).
Procedural History
Turley filed charges of discrimination with federal and state authorities in 2005 and 2006. On December 6, 2006, after exhausting his administrative remedies, Turley, through counsel, instituted this action in the United States District Court for the Western District of New York. The complaint alleges disparate treatment, retaliation, and the creation of a hostile work environment, in violation of 42 U.S.C. § 1981, Title VII, 42 U.S.C. § 2000e et seq., and the New York Human Rights Law, N.Y. Exec. Law § 291 et seq.,
The trial lasted for three weeks, after which the jury deliberated for less than a
After trial, the defendants moved under Federal Rules of Civil Procedure 50(b) and 59 for judgment as a matter of law, a new trial, or remittitur of damages, on several grounds. Turley v. ISG Lackawanna, Inc., 960 F.Supp.2d 425, 433 (W.D.N.Y.2013). The district court denied the defendantsâ motion for judgment as a matter of law, but partially granted the motion for a new trial based on its conclusion that the punitive damages award was excessive. Id. at 450, 456. The court ordered the new trial unless the plaintiff agreed for the punitive damages award to be reduced to a total of $5 million on remittitur, a figure the district court thought represented âthe upper most limit permissible under the law.â Id. at 453-54. The plaintiff accepted the reduction. A final breakdown of the awards is as follows:
Compensatory Punitive
Hostile Work Environment
Corporate defendants $1,000,000 $4,000,000
Sampsell $25,000 $0
Marchand $25,000 $0
Jaworski $10,000 $0
Subtotal $1,060,000 $4,000,000
Intentional Infliction of Emotional Distress
ArcelorMittal USA Lackawanna Inc. $250,000 $998,750
Sampsell $10,000 $1,250
Subtotal $260,000 $1,000,000
Total $1,320,000 $5,000,000
See id. at 456. .The district court also awarded the plaintiff attorneyâs fees of $437,323.30 and costs of $32,711.42. Id.
The defendants appealed.
DISCUSSION
The degree of racial intimidation and ridicule that pervaded Turleyâs workplace during the relevant period far surpassed any threshold necessary to demonstrate a hostile and abusive work environment. See, e.g., Harris v. Forklift Sys., Inc., 510 U.S. 17, 21-22, 114 S.Ct. 367, 126 L.Ed.2d 295 (1993). The defendants do not argue otherwise.
Instead, they allege five errors in the verdict and judgment, for which the remedy demanded ranges from a reduction in damages to a new trial. First, the defendants contend that alleged errors in the jury instructions and verdict form prejudiced their case and warrant a new trial on the statutory harassment claims. Second, the parent corporation in this case, now named ArcelorMittal USA, Inc., argues that it was not the plaintiffs employer, and should not have been held liable as to those claims. Third, the defendants argue that, irrespective of whether the alleged conduct constituted racial harassment, it does not meet the strict standard set under New York law for intentional infliction of emotional distress. Finally, they dispute the size of both the compensatory and punitive damages awards.
I. Jury Instructions and Verdict Form
We review a claim of error in the district courtâs jury instructions de novo,
The asserted error in this case concerns the courtâs instructions on the standard for employer liability in a hostile work environment claim. It is the plaintiffs burden to establish that the discriminatory conduct may be imputed to the employer. See, e.g., Summa v. Hofstra Univ., 708 F.3d 115, 124 (2d Cir.2013). To succeed in that endeavor, the plaintiff can demonstrate that a supervisor used his or her authority âto further the creation of a discriminatorily abusive working environment,â Perry, 115 F.3d at 153, or that the employer knew or reasonably should have known about harassment by non-supervisory co-workers, âyet failed to take appropriate remedial action,â
The defendants contend that the district courtâs instructions would have led the jury to conduct a different, and legally unsound, inquiry. The court instructed the jury that when a non-supervisory coworker creates a hostile work environment, the employer will be liable only if the plaintiff proves that his âsupervisor or successively higher authority knew ... or should have known ... of the hostile or abusive work environment and permitted it to continue by failing to take remedial action.â 13 Trial Tr. 121-22. The defendants argue that this instruction would have allowed the jury to hold the company liable if any single supervisor or higher authority failed to adequately respond, on his own, to the harassment. If the defendantsâ interpretation is correct, then this instruction would constitute legal error because the employerâs response to harassment must be assessed as a whole and in light of the totality of the circumstances. See, e.g., Distasio, 157 F.3d at 65.
We conclude, however, that when read in context, it is clear that the instruction does not contain the error that the defendants assert. In the paragraph immediately following the language in question, the district court explained:
[A]n employerâs response need only be reasonable under the circumstances.... Whether an employerâs response was reasonable has to be assessed from the totality of the circumstances.... Factors to be considered in determining whether the response was reasonable include â okay, weâre talking about reasonable employer response â the gravity of the harm being inflicted upon the plaintiff, the nature of the employerâs*154 response in light of the employerâs resources, and the nature of the work environment. An employerâs response to co-worker harassment is not unreasonable simply because it has not been successful in preventing further harassment.
Trial Tr. 13:122. This passage uses the phrase âemployerâs responseâ five times, and explicitly states that the jury must consider the totality of the circumstances. Id. It employs phrases, such as âthe employerâs resources,â id., that would make little sense unless the jury was being asked to consider the employerâs response as a whole.
We are not permitted to dissect a jury verdict by combing through a trial courtâs instructions seeking language that, when isolated from its context, might be or appear to be misleading. See, e.g., Lore, 670 F.3d at 156 (noting that a charge must be read âas a wholeâ); Clark v. John Lamula Investors, Inc., 583 F.2d 594, 600-01 (2d Cir.1978) (similar). â[A] jury charge should be examined in its entirety, not scrutinized strand-by-strand.â SR Intâl Bus. Ins. Co. v. World Trade Ctr. Properties, LLC, 467 F.3d 107, 119 (2d Cir.2006) (quoting Time, Inc. v. Petersen Publâg Co., 173 F.3d 113, 119 (2d Cir.1999)). In the case at bar, the jury instruction, when examined as a whole, properly focused the juryâs attention on the totality of the employerâs response. The district court therefore did not âprovide a misleading impression or inadequate understanding of the law.â Schwartz v. Liberty Mut. Ins. Co., 539 F.3d 135, 147 (2d Cir.2008) (internal quotation marks omitted).
The defendants also contend, with respect to the same issue, that a question on the verdict form was misleading and prejudicial. A verdict form âmust be read in conjunction with the judgeâs charge to the jury.â Vichare v. AMBAC, Inc., 106 F.3d 457, 466 (2d Cir.1996); Shah v. Pan Am. World Svcs., Inc., 148 F.3d 84, 96 (2d Cir.1998), cert. denied, 525 U.S. 1142, 119 S.Ct. 1033, 143 L.Ed.2d 42 (1999); accord Lore, 670 F.3d at 159-60. Here, the form was ambiguous with respect to whether any one managerâs failure to respond adequately could create liability for a hostile work environment.
Even assuming arguendo that the jury instructions and the form had been erroneous, however, we do not think that the errors would have prejudiced the defendants. Defendants Sampsell, Marchand, and Jaworski undertook most of the several remedial actions in response to Turleyâs complaints, conducting some investigations, holding a few employee meetings, and taking security precautions, such as installing lights in the parking lot. The jury nonetheless decided that each of these defendants had either actively participated in the harassment or had failed to take adequate measures to stop or remedy it.
II. Parent-Subsidiary Liability
The parent company â now, as noted, named ArcelorMittal USA, Inc.â further argues that it cannot be held liable on the plaintiffs harassment claims because it was not the plaintiffs âemployer,â as that term is understood under the relevant statutes. We review de novo the district courtâs denial of judgment as a matter of law on this issue, although our review is âbound by the same stern standardsâ as the district courtâs. Cross v. N.Y.C. Transit Auth., 417 F.3d 241, 248 (2d Cir.2005). We therefore view all evidence and draw all inferences in favor of the party opposing judgment as a matter of law, Fabri v. United Techs. Int'l Inc., 387 F.3d 109, 119 (2d Cir.2004) â in this case, the plaintiff. We will overturn a verdict only if we conclude that there is âsuch a complete absence of evidence supporting the verdict that the juryâs findings could only have been the result of sheer surmise and conjecture, or such an overwhelming amount of evidence in favor of the appellant that reasonable and fair minded [jurors] could not arrive at a verdict against the appellant.â Gronowski v. Spencer, 424 F.3d 285, 292 (2d Cir.2005) (internal quotation marks and brackets omitted). The record supporting the juryâs finding on this issue is not so sparse as to require a reversal.
The jury determined that both Lackawanna and its corporate parent were liable on the federal and state harassment claims.
there is an equally fundamental principle of corporate law, applicable to the parent-subsidiary relationship as well as generally, that the corporate veil may be pierced and the shareholder held liable for the corporationâs conduct when, inter alia, the corporate form would otherwise be misused to accomplish certain wrongful purposes.
United States v. Bestfoods, 524 U.S. 51, 62, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998). In the employment-discrimination context, we may look past the formal separation among corporate affiliates when âextraordinary circumstancesâ permit treating a parent and a subsidiary as a âsingle employerâ for the purposes of applicable statutes. Murray, 74 F.3d at 404; see generally 1 Fletcher Cyclopedia of the Law of Corporations § 43.90 (2014).
To determine whether, under Title YII,
Our case law instructs us to apply the same four-factor inquiry to determine whether two or more entities constitute a âsingle employerâ under the New York Human Rights Law. Brown, 756 F.3d at 226-28. Applying the test under both federal and state statutes serves the stated goal of the New York Court of Appeals âto resolve federal and state employment discrimination claims consistently.â
The single-employer inquiry is conceptually distinct from other theories of corporate veil-piercing. Cf. Truck Drivers Local Union No. 807 v. Regâl Imp. & Exp. Trucking Co., 944 F.2d 1037, 1046 (2d Cir.1991) (making a similar point in the context of labor relations). For example, under the single-employer test, a plaintiff need not demonstrate unlawful motive or any intent to use the corporate form to avoid contractual obligations. See, e.g., Lihli Fashions Corp. v. Natâl Labor Relations Bd., 80 F.3d 743, 748 (2d Cir.1996); Trustees of Pension, Welfare & Vacation Fringe Benefit Funds of IBEW Local 701 v. Favia Elec. Co., 995 F.2d 785, 788-89 (7th Cir.1993). And the plaintiff need not demonstrate that the parent company exercises âday-to-day controlâ over labor relations. See Solis v. Loretto-Oswego Residential Health Care Facility, 692 F.3d 65, 76-77 (2d Cir.2012). The plaintiff must
In this case, there was some evidence that the parent company was directly and necessarily involved in decisions relating to the plaintiffs employment and to the course of harassment. It negotiated and entered into the collective bargaining agreement with the union, and it was this agreement that governed the plantâs response to Turleyâs complaints. A 2007. harassment training seminar explained that all complaints must be reported to the corporate human resources department, and that any settlement that changes anyoneâs terms of employment must be approved by the corporate office. Employees were directed to report harassment to the âAlertline,â a nationwide âhotline.â Plant managers repeatedly stated that they were required to check with the corporate legal department in Chicago before providing information to assist police investigations concerning threats against Turley.
This evidence, along with additional facts recounted in the district courtâs opinion, see Turley, 960 F.Supp.2d at 437-40, provided a sufficient basis for the jury to conclude that the two companies constituted a single employer for the purposes of the federal and state statutory claims. We do not mean to imply that Lackawanna and its parent company would have constituted a single entity for all purposes. And, because our review is constrained by the strict standards that govern a motion for judgment as a matter of law, we do not imply that we would have necessarily treated these two entities as a single employer were we sitting as the trier of fact in this case. But because we find neither a âcomplete absence of evidenceâ supporting the jury verdict nor an overwhelming amount of evidence favoring the defendant, see Gronowski, 424 F.3d at 292, we will not disturb the jury verdict' as to corporate liability.
III. Intentional Infliction of Emotional Distress
The district court denied the defendantsâ motion for judgment as a matter of law on the plaintiffs claim for intentional infliction of emotional distress (âIIEDâ). Turley, 960 F.Supp.2d at 443-45. The defendants contend that the district court erred by permitting the juryâs verdict on that claim to stand. Our review is de novo, within the strict limitations explained above. See, e.g., Gronowski, 424 F.3d at 292.
The IIED tort is problematic. It provides a remedy for the damages that arise out of a defendant engaging in âextreme and outrageous conduct, which so transcends the bounds of decency as to be regarded as atrocious and intolerable in a civilized society.â Freihofer v. Hearst Corp., 65 N.Y.2d 135, 143, 490 N.Y.S.2d 735, 480 N.E.2d 349, 355 (1985); accord Restatement (Second) of Torts § 46 cmt. d (1965).
Then-Chief Judge Kaye, writing for the New York Court of Appeals in Howell, explained the courtâs reasons for reading the IIED tort narrowly:
Unlike other intentional torts, intentional infliction of emotional distress does not proscribe specific conduct (compare, e.g., Restatement [Second] of Torts § 18 [battery]; id., § 35 [false imprisonment] ), but imposes liability based on after-the-fact judgments about the actorâs behavior. Accordingly, the broadly defined standard of liability is both a virtue and a vice. The tort is as limitless as the