Opinion ID: 624286
Heading Depth: 1
Heading Rank: 2

Heading: Judgment as a Matter of Law on Punitive Damages

Text: Next, UPS argues the district court erred when it denied its motion for judgment as a matter of law on Jones's claim for punitive damages. According to UPS, we should reverse the district court's decision (1) because there is insufficient evidence to indicate that Sloan acted with the intent necessary for the imposition of punitive damages and (2) because there is no evidence that UPS authorized or ratified Sloan's conduct. Aplt. Br. at 34. As noted previously, we review the district court's denial of a motion for judgment as a matter of law de novo, Cummings, 365 F.3d at 949, and will reverse only if all of the evidence, viewed in the light most favorable to the nonmoving party, reveals no legally sufficient evidentiary basis to find for the nonmoving party, Burrell, 603 F.3d at 832. 1. Availability of Punitive Damages In diversity cases, state law governs the substantive elements upon which a punitive damage award may be based. Miller v. Cudahy Co., 858 F.2d 1449, 1457 (10th Cir.1988). In Kansas, a plaintiff may recover punitive damages if he or she proves by clear and convincing evidence that the defendant acted with willful conduct, wanton conduct, fraud, or malice. Kan. Stat. Ann. § 60-3702(c). We start by noting that in retaliation claims in Kansas, punitive damages may not be imposed automatically on an employer when a jury finds unlawful retaliation. Hysten v. Burlington N. Santa Fe Ry. Co., 530 F.3d 1260, 1277 (10th Cir.2008). This is because an award of punitive damages is improper when the evidence . . . show[s] that the employer reasonably believed that his retaliatory conduct was entirely lawful. Id. at 1277-78. Nonetheless, an employer can be liable for punitive damages, even if it does not know it is violating an employee's rights, so long as the employer appreciates the wrongfulness, harmfulness, or injuriousness of the act itself. Id. at 1277. Accordingly, when an employer terminates an employee in contravention of Kansas public policy and presents pretextual justifications to conceal this conduct, a jury [can] infer that the employer was acting with the purpose of doing something wrongful. Id. The jury's imposition of punitive damages was appropriate here because there was a legally sufficient evidentiary basis for the jury to find that Sloan's conduct was willful and malicious. The evidence indicates that Sloan, on multiple occasions, intentionally interfered with the doctors' medical evaluations in an attempt to prevent Jones from returning to work. Sloan first called Dr. Legler and asked him to change his diagnosis, even though he observed Jones perform a lift test and concluded that he could return to work. Sloan also told Dr. Buck that UPS would not pay for another FCE even though two other doctors had indicated that Jones could return to work. Moreover, Sloan misled Dr. Buck when she told him that he was supposed to base his opinion solely on Jones's past medical records. Finally, after the grievance panel instructed Jones to return to Dr. Buck in order to comply with the CBA's third-party doctor procedure, Sloan made no effort to inform Dr. Buck that, contrary to what she had previously told him, he was to make an independent determination regarding Jones's present physical limitations. In light of Sloan's repeated attempts to prevent Jones from returning to work by both omission and commission, we conclude that a jury could reasonably find that punitive damages were appropriate. 2. UPS's Knowledge UPS also argues that even if Sloan's actions warranted an award of punitive damages, it cannot be liable for punitive damages because it did not authorize or ratify her conduct. Under Kansas law, punitive damages may not be assessed against [an] ... employer for the acts of... [an] employee unless the questioned conduct was authorized or ratified by a person expressly empowered to do so on behalf of the ... employer[.] Kan. Stat. Ann. § 60-3702(d)(1). Authorization or ratification under § 60-3702(d)(1) may be either express or implied. Smith v. Printup, 254 Kan. 315, 866 P.2d 985, 1003 (1993). Implied ratification may be based on a course of conduct indicating the approval, sanctioning, or confirmation of the questioned conduct. Id. We first address whether there was a legally sufficient evidentiary basis for the jury to conclude that a UPS employee was expressly empowered by UPS to authorize or ratify Sloan's improper conduct. Based on the evidence presented at trial, we conclude that the jury could have reasonably determined that Don Lewick, the labor manager in UPS's Kansas City office, was such an individual. Lewick testified at trial that as a labor manager he worked to resolve labor issues arising from certain employment situations. App. Vol. 5, at 1154. As part of this work, Lewick would hear grievances filed by employees, attempt to settle those grievances, and, in the event the grievance could not be settled, present UPS's case before the union grievance panels. Id. at 1154-55. Not surprisingly, the record indicates Lewick was actively involved in Jones's dispute with UPS. According to Jones, it was Lewick who first told Jones that he would not be able to return to work at UPS. And Lewick himself testified that he received reports from the human resources department regarding Jones's doctors appointments, that he represented UPS in Jones's grievance proceedings, and that he met with Sloan regarding her interactions with Dr. Buck and instructed her regarding how to proceed. Id. Vol. 5, at 1162-66, 1175, 1177-78. Given these facts, we conclude that the jury could have reasonably found that Lewick was authorized by UPS to authorize or ratify Sloan's conduct. We also conclude that there was a legally sufficient evidentiary basis for the jury to find that Lewick did in fact authorize or ratify Sloan's interference with Jones's attempts to return to work. Lewick knew Dr. Legler initially concluded that Jones could return to work without restrictions. Lewick testified that he received Dr. Legler's initial report and that after he read the report, he was informed by someone in the human resources department that an amended release from Dr. Legler would be forthcoming. Id. at 1162-63. Lewick then received an amended report from Dr. Legler which indicated Dr. Legler had changed his initial conclusions to now conclude that Jones could not return to work. Id. In addition, as Lewick represented UPS in Jones's grievance proceedings, he was aware of all of the facts surrounding Jones's grievances and was therefore likely on notice regarding Sloan's providing misinformation to Dr. Buck. Lewick testified that he read Dr. Buck's first report, in which Dr. Buck stated that his medical opinion was based upon the medical records provided to him by Dr. Stechschulte, Dr. Legler, and Bob Mitchell, the physical therapist. Id. at 1174; Add. at 211. In addition, Lewick testified that when he read Jones's grievance complaint in which Jones alleged that UPS didn't want Dr. Buck's opinion and instead wanted only the opinion of [the] doctor related to the company, he called Sloan because he was concerned. App. Vol. 5, at 1173-74. After speaking with Sloan about this matter, Lewick instructed her not to speak with Dr. Buck prior to Jones's second visit so that she would not muddy the waters further. Id. at 1177-78. Lewick instructed Sloan in this manner even though Lewick knew (1) that Jones had complained to the grievance panel that UPS interfered with Dr. Buck's analysis at Jones's first visit; (2) that Dr. Buck's first report was based solely on Jones's past medical reports; and (3) that the grievance panel had ordered Jones to see Dr. Buck againthis time in accordance with the CBA. Id. at 1173-76. Ignorant of the import of the grievance panel's order regarding Jones's second visit, Dr. Buck again followed Sloan's previous instructions and issued a report based only on Jones's prior medical reports. In light of this evidence, we conclude that there was a legally sufficient factual basis for the jury to find that UPS authorized or ratified Sloan's improper behavior. Lewick himself testified that he knew of the previous medical reports releasing Jones to work and that he also knew that Dr. Legler then issued an amended report recanting his prior conclusion that Jones could return to work without restrictions. More important, Lewick was directly involved with Jones's union grievances, and as a result, he knew not only of Jones's complaint regarding UPS's interference, but also that Dr. Buck had issued a report based solely on Jones's prior medical records. Knowing this, and knowing that the grievance panel instructed Jones to obtain a second opinion from Dr. Buck, he instructed Sloan not to speak with Dr. Buck further. While we recognize that it could potentially be argued that Lewick's instruction that Sloan not speak with Dr. Buck was not made in an attempt to prevent Jones from obtaining a fair evaluation, we can only reverse a jury's finding if the evidence points but one way. Baty, 172 F.3d at 1241. In this case, based on the evidence presented, there is a sufficient factual basis to support the jury's finding that UPS authorized or ratified Sloan's conduct. We therefore affirm the district court's denial of UPS's motion for judgment as a matter of law on Jones's request for punitive damages.