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. e du/thir dc ir c uit_1996/155UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

Nos. 94-5331 and 94-5347

___________

EVELYN DELLI SANTI

Appellant in No. 94- 5331

vs.

CNA INSURANCE COMPANIES; CONTINENTAL CASUALTY COMPANY;

RICHARD FARAH

EVELYN DELLI SANTI

vs.

CNA INSURANCE COMPANIES; CONTINENTAL CASUALTY COMPANY;

RICHARD FARAH

CNA Insurance Companies; Continental Casualty Compan y

Appellants in No. 94 -5347

__________

Appeal from the United States District Co urt for the District of New Jersey (D.C. Civ. No. 88-cv-05137)

___________

Argued March 7, 1996 Before: MANSMANN* and ALITO, Circuit Judge s, and RESTANI, Judge, Court of International Tra de.**

(Filed June 20, 1996)

___________

* The Honorable William D. Hutchinson was a member of the original panel which heard argument in this appeal on March 6, 1995. He died on October 8, 1995 before the appeal was resolved; Judge Mansmann was designated to serve in his place on the reconstituted panel.

** Honorable Jane A. Restani, Judge, United S tates Court of International Trade, sitting by designation.William C. Slattery, Esquire (ARGUED)

Norris, McLaughlin & Marcus

721 Route 202-206

P.O. Box 1018 Somerville, NJ 08876

Neil M. Mullin, Esquire Jon W. Green, Esquire Smith Mullin, P.C.

200 Executive Drive

Suite 155 West Orange, NJ 07052

Counsel for Evelyn Delli Santi

Jeffrey S. Goldman, Esquire Allison C. Blakely, Esquire (ARGUED)

Fox & Grove

311 South Wacker Drive

Suite 6200 Chicago, IL 60606

Counsel for CNA Insurance Companies and Continental Casualty Company

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OPINION OF THE COURT

__________

MANSMANN, Circuit Judge. In this discrimination case tried pursuant to the New Jersey Law Against Discrimination, the jury found t hat Evelyn Delli Santi proved by a preponderance of the eviden ce that CNA Insurance Company discharged her in retaliation for her complaints of age and sex discrimination. The jury specifically rejected CNA's assertion that it discharged Delli S anti because she allegedly inflated her gasoline expense records

. Nonetheless, the district court granted CNA's motio n for judgment as a matter of law and conditionally granted its mo tion for a new trial, holding that CNA proved as an affirmative de fense that, despite retaliatory intent, it would have discharge d Delli Santi in any event. We find that, under these specific circums tances of the jury's rejection of the non-discriminatory reason p roffered by the defense, the court could not utilize this evide nce against the plaintiff. Therefore, since there was legally sufficient evidence to support the jury's verdict, we will vac ate the district court's judgment as a matter of law on the affirmative

defense for CNA. We will also vacate the district court's conditional grant of a new trial because, based upo n our review of the record, the verdict was not against the clea r weight of

the evidence. We will, however, affirm the district cour t's order granting CNA a new trial unless Delli Santi agrees to accept aremittitur of the jury's excessive pain and sufferi ng award.

Therefore, we will return this case to the district court for entry of judgment on the jury verdict, including th e jury's front pay award of $152,266 representing Delli Santi's fu ture economic

losses.

I. In 1951, Evelyn Delli Santi began her empl oyment as a typist clerk with The American Casualty Insurance C ompany, which eventually merged with CNA. By the mid-1960s, she was a firstparty claims handler. CNA continued to promote Del li Santi and, ultimately, she became a claims representative. Al though CNA's home office is located in Chicago, Illinois, Delli Santi reported to the Cedar Knolls, New Jersey branch office, part of CNA's eastern region. Delli Santi first complained about discrim ination during an employee communication session ("ECS") wi th Richard Farah, a New Jersey branch claims manager, in Octob er 1986. According to Delli Santi, she told Farah that her s upervisors in the past informed her that the company would not pr omote her above grade level 34 until she came in from her fie ld position.

When Farah told her this was untrue and there were two men in field positions at grade level 36 (a higher level), Delli Santi stated: "[T]hat's pretty good. I said, that's dis crimination, I says, sex and age. . . . And I told him, I didn't think the company really cared about promoting women because I had a problem once before, as you heard early on, when we merged, and I didn't think it was right." In April 1987, Delli Santi complained of d iscrimination to Dennis McCarthy, her immediate supervisor, at he r annual performance review. Dissatisfied with CNA's failur e to promote her along with male counterparts in the field, she said, "[T]here you go, there it is, discrimination. I said, this is not fair, and I'm not happy at all with this situation." Acc ording to Delli Santi, McCarthy told her that she should talk to Farah about her complaints. The third discrimination complaint arose o ne week later in another ECS meeting with Farah. There Delli San ti voiced her disapproval about the refusal to promote her to gra de level 36, stating "[A]s far as I'm concerned it's more discri mination, harassment, age and sex discrimination, and its not right, and I'm not happy with it at all." After making these complaints, Delli Santi 's expense reports were called into question. Delli Santi's g as mileage and the number of handwritten receipts for her May expense report were substantially the same as they were in three p revious expense submissions that McCarthy and Farah had rev iewed and approved for the last half of March and all of Apri l 1987. When Delli Santi submitted her expense reports for May 1 987, however, McCarthy took exception to the amount reported for gas purchases

because "the numbers were a little bit off." Delli Santi's May 1987 expense reports reflected fifteen gasoline pur chases during a thirty-one day period in which she drove less tha n 800 miles. Only four of the gasoline purchases were documented byidentifiable service station receipts. The remaini ng eleven

purchases were documented by Delli Santi's own "in lieu of" vouchers, which had handwritten dollar amounts and dates, an acceptable alternative to service station receipts. Subsequently, CNA conducted an internal in vestigation into Delli Santi's expense accounts. Based upon th e results of this investigation, CNA concluded that Delli Santi had inflated her expense accounts. On September 16, 1987, CNA t erminated Delli Santi after thirty-six years of employment os tensibly because she misrepresented her gas expenses for her company car. At the time Delli Santi was 59 years old. In October 1988, Delli Santi filed a multi -count complaint in a New Jersey state court against CNA a nd Farah. Delli Santi's original complaint included claims pu rsuant to both the federal Age Discrimination in Employment Act (" ADEA"), 29

U.S.C.  621-634 (1994) and the New Jersey Law Against Discrimination ("LAD"), N.J. Stat. Ann.  10:5-12d (West Supp. 1994). CNA removed the case to the U.S. District C ourt for the District of New Jersey. Prior to trial, however, D elli Santi abandoned her ADEA claim. Consequently, after the district court disposed of all pre-trial motions, the sole issue f or the jury to decide was whether the evidence supported Delli San ti's LAD retaliation claim. This claim was tried to a jury from January 20 to February 10, 1994. At trial, Delli Santi argued that CNA sing led her out for termination, not because she falsified her expe nse accounts, but because she had complained about discrimination . In support, Delli Santi relied, inter alia, upon the following stipulation, which was read to the jury: According to the CNA fleet reports, from January 1985 through March 1988, 215 perso ns achieved a mileage of less than 10 miles p er gallon in one of the 13 quarters reported. Of those persons, 31 had a reported mileag e of less than 10 miles per gallon in more t han one reporting quarter.

App. at 1090. In addition to the above stipulation, Dell i Santi pointed to the following October 27, 1987 internal CNA memo, which was issued to all fleet services managers:

We have discovered situations such as vehicles consistently averaging less than 10 miles per gallon (our fleet averages 23+ m.p.g.) . . . . In some instances, these conditions have existed for several quarte rs which is an indication that drivers are no t being counseled.

App. at 326. Although the memo advised managers to "counsel" these drivers, there was no directive to investigat e, discipline or terminate any of them. The memo referring to widespread instances of arguably suspicious low mileage similar to Delli Santi's was alsodistributed to David Koester, senior vice president of

administration, who testified at trial that no acti on whatsoever was taken against these drivers. Indeed, Koester a nd Kent Crassweller, an investigation manager, conceded tha t they were not aware of anyone -- except Delli Santi -- who wa s investigated, disciplined or terminated for reporti ng low gas mileage. Koester's testimony, however, is at odds with his statement that any fleet driver reporting under ten miles per gallon should have been investigated because "it's an indicator

of some issue." At trial, CNA introduced the following evi dence. Larry Schroeder, the Chicago corporate security man ager, reviewed Delli Santi's May expense report and decided to ope n an investigation. Schroeder stated that he opened the Delli Santi investigation because the handwritten vouchers, cou pled with the low mileage, were "strange." Accordingly, in June 1987 Crassweller, an investigation manager, and Kathy Fo ster, a regional personnel manager, interviewed Delli Santi , asking her to explain the handwritten receipts. Delli Santi s tated that she wrote them herself on receipt pads from her brother 's business. When questioned about her gas mileage, Delli Santi stated that the car "gets what it gets" and explained that (1) she sometimes would allow her car to idle (running the air condit ioner or heater depending on the season); (2) children might be stealing gas from her car; and (3) the car "ran rough." Fol lowing the interview, Crassweller reported this conversation t o Schroeder and Robert Keith, corporate security manager. Crassweller then returned to Chicago and s upervised a review of several of Delli Santi's past expense rep orts, which revealed the following: if Delli Santi's handwritt en generic receipts were totally discounted and her gasoline c alculated solely on the basis of verifiable service station r eceipts, the gasoline mileage for her 1984 Dodge Aries K would h ave been eighteen miles per gallon for the first quarter of 1986; twentyfour miles per gallon for the third quarter of 1986 ; seventeen miles per gallon for the fourth quarter of 1986; an d sixteen miles per gallon for the first quarter of 1987. Th ese averages were consistent with the estimated mileage of twent y-three miles per gallon for her vehicle and the company's fleet- wide average of approximately twenty-three-and-a-half miles per gallon. The investigation into Delli Santi's expen se reports, over a period of more than three years, revealed an inverse relationship between the average number of handwrit ten receipts submitted per expense period and gasoline mileage. In 1984, Delli Santi averaged eleven to thirteen miles per g allon, with an average of two to three handwritten receipts per ex pense period; in 1985, she averaged about ten miles per gallon, w ith an average of three to four handwritten receipts; in 1986, she was getting about seven miles per gallon, with an average of fo ur handwritten receipts per expense period; and, finally, in 1987, Delli Santi got only six miles per gallon, with an average of f ive handwritten receipts per expense period. CNA's corporate security manager, Robert K eith, stated that he was "highly suspicious" and believed Delli Santi wasstealing, but he was reluctant to terminate Delli S anti without

first affording her the benefit of the doubt. Beca use Delli Santi had stated at the outset of the investigation that the car "ran rough," Keith decided to have her car test dri ven. Accordingly, Farah directed Leonard Polizzi, a mana ger in another CNA office, to test drive the car and keep a record of the gas mileage. Polizzi drove Delli Santi's car back and forth to his office, a round trip of eighty miles per day, and r eported that the car had given him twenty-four to twenty-seven m iles per gallon with no mechanical problems. Because Polizz i performed the test drive generally under highway conditions, the test drive may not have duplicated Delli Santi's exact driving conditions.

Keith testified nonetheless that the test drive results

confirmed his belief that Delli Santi used inflated expense accounts to steal. He immediately reported this be lief to his superior David Koester, senior vice president of ad ministration, and Carolyn Murphy, senior vice president of field operations. Koester and Murphy, who are both located in Chicago , agreed with

Keith. After reviewing the recommendations, Meyer and Keith discussed the matter. Keith told Meyer that he had already discussed the matter with Koester and Murphy and ha d informed Meyer that the penalty for employee theft at CNA wa s uniform and unyielding: mandatory termination. Specifically, Keith

testified: [W]e do not make exceptions to our policy and practice of terminating people who either lie to us, or who steal from us. We don't mak e an exception. We never have, we can't mak e an exception for the reason of, there has to be fairness and consistency, and people ne ed to understand the rules, and that's what we've done in the past, and that's what we 'll

continue to do in the future. It's the on ly

way we can run a company.

App. at 1375. At the close of this evidence, on February 10, 1994, the jury returned a verdict in favor of Delli Santi . Answering specific interrogatories, the jury found: that Del li Santi proved by a preponderance of the evidence that CNA discharged her in retaliation for her complaints about discriminat ion; and that CNA failed to prove that, even though it terminated Delli Santi in retaliation for her complaints about discriminat ion, CNA would have discharged her in any event for stealing. The jury returned a $627,866 award for compensatory damages, assessin g $300,000 for pain and suffering. The district court declined to submit the issue of punitive damages to the jury. On February 22, the district court entered judgment on the jury verdict

. Subsequently the district court entered a post-judgment order granting judgment as a matter of law in CNA's favor because the court agreed with CNA's claim that it would hav e discharged Delli Santi, regardless of retaliatory intent, due to CNA's discovery that CNA had allegedly falsified her expe nse accounts.In addition to granting judgment as a matter of lawon this

claim, the district court conditionally granted a n ew trial. Further, the district court conditionally granted a new trial based upon damages unless Delli Santi accepted a re mittitur of the pain and suffering award from $300,000 to $5,00 0. The district court granted CNA's motion for a remittitu r on the basis of future earnings totaling $152,266 because it fou nd that Delli Santi was ineligible for reinstatement with CNA. F inally, the district court denied, without prejudice, Delli San ti's application for pre-judgment interest and request f or counsel fees and expenses. Both parties filed timely notic es of appeal.

II. The New Jersey Law Against Discrimination "makes retaliatory discrimination an unlawful employment p ractice." Jamison v. Rockaway Township. Bd. of Educ., 577 A.2 d 177, 182 (N.J. Super. Ct. App. Div. 1990). An unlawful empl oyment practice occurs when a person, whether an employer or employee, takes "reprisals against any person because that pe rson has opposed any practices or acts forbidden under this act or because that person has filed a complaint, testified or ass isted in any proceeding under this act." N.J. Stat. Ann.  10:5-12d. To establish a prima facie case of retalia tion, an employee must show by a preponderance of the eviden ce that (1) he or she "engaged in a protected activity known to th e employer;" (2) he or she thereafter was "subjected to [an] adv erse employment decision by the employer;" and (3) there was a "causal link" between the protected activity and adverse employment decision. Jamison, 577 A.2d at 182 (citing Wrighte n v. Metropolitan Hosps., Inc., 726 F.2d 1346, 1354 (9th Cir. 1984) and Velantzas v. Colgate-Palmolive Co., Inc., 536 A .2d 237, 238 n.1 (N.J. 1988)); accord Craig v. Suburban Cablevis ion, Inc., 660 A.2d 505, 508 (N.J. 1995) (citing Jamison, 577 A.2d 177 and Wrighten, 726 F.2d at 1354); Wachstein v. Slocum, 6 25 A.2d 527, 534 (N.J. Super. App. Div.), certif. denied, 636 A. 2d 521 (N.J. 1993); see also Robinson v. Southeastern Pa. Transp . Auth., 982 F.2d 892, 895 n.1 (3d Cir. 1993); Quiroga v. Hasbro , Inc., 934 F.2d 497, 501 (3d Cir.), cert. denied, 502 U.S. 940 (1991); Jalil v. Avdel Corp., 873 F.2d 701, 708 (3d Cir. 1988), c ert. denied, 493 U.S. 1023 (1990). Once an employee succeeds in showing these facts, he or she establishes a prima facie case of retaliation a nd the burden of production (although not the burden of persuasio n) "shifts to the employer to articulate some legitimate non-reta liatory reason for the adverse action." Jamison, 577 A.2d at 182 (citing Wrighten, 726 F.2d at 1354). If the employer comes forward with evidence showing some legitimate non-retaliatory re ason, the employee still has the opportunity to produce evide nce sufficient to persuade the factfinder by a preponderance of th e evidence that the employer nevertheless harbored a discrimin atory intent. Id. An employee can make this showing by producing evidence and proving to the factfinder's satisfaction that "the articulated reason is a pretext for the retaliation or that a d iscriminatory reason more likely motivated the employer." Id. (c itingWrighten, 726 F.2d at 1354 (citing Texas Dep't. of Community

Affairs v. Burdine, 450 U.S. 248, 256 (1981)). Assuming the employee meets this burden, a presumption arises under New Jersey law "that the adverse emplo yment action was the product of improper retaliatory intent." I d. (citing Wrighten 726 F.2d at 1354). Then "the employer mus t prove by the preponderance of the evidence that the adverse acti on would have been taken regardless of retaliatory intent." Id. (citing Wrighten, 726 F.2d at 1354). But see Jalil, 873 F. 2d at 706 (ultimate burden of persuasion always remains with the employee who seeks to prove a retaliation claim).

A. At trial, CNA moved for judgment as a matt er of law at the close of Delli Santi's case and again at the cl ose of all the evidence, arguing that Delli Santi had not adduced sufficient evidence to meet either her prima facie burden or h er burden of proving pretext. On cross-appeal, CNA asks us to r eview the district court's denial of its motion which sought judgment that CNA had not discharged Delli Santi out of retaliati on for her complaints of discrimination. We exercise plenary review over the distri ct court's order granting a Rule 50(b) motion for judgment as a matter of law. Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1 153, 1166 (3d Cir. 1993) (citing Wittekamp v. Gulf & Western, Inc ., 991 F.2d 1137, 1141 (3d Cir.), cert. denied, 114 S. Ct. 309 (1993)). Our role is to determine "whether the evidence and just ifiable inferences most favorable to the [non-moving] party afford any

rational basis for the verdict." Anastasio v. Sche ring Corp., 838 F.2d 701, 705 (3d Cir. 1988) (citing Bhaya v. W estinghouse Electric Corp., 832 F.2d 258, 259 (3d Cir. 1987), c ert. denied, 488 U.S. 1004 (1989)); Blum v. Witco Chem. Corp., 8 29 F.2d 367, 372 (3d Cir. 1987). In our view, Delli Santi presented suffici ent evidence to allow a rational jury to find that her superviso rs (who were aware of her discrimination complaints) possessed a retaliatory intent and, thus, tainted the ultimate decision. F or years Delli Santi submitted expense reports indicating lo w gas mileage without incident. In fact, in February 1986, Farah (who at the time was substituting for Powell) approved Delli Sa nti's expense report even though she reported less than five mile s per gallon. He and McCarthy thereafter approved Delli Santi's g as expenditures on three separate occasions (the last half of March and all of April 1987) when she reported gas mileag e well under ten miles per gallon. So, too, Franceschini approv ed Delli Santi's expense reports in December 1986 and Januar y 1987 even though she reported less than ten miles per gallon. The reports approved by McCarthy, Farah and Franceschini did no t differ significantly from her May 1987 expense report. It was only

after Delli Santi voiced concerns about discriminat ion that CNA decided to investigate her gas expense reports beca use the numbers, which were the same for years, were now "a little bit

off."

We also find that there was sufficient evi dence to support the jury's finding that CNA's proffered rea son for DelliSanti's termination was pretextual. Despite Koeste r's statement

that CNA had a policy of investigating drivers repo rting less than ten miles per gallon, "there was uncontested e vidence of CNA's inertia in the face of its knowledge that som e 215 employees had achieved mileage of less than 10 mile s per gallon. Of these, 31 had reported mileage of less than 10 m iles per gallon in more than one reporting period." See Del li Santi, No. 88-5137, slip op. at 15-16. A CNA internal memoran dum reported that CNA was aware of drivers "consistently averagi ng less than 10 miles per gallon" and, "[i]n some instances, the se conditions have existed for several quarters"; yet, Koester "w as unaware of any driver who reported less than ten miles per gal lon ever being investigated by Corporate Security or ever being te rminated for misrepresentation of his gas expenses." Id. at 16. Thus, there was ample evidence from which the jury could infer that CNA singled out Delli Santi given that it did not investigate, discipline or terminate any other employee who reported low gas mileage. Accordingly, the distric t court did not err in denying CNA's motion for judgment as a m atter of law

based on its retaliation claim.

B. On the basis of this evidence, however, th e district court conditionally granted CNA a new trial on Dell i Santi's retaliation claim. In reviewing the district court 's decision to set aside the verdict as against the clear weight o f the evidence, we "exercise a closer degree of scrutiny and supervision" because this case deals with "material which is familiar and simple, . . . lying well within the co mprehension of [the] jurors. . . ." Klein v. Hollings, 992 F.2d 1 285, 1290 (3d Cir. 1993) (internal quotes omitted) (ellipses and alteration in original). Because the subject matter of this case "is simple and within a layman's understanding," we give the d istrict court "less freedom to scrutinize the jury's verdict than in a case that deals with complex factual determinations." I d. (internal quote omitted). With respect to the court's ruling that th e verdict was against the clear weight of the evidence, we cautio n that the district court ought only to grant a new trial on t his basis where "a miscarriage of justice would result if the verdict were to stand." Fineman v. Armstrong World Indus., Inc. , 980 F.2d 171, 211 (3d Cir. 1992) (quoting Williamson v. Cons olidated Rail Corp., 926 F.2d 1344, 1352 (3d Cir. 1991)). We hav e observed that "[t]his limit upon the district court's power to grant a new

trial seeks to ensure that a district court does no t substitute its `judgment of the facts and the credibility of t he witnesses for that of the jury'." Id. (quoting Lind v. Schen ley Indus., Inc., 278 F.2d 79, 90 (3d Cir.) (in banc), cert. de nied, 364 U.S. 835 (1960)). "Such an action effects a denigration of the jury system and to the extent that new trials are grante d the judge takes over, if he does not usurp, the prime functio n of the jury

as the trier of facts." Id. With this standard of review in mind, we turn to the merits of the new trial motion

. In considering CNA's motion for a new tria l, thedistrict court decided that Delli Santi presented s ufficient

evidence to establish a prima facie case of retalia tion. Nevertheless, without repudiating its earlier deter mination (on CNA's motion for judgment as a matter of law) that Delli Santi "generated enough speculation in the eyes of the ju ry to allow them to dismiss CNA's explanation as pretext," Dell i Santi, No. 88-5137, slip op. at 17, the district court conclud ed that the jury's finding of pretext was against the weight of the

evidence. We believe that the jury could have ration ally inferred that the Chicago decision-makers -- Koester, Keith, and Murphy -- were not the effective decision-makers, but rather their decision to fire Delli Santi was influenced by her managers in New Jersey. Though CNA terminated Delli Santi on September 16, 1987, after McCarthy, Farah, Franceschini, Foster, Meyer, and O ttinger had signed Delli Santi's termination notice, neither Ko ester nor Murphy signed the internal termination document unt il about one week later. Koester's own testimony buttressed thi s posttermination approval when he admitted that he did n ot sign the internal termination document until September 22, 1 987. Keith

conceded on cross-examination that no relevant docu ments suggested that Koester and Murphy took part in the decisionmaking process before September 22, 1987, six days after Delli Santi's termination. Ottinger, moreover, testified that once Meyer announced his decision to approve Delli Santi 's termination at a late August 1987 meeting, which Koester, Keith , and Murphy did not attend, the firing would have occurred by t he next day except for the fact that Delli Santi was on vacatio n. Thus, the jury had an entirely rational basis for concluding that the Chicago decision-makers did not base their decision "completely on the basis of the investigation by Corporate Secu rity" and their "overwhelming reasonable belief that Delli Sa nti was stealing from the company through the submission of fraudulent expense reports," see Delli Santi, No. 88-5137, sli p op. at 30, but instead that her termination was the product of a retaliatory animus on the part of her New Jersey branch office supervisors. In addition, the memorandum and the stipul ation indicating CNA's failure to investigate, terminate or otherwise discipline any other employee who appeared to infla te gas purchases support the jury's finding that the artic ulated reason for discharging Delli Santi was a pretext. Althoug h the district court recognized that Delli Santi could defeat CNA' s motion for a conditional grant of a new trial if she "prove[d] t hat she was singled out; that others had submitted the same or substantially similar expense reports and had not been discipline d in a like manner," the court failed to consider other substan tial evidence; namely, that for almost fourteen years Delli Santi had submitted similar reports without anyone questioning her gas expenditures, that Farah and McCarthy initiated the so-called "in vestigation" into Delli Santi's expense reports only after she h ad complained to them about sex and age discrimination, that over two hundred other drivers similarly reported under ten miles pe r gallon of gas, and over thirty fleet drivers did so in more t han one reporting period. CNA, however, never disciplined, investigated,or terminated a single employee for the same reason it terminated

Delli Santi. The district court should not have require d Delli Santi to prove "selective enforcement of CNA's policy aga inst employee theft." Instead, Delli Santi met her burden of sho wing that the company did not enforce such a policy by the eviden ce that other employees were claiming excessive gasoline expenses without any fear of investigation or repercussion, nor especial ly, termination. The jury, by drawing reasonable infer ences from the evidence adduced at trial, could rationally conclud e that the legitimate non-retaliatory reason offered by CNA wa s a pretext for discharging Delli Santi. We, therefore, conclu de that the grant of a new trial was not consistent with a soun d exercise of discretion since the jury's finding of pretext was supported by the clear weight of the evidence.

C. Although the district court found that Del li Santi met her burden of proving retaliatory discharge, the di strict court held that CNA was nonetheless entitled, after the j ury verdict and as an "affirmative defense", to argue to the co urt that although there may have been retaliatory intent in her termination, Delli Santi would still have been dism issed in any event due to her fraudulent expense submissions. A district court should enter judgment for an employer

as a matter of law on its "affirmative defense" "on ly if the record shows that [the employer] established the de fense so clearly that no rational jury could have found to t he contrary." E.E.O.C. v. State of Del. Dept. of Health and Socia l Servs., 865 F.2d 1408, 1414 (3d Cir. 1989) (citing Fireman's Fu nd Ins. Co. v. Videfreeze Corp., 540 F.2d 1171, 1177 (3d Cir. 1976 ), cert. denied, 429 U.S. 1053 (1977), and Arkwright Mut. In s. Co. v. Philadelphia Elec. Co., 427 F.2d 1273, 1275 (3d Cir . 1970)) (footnote omitted). Here, too, "we must view the e vidence most favorably to [the employee] and accord [her] the be nefit of all justifiable inferences." Id. (citing Bhaya, 832 F. 2d at 259 and Aloe Coal Co. v. Clark Equip. Co., 816 F.2d 110, 11 3 (3d Cir.), cert. denied, 484 U.S. 853 (1987)). In granting CNA's motion for a judgment as a matter of law on its "affirmative defense," the court reasone d that the ultimate decision-makers (Koester, Keith, and Murph y) were unaware of any retaliatory intent and, given the "o verwhelming evidence of Delli Santi's theft," coupled with CNA' s policy to terminate those employees who it believed were stea ling, there was no evidence "from which a jury could have ratio nally inferred that CNA would not terminate an employee who the co mpany believed was engaging in expense account misrepresentation." Delli Santi, No. 88-5137, slip op. at 25-26. We cannot agree with the district court's statement that "[t]here was no evidence from which a jury cou ld have rationally inferred that CNA would not terminate an employee who the company believed was engaging in expense accoun t misrepresentation." Delli Santi, No. 88-5137, slip op. at 25-26. In so concluding, we are drawn again to the stipula tion that over200 CNA employees were reporting mileage of less th an ten miles

per gallon and CNA's awareness of this fact as evid enced by the October 27, 1987, internal memorandum conceding tha t these drivers were not being counseled. See supra pp. 7- 8. With this evidence, a jury could have rati onally inferred that CNA was singling out Delli Santi base d upon her discrimination claims because it failed to investig ate, discipline or terminate any other employee (over 20 0 of them) for unexplainably low gas mileage, which, as stated by Koester, "is

an indicator of some issue." Because Koester and C rassweller admitted during trial that they were not aware of C NA investigating, disciplining, or terminating persons other than Delli Santi for reporting excessively low gas milea ge, the jury could conclude both that low gas mileage was "an in dicator of some issue" only because Delli Santi voiced discrim ination claims and that CNA's policy against company theft did not dictate Delli Santi's (or anyone else's) termination for inflatin g gas expenditures. Our conclusion is further supported by the evidence that, to the time of trial, CNA had failed to enfor ce its policy against expense account fraud. A CNA employee, Har old Ronin, stated that even though CNA fleet records accuratel y reflected drivers reporting under ten miles per gallon, he ha d no intention whatsoever of sending their names to corporate secu rity for possible investigation. Thus, despite Keith's admo nition that CNA does not "make exceptions to [its] policy and p ractice of terminating people who either lie to us, or who ste al from us," a

reasonable factfinder could conclude that the evide nce of fraudulent gas expense reports would not have led t o Delli Santi's termination on legitimate grounds. Finally, we consider whether the district court erred when it conditionally granted CNA a new trial on it s "affirmative defense." Our reasoning here follows that which we have already stated in reversing the district court's or der granting CNA's motion for judgment as a matter of law on thi s "affirmative defense." Briefly, we hold that CNA failed to meet its burden of persuasion on this issue because the jury rejected outright CNA's assertion that Delli Santi was discharged for theft . Indeed, once the jury found that CNA's proffered reason for Delli Santi's discharge (employee theft) was a pretext, the distr ict court could not later rely on this reason, raised as an a ffirmative defense in a post-verdict motion. Once again, on t he basis of this record, we cannot say that the verdict was aga inst the clear weight of the evidence.

III. After the jury's verdict for Delli Santi, the district court also entered judgment for CNA as a matter of law on the issue of whether Delli Santi was ineligible for fut ure employment or front pay because of her alleged theft. The dis trict court relied upon Massey v. Trump's Castle Hotel and Casi no, 828 F. Supp. 314 (D.N.J. 1993), where the court held that an employer who unlawfully discharges an employee could use aft er-acquired evidence (which would have led to the employee's te rmination onlawful and legitimate grounds) "to bar the specific remedies of

reinstatement and front-pay if the employer demonst rates that, based solely on that misconduct, it would have made the same employment decision regarding that employee." Id. at 328. The court in Massey reasoned that "to require employers to reinstate or provide front-pay to an employee today that they can now fire legitimately tomorrow would be nonsensical." Id. a t 323. SeeMcKennon v. Nashville Banner Publ. Co., 115 S. Ct. 879, 886 (1995) (where employer discovers after termination, that employee engaged in wrongdoing, generally "neither reinstate ment nor front pay is an appropriate remedy"). We find that the district court erred by a llowing CNA

to assert as an "affirmative defense" its claim tha t Delli Santi was ineligible for front pay because this case does not involve after-acquired evidence. In Mardell v. Harleysvill e Life Ins. Co., 31 F.3d 1221, 1228 (3d Cir. 1994), abrogated b y McKennon, 115 S. Ct. 879 (1995), we distinguished an after-ac quired evidence case by stating: What sets an after-acquired evidence case far apart from a mixed-motives case like Price Waterhouse or a pretext case like McDonnel l Douglas is that the articulated "legitimat e" reason, which was non-existent at the time of the adverse decision, could not possibly h ave motivated the employer to the slightest degree. After-acquired evidence, simply p ut, is not relevant in establishing liability

under Title VII or ADEA because the sole question to be answered at that stage is whether the employer discriminated against the employee on the basis of an impermissi ble

factor at the instant of the adverse employment action.

Mardell, 31 F.3d at 1228. Here, CNA's articulated reason (that Delli Santi allegedly inflated her gas receipts) wa s known to CNA at the time of the adverse action; indeed, CNA clai ms that it was the very reason for the discharge. Delli Santi's a lleged wrongdoing did not arise after the fact but, instea d, allegedly motivated CNA to discharge her in the first instanc e. This case is unlike the case where a diffe rent and legitimate reason for discharge is discovered by th e employer after its adverse employment action for another rea son as well. Here, CNA's stated reason for Delli Santi's dischar ge, theft, was specifically rejected by the jury. By its own find ings, the jury expressed its disbelief that in the absence of a re taliatory

motive CNA would have made the same decision to dis charge Delli Santi. Instead, the jury drew the opposite inferen ce (based upon the evidence that CNA did not investigate, discipli ne or terminate any other employee who was reporting low gas mileage and CNA's internal memorandum stating that these dr ivers should be counseled) that Delli Santi would not have been discharged for stealing. Accordingly, we will reinstate the jury' s award of $152,266 representing Delli Santi's front pay.IV.

Under the LAD, an employee can recover dam ages for pain and suffering. N.J. Stat. Ann.  10:5-3; Catalane v. Gilian Instrument Corp., 638 A.2d 1341, 1353 (N.J. Super. Ct. App. Div.), certif. denied, 642 A.2d 1006 (N.J. 1994). To recover these damages, an employee does not need to present either expert testimony or objective corroboration. See Rendine v. Pantzer, 648 A.2d at 245; see also Bolden v. Septa, 21 F.3d 29, 34 (3d Cir. 1994) (expert medical testimony is not require d to prove damages for emotional distress in a case brought un der  1983). We hasten to add, however, that "New Jersey courts have been careful to award such damages only in cases where t he record demonstrates a `substantial basis for compensation. '" Abrams v. Lightolier, Inc., 841 F. Supp. 584, 593 (D.N.J. 199 4) (quoting Castellano v. Linden Bd. of Educ., 400 A.2d 1182, 1 184 (N.J. 1979)), aff'd, 50 F.3d 1204 (3d Cir. 1995). Here, the jury awarded Delli Santi $300,00 0 for pain and suffering. The district court, however, condit ionally granted CNA a new trial on damages if Delli Santi r efused to accept a remittitur of the pain and suffering award from $300,000 to $5,000, reasoning that although "Delli Santi's t estimony supported an award for pain and suffering it did no t support one so large." Delli Santi, No. 88-5137, slip op. at 4 0-41. Delli Santi argues that the district court overlooked

substantial evidence when it concluded that her tes timony did not support an emotional damage award "so large," id. a t 41, namely, the humiliation and emotional damages flowing from the loss of her reputation. At trial Delli Santi testified tha t she was "terrified" to interview with prospective employers , "afraid" to network with people in the industry, and her social life nearly ceased to exist -- all because people might "find o ut" the alleged reason for her firing. We stress our "severely limited" role in r eviewing the question of whether the district court abused its d iscretion in remitting the pain and suffering award. We "may di sturb the district court's determination with respect to a re mittitur only for abuse of discretion, and reverse and grant a ne w trial only if the verdict is so grossly excessive as to shock the judicial conscience." Gumbs v. Pueblo Int'l., Inc., 823 F.2 d 768, 771 (3d Cir. 1987) (internal quotes omitted); see also Will iams v. Martin Marietta Alumina, Inc., 817 F.2d 1030, 1038 (3d Cir . 1987) (court must "review a damage award to determine if it is r ationally based"); Walters v. Mintec/Int'l., 758 F.2d 73, 82 (3d Cir. 1985) ("a district court should be alert to its responsib ility to see that jury awards do not extend beyond all reasonabl e bounds").

Our role is even more limited than the district cou rt's; we must give "additional deference" where the district cour t has already granted a remittitur. Gumbs, 823 F.2d at 771. In undertaking our circumscribed role, here, we find that a reviewof jury verdicts in other cases may prove helpful, though n ot mandatory.

Id. at 773. In Abrams, for instance, the jury awarded an employee $100,000 in damages for emotional distress under th e LAD basedupon his testimony that

it had been a very upsetting thing to be accused in secret of bribery, to a company that you've worked for, without even the courtesy of being told about it.

It has been very unnerving, unpleasant and distressing to have somebody tell you that you can't have a job because you are not u p to it physically. . . . [a]nd I have reall y been very, very, very upset by the whole thing.

841 F. Supp. at 593 (alteration in original). The district court, however, ordered a remittitur, reasoning tha t, "[g]iven the paucity of evidence regarding plaintiff's actua l mental distress," the award was grossly excessive to the e xtent it exceeded $2,500. Id. at 594. See Jackson v. Conso lidated Rail Corp., 538 A.2d 1310, 1317 (N.J. Super. Ct. App. Di v. 1988) ("the severity of the distress from the testimony of the plaintiff himself was not of such a degree to warrant the jud gment of over half a million dollars" in damages for emotional di stress under the LAD); Catalane, 638 A.2d at 1353 (court upheld trial court's decision to grant new trial on damages under the LA D because $250,000 award for emotional distress "shocked the conscience" of the trial judge) (internal quote omitted). Against this backdrop, we conclude that th e district

court acted within the confines of its discretion i n ordering a new trial unless Delli Santi accepted a remittitur of $295,000. Although Delli Santi testified about her distress, the district court determined that Delli Santi's evidence of pai n and suffering did not support an award of $300,000. Be cause we must give deference to the judgment of the trial court w ho was "in the best position to evaluate the evidence and assess w hether the jury's verdict [was] rationally based", Gumbs, 823 F.2d at 772 (quoting Murray v. Fairbanks Morse, 610 F.2d 149, 1 53 (3d Cir. 1979)), we cannot say that the district court excee ded the bounds of its discretion in remitting the pain and sufferi ng award from $300,000 to $5,000.

V. Finally, Delli Santi argues that the distr ict court should have submitted the issue of punitive damages to the jury. We exercise plenary review over the district court's decision to deny Delli Santi's request to send the issue of punitive damages to the jury. Bonjorno v. Kaiser A luminum & Chem. Corp., 752 F.2d 802, 814-15 (3d Cir. 1984), c ert. denied, 477 U.S. 908 (1986); Lightning Lube, 4 F.3d at 1167

. "The New Jersey Supreme Court has made cle ar that `[t]o warrant a punitive award, the defendant's conduct m ust have been wantonly reckless or malicious. There must be an i ntentional wrongdoing in the sense of an `evil minded act' or an act accompanied by a wanton and willful disregard for t he rights of another.'" Lightning Lube, 4 F.3d at 1192 (quoting Nappe v.Anschelewitz, Barr, Ansell & Bonello, 477 A.2d 1224 , 1230 (N.J.

1984)) (alteration in original); accord Jackson, 53 8 A.2d at 1319-20. As we noted in Levinson, 868 F.2d at 563, however, "we do not suggest that in every employment discriminat ion case in which there is a basis for compensatory damages it follows that punitive damages are also available." See Catalane , 638 A.2d at 1354 ("punitive damages are only to be awarded in e xceptional cases even where the LAD has been violated"); Maczi k v. Gifford Park Yacht Club, 638 A.2d 1322, 1326 (N.J. Super. C t. App. Div.) ("Punitive damages . . . are distinct from compensa tory damages, require a greater threshold basis, and are assessed only when the wrongdoer's conduct is `especially egregious.'"); W eiss v. Parker Hannifan Corp., 747 F. Supp. 1118, 1136 (D.N.J. 199 0) ("plaintiff must show more than the minimum conduct necessary t o prove the underlying [LAD claim] before an award of punitive damages becomes appropriate"); Lehmann v. Toys `R' Us, Inc. , 626 A.2d 445, 464 (N.J. 1993) (punitive damages are to be aw arded "when the wrongdoers conduct is especially egregious") (c iting Leigruber v. Claridge Assocs., 375 A.2d 652 (N.J. 1 977)). Butsee Johnson v. Ryder Truck Rentals Inc., 624 A.2d 632, 635 (N.J

. Super. Ct. Law Div. 1993) ("no proofs other than a violation of the [LAD] are required to warrant the imposition of punitive damages"). Although we conclude there is sufficien t evidence to support the jury's verdict for compensatory damages , we do not perceive any basis to interfere with the district c ourt's reasoning that there was a lack of evidence to subm it the issue of punitive damages to the jury.

VI. For the foregoing reasons, we will reverse the district court's grant of judgment as a matter of law in fav or of CNA and, in addition, reverse the district court's condition al grant of a new trial on liability issues. We will affirm the district court's decision to grant a new trial on the issue of damages unless Delli Santi accepts the remittitur, but we w ill reinstate the jury's award of $152,266 representing damages f or loss of future earnings. On remand the district court shou ld consider Delli Santi's motions for prejudgment interest and costs and attorney's fees.

Delli Santi v. CNA Insurance

Nos. 94-5331 and 94-5347

ALITO, Circuit Judge, concurring and dissenting. I concur in the judgment except insofar as it reinstates the jury's award of front pay. I agree with the majority that a reasonable jury could have found th at CNA would not have launched its investigation of the plaintif f's gasoline vouchers were it not for her complaints of discrimi nation. Both the timing of the investigation and CNA's failure t o investigate other employees who reported low gasoline mileage g ive rise to aninference of retaliation. I recognize that, of the low-mileage

employees, the plaintiff's record was apparently on e of, if not the very, worst, and this is certainly a fact that I would have

taken into account if I had been the trier of fact. Nevertheless, I think that, even assuming that the plaintiff bore the burden of persuasion with respect to the questi on whether

retaliation was a determinative factor in the disch arge decision (a question I discuss below), a reasonable jury cou ld have found

that it was. A reasonable jury could not have found, ho wever, that the plaintiff did not falsify her vouchers. Drivin g a compact car with an EPA-estimated gas mileage of 23 miles p er gallon, she reported gas mileage, over a five-year period, that was far, far lower, reaching a nadir of three miles per gallon f or one reporting period. She offered a host of excuses fo r her low mileage, but these were either inherently dubious o r were discredited by CNA's investigation. For example, a lthough the plaintiff suggested that her low mileage might be a ttributable to mechanical problems with her car (she said that the car "ran rough"), when the car was test driven it achieved 2 4 to 27 miles per gallon. Most damning was the plaintiff's submi ssion of "receipts" for gas purchases that she herself wrote up. The mileage that she reported for particular periods wa s inversely proportional to the number of these suspicious "rec eipts" that she submitted. In 1984, when she submitted an aver age of two to three such "receipts" per expense period, her repor ted mileage was 11 to 13 miles per gallon. In 1985, she submit ted an average of three to four such "receipts" per period, and he r mileage sank to 10 miles per gallon. In 1986, when she averaged four such "receipts" per period, her mileage fell further to 7 miles per gallon. And finally, in 1987, when she reached an average of five such "receipts" per period, her mileage plumme ted to 6 miles per gallon. As the district court observed, the pr oof of the plaintiff's pilfering was "overwhelming." A reasonable jury likewise could not have found that CNA did not have a policy of firing employees who w ere proven to have stolen from the company. Employers do not rou tinely tolerate employees who are proven to have stolen fr om them; CNA offered evidence that it had a blanket policy of fi ring such employees; and I am aware of no direct evidence to the contrary. The majority suggests, however, that the absence of such a policy can be inferred from the fact that CNA approved the plaintiff's expense reports for some time without launching an investigation and the fact that CNA did not investigate other emp loyees who reported very low mileage. This reasoning overlook s the important difference between the failure to investi gate suspicious conduct, which may result from lax admin istrative controls, and the toleration of proven theft. Once the plaintiff was investigated, CNA was confronted with what the district court aptly described as "overwhelming" proof of her thef t. In my judgment, a reasonable jury could not have inferred from CNA's failure to investigate suspicious conduct that it w as CNA's policy to tolerate proven theft. Because it is CNA's policy to fire employe es, such asthe plaintiff, who are caught stealing from the company, the

plaintiff is not entitled to reinstatement or front pay. In McKennon v. Nashville Banner Publishing Co., 115 S. Ct. 879 (1995), the Supreme Court held that an employer who discharges an employee for a discriminatory reason is liable unde r the federal Age Discrimination in Employment Act even though th e employer

discovers after the action is taken that it has a d ifferent, legitimate reason for the same action. The Court o bserved, however, that in such a case "as a general rule . . . neither reinstatement nor front pay is appropriate." Id. a t 886. The Court explained: "It would be both inequitable and pointless to order the reinstatement of someone the employer wou ld have terminated, and will terminate, in any event and up on lawful grounds." Id. I think that this teaching would be controlling

here if this case rested on federal rather than sta te law. The majority, however, facilely dismisses the teaching of McKennon as applicable only in "after-acquired" evidence cases, that is, cases in which the evidence of the legitimate reason for discharge is acquired after the adverse employment decision is taken. This reasoning does not seem to me to make any sense. Consider the following two cases. In C ase A, which is analogous to McKennon, the employer discharges a n employee for a discriminatory reason and then, when sued or thre atened with suit, launches an investigation of the employee and discovers a legitimate reason for discharge. In Case B, which is comparable to this case, the same employer, acting with the sa me discriminatory motive, targets the same employee fo r investigation before firing him and then discovers, as a result of the investigation, the same legitimate ground fo r termination. In Case A, the employee, under McKennon, would not be entitled to reinstatement or front pay, and I cannot think of a ny good reason for treating the employee in Case B more favorably than the employee in Case A. While McKennon is not directly controlling here because this case is based on the New Jersey Law Against Di scrimination ("LAD") rather than federal anti-discrimination law , I think that the New Jersey Supreme Court would follow McKennon, see Miller v. Beneficial Management Corp., 855 F. Supp. 691, 715- 17 (D.N.J. 1994); Massey v. Trump's Castle Hotel and Casino, 8 28 F. Supp. 314, 324 (D.N.J. 1993), or would adopt some related rule limiting a plaintiff's entitlement to reinstatement or front pay in cases where a legitimate reason for discharge is discover ed after the employee is wrongfully terminated or targeted for i nvestigation. (In an extreme case -- say, the investigation uncov ers, not petty chiselling on expense vouchers, but massive embezzl ement -- ordering reinstatement or front pay would be prepos terous.) One other aspect of the majority opinion b ears comment. The majority appears to hold that the standards set out in Jamison v. Rockaway Township Bd. of Educ., 242 N.J. Super. 436, 445, 577 A.2d 177, 182 (App. Div. 1990), apply in a ll LAD retaliation cases. Jamison itself, however, takes pains to limit its holding to cases involving the failure to promo te, see N.J. Super. at 446-47, 577 A.2d at 182-83 and the p laintiff argues strenuously that it does not apply here. Wh ile it may bethat the New Jersey Supreme Court will ultimately h old that

Jamison governs all LAD retaliation cases, it has n ot done so yet, and I see no need for us to venture a predicti on on this question, because I think that the result here woul d be the same whether Jamison applies or not. Under Jamison, as I understand it, once th e employer satisfies its burden of production under the second step of the McDonnell Douglas scheme, the plaintiff must then s how that retaliation was a motivating factor in the challeng ed action, not

that it was the sole or a determinative cause. The n, the burden of persuasion switches to the employer to pr ove by a preponderance of the evidence that retaliation was not a

determinative cause. Under the federal scheme, which I take it would apply if Jamison does not, see McKenna v. Pacific Rail Se rvice, 32 F.3d 820 (3rd Cir. 1994), once the employer satisfies it s burden of production under the second step of McDonnell Dougl as, and assuming the case does not call for special treatme nt under Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), it woul d then be up to the plaintiff to prove by a preponderance of the evidence, using direct or indirect proof, that retaliation wa s a determinative cause of the challenged action. See Miller v. CIGNA Corp., 47 F.3d 586, 598 (3rd Cir. 1995) (in b anc). Thus,

the difference between the two schemes concerns the allocation of the risk of non-persuasion on the question whether retaliation was a determinative cause. In this case, I think t hat whoever had that burden, the evidence was sufficient to pro ve that the investigation was begun for a retaliatory reason an d was thus a determinative cause of the plaintiff's termination. Accordingly, it seems to me to be both unnecessary and imprudent for this panel to make a prediction on this point.