Opinion ID: 891637
Heading Depth: 1
Heading Rank: 4

Heading: per se ban on punitive damages is inconsistent with New Mexico public policy.

Text: {19} At the heart of today's controversy is the inherent tension that exists in most collective bargaining arrangements between the interests of individual union members and the well-being of the collective (the union as a whole). Our concern for the vitality of unions as collective bargaining agents is such that we elected in Callahan to raise the threshold for liability to shield merely negligent union conduct from suit by aggrieved members. Our decision in that case came at no small cost to the individual interests of union members, but we agreed that those interests must be subordinated to the collective interests of all members in a bargaining unit. Callahan, 2006-NMSC-010, ¶¶ 9-15, 139 N.M. 201, 131 P.3d 51. We concluded that the interests of the collective are best served by a union that is able to exercise broad discretion in determining whether and how to prosecute an individual member's grievance. Id. To now go further and shield even the most egregious union conduct from punitive damages, would, in our view, undermine the interests of both Unions and their members. {20} Punitive damages serve two important policy objectives under our state common law: to punish reprehensible conduct and to deter similar conduct in the future. Bogle v. Summit Inv. Co., 2005-NMCA-024, ¶ 34, 137 N.M. 80, 107 P.3d 520. These objectives are of critical importance in the DFR context, where unions appropriately enjoy broad discretionary authority and the employee has little recourse outside of the grievance process. As our Court of Appeals observed, punitive damages are the best means of deterring union misconduct because actual or compensatory damages in DFR actions may be de minimis or difficult to quantify. Akins, 2009-NMCA-051, ¶ 24, 146 N.M. 237, 208 P.3d 457; see also Sanchez v. Clayton, 117 N.M. 761, 767, 877 P.2d 567, 573 (1994) (Indeed, if the defendant's conduct otherwise warrants punitive liability, the need for punishment or deterrence may be increased by reason of the very fact that the defendant will have no liability for compensatory damages. (citing 1 Dan B. Dobbs, Law of Remedies § 3.11(10), at 515-16 (2d ed. 1993))). The present case is illustrative; a compensatory award against the Union of a mere $1,661 would hardly deter similar outrageous conduct against other Union members in the future. {21} In Foust, the Supreme Court was persuaded that windfall recoveries against labor unions could deplete union treasuries and impair[] the effectiveness of unions as collective-bargaining agents. 442 U.S. at 50-51, 99 S.Ct. 2121. The Union argues that the same concerns merit adopting a per se ban on punitive damages for DFR actions in New Mexico. But nothing in the present case nor anything cited by the Union indicates that such fears are presently warranted in New Mexico's public sector. Despite Foust's holding in the DFR context, unions in New Mexico are currently subject to punitive damages under a variety of federal laws, such as the Labor Management Reporting and Disclosure Act (LMRDA) and 42 U.S.C. § 1981 (2006). See 29 U.S.C. §§ 411(a)(4), 412 (2006) (right to sue and civil action/jurisdiction provisions of the LMRDA); Int'l Bhd. of Boilermakers v. Braswell, 388 F.2d 193, 200 (5th Cir.1968) (punitive damages available under LMRDA); Woods, 925 F.2d at 1204 (Under § 1981, the common law rule is that punitive damages may be awarded in appropriate cases.). Unions have also, up to now, been subject to punitive damages for breach of the state duty of fair representation. Thus, to adopt a per se ban here would be to depart from the status quo. Despite the potential for exposure to punitive damages from several angles, the Union cannot point to a single example where runaway punitive damages awards substantially debilitated a labor union in New Mexico. If anything, the present case suggests that our juries are entirely capable of assessing sensible and appropriate punitive damages. [2] {22} Should a jury's punitive damages award exceed the bounds of reasonableness, several checks at the trial and appellate levels operate to temper jury exuberance. These checks include the trial court's ability to order a remittitur and the appellate courts' ability to review the award for reasonableness and constitutionality. Chavarria v. Fleetwood Retail Corp., 2006-NMSC-046, ¶ 36, 140 N.M. 478, 143 P.3d 717; see BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). {23} The present case illustrates the danger of further insulating unions in DFR actions. In response to serious allegations of a racially hostile work environment, the Union's response to Akins was that he was the wrong color and needed to learn to speak Spanish. At oral argument counsel for the Union asserted that such racial discrimination is the rarest type of DFR case. Counsel went on to describe an example of the typical DFR case as one where the Union fails to pursue an employee's grievance because the employee has shown favor to the employer, or is a dissident in the Union's eyes. This is the conduct that the Union would have us protect for the sake of hypothetical risks to the well-being of the collective. When we asked what safeguard would remain for the individual dissident were we to adopt a per se ban on punitive damages, counsel suggested that the Union's internal democratic process would be sufficient. We commend the Union for its forthright representation to this Court, but given the facts of this case, we remain persuaded of the need for the punishment and deterrence functions served by punitive damages awards. {24} New Mexico law reflects a preference for holding individuals and institutions accountable for their actions regardless of status. See Yount v. Johnson, 1996-NMCA-046, ¶ 4, 121 N.M. 585, 915 P.2d 341 ([O]ur courts have moved forcefully towards a public policy that defines duty under a universal standard of ordinary care, a standard which holds all citizens accountable for the reasonableness of their actions. The movement has been away from judicially declared immunity or protectionism, whether of a special class, group or activity.). For instance, like most other states, our Legislature has not adopted the doctrine of charitable immunity from suit in tort, despite policy arguments in favor of such immunity that are at least as persuasive as those in favor of immunity for unions. See Janet Fairchild, Annotation, Tort Immunity of Nongovernmental CharitiesModern Status, 25 A.L.R.4th 517 (Westlaw 2009) (citing cases completely or partially abrogating doctrine of charitable immunity in a majority of jurisdictions). But see Abramson v. Reiss, 334 Md. 193, 638 A.2d 743, 750 (1994) (recognizing complete charitable immunity in Maryland); N.J. Stat. Ann. § 2A:53A-7 (West, Westlaw through L. 2010, c. 18) (codifying charitable immunity in New Jersey, except for damages by a willful, wanton or grossly negligent act of commission or omission, including sexual assault and other crimes of a sexual nature). Nor are we aware of any common-law cause of action in New Mexico for which punitive damages have been prohibited. {25} In isolated circumstances, our Legislature has created limited tort immunity for certain actors and institutions. See NMSA 1978, §§ 24-15-1 to -14 (1969, as amended through 1997) (Ski Safety Act); NMSA 1978, §§ 41-4-1 to -29 (1976, as amended through 2009) (Tort Claims Act); NMSA 1978, §§ 41-10-1 to -5 (1981, as amended through 1997) (Food Donors Liability Act); NMSA 1978, §§ 41-12-1 to -2 (1989, as enacted through 1997) (Athletic Organization Volunteers); NMSA 1978, §§ 42-13-1 to -5 (1993, as amended through 1995) (Equine Liability Act). With the exception of the Tort Claims Act, however, none of these statutes immunize conduct that would warrant a punitive damages award. The above statutes also suggest that the Legislature is capable of making exceptions to general tort principles when public policy so counsels. We would defer to the Legislature for such a drastic departure from current policyif at all desirableas that urged by the Union. See Berlangieri v. Running Elk Corp., 2003-NMSC-024, ¶ 15, 134 N.M. 341, 76 P.3d 1098 (Courts are generally less well-equipped to address complex policy issues than legislatures.); Torres v. State, 119 N.M. 609, 612, 894 P.2d 386, 389 (1995) ([I]t is the particular domain of the legislature, as the voice of the people, to make public policy.). {26} Finally, the Union argues that we should adopt a per se ban on punitive damages in DFR actions because punitive damages are not available under the Human Rights Act, and we should seek symmetry in the remedies the law provides for like conduct. See NMSA 1978, §§ 28-1-1 to -15 (1969, as amended through 2007) (Human Rights Act) (prohibiting discriminatory conduct); Trujillo v. N. Rio Arriba Elec. Coop., 2002-NMSC-004, ¶ 30, 131 N.M. 607, 41 P.3d 333 (filed 2001) (punitive damages are not recoverable under New Mexico's Human Rights Act). {27} We agree that symmetry of remedies is a laudable policy goal. The Union, however, conceded at oral argument that discriminatory conduct is rarely the basis for DFR actions. It makes little sense for us to align the common-law DFR remedial scheme with that of the statutory Human Rights Act. Moreover, the Human Rights Act was modeled after federal Title VII legislation, which has since been amended to allow for recovery of punitive damages. See Ocana v. Am. Furniture Co., 2004-NMSC-018, ¶ 23, 135 N.M. 539, 91 P.3d 58 (New Mexico Human Rights Act tracks language of federal Title VII); 42 U.S.C. § 1981(a) (as amended by Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071) (allowing for recovery of punitive damages). More to the point, labor unions may be subject to liability under Title VII for intentionally failing to file grievances concerning a racially hostile working environment. Woods, 925 F.2d at 1200. Thus, the exact conduct exhibited by the Union in this case could subject the Union to punitive damages in a federal Title VII case. {28} As we mentioned above, we are aware of no New Mexico common-law cause of action in tort where we have held that punitive damages are unavailable as a matter of law. Absent a more compelling policy consideration than that presented by the Union, we make no exception for DFR claims. [3] Accordingly, we adhere instead to the general common-law principle in New Mexico that punitive damages should be available as long as the wrongdoer's conduct is willful, wanton, malicious, reckless, fraudulent or in bad faith. See UJI 13-1827; Coates v. Wal-Mart Stores, Inc., 1999-NMSC-013, ¶ 47, 127 N.M. 47, 976 P.2d 999.