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Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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,, 

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

GLADYS G. SMITH, Administratrix } 

of the Estate of Ray L. Smith, } 

} 

Plaintiff-Appellant } 

and Cross-Appellee, } 

} 

.FILED 

United St.ates Court of Appeals 'l'enth Cir-cnit 

JUN 021989 

ROBERT L. HOECKER 

Clerk 

vs. } 

} 

Nos. 87-2054 

87-2111 

DEPARTMENT OF HUMAN SERVICES, } 

State of Oklahoma, ) 

} 

Defendant-Appel lee ) 

and Cross-Appellant. ) 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV-84-809-R) 

E.V. Spadafora of Spadafora & Neugebauer, Oklahoma City, Oklahoma, 

for Plaintiff-Appellant. , 

Richard w. Freeman, Jr., Assistant General Counsel (Charles Lee 

Waters, General Counsel, David A. Brown, Assistant General 

Counsel, with him on the brief), Department of Human Services, 

Oklahoma City, Oklahoma, for Defendant-Appellee. 

Before BALDOCK, BRORBY and EBEL, Circuit J~dges. 

BALDOCK, Circuit Judge. 

On August 20, 1982, Ray L. Smith (Smith), then 59 years of 

age, was terminated by his employer, the Oklahoma Department of 

Human Services (DHS). Smith's appeal of that termination decision 

was dismissed by the Oklahoma Ethics & Merit Commission 

Appellate Case: 87-2111 Document: 01019785738 Date Filed: 06/02/1989 Page: 1 
(Commission). Smith sought review of the Commission's decision in 

Oklahoma state court, requesting that he be reinstated to his 

former position and receive back pay. Prior to the rendering of 

the state court decision, he received from the Equal Employment 

Opportunity Commission (EEOC) a letter giving him the right to sue 

the DHS in federal court for age discrimination under the ADEA. 

Smith filed his complaint in federal court on March 29, 1984, 

seeking reinstatement and back pay as in state court, along with 

attorney fees and costs of the federal action. Smith also 

requested liquidated damages, represented by an amount equal and 

in addition to actual damages, as provided for in cases of 

"willful" violations of the ADEA. See 29 u.s.c. S 626(b) & 

216(b). 

In April 1984, Smith was granted judgment in Oklahoma state 

court, which ordered Smith reinstated to his former position and 

awarded him all back pay and benefits accruing since his 

discharge. Smith v. Oklahoma Ethics and Merit Comm'n, No. C-82-

116 (D. Ct. of Alfalfa County, May 15, 1984). In September 1984, 

the federal district court stayed the proceedings under the ADEA 

pending the appeal of the Oklahoma state court decision. The 

Oklahoma Court of Appeals affirmed, and certiorari was denied by 

the Oklahoma Supreme Court. Department of Human Servs. v. Smith, 

No. 62,360 (Okla. Ct. App. July 30, 1985), cert. denied, No. 62-

360 (Okla. Nov. 13, 1985). After the mandate of the Oklahoma 

Supreme Court issued, the DHS reinstated Smith to his employment 

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and paid him gross back pay of $56,243.04. 1 Rec. vol. I, doc. 25 

at 2 n.2. The stay of the federal action was vacated in April 

1986. Smith died in January 1987, and the federal district court 

entered an order in May 1987, substituting Gladys Smith (Mrs. 

Smith), the administratrix of Smith's estate, as plaintiff. 

Although Smith received actual damages in state court in 

excess of that requested in federal court on the basis of the same 

discriminatory action, 2 he continued to pursue an award of 

liquidated damages under the ADEA in federal court. 3 

1 The Oklahoma state trial court also awarded Smith 

post-judgment interest and $11,200 in attorney fees. 

attorney fees is currently on appeal to the Oklahoma 

Court. 

After the 

$8,378.56 in 

The award of 

Supreme 

2 Smith sought $25,213 in back pay in the federal action, 

covering the period from the date of his termination until the 

filing of the federal action, along with $43.63 per day for each 

additional day until his reemployment by the DHS. Rec. vol. I, 

doc. 25 at 3 n.3. 

3 Smith argued that upon a showing of willfulness, he was 

entitled to liquidated damages equal to an amount represented by 

the actual damages compensable under the ADEA. The DHS countered 

by arguing that the state court recovery of actual damages must be 

offset against the lesser amount requested in federal court, 

thereby leaving no actual damages upon which to predicate an award 

of liquidated damages. See,~, Fariss v. Lynchburg Foundry, 

769 F.2d 958 (4th Cir. 1985) (pension benefits received upon 

wrongful termination of employee must be offset against claimed 

actual loss from termination prior to calculation of liquidated 

damages; liquidated damages should be assessed only on actual 

pecuniary loss). The trial court chose not to follow cases such 

as Fariss, as each of the cases cited by Smith involved an offset 

of amounts received in actual mitigation of a plaintiff's 

pecuniary loss, while Smith's state court award represented the 

amount of his actual loss, but did not diminish it. Rec. vol. I, 

doc. 25 at 8. Thus, having already found the DHS liable for 

violating the ADEA, see infra n.5, although not awarding actual 

damages, the trial court allowed Smith to proceed on his claim 

solely for liquidated damages, to be measured by his actual 

pecuniary loss as recovered in the state court action. Id. at 9. 

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federal district court disposed of a number of issues on various 

motions for partial summary judgment, 4 trial was had to the court 

on the remaining issue of whether the DHS had acted willfully in 

terminating Smith, thereby giving rise to liability for liquidated 

damages. Smith introduced into evidence a set of stipulated facts 

and rested. The trial court ruled in favor of the Oklahoma DHS, 

finding that Smith had not met his burden of showing willfulness 

as required to support an award of liquidated damages. We have 

jurisdiction of this appeal pursuant to 28 u.s.c. § 1291. 

According to Mrs. Smith, the trial court's conclusion that 

the DHS did not act willfully is unsupported either by the 

relevant facts or the applicable law. The DHS seeks affirmance of 

the trial court's ruling on willfulness, but in the event that 

that decision is not affirmed, asserts four issues on crossappeal. First, the DHS argues that the ADEA action in federal 

court was barred by the doctrine of res judicata, based on the 

prior state court proceedings. Second, the DHS contends that the 

Eleventh Amendment immunizes the DHS from a suit for damages under 

4 In an order dated September 25, 1984,· the trial court ruled 

that Smith's action was not precluded by the doctrine of res 

judicata in light of the previous state court litigation, and that 

the Eleventh Amendment did not bar a claim for actual and 

liquidated damages against the Oklahoma DHS. Rec. vol. I, doc. 

12. The trial court's January 27, 1987, order granted summary 

judgment in favor of Smith on the issue of the DHS's liability for 

violation of the ADEA, and in favor of the defendant on the 

appropriate amount of actual damages recoverable by Smith. Rec. 

vol. I, doc. 25. The trial court held that Smith failed to prove 

a claim to any actual damages not already recovered in state 

court, and therefore awarded no actual damages. Id. On April 13, 

1987, the trial court denied a motion by the DHS to vacate the 

grant of summary judgment in favor of Smith regarding the DHS's 

liability for its violation of the ADEA. Rec. vol. I, doc. 35. 

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Appellate Case: 87-2111 Document: 01019785738 Date Filed: 06/02/1989 Page: 4 
the AOEA. Third, according to the OHS, Smith's failure to recover 

actual damages in the federal action precludes an award of 

liquidated damages. Lastly, the OHS asserts that Smith's claim 

fo! liquidated damages did not survive his death. As we agree 

with this last contention, we need not address the other issues. 

We affirm the judgment of the district court as hereafter modified 

and remand to the district court with an order to dismiss Smith's 

complaint. 

The question of the survival of an action grounded in federal 

law is governed by federal common law when, as here, there is no 

expression of contrary intent. James v. Home Constr. Co., 621 

F.2d 727, 729 (5th Cir. 1980); 7C C. Wright, A. Miller & M. Kane, I 

Federal Practice and Procedure§ 1952 at 526 (1986). The general 

rule under the federal common law is that an action for a penalty 

does not survive the death of the plaintiff. Schreiber v. 

Sharpless, 110 U.S. 76, 80 (1884); Smith v. No. 2 Galesburg Crown 

Fin. Corp., 615 F.2d 407, 414 (7th Cir. 1980), overruled on other 

grounds, Pridegon v. Gates Credit Union, 683 F.2d 182, 194 (7th 

Cir. 1982). The issue here, then, is whether Smith's action for 

liquidated damages under the AOEA is penal such that it does not 

survive his death. 

A number of courts have considered whether actions under 

various federal statutes survive the death of the plaintiff. See, 

~' Kilgo v. Bowman Transp., Inc., 789 F.2d 859, 876 (11th Cir. 

1986); In re Wood, 643 F.2d 188, 190 (5th Cir. 1980); James v. 

Home Constr. Co., 621 F.2d 727, 729 (5th Cir. 1980); Smith v. No. 

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. . 

2 Galesburg Crown Fin. Corp., 615 F.2d 407, 414 (7th Cir. 1980); 

Murphy v. Household Fin. Corp., 560 F.2d 206, 208 (6th Cir. 1977); 

Khan v. Grotnes Metalforming Systems, Inc., 679 F. Supp. 751, 756 

(N.D. Ill. 1988); Asklar v. Honeywell, Inc., 95 F.R.D. 419, 422 

(D. Conn. 1982). Typically, a court is required to infer from a 

reading of the relevant statute and its history whether a cause of 

action is penal or remedial in nature. In doing so, most courts 

employ a test first articulated by the Sixth Circuit in Murphy v. 

Household Finance Corp., 560 F.2d 206 (6th Cir. 1977). There, 

distilling a discussion of penal laws found in Huntington v. 

Attrill, 146 U.S. 657 (1892), the court developed a three-factor 

analysis requiring an assessment of "l) whether the purpose of the 

statute was to redress individual wrongs or more general wrongs to 

the public; 2) whether recovery under the statute runs to the 

harmed individual or to the public; and 3) whether the recovery 

authorized by the statute is wholly disproportionate to the harm 

suffered." Murphy, 560 F.2d at 209. 

Applying Murphy's analysis, at least two courts have held 

that an action under the ADEA survives the death of the plaintiff. 

Khan, 679 F. Supp. at 756; Asklar, 95 F.R.D. at 424. According to 

those courts, "[w]hile the ADEA does provide for liquidated 

damages, ..• its primary purpose is to compensate, and where 

appropriate reinstate, individuals who have suffered employment 

discrimination because of their advanced age." Asklar, 95 F.R.D. 

at 423 (quoted in Khan, 679 F. Supp. at 756). Further, according 

to those courts, the recovery under the ADEA redresses individual 

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wrongs, runs to the individual wronged, and is not 

disproportionate to the harm suffered. 5 Id. 

Both cases, however, are distinguishable. Asklar involved an 

allegation of willful discrimination, and thus apparently involved 

a claim for liquidated damages, but was decided before the Supreme 

Court's characterization of liquidated damages as punitive in 

Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985) 

(discussed infra). Additionally, the court's-holding in Asklar, 

95 F.R.D. at 423, that the ADEA's primary purpose is remedial, 

although providing for liquidated damages claims, is not 

applicable to a situation involving a claim only for liquidated 

damages, especially in light of Thurston. Khan is inapposite 

because, while decided after Thurston, it makes no reference to 

any willful violation of the ADEA, or any claim for liquidated 

damages. Unlike the instant case, then, Khan apparently considers 

only the compensation and reinstatement functions of the ADEA, and 

cites Asklar for the proposition that the ADEA is primarily 

remedial in nature. 

Further, and most significantly, we are not required to apply 

the Murphy factors in order to infer the nature of a liquidated 

damages claim. In Trans World Airlines, Inc. v. Thurston, 469 

U.S. 111 (1985), the Supreme Court considered the issue of the 

5 In Fariss v. Lynchburg Foundry, 769 F.2d 958 (4th Cir. 1985), 

involving a claim under the ADEA for reinstatement, backpay, and 

punitive damages, the court stated in a footnote that a claim 

under the ADEA survives the death of the original plaintiff. Id. 

at 962 n.3. Fariss was decided before Thurston, however, and 

merely cites, without discussion, Asklar, distinguished above. 

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appropriate standard by which to determine the "willfulness" 

needed to support an award of liquidated damages under the ADEA. 

The Court stated that "[t]he legislative history of the ADEA 

indicates that Congress intended for liquidated damages to be 

punitive in nature." Id. at 125. According to the Court, the 

original administration bill incorporated§ 16(a) of the Fair 

Labor Standards Act, imposing criminal liability for a willful 

violation. Id. However, because of anticipated difficulties of 

proof under a criminal provision, as well as impediments to 

investigation, conciliation, and enforcement that might arise from 

an employer's invocation of the fifth amendment, the criminal 

penalty for willful violations was eliminated and replaced by a 

double, or liquidated, damages provision. Id. The legislative 

history reflected that the liquidated damages provision was 

intended to provide an effective deterrent to willful violations 

of the ADEA. Id. 6 

6 It is this characterization of ADEA liquidated damages by the 

Supreme Court which lies at the heart of our disagreement with the 

concurrence filed herewith. The concurrence cites a recent· 

Supreme Court decision, United States v. Halper, 57 U.S.L.W. 4526 

(U.S. May 15, 1989), considering the nature of punishment for 

purposes of double jeopardy analysis, for the proposition that "in 

the ordinary case fixed-penalty-plus-double-damages provisions can 

be said to do no more than make the Government whole." Id. at 

4530. This is not the ordinary case, however, as the Supreme 

Court has specifically stated that with regard to ADEA liquidated 

damages, the intent of Congress was not to make a plaintiff whole 

upon a showing of basic ADEA liability, but to punish and deter 

upon a showing of willfulness. Thurston, 469 U.S. at 125-26. 

Because of this, the cases cited by the concurrence do not involve 

"similar kinds of damage provisions," and application of the test 

set forth in Murphy v. Household Finance Corp., 560 F.2d 206 (6th 

Cir. 1977), discussed infra, is unnecessary. 

Nor is it especially significant that the Court in Thurston 

(footnote continued on next page) 

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To the extent that the Supreme Court's discussion of penal 

laws in Huntington v. Attrill, 146 U.S. 657 (1892), from which the 

Murphy factors were formulated, lends guidance to the issue of 

survival of an action, it supports the characterization of 

liquidated damages under the ADEA as penal. In Huntington, the 

Court considered the rule that the courts of one sovereign are 

without power to enforce the penal laws of another. The tenor of 

the Court's opinion is that while statutes providing for a right 

of recovery to an individual often have a penal element, id. at 

667, the word "penal" in its true sense denotes "a criminal or 

quasi-criminal law," id. at 676. The Court also quoted with 

approval another court's comparison of penal and remedial actions, 

stating that "'[a penal prosecution] is prosecuted for the purpose 

of punishment, and to deter others from offending in like 

manner.'" Id. at 668 (quoting Reed v. Northfield, 13 Pick. 94, 

100-01). Given the Supreme Court's clear characterization of the 

liquidated damages recovery under the ADEA as a more expedient 

substitute for a criminal sanction, intended to punish and deter 

willful violations, we conclude that an action solely for 

liquidated damages under the ADEA is penal such that it does not 

survive Smith's death. 

We acknowledge that the application of Smith v. No. 2 

Galesburg Crown Fin. Corp., 615 F.2d 407 (7th Cir. 1980), might 

(footnote continued from previous page) 

did not address the issue of survival. This is amply demonstrated 

by the cases cited in the concurrence, each of which looks to a 

non-survival context to ascertain the purpose served by the 

relevant statutes. 

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support the survival of this action. In Smith, the court 

evaluated a cause of action under the Truth in Lending Act (TILA), 

stating that "[t]here is no question that TILA creates a cause of 

action for a civil penalty;" both Congress and the Supreme Court 

had described the action as such. Id. at 414. Nevertheless, the 

court reasoned that the characterization of the action as "penal'' 

was not conclusive as to the survival of the TILA action, because 

"the term 'penal' is used in different contexts to mean different 

things." Id. In order to ascertain the nature of a cause of 

action for the specific purpose of determining survival, the court 

looked to the Murphy factors, even though the civil recovery was 

clearly described as "penal.'' The factors in Murphy, however, 

were articulated and employed for the purpose of determining, in 

the face of statutory silence, whether a statute was penal in 

nature within the meaning of Huntington, 146 U.S. at 666-67, a 

case having nothing to do with the survival of an action. Thus, 

we are not persuaded by the conclusion in Smith that regarding the 

survival of an action, the Murphy factors possess any special 

relevance somehow more probative of legislative intent than the 

Supreme Court's explicit interpretation of the penal nature of a 

liquidated damages award under the ADEA. 

In conclusion, we note that the rule of Schreiber v. 

Sharpless, 110 U.S. at 80, is that actions on penal statutes do 

not survive a party's death; claims for reinstatement, backpay, 

and other benefits under the ADEA are clearly remedial in nature, 

and we could not say that the ADEA statute itself is a penal 

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statute. Schreiber also cautions, however, that in evaluating 

survival, a court should look beyond "forms and modes of 

proceedings" and concentrate on the nature of the action brought. 

Id. As initially filed, prior to prevailing in state court, 

Smith's action did request reinstatement and actual damages as 

well as liquidated damages. Following the state court recovery 

and the lifting of the stay in federal court, however, Smith only 

''implie[d]" that he was entitled to actual damages in addition to 

those recovered in state court, rec. vol. I, doc. 25 at 9, the 

trial court entered summary judgment in favor of the OHS on this 

issue, and Smith does not appeal that ruling. Therefore, this 

action is essentially for liquidated damages, penal in nature, and 

to focus instead on the generally remedial nature of the ADEA 

statute, or the original posture of Smith's claim, rather than the 

essence of this action would, in our opinion, improperly elevate 

form over substance. We hold that Smith's suit, being in its 

essential nature a suit for liquidated damages under the ADEA, 

does ndt survive his death. 

We modify the judgment in favor of the defendant and remand 

to the district court with an order to dismiss the suit. So 

modified, we AFFIRM. 

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Nos. 87-2054, 87-2111 -- Smith v. Dept. of Human Services 

Ebel, Circuit Judge, concurring in the judgment: 

I concur in the judgment of the court. However, I am not 

persuaded that the Supreme Court's language in Trans World 

Airlines, Inc., v. Thurston, 469 U.S. 111, 125 (1985), is 

controlling in this context, especially when that case did not 

concern the issue of survivability and the Court was not focusing 

on it. 

The analysis set forth in Murphy v. Household Finance Corp., 

560 F.2d 206 (6th Cir. 1977), if followed, would lead to the 

conclusion that the liquidated damage provision of the ADEA is 

remedial rather than penal. Further, dicta by the United States 

Supreme Court in the recent case of United States v. Halper, 57 

U.S.L.W. 4526 at 4530 (U.S. May 15, 1989), suggests that this kind 

of provision should normally be considered remedial in nature. 

The Court in Halper stated that "in the ordinary case fixedpenalty-plus-double-damages provisions can be said to do no more 

than make the Government whole," and thus, would not be considered 

penal for purposes of triggering the Double Jeopardy Clause. 

Given the difficulty of this issue and the number of other cases 

holding generally that similar kinds of damage provision are not 

penal, I would prefer not to reach the survivability issue. See, 

~' Kilgo v. Bowman Transp., Inc., 789 F.2d 859, 876 (11th Cir. 

1986); In re Wood, 643 F.2d 188, 190-92 (5th Cir. 1980); Smith v. 

No. 2 Galesburg Crown Fin. Corp., 615 F.2d 407, 414-15 (7th Cir. 

1980). 

Appellate Case: 87-2111 Document: 01019785738 Date Filed: 06/02/1989 Page: 12 
Nonetheless, I believe that the judgment of the district 

court should be affirmed because plaintiff did not present 

sufficient evidence showing that defendant's conduct was willful. 

The state court made no finding that defendant had willfully 

violated the ADEA, and the state court's determination 

consequently does not have any preclusive effect on that issue in 

this case. The only evidence of willfulness that plaintiff 

submitted at trial was a one-page stipulation in which defendant 

agreed that it was "aware of the Age Discrimination in Employment 

Act, 29 U.S.C. et seq., and the provisions therein." (Plaintiff's 

Exh. 1.) Under Thurston, mere awareness of the ADEA by a 

defendant is not enough to cause a violation of the Act to be 

willful. 469 U.S. at 127-28. 

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