Opinion ID: 78554
Heading Depth: 2
Heading Rank: 2

Heading: Constitutional Law

Text: The defendants also challenge the constitutionality of the $500,000 punitive award, asserting that they did not have fair notice that they might be liable to pay a punitive award so much greater than the compensatory award. The foundation of the due process inquiry is found in B.M.W. of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). Elementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a State may impose. Id. at 574, 116 S.Ct. 1589. While [p]unitive damages may properly be imposed to further a State's legitimate interests in punishing unlawful conduct and deterring its repetition, id. at 568, 116 S.Ct. 1589 (citations omitted), and states have considerable flexibility in determining the level of punitive damages that they will allow, id., an award runs afoul of the due process clause when it can fairly be categorized as `grossly excessive' in relation to these interests, id. (quoting TXO Prod. Corp. v. Alliance Resources Corp., 509 U.S. 443, 454, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993)). To help determine when an award is grossly excessive, the Supreme Court has adopted three guideposts for a court's consideration: the degree of reprehensibility of the defendant's actions; the disparity between the harm or potential harm suffered by [the plaintiff] and his punitive damages award; and the difference between this remedy and the civil penalties authorized or imposed in comparable cases. Id. at 574-75, 116 S.Ct. 1589. Proper due process analysis of a punitive award in the Eleventh Circuit requires first that we identify the state's interest in deterring the relevant conduct and the strength of that interest. Next, we review the district court's findings regarding the three BMW guideposts. Johansen, 170 F.3d at 1335. While we are mindful of the difficulty of our task, id. at 1333 n. 22 (citing Gore, 517 U.S. at 606, 116 S.Ct. 1589 (Scalia, J., dissenting)), we are guided by the understanding that the constitutional question ultimately hinges on whether a defendant had adequate notice that its conduct might subject it to this punitive damage award. Id. at 1335; see also Action Marine, Inc. v. Cont'l Carbon, Inc., 481 F.3d 1302, 1318 (11th Cir. 2007) (We do not view these guideposts as an analytical straitjacket, and we maintain as our overarching aim eliminating the risk that a defendant is punished arbitrarily or without fair notice of the possible consequences of its actions.) (quotation marks and citations omitted). The state's interest in deterring defendants' conduct is strong. As the Supreme Court of Florida has stated: There can be no doubt at this point in time that both the state of Florida and the federal government have committed themselves strongly to outlawing and eliminating sexual discrimination in the workplace, including the related evil of sexual harassment. The statutes, case law, and administrative regulations uniformly and without exception condemn sexual harassment in the strongest possible terms. Byrd v. Richardson-Greenshields Secs., Inc., 552 So.2d 1099, 1102 (Fla.1989). Furthermore, the state's interest in protecting workers from sexual discrimination extends to both statutory and common law claims: Public policy now requires that employers be held accountable in tort for the sexually harassing environments they permit to exist, whether the tort claim is premised on a remedial statute or on the common law. Id. at 1104. There is no question that Florida has a considerable interest in protecting workers from the kind of sexual misconduct to which Myers was subjected for so many years. The jury found a battery by a superior on an employee in the workplace. This battery followed a long period during which Siegel and CFI subjected Myers to sexual harassment, but for which recovery was barred by the statute of limitations. Furthermore, Myers' repeated complaints, both to Siegel and other CFI executives, were ignored and rebuffed. This unchecked pattern of antisocial behavior from Siegel and CFI underscores the need for punitive damages as a means to correct evil-doing in areas not covered by the criminal law. See Campbell v. Gov't Employees Ins. Co., 306 So.2d 525, 531 (Fla. 1974). With awareness of the powerful state interests in play, we turn next to the Gore guideposts. The first is the degree of reprehensibility, and it is the most important indicium. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003); see also Goldsmith, 513 F.3d at 1283 (calling the first prong the dominant consideration). The Supreme Court, in State Farm, identified five specific factors for consideration: We have instructed courts to determine the reprehensibility of a defendant by considering whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident. 538 U.S. at 419, 123 S.Ct. 1513; see also Goldsmith, 513 F.3d at 1283 (citing EEOC v. W&O, Inc., 213 F.3d 600, 614-15 (11th Cir.2000)). While there is no requirement that a certain number of the five State Farm factors be present in order to support a finding of reprehensibility, reprehensibility grows more likely as more factors are present. See State Farm, 538 U.S. at 419, 123 S.Ct. 1513. The district court took each State Farm factor in turn. On the first factor, the court noted that the harm here was emotional rather than economic. Myers, 2008 WL 4710898 at . As the jury heard evidence that Myers felt upset, embarrassed, humiliated, and degraded by Siegel's actions at CFI, this finding of fact does not constitute clear error. On the second factor, the district court noted that there is some disregard of health at play insofar as Plaintiff's emotional health was involved. Id. Since there was plenty of evidence here, concerning both the battery and the sexual harassment, suggesting an indifference or reckless disregard towards Myers' health, whether physical or emotional, it was not clear error for the district court to so find. On the third factor, the district court found that the employment relationship mattered: financial vulnerability is implicated somewhat because, although this battery claim did not involve financial consequences for Plaintiff per se, the events did occur in the workplace and Plaintiff's bosswho controlled Plaintiff's earnings was the one who committed the acts. Id. Myers presented evidence that she feared making too big a deal of the touchings and harassment because Siegel was her boss and she did not want to lose her job. She testified that she stayed at CFI in part because she needed the money, and because she knew that her chosen industry would not be as kind to a person without a college degree as had been CFI. The district court's determination, therefore, that the superior-subordinate relationship between Siegel and Myers injected a sense of financial vulnerability into their interactions cannot constitute clear error. Cf. Stockett v. Tolin, 791 F.Supp. 1536, 1555 n. 4 (S.D.Fla.1992); Hughston v. New Home Media, 552 F.Supp.2d 559, 567 (E.D.Va. 2008). On the fourth factor, the district court wrote, there is some evidence of repeated actions, though only a six-month time period is at issue. Myers, 2008 WL 4710898 at . We note, however, that a jury may consider material external to the charge in determining the reprehensibility of the charge itself. See Gore, 517 U.S. at 576-77, 116 S.Ct. 1589 (Certainly, evidence that a defendant has repeatedly engaged in prohibited conduct while knowing or suspecting that it was unlawful would provide relevant support for an argument that strong medicine is required to cure the defendant's disrespect for the law.) (citing TXO, 509 U.S. at 462 n. 28, 113 S.Ct. 2711); State Farm, 538 U.S. at 423, 123 S.Ct. 1513 (noting the relevance to the reprehensibility inquiry of similar prior transgressions) (citing TXO, 509 U.S. at 462 n. 28, 113 S.Ct. 2711); Johansen, 170 F.3d at 1333 (similar). Moreover, evidence of other acts need not be identical to have relevance in the calculation of punitive damages. State Farm, 538 U.S. at 423-24, 123 S.Ct. 1513. In this case, there was voluminous evidence of repetition presented to the jury. Myers described a pattern of sexual touching from Siegel beginning in 1995 and ending in 2000. He touched her in the office, in the restaurant, in the spa, in the treatment room, and on the dance floor. He touched her legs, her behind, and her shoulders. He touched her when they were alone and when other CFI employees were around. While these touchings were not all identical, it did not constitute clear error for the district court to determine that the battery for which defendants were held liable replicate[d] the prior transgressions. Cf. id. at 423, 123 S.Ct. 1513 (citing TXO, 509 U.S. at 462 n. 28, 113 S.Ct. 2711). The district court's only error was the suggestion that the similar prior transgressions that are time-barred are in no way relevant to the reprehensibility inquiry; such a conclusion does not flow from our precedents. See Gore, 517 U.S. at 576-77, 116 S.Ct. 1589; State Farm, 538 U.S. at 423, 123 S.Ct. 1513 (citing TXO, 509 U.S. at 462 n. 28, 113 S.Ct. 2711); Johansen, 170 F.3d at 1333. On the fifth and final factor, the district court noted that battery is an intentional tort, although malice is not required for its commission. Myers, 2008 WL 4710898 at . Inasmuch as battery in Florida can be sustained by an intent to do mere offense, see Paul v. Holbrook, 696 So.2d 1311, 1312 (Fla.Dist.Ct.App.1997), the district court's determination that intentional malice was not present is not clearly erroneous. After the analysis of the State Farm factors, the district court turned to Gore and concluded that Mr. Siegel's conduct is at the low to middle range of the reprehensibility scale. Id. This is a factual finding, see Johansen, 170 F.3d at 1334, for which the district court is allowed in its discretion to weigh the severity of each factor, see State Farm, 538 U.S. at 419, 123 S.Ct. 1513. In light of the ample evidence that Myers suffered emotional distress, that she decided to stomach the objectionable conduct for fear of losing her job and her income, that the behavior persisted for years and over her frequent objections, and that no one at CFI seemed to care, we cannot say that the district court's conclusion regarding reprehensibility is clearly erroneous. The second Gore guidepost is the ratio of punitive damages to actual harm inflicted on the plaintiff. The proper inquiry is whether there is a reasonable relationship between the punitive damages award and the harm likely to result from the defendant's conduct as well as the harm that actually has occurred. Gore, 517 U.S. at 581, 116 S.Ct. 1589 (citing TXO, 509 U.S. at 460, 113 S.Ct. 2711) (emphasis in original) (quotation marks omitted). On this issue, comparison between the compensatory award and the punitive award is significant. Id. at 581, 113 S.Ct. 2711 (citing TXO, 509 U.S. at 459, 113 S.Ct. 2711; Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991)). In particular, the ratio of punitive to compensatory damages is instructive. See State Farm, 538 U.S. at 425, 123 S.Ct. 1513. Nevertheless, the Supreme Court has consistently rejected the notion that the constitutional line is marked by a simple mathematical formula, even one that compares actual and potential damages to the punitive award. Gore, 517 U.S. at 582, 116 S.Ct. 1589 (citing TXO, 509 U.S. at 458, 113 S.Ct. 2711); see also State Farm, 538 U.S. at 425, 123 S.Ct. 1513; Goldsmith, 513 F.3d at 1283. In this case, the amended judgment set punitive damages at $506,847.78 and compensatory damages at $103,622.09. Since this yields a ratio of punitive to compensatory damages of approximately 4.89:1, the district court's finding that the ratio was less than 5 to 1, Myers, 2008 WL 4710898 at , is not clearly erroneous. Cf. Johansen, 170 F.3d at 1334 ([T]he ratio of the actual to the punitive damages is an historical fact. We accept that finding unless it is clearly erroneous.). The district court then concluded that [t]his ratio does not suggest an excessive award. Myers, 2008 WL 4710898 at . Notably, this Court has approved of a number of punitive awards where the ratio of punitive to compensatory damages exceeded 4.89:1. See Johansen, 170 F.3d at 1327, 1339 (ratio of 100:1); Goldsmith, 513 F.3d at 1283, 1285 (ratio of 9.2:1); U.S. EEOC v. W&O, Inc., 213 F.3d 600, 616-17 (11th Cir.2000) (ratio of 8.3:1); Action Marine, Inc. v. Cont'l Carbon, Inc., 481 F.3d 1302, 1321, 1323 (11th Cir.2007) (ratio of 5.5:1); see also Bogle v. McClure, 332 F.3d 1347, 1362 (11th Cir.2003) (ratio of 3.8:1). Furthermore, on the one occasion where this Court has struck down a punitive award for constitutional excess, it reduced an award with a ratio of 8,692:1 to an award with a ratio of 2,173:1. See Kemp v. Am. Tel. & Tel. Co., 393 F.3d 1354, 1365 (11th Cir.2004) (reducing the punitive award from $1,000,000 to $250,000 when compensatory damages amounted to $115.05). Those cases, like this one, implicated powerful state interests, from protection of the environment, see Johansen, 170 F.3d at 1339; Action Marine, 481 F.3d at 1319, to the elimination of workplace discrimination, see Goldsmith, 513 F.3d at 1267; EEOC v. W&O, 213 F.3d at 607; Bogle, 332 F.3d at 1350, to the protection of consumers, see Kemp, 393 F.3d at 1357. Again, the state interest in protecting employees from repeated offensive sexual touchings by the boss in the workplace is strong. Furthermore, the $506,847.75 punitive award bears a reasonable relationship both to the harm Myers has suffered and to the harm likely to result should CFI not be penalized now. The district court, therefore, did not err in determining that the punitive ratio of 4.89:1 does not offend constitutional due process. Defendants urge, nevertheless, that under Exxon Shipping Co. v. Baker, ___ U.S. ___, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008), any ratio greater than 1:1 is constitutionally suspect. Their reliance on Exxon is misplaced. In Exxon, the Supreme Court was quite explicit that it was dealing with maritime law, and not due process of law. See, e.g., id. at 2626 (Today's enquiry differs from due process review because the case arises under federal maritime jurisdiction, and we are reviewing a jury award for conformity with maritime law, rather than the outer limit allowed by due process ....); id. at 2626-27 (Our review of punitive damages today, then, considers not their intersection with the Constitution, but the desirability of regulating them as a common law remedy for which responsibility lies with this Court as a source of judge-made law in the absence of statute.). Defendants' suggestion that the punitive award violates the Constitution of the United States can therefore find no support in Exxon. The third and final Gore guidepost is a comparison between the punitive damages award and the civil or criminal penalties that could be imposed for comparable misconduct. 517 U.S. at 583, 116 S.Ct. 1589. When considering criminal penalties, a reviewing court considers both fines and imprisonment. See Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991); see also Gore, 517 U.S. at 583, 116 S.Ct. 1589 (citing Haslip, 499 U.S. at 23, 111 S.Ct. 1032). These peripheral sanctions are significant because they can serve to give fair notice to potential tortfeasors of the magnitude of sanctions they might face for their actions. See Gore, 517 U.S. at 584, 116 S.Ct. 1589; Johansen, 170 F.3d at 1337. The third guidepost presents a mixed question of law and fact: [T]he selection of the most appropriate point of comparisonactual fine imposed, the maximum possible penalty or penalties in similar casesis an issue of law. We, therefore, review the district court's determination of the appropriate comparison de novo. However, the district court's finding regarding this comparison, i.e., the disparity between the amount of the punitive damages award and the amount of the other civil or criminal sanctions, is an historical fact which we review for clear error. Johansen, 170 F.3d at 1334. The district court determined that Florida's statutory cap on punitive damages was the most appropriate comparison point. See Myers, 2008 WL 4710898 at . This was error. The fact that some torts can be punished up to $500,000 does not put people on notice that battery might be punished up to $500,000. Rather, the district court should have compared the punitive award to the sanctions available for a criminal battery. [7] However, even after determining that the district court applied the wrong comparison point, we still ultimately affirm its conclusion. We do so because the proper comparison point did provide unambiguous notice to the defendants of the seriousness of their tort. Battery is a crime in Florida punishable by up to a year in prison, see Fla. Stat. §§ 784.03(1), 775.082(4)(a), 775.083(1)(d), which is a serious criminal sanction. [8] The due process clause is violated when defendants do not have fair notice of the magnitude of the punitive sanctions they might face. Because battery can carry a prison term of a year, residents of Florida have fair notice that battery is an offense with formidable consequences. A $500,000 punitive award fits comfortably within this array of potential sanctions. As a final matter, under controlling case law, the courts of this Circuit are empowered to consider the financial resources of the defendant when determining the constitutionality of an award. See Johansen, 170 F.3d at 1338; W&O, 213 F.3d at 616-17 (similar); Kemp, 393 F.3d at 1364. Undeniably, the $500,000 punitive award is a serious sanction and may not be taken lightly. It will not, however, bankrupt or cripple these wealthy defendants. Moreover, the trial judge could readily find that a lesser award would not provide the same level of deterrence. We can discern nothing to suggest that the punitive award in this case is in any way violative of the Constitution. Siegel engaged in a pattern of offensive sexual touchings in the workplace, heaping upon Myers, his subordinate, indignities both private and public. CFI, alerted to Siegel's abhorrent behavior on numerous occasions by Myers, did nothing to stop it, and even in some instances encouraged it. It can hardly be said that the defendants did not have fair notice that years of such behaviorculminating in the battery for which they were found liablemight expose them to a substantial punitive damages award. The jury and the district court, after hearing extended testimony, plainly meant for the defendants to understand that their conduct towards Myers was wholly unacceptable and that it would be punished in a substantial manner. Ultimately, the Constitution permits the district court to fashion a punitive remedy that will effectively deliver this message.