Free Response to Motion - District Court of Colorado - Colorado

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 1 of 10

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-cv-02199-MSK-MEH MICHAEL E. CLAWSON and JARED L. DILLON, Plaintiffs, vs. MOUNTAIN COAL COMPANY, L.L.C., ARCH WESTERN RESOURCES, L.L.C., and ARCH COAL, INC. Defendants.

DEFENDANTS' RESPONSE TO PLAINTIFFS' MOTION FOR ASSESSMENT AND AWARD OF PUNITIVE DAMAGES

Defendants Mountain Coal Company, L.L.C. ("Mountain Coal"), Arch Western Resources, L.L.C. ("Arch Western Resources"), and Arch Coal, Inc. ("Arch Coal") hereby submit this response to Plaintiffs' Motion for Assessment and Award of Punitive Damages by the Court or for Additur (Docket No. 418) ("Plaintiffs' Motion"). By their Motion, Plaintiffs ask the Court to disregard the jury's determination not to award any punitive damages, essentially treating it as merely an advisory verdict, and make its own findings as to an award of punitive damages. In the alternative, Plaintiffs ask the Court to order an additur on the basis that the verdict as to punitive damages is clearly inadequate and, therefore, Defendants should be ordered to accept a verdict of $200,000 in punitive damages for each plaintiff, or face a new trial on the amount of punitive damages.

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 2 of 10

Because whether to award punitive damages was a proper determination for the jury and additur is not allowed in federal court, Plaintiffs' Motion should be denied in its entirety. I. ARGUMENT A. The Award of Punitive Damages, If Any, Was a Determination to Be Made by the Jury

Plaintiffs first contend that the Court should treat the jury's verdict on punitive damages as merely advisory and substitute its own factual findings and award on punitive damages. Plaintiffs' argument is based entirely on their interpretation of Cooper Ind., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001). Relying on the Supreme Court's discussion in Cooper that "the level of punitive damages is not really a `fact' `tried' by the jury," 532 U.S. at 437, Plaintiffs argue that the Court may accept or reject the jury's findings on punitive damages and substitute its own findings and award. Plaintiffs' Motion at 5. Plaintiffs' argument is flawed. The question presented in Cooper was a very narrow one, whether a district court's determination on the constitutionality of a punitive damage award is subject to de novo review, as opposed to review for an abuse of discretion. 532 U.S. at 426. The Court held that, when the challenge to a punitive damage award is on constitutional grounds, the district court's determination on constitutionality should be reviewed de novo. Id. at 436. 1 Cooper does not hold that the actual award of punitive damages is one to be made by the trial court, rather than a jury. In fact, the Supreme Court specifically noted that historical material standing for the proposition that "determining the amount of punitive damages should be left to the discretion of the jury" does not conflict with its decision to require de novo review when the award is challenged on constitutional grounds. Cooper, 532 U.S. at 437, n. 11, citing
1

Plaintiffs do not challenge the punitive damage award here on constitutional grounds.

2

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 3 of 10

Barry v. Edmunds, 116 U.S. 550 (1886) ("[I]t is the peculiar function of the jury" to set the amount of punitive damages); Day v. Woodworth, 13 How. 363, 371 (1852) (punitive damages should be "left to the discretion of the jury"). Moreover, in Cooper, the Supreme Court noted that the factual findings supporting the punitive damage award, based upon the jury instructions, cannot be ignored. "Nothing in our decision today suggests that the Seventh Amendment would permit a court, in reviewing a punitive damages award, to disregard such jury findings." 532 U.S. at 439, n. 12. As demonstrated above, Plaintiffs' argument that the Supreme Court's decision in Cooper allows this Court to disregard the jury's findings on punitive damages and substitute its own findings is simply contrary to controlling law. In fact, Plaintiffs fail to cite to a single case in the five years since Cooper was decided in which a court substituted its own findings and award. 2 Moreover, as Plaintiffs correctly note, jury trials became available under Title VII (whose remedial scheme is used by the ADA) only after passage of the Civil Rights Act of 1991, which gave plaintiffs the option of seeking compensatory or punitive damages and, if so, requesting a jury. Thus, it is implicit in the remedial scheme that, if a plaintiff seeks compensatory or punitive damages and demands a jury, it is the jury who should be making the determination on such damages. In the only case cited by Plaintiffs, Jones v. Rent-A-Center, 281 F. Supp.2d 1277, 1283 (D. Kan. 2003), the defendant argued that, in reviewing a jury verdict on punitive damages, the court may not consider evidence that was not presented to the jury. The court responded that it had not considered any such evidence in its review but, in dicta, noted that a review of such evidence would not implicate the Seventh Amendment, following Cooper. Id. at 1283 and n. 2. The case does not support Plaintiffs' argument that a court may substitute its own findings and award of punitive damages.
2

3

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 4 of 10

Indeed, the parties, prior to trial, were in agreement that the Court would make the ultimate determination as to back and front pay and costs and attorneys' fees, but that the jury would determine all other claims, including compensatory and punitive damages. See Final Pretrial Order at 37. Eventually, the Court indicated that it would receive an advisory verdict from the jury on back pay. At no time prior to the filing of this Motion did Plaintiffs indicate to Defendants or the Court their presently stated belief that the punitive damages award also would be merely advisory. Therefore, even if Plaintiffs are correct that the jury's determination on punitive damages may be treated as merely advisory, they waived such issue by agreeing in the Final Pretrial Order, filed in September 2003 long after the Cooper decision, that the jury would determine their claim for punitive damages. In sum, Plaintiffs' argument that the Court may substitute its own findings and determination of an appropriate amount of punitive damages is contrary to law and their prior representations and should be rejected. B. Additur Is Not Allowed in Federal Court Plaintiffs argue, in the alternative, that the Supreme Court's decision in Cooper gives the Court authority to order additur. Plaintiffs recognize that additur has been prohibited in federal courts since Dimick v. Schiedt, 293 U.S. 474 (1935). The Supreme Court distinguished the practice of additur from remitittur, which is allowed, by noting: Where the verdict is excessive, the practice of substituting a remission of the excess for a new trial is not without plausible support in the view that what remains is included in the verdict along with the unlawful excess--in that sense that it has been found by the jury--and that the remittitur has the effect of merely lopping off an excrescence.

4

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 5 of 10

Id. at 486-87. The prohibition on the use of additur in the federal courts also has been noted by the Tenth Circuit. Sanjuan v. IBP, Inc., 160 F.3d 1291, 1301 (10th Cir. 1998); Lyon Dev. Co. v. Business Men's Assurance Co. of Am., 76 F.3d 1118, 1125 (10th Cir. 1996). Nevertheless, Plaintiffs contend that, as a result of the Supreme Court's decision in Cooper, federal courts are now free to consider additur. Plaintiffs' Motion at 5-7. As more fully discussed above, the issue considered by the Supreme Court in Cooper did not relate to additur but, rather, dealt with the narrow question of the appropriate standard of review for a constitutional challenge to an award of punitive damages. Nowhere in the Cooper opinion is additur or remittitur mentioned, nor is there any reference to the Dimick case or overruling such precedent. Rather, as stated above, the Supreme Court specifically noted that its decision in Cooper was not intended to conflict with the historical material holding that the amount of punitive damages is properly determined by the jury. Moreover, Plaintiffs fail to cite to a single case since Cooper interpreting such case to mean that additur is no longer prohibited in federal courts. Defendants have been unable to locate a single court of appeals or district court case overruling the prohibition on additur. Rather, to the contrary, post-Cooper cases and secondary sources indicate that the prohibition on additur continues. See, e.g., Franceschi v. Hosp. Gen. San Carlos, Inc., 420 F.3d 1, 5 (1st Cir. 2005) (noting that federal courts are prohibited from granting additur); Tezak v. Montgomery Ward & Co., Inc. 33 Fed. Appx. 172, 177-78 (6th Cir. 2002) (same), attached as Exhibit 1; Trinity Products, Inc. v. Burgess Steel, LLC, 2006 WL 903241 at *6-7 (E.D. Mo. April 7, 2006) (same), attached as Exhibit 2; Lapapa v. Nat'l Railroad Passenger Corp., 2005 WL 3533858 at *2-3 (E.D. La. Oct. 19, 2005) (same), attached as Exhibit 3; John J. Kircher & Christine M.

5

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 6 of 10

Wiseman, PUNITIVE DAMAGES: LAW & PRAC. 2D § 18.12 (March 2006) (noting that on the federal level, judicial use of the additur device is not allowed). In sum, the controlling law prohibits additur in federal court and Plaintiffs have failed to demonstrate that such law is no longer valid. 3 C. The Jury's Award Was Not Inadequate, Under the Proper Standard of Review As Defendants have made clear above, Plaintiffs are not entitled to have the Court substitute its own findings and issue an award of punitive damages or an additur. However, assuming arguendo that the Court were to reach the issue (which it need not), the jury's decision not to award punitive damages was proper and supported by the evidence. A jury's finding on damages "is considered inviolate" unless "the verdict is so inadequate as to shock the judicial conscience and to raise an irresistible inference that passion, prejudice, corruption or other improper cause invaded the trial." Black v. Hieb's Enterprises, Inc., 805 F. 2d 360, 362 (10th Cir. 1986). Plaintiffs have failed to show that the decision not to award punitive damages was improper or that an award of zero is so inadequate as to shock the judicial conscience and raises an inference of passion, prejudice, corruption or other improper cause.

Because additur has not been allowed in federal courts, there are no federal cases providing guidance to the parties or the Court as to how to determine an appropriate amount or what might be an appropriate relationship of an award to the actual harm. Therefore, Plaintiffs are forced to rely on cases involving remittitur and the reduction of an award of punitive damages because of excessiveness. Plaintiffs' Motion at 10. Plaintiffs seem to contend that, if most cases review the ratio by which punitive damages exceed actual damages and allow such a ratio, then their request for "punitive damages in an amount less than actual damages" must be reasonable. Id. Plaintiffs offer no explanation or basis for their request for $200,000 each in punitive damages. On this further basis, their request for punitive damages should be rejected.

3

6

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 7 of 10

The instruction given to the jury, reflecting the proper considerations under Tenth Circuit law as to an award of punitive damages, and the verdict form, acknowledged that, even with a finding of willfulness, such damages are not required. Specifically, the jury was instructed: If you find in favor of Mr. Clawson and/or Mr. Dillon on their claims, and you find that the Defendants' conduct was willful or done with reckless indifference, you may, but are not required to, award punitive damages. The purpose of punitive damages are both to punish a defendant and to deter a defendant or others from committing similar acts in the future. Jury Instruction No. 23 (emphasis added). 4 Plaintiffs made no objections to the instruction on punitive damages or the verdict form. Yet Plaintiffs now argue that a finding of willfulness means that punitive damages must be awarded. As is clear from the instructions, "[p]unitive damages are not automatic." Sanjuan v. IBP, Inc., 941 F. Supp. 1000, 1007 (D. Kan. 1996), aff'd on other grounds, 160 F.3d 1291 (10th Cir. 1998). "An award of actual damages does not mandate the allowance of punitive damages." Id. Furthermore, the Supreme Court has noted that "[i]t should be presumed a plaintiff has been made whole for his injuries by compensatory damages, so punitive damages should only be awarded if the defendant's culpability, after having paid compensatory damages, is so reprehensible as to warrant the imposition of further sanctions to achieve punishment or deterrence." State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419 (2003). After the verdict was read, including the award of zero dollars to each Plaintiff in punitive damages, Plaintiffs did not voice any objection or request that the Court seek further In addition, the final verdict form, after asking whether a plaintiff proved malice or reckless indifference, stated "If your answer is `YES', you may, but are not required to, award punitive damages to Mr. Clawson/Mr. Dillon." Verdict Form at 6-7.
4

7

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 8 of 10

clarification. As a result, the parties and the Court may now only speculate as to how and why the jury reached its determination. However, as was undisputed at trial, Mountain Coal modified its "no restrictions" policy in December 2000 to clarify that only work restrictions that interfered with the performance of essential functions with or without accommodation would prevent an employee from returning to work. Therefore, a conclusion that punitive damages were not necessary to further punish or deter Defendants was supported by the undisputed evidence. Notably, Plaintiffs do not even address why the failure to award any punitive damages was improper. In other words, they do not present any argument as to how an award of punitive damages would serve the purposes identified in the instructions. Rather, Plaintiffs skip ahead to the factors to be considered once it is determined that some award of punitive damages is necessary and appropriate. Specifically, Plaintiffs contend that "[t]he evidence regarding the willfulness of defendants' conduct, the evidence of defendants' size and wealth, and the relationship of the amount awarded to the harm inflicted show that the jury's assessment was grossly inadequate." Plaintiffs' Motion at 7. Plaintiffs refer to a number of pieces of "evidence" which they contend show the degree of willfulness or reprehensibility of Defendants' conduct. Plaintiffs' Motion at 8-10. However, there was contrary evidence presented on these issues and, in order to find liability, the jury did not have to come to the conclusions presented by Plaintiffs in their Motion. Moreover, the "evidence" argued by Plaintiffs does not fall within the considerations for determining reprehensibility, which have been identified as whether: "the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct

8

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 9 of 10

involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery or deceit or mere accident." State Farm, 538 U.S. at 419. In sum, Plaintiffs have failed to demonstrate that the jury's determination not to award punitive damages was so contrary to the evidence or law as to shock the judicial conscience or raise an inference of an improper basis for the decision. Thus, even if the Court had the authority to do so, there is no proper basis upon which to alter the award. II. CONCLUSION As set forth more fully above, because the determination of punitive damages was properly an issue for the jury to decide and additur is not permissible in federal court, Plaintiffs' Motion should be denied. In any event, Plaintiffs have failed to demonstrate any proper basis upon which to reconsider the jury's determination. DATED: June 5, 2006. Respectfully submitted,

s/Monique A. Tuttle Jeffrey T. Johnson Monique A. Tuttle HOLLAND & HART LLP 555 Seventeenth Street, Ste. 3200 Post Office Box 8749 Denver, Colorado 80201 Telephone: (303) 295-8000 Facsimile: (303) 295-8261 E-mail: [email protected] [email protected] ATTORNEYS FOR DEFENDANTS

9

Case 1:01-cv-02199-MSK-MEH

Document 434

Filed 06/05/2006

Page 10 of 10

CERTIFICATE OF SERVICE (CM/ECF)

I hereby certify that on June 5, 2006, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the following email addresses: [email protected] [email protected] I am not aware of any non CM/ECF participants in this matter requiring service by other means.

s/Monique A. Tuttle Jeffrey T. Johnson Monique A. Tuttle Attorneys for Defendants HOLLAND & HART LLP 555 Seventeenth Street, Ste. 3200 Post Office Box 8749 Denver, Colorado 80201 Telephone: (303) 295-8000 Facsimile: (303) 295-8261 E-mail: [email protected] [email protected]

3562675_3.DOC

10