Opinion ID: 760179
Heading Depth: 2
Heading Rank: 1

Heading: Reduction of the Damages Award

Text: 28 Hawkins's primary contention is that the district court erred in reducing the jury's award of compensatory and punitive damages from $1,250,000 to $50,000 pursuant to 42 U.S.C. § 1981a, which in 1991 amended Title VII with respect to available monetary relief. Prior to 1991, Title VII provided only for equitable remedies, such as backpay. See, e.g., Landgraf v. USI Film Products, 511 U.S. at 252, 114 S.Ct. 1483. The 1991 Act expanded the monetary remedies available under Title VII by allowing awards of compensatory and punitive damages; but it placed limits on the size of those awards, pegging the limitation to the size of the defendant employer's staff. See Pub.L. No. 102-166, § 102, 105 Stat. at 1073 (codified at 42 U.S.C. § 1981a(b)(3)). Under § 1981a(b)(3), on a claim of intentional discrimination in violation of Title VII, a defendant that employs fewer than 101 employees is not to be held liable for compensatory and punitive damages, combined, totaling more than $50,000. See 42 U.S.C. § 1981a(b)(3)(A). It is undisputed that, at all relevant times, LSC employed fewer than 101 employees. 29 However, Title VII's ceiling on compensatory and punitive damages does not limit the scope of relief available under § 1981, see 42 U.S.C. § 1981a(b)(4), and Hawkins argues that § 1981a(b)(4), rather than § 1981a(b)(3), was controlling because her retaliatory discharge claim was brought not only under Title VII but also under § 1981. The district court rejected this argument, stating as follows: 30 [T]he plaintiff contends that her cause of action arose under 42 United States Code section 1981 and not just under Title VII. But this was not her theory in resisting defendants' summary judgment motion and asserting her own motion for summary judgment that was denied by Judge Trager in pretrial rulings. The case was not submitted to the jury on a section 1981 theory but rather on a Title VII theory based on the right to trial by jury under the amendments contained in 42 United States Code section 1981a. 31 Posttrial Ruling at 11. For the reasons that follow, we conclude that the district court erred in ruling that Hawkins's retaliation claim had not been pursued under § 1981, but we conclude that the error was harmless. 32
33 In the complaint, Hawkins alleged that she had been discharged in retaliation for filing a charge of discrimination against LSC, and she cited both Title VII and § 1981. We see no indication in the record that she abandoned the § 1981 claim thereafter. It is true, as the district court noted, that in connection with the motion and cross-motion for summary judgment, Hawkins generally mentioned § 1981 only in connection with her claim of discriminatory discharge (see, e.g., Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment and in Support of Plaintiff's Cross Motion for Summary Judgment at 15, 23) because of her race (id. at 15). But we cannot agree that the limited references implied that she had abandoned her claim of retaliatory discharge in violation of § 1981. Insofar as the references to § 1981 related to her own cross-motion, the fact that they did not mention retaliation merely indicated that as to her retaliation claim brought under that section she did not seek summary judgment. And Hawkins's failure to mention § 1981 in opposing defendants' motion for summary judgment was not significant since defendants' motion itself sought only partial summary judgment and did not mention § 1981. Aside from seeking dismissal of all claims against Lipofsky and all state-law claims against any defendant, the motion requested only dismissal of the claims against Hamilton in his individual capacity under Title VII. (See Defendants' Notice of Motion for Summary Judgment at 1-2.) 34 Moreover, the proceedings following the granting of partial summary judgment plainly revealed that Hawkins had not abandoned her § 1981 claim. For example, in a subsequent letter to Hawkins prior to trial, defendants' counsel wrote to confirm their mutual understanding that [y]our Section 1981 claims relate ... to your discharge claim and the alleged retaliatory acts leading to your discharge. (Letter of Gary P. Rothman to Hawkins dated January 9, 1996.) Further, it is noteworthy that, although all of the Title VII and state-law claims against Hamilton had been dismissed or withdrawn prior to trial, he remained a defendant in the case. Since the only other claims against Hamilton were asserted under § 1981, the inference is inescapable that Hawkins's § 1981 claims remained alive. In submitting the case to the jury, the court instructed that Hawkins had claims against both LSC and Charles Hamilton; and although the special verdict form used by the court did not ask the jury to specify under which statute it was returning its verdict (an omission that in other circumstances could necessitate a retrial, see, e.g., Gierlinger v. New York State Police, 15 F.3d 32, 34 (2d Cir.1994)), it is clear that the jury was asked to answer liability questions with respect to defendants in the plural. Finally, in giving its instructions, the court read to the jury the text not only of Title VII but also of § 1981. 35 Accordingly, we conclude that the district court erred in ruling that the § 1981 claims had not been submitted to the jury and in rejecting Hawkins's contention that her retaliation claim was not subject to a ceiling on that basis. For the reasons discussed in the next section, however, we conclude that the result reached was correct for a more fundamental reason. 36
37 Section 1981 provides, to the extent pertinent here, that [a]ll persons within the jurisdiction of the United States shall have the same right ... to make and enforce contracts ... as is enjoyed by white citizens. 42 U.S.C. § 1981(a). Prior to the Supreme Court's decision in Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), this Court had ruled that § 1981 provided a cause of action for employees who were terminated in retaliation for engaging in activity protected by § 1981 or for protesting conduct that violated § 1981. See, e.g., Choudhury v. Polytechnic Institute of New York, 735 F.2d 38, 42-43 (2d Cir.1984) (§ 1981 provides right to sue on claim that employer retaliated against employee for filing a complaint of racial discrimination, whether or not the retaliation itself was racially motivated); see also Albert v. Carovano, 851 F.2d 561, 572-73 (2d Cir.1988) (en banc); Taitt v. Chemical Bank, 849 F.2d 775, 777 (2d Cir.1988); DeMatteis v. Eastman Kodak Co., 511 F.2d 306, 312 (2d Cir.) (white person, punished for attempting to vindicate rights of racial minorities, has standing to sue under § 1981), modified on other grounds, 520 F.2d 409 (1975). 38 In Patterson, the Supreme Court held that the make and enforce contracts language of § 1981 encompassed discrimination in contract formation but not contract performance. See 491 U.S. at 179, 109 S.Ct. 2363; Butts v. City of New York Department of Housing, 990 F.2d 1397, 1404 (2d Cir.1993). Thus, under Patterson, a claim of discrimination in the denial of a promotion was actionable under § 1981 [o]nly where the promotion [would have risen] to the level of an opportunity for a new and distinct relation between the employee and the employer. Butts v. City of New York Department of Housing, 990 F.2d at 1411 (quoting Patterson, 491 U.S. at 185, 109 S.Ct. 2363). In addition, after Patterson several courts concluded that retaliatory discharge claims, which involved conduct subsequent to contract formation, were not actionable under § 1981. See, e.g., Carter v. South Central Bell, 912 F.2d 832, 840-41 (5th Cir.1990); Sherman v. Burke Contracting, Inc., 891 F.2d 1527, 1535 & n. 17 (11th Cir.1990), cert. denied, 498 U.S. 943, 111 S.Ct. 353, 112 L.Ed.2d 317 (1990). 39 In response to Patterson, Congress included in the 1991 Act a provision adding a subsection to § 1981, defining the phrase make and enforce contracts. That subsection states that  'make and enforce contracts' includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship. 42 U.S.C. § 1981(b). Legislative history supports the view that this definition was intended to encompass both a race-based failure to promote and retaliation for a complaint of such a failure to promote: 40 The Committee intends this provision to bar all race discrimination in contractual relations. The list set forth in subsection (b) is intended to be illustrative rather than exhaustive. In the context of employment discrimination, for example, this would include, but not be limited to, claims of harassment, discharge, demotion, promotion, transfer, retaliation, and hiring. 41 H.R.Rep. No. 102-40(I), at 92 (1991), reprinted in 1991 U.S.C.C.A.N. 549, 630 (emphasis added). In the aftermath of the 1991 Act, a number of courts have concluded that certain retaliatory discharge claims are actionable under § 1981. See, e.g., Andrews v. Lakeshore Rehabilitation Hospital, 140 F.3d 1405, 1412-13 (11th Cir.1998); Barge v. Anheuser-Busch, Inc., 87 F.3d 256, 259 (8th Cir.1996); Thomas v. Exxon, U.S.A., 943 F.Supp. 751, 762-63 (S.D.Texas 1996), aff'd, 122 F.3d 1067 (5th Cir.1997). 42 We remain of the view, in light of the broad sweep of § 1981(b), that a retaliation claim may be brought under § 1981. However, to be actionable under § 1981, the retaliation must have been in response to the claimant's assertion of rights that were protected by § 1981. See, e.g., Choudhury v. Polytechnic Institute of New York, 735 F.2d at 43-44 n. 6 (In our case § 1981 is being used to proscribe retaliation for asserting rights protected by § 1981 itself.); see also Manning v. Metropolitan Life Insurance Co., 127 F.3d 686, 689 n. 1 (8th Cir.1997) (gender-based retaliation not cognizable under § 1981). An act of retaliation for engaging in activity protected by Title VII does not give rise to a claim for retaliation that is cognizable under § 1981 unless that activity was also protected by § 1981. 43 In the present case, Hawkins's employment was terminated on April 16, 1992, following her September 1991 filing of an administrative complaint with DHR and the EEOC alleging that she had been denied promotions to Senior Attorney on the basis of her race and gender. However, at the time Hawkins was denied promotions, her denial-of-promotion claim was not actionable under § 1981. Her claim of gender discrimination was plainly outside the scope of § 1981, which deals with discrimination on the basis of race or alienage. And prior to the November 21, 1991 effective date of the 1991 Act, the denial of a promotion of the sort sought by Hawkins, even if the denial was racially motivated, was not cognizable under § 1981 because promotion to the position of Senior Attorney would not have created a new and distinct relationship between Hawkins and LSC. Indeed, the parties agreed that Ms. Hawkins had no § 1981 claim regarding her promotion claims or for any other claims arising prior to the 1991 amendments to § 1981. (Hawkins brief on appeal at 6.) Accordingly, Hawkins's September 1991 complaint to the administrative agencies that she had been denied promotions did not involve the assertion of a right that was then protected by § 1981. Any retaliation against her for filing that complaint was thus not cognizable under § 1981. 44 We conclude that Hawkins's claim for retaliation in violation of § 1981 should have been dismissed as a matter of law, and that her recovery of damages was sustainable only under Title VII. The district court's application of the damages ceiling was therefore not error. 45