Free Motion for Miscellaneous Relief - District Court of Colorado - Colorado

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

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

PLAINTIFFS' MOTION FOR ASSESSMENT AND AWARD OF PUNITIVE DAMAGES BY THE COURT OR FOR ADDITUR

The plaintiffs, Michael E. Clawson and Jared L. Dillon, through their undersigned counsel, Killian, Guthro & Jensen, P.C., hereby submit their Motion for Assessment and Award of Punitive Damages by the Court or for Additur, and in support thereof, state as follows: I. BACKGROUND AND RELIEF REQUESTED The United States Supreme Court determined in Cooper Indus. v. Leatherman Tool Group that the amount of an award of punitive damages was not a finding of fact by the jury within the Seventh Amendment. 532 U.S. 424, 432, 437 & FN 11 (2001). This holding by the Supreme Court means that the jury's determination of the amount of punitive damages is not subject to the protections of the Seventh Amendment. At the very least, punitive damage awards are now subject to additur, which otherwise had been prohibited by the Seventh Amendment. Dimick v. Schiedt, 293 U.S. 474 (1935). An even more persuasive interpretation is that the jury

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determination of an amount of punitive damages may be altered at the Court's discretion, much like an advisory verdict, because the determination is not a finding of fact. Plaintiffs assert that the jury's assessment of zero dollars in punitive damages was inadequate and against the great weight of the evidence. The court should reject the jury's determination, make findings on the factors for determining the amount of punitive damages, and award punitive damages in an appropriate amount. If the determination of an amount of punitive damages is not a finding of fact, then the "shock the conscience" standard should not apply because it pertains to findings of fact. However, plaintiffs would assert that the assessment of zero dollars in punitive damages in this case is so inadequate as to shock the conscience of the Court. The Seventh Amendment does not apply to punitive damages determination, and the Court may thus order an additur requiring the defendants to accept punitive damages or order a new trial on the amount of punitive damages. Plaintiffs believes the evidence shows that an appropriate award of punitive damages is $200,000 per plaintiff, or such lesser amount as will reach the statutory damage cap of $300,000 contained in 42 USC § 1981a(b)(3), once added to the compensatory damages. II. A JURY'S DETERMINATION OF THE AMOUNT OF PUNITIVE DAMAGES IS NOT A DETERMINATION OF FACT An assessment of damages that measures the harm done to a plaintiff is a question of fact, and the jury's decision on this issue is protected by the Seventh Amendment. Kennon v. Gilmer, 131 U.S. 22, 27-29 (1889); Dimick v. Schiedt, 293 U.S. 474 (1935). This is not the case with punitive damages, which do not compensate the plaintiff, but serve to punish the defendant and provide an example to others. "A jury's assessment of the extent of a plaintiff's injury is 2

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essentially a factual determination, whereas its imposition of punitive damages is an expression of its moral condemnation." Cooper, 532 U.S. at 432. "[T]he level of punitive damages is not really a `fact' `tried' by the jury." Cooper, 532 U.S. at 437. If the amount of punitive damages is not a finding of fact, the Seventh Amendment does not protect it. This is because the Seventh Amendment only prohibits reexamination of a "fact tried by a jury". U.S. Const. Amend. VII. "Because the jury's award of punitive damages does not constitute a finding of `fact' appellate review of the District Court's determination that an award is consistent with due process does not implicate the Seventh Amendment concerns raised by respondent . . . ." Cooper, 532 U.S. at 437. As the dissent of Justice Ginsburg noted, the Supreme Court was holding that a jury's determination as to the amount of punitive damages was not a finding of fact under the Seventh Amendment, and that was the only way the Court could justify de novo review of a district court's refusal to reduce punitive damages. Cooper, 532 U.S. at 444, 446 (Ginsburg Dissent). At least one court has since noted that it may now consider evidence not presented to the jury in deciding whether to affirm an award of punitive damages under Title VII. Jones v. RentA-Center, 281 F.Supp. 2d 1277, 1279, 1283 & FN 1, 2 (D. Kan. 2003). This would not offend the Seventh Amendment because the jury's decision on the amount of punitive damages is not a finding of fact after Cooper. Jones, 281 F.Supp. 2d at FN 2. Because the amount of punitive damages is not a question of fact, the Constitutional prohibitions on reexamining the amounts awarded for injuries do not apply to punitive damages. The Court may make findings and order defendants to pay a specific amount of punitive damages. Alternatively, the court may order an additur. 3

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III.

THE COURT SHOULD MAKE FINDINGS AND ORDER THE DEFENDANTS TO PAY PUNITIVE DAMAGES, AND NEED NOT OFFER DEFENDANTS THE OPTION OF A NEW TRIAL ON DAMAGES If the amount of punitive damages does not constitute a finding of fact, it is questionable

whether the jury should be making a determination at all. Lisa Litwiller, Has the Supreme Court Sounded the Death Knell for Jury Assessed Punitive Damages?, 36 U.S.F. L. Rev. 411, 411, 470, 471 (Winter 2002). "The controlling distinction between the power of the court and that of the jury is that the former is the power to determine the law and the latter to determine the facts." Dimick, 293 U.S. at 485. The amount of punitive damages is not a finding of fact, and court is not bound by the jury's determination of the amount. While Professor Litwiller has a point in regard to jury determination of punitive damage amounts, 42 U.S.C. § 1981a(c) allows jury trials where the complaining party seeks "compensatory or punitive damages" (emphasis added). At the very least, making the availability of a jury dependent on the type of damages sought indicates the jury should determine if they are available. Cooper does not alter the nature of the jury's finding of willfulness, or any other prerequisite to punitive damages, only the amount. It also makes sense to allow the jury to give an "expression" of "moral condemnation" as the jury is the "conscience of the community". See Malandris v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 703 F.2d 1152, 1170 (10th Cir. 1981); Gilbert v. Mullins, 302 F.3d 1166, 1176 (10th Cir. 2002). The Cooper court noted, based on prior cases, that "perhaps . . . determining the amount of punitive damages should be left to the discretion of the jury" but this "do[es] not indicate that the amount of punitive damages imposed by the jury is itself a `fact' within the meaning of the Seventh Amendment Reexamination Clause." Cooper, 532 U.S. at 437 FN 11. 4

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If the jury's role is to find facts, and assessing the amount of punitive damages is not such a finding, it is manifestly clear that the court is not bound by the jury's determination. If the court is free to review evidence not submitted to the jury in upholding an award of punitive damages, the court is equally free to reassess the evidence and the amount of the award. It is the Seventh Amendment that prohibits the court from substituting its judgment for the jury's. Kennon, 131 U.S. at 27-29. Either the Seventh Amendment applies, or it does not; the Supreme Court says it does not. This means that the jury's determination of the amount of punitive damages is, in essence, advisory. While the jury has a role in advising the judge on the amount of punitive damages as the "conscience of the community," the ultimate decision must be left to the judge, because the determination does not involve a finding of fact. Like any other advisory verdict, the court is free to accept or reject the jury's determination and may substitute its findings for the jury's findings. Hargrove v. American Cent. Ins. Co., 125 F.2d 225, 228 (10th Cir. 1942); Smith v. Northwest Fin. Acceptance, 129 F.3d 1408, 1416 FN 6 (10th Cir. 1997). Based on the evidence presented at trial, as discussed below, the jury's assessment of zero dollars in punitive damages is clearly inadequate. The court should substitute its own judgment for the jury's and assess a greater amount of punitive damages. IV. ALTERNATIVELY, THE COURT HAS THE AUTHORITY TO ORDER ADDITUR, WHICH WOULD BE APPROPRIATE HERE "Additur is the correlative of remittitur. Where a verdict is clearly inadequate, a plaintiff's motion for a new trial will be denied if the defendant agrees to an increase in the judgment to an amount set by the trial judge." John W. Grund & J. Kent Miller, Colorado Personal Injury Practice, 7A West's Colorado Practice Series, § 37.24 p.197 (2000). Additur has 5

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been prohibited in federal courts because of the Seventh Amendment. Dimick v. Schiedt, 293 U.S. 474 (1935). Although courts in some states are permitted to require defendants to choose either a court-increased verdict or a new trial, the Supreme Court in Dimick v. Schiedt . . . determined that additur cannot be used in the federal courts because it involves an unconstitutional reexamination of the jury verdict in violation of the Seventh Amendment. Lyon Dev. Co. v. Business Men's Assurance Co. of Am., 76 F.3d 1118, 1125 (10th Cir. 1996). To determine that additur was prohibited by the Seventh Amendment, the Supreme Court looked to the common law as it existed in 1791. Dimick, 293 U.S. at 476-477. The Supreme Court examined the common law throughout the opinion, and determined that additur was generally not permitted as of 1791. However, by the time Dimick was decided in 1935, several states had adopted additur as permissible under their laws. Dimick, 293 U.S. at 489-90 (Stone Dissent). Additur continues to be used in the state courts. See Lyon, 76 F.3d at 1125. Additur, a corollary of the accepted practice of remittitur, is a legitimate tool of the judiciary, barred only by the Seventh Amendment. Even the Dimick court did not want inadequate jury verdicts on damages to remain unaltered. "Where the verdict returned by the jury is palpably or grossly inadequate or excessive, it should not be permitted to stand." Dimick, 293 U.S. at 485. However, the court was constrained by the Seventh Amendment, and only new trials could be awarded without the use of an additur. However, in light of Cooper, the Seventh Amendment constraint does not apply to the jury's determination of the amount of punitive damages. The Supreme Court in Cooper held that the Seventh Amendment does not apply to the jury's determination as to the amount of punitive damages. Cooper, 532 U.S. at 432, 437 & FN 11. It is the Seventh Amendment 6

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Reexamination Clause that prohibits additur. Lyon, 76 F.3d at 1125. The Supreme Court determined that the amount of punitive damages imposed by the jury is not a "fact" within the meaning of the Seventh Amendment's Reexamination Clause. Cooper, 532 U.S. at 437 FN 11. Because the Seventh Amendment does not apply to the amount of punitive damages, additur is allowed. If the court does not simply substitute its judgment for the jury's on the issue of the amount of punitive damages, additur should be used. This is an appropriate case for the use of additur. The standard for additur should be the standard expressed by the Supreme Court for not allowing a verdict to stand. The standard is whether "the verdict by the jury is palpably or grossly inadequate . . . ." Dimick, 293 U.S. at 485. As discussed further below, given the evidence in this case and the finding of willfulness, an award of zero dollars in punitive damages is palpably and grossly inadequate. Therefore, plaintiffs request additur requiring the defendants to pay an amount in punitive damages greater than that awarded by the jury, or a new trial solely on the issue of the amount of punitive damages. V. BASED ON THE EVIDENCE PRESENTED, THE COURT SHOULD AWARD EACH PLAINTIFF $200,000 IN PUNITIVE DAMAGES, OR ORDER AN ADDITUR OF THIS AMOUNT The 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. The court should not allow the verdict of zero dollars in punitive damages to stand.

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A.

The Willfulness and Reprehensibility of Defendants' Conduct

The evidence regarding the willfulness and reprehensible nature of defendants' conduct is clear and overwhelming. Defendants had a policy of automatically terminating any employee who at maximum medical improvement had work restrictions. This sort of policy will "inevitably lead to violations of the ADA." Hines v. Chrysler Corp., 231 F.Supp. 2d 1027, 1046 (D. Colo. 2002). While defense witnesses denied this was the actual policy, it is clear that the jury did not find these witnesses credible and believed the written policy spoke for itself. At the same time defendants had this policy, they were filing documents with the EEOC stating that they were committed to following the ADA and accommodating disabled individuals. Defendants also failed to engage in the interactive process in good faith. Absent exceptional circumstances, the interactive process is required by the ADA. Smith v. Midland Brake, Inc., 180 F.3d 1154, 1171-73 (10th Cir. 1999). In regard to Mr. Clawson, defendants did not work with him or his doctors to determine his true abilities or what jobs he could do at the mine. Defendants only offered him a chance to apply for a job they subjectively believed he was not qualified for, and even then made him compete for it with others, contrary to the ADA's requirement of accommodation. Smith, 180 F.3d at 1164-1170. Defendants did not engage in any sort of process with Mr. Dillon. When Mr. Dillon told Mr. Langrand he had been allowed to work with restrictions before, he was told "that was then." The only explanation for defendants' motives is a memo stating it was too difficult to keep track of injured employees with limitations. It is apparent that defendants felt it was too difficult to comply with the ADA as well. Defendants had these policies and took these actions, despite being aware of the ADA and its requirements. Defendants' EEO and Affirmative Action 8

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policies mirror the requirements of the ADA, demonstrating this knowledge. Mr. DiClaudio admitted at trial that he was familiar with the requirements of the ADA, including the term "essential function." After these events came to light, Arch Coal still promoted Mr. DiClaudio, demonstrating the lack of concern it has for its manager's compliance with federal law. Most disturbingly, defendants took these actions despite having in-house counsel providing advice. Either in-house counsel felt defendants would not get caught, was providing bad advice, or was being ignored. In any event, as counsel was in-house and an agent, defendants are responsible for her conduct. An award of zero dollars considering this conduct is palpably and grossly inadequate. B. Defendants' Size and Wealth

The evidence at trial showed that Mountain Coal itself, with one mine, produced in excess of five million tons of coal per year, with a value in excess of fifty million dollars a year. There was testimony that Mountain Coal employed over three hundred employees. Mountain Coal has the resources to pay these employees high hourly rates and provide them with extensive benefits. The evidence shows that Arch Western Resources owned a number of other subsidiaries, some owning more than one mine. Its resources are, in turn, substantially greater that Mountain Coals'. Arch Coal owns Arch Western Resources, as well as a number of other subsidiaries. Arch Coal is the number two coal producer in the country. Arch Coal's size and wealth are truly significant. As stated in plaintiffs' closing, a punitive damage award of $500,000 would be less than 1% of gross coal sales for one year, just at Mountain Coal. Mountain Coal owns just one of the many coal mines within the Arch Coal corporate family. An award of $200,000 for each plaintiff is appropriate in relation to the significant size and wealth 9

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of the corporate defendants. An award of zero dollars does not adequately account for the size of the defendants and their ability to absorb an award of economic and non-economic damages. C. The Relationship of the Punitive Damages to the Harm Inflicted

In this case, the jury found that defendants had caused over $100,000 in economic harm to Mr. Dillon and over $200,000 in economic harm to Mr. Clawson. The jury also found that the defendants had done $250,000 in non-economic harm to each of the plaintiffs. Thus, the amount of harm done by defendants to plaintiffs in violating the ADA was significant. The defendants did in excess of $350,000 in harm to Mr. Dillon. The defendants did in excess of $450,000 in harm to Mr. Clawson. Most of the cases on the subject of the amount of punitive damages discuss the ratio by which punitive damages exceed actual damages. See Jones v. Rent-A-Center, 281 F.Supp. 2d 1277, 1286-87, 1289-90 (D. Kan. 2003) (discussing subject generally); Corti v. Storage Tech. Corp., 304 F.3d 336, 342-43 (4th Cir 2002) (consider economic damages in assessing punitive damages); Foster v. Time Warner Enter. Co., L.P., 250 F.3d 1189, 1194, 1196-97 (8th Cir. 2001) (affirming ratio of 1.8-1, including economic damages in the ratio, up to 10-1 has been allowed). In this case, plaintiffs are asking for punitive damages in an amount less than actual damages. In Mr. Clawson's case, $200,000 in punitive damages is less than one-half his actual damages.

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Considering the amount of harm done by defendants' willful violation of the ADA, an award of zero dollars in punitive damages is palpably and grossly inadequate. An award of $200,000 in punitive damages is appropriate under the circumstances.1 CONFERRAL Plaintiffs' counsel has conferred with defense counsel concerning this motion. Defendants object to this motion. CONCLUSION The court has authority to overrule the jury's determination of the amount of punitive damages because the determination does not fall within the Seventh Amendment. The court should replace the jury's judgment with its own and make its own findings. The court should award plaintiffs each $200,000 in punitive damages as a punishment of defendants and to serve as an example to others. Alternatively, the court should order an additur. The prohibition on additur is specifically a product of the Seventh Amendment. The Seventh Amendment does not apply to the determination of the amount of punitive damages, and thus additur as to punitive damages is not prohibited. As an alternative to replacing the jury's verdict, the court should order defendants to accept a verdict of $200,000 in punitive damages for each plaintiff, or order a new trial on the amount of punitive damages. The jury's award of zero dollars in punitive damages is palpably and grossly inadequate, and an award of $200,000 for each plaintiff is clearly and easily justified by the evidence.
Plaintiffs recognize that an award of $200,000 would put them over the $300,000 damage cap on combined noneconomic and punitive damages. However, it is expected that defendants will move for a remittitur of the noneconomic damages. Such a motion is standard practice, regardless of the merits. Plaintiffs do not believe that a remittitur is appropriate in this case. However, the court may disagree. Due to this possibility, plaintiffs are requesting an appropriate amount of punitive damages, which can be reduced by the court to comply with the damages cap after all appropriate motions are decided.
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RESPECTFULLY SUBMITTED this 11th day of May, 2006.

s/J. Keith Killian J. Keith Killian Damon Davis Killian, Guthro & Jensen, P.C. 225 N. 5th Street Grand Junction, CO 81501 Telephone: (970) 241-0707 FAX: (970) 242-8375 E-mail: [email protected] Attorney for Plaintiffs Michael E. Clawson and Jared L. Dillon

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UNITED STATES DISTRICT COURT FOR THE DISTRIT OF COLORADO CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on May 11, 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 e-mail addresses: [email protected] [email protected] and, I hereby certify that I have mailed or served the document or paper to the following non CM/ECF participants in the manner (mail, hand-delivery, etc.) indicated by the non-participant's name: Mr. Michael Clawson 38506 Back River Road Paonia, CO 81428 Mr. Jared Dillon 35404 Back River Road Hotchkiss, CO 81419 Mail

Mail

s/ J. Keith Killian J. Keith Killian Attorney for Plaintiffs Killian, Guthro & Jensen, P.C. 225 N. 5th Street Grand Junction, CO 81501 Telephone: (970) 241-0707 Fax: (970) 242-8375 [email protected]

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