Court Opinion

ID: 13246
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:25:13+00
Date Added: 2024-06-11T15:04:38.251095
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT

                ____________________________________

                            No. 96-31019
                ____________________________________

BARBARA GEORGE and TASHA WILLIAMS,

                                          Plaintiffs-Appellees-
                                               Cross-Appellants,

                                 v.

DALE FOSTER, et al.,

                                                    Defendants,

RACETRAC PETROLEUM, INC.,

                                          Defendant-Appellant-
                                               Cross-Appellees.

           _______________________________________________

             Appeal from the United States District Court
                 for the Western District of Louisiana
                              (94-CV-1778)
           _______________________________________________
                            October 15, 1997

Before KING, DUHÉ, and WIENER, Circuit Judges.

PER CURIAM:*

        In this hostile work environment sexual harassment case,

Defendant-Appellant-Cross-Appellee     Racetrac   Petroleum,      Inc.

(Racetrac) appeals the district court’s denial of its motion for a

new trial on the grounds that (1) the evidence did not support the

    *
          Pursuant to 5TH CIRCUIT RULE 47.5, the Court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIRCUIT RULE
47.5.4.
award of punitive damages to Plaintiffs-Appellees-Cross-Appellants

Barbara George and Tasha Williams (collectively, plaintiffs) and

(2) alternatively, the punitive damages award was excessive and

should have been remitted. Racetrac also asserts that the district

court erred in denying its motion to set aside the jury’s verdict

awarding mental anguish damages to plaintiff George. On cross-

appeal, plaintiffs seek to have the amount of compensatory damages

increased.

      Having thoroughly reviewed the briefs and the record in this

case, we conclude that the district court did not abuse its

discretion in denying Racetrac’s motion to set aside the verdict

and motion for a new trial and remittitur, and we therefore affirm

the   judgment   in    those      respects.     Additionally,    we   dismiss

plaintiffs’ cross-appeal because plaintiffs failed to make a motion

for a new trial in the district court.            Finding that prejudgment

interest does not further the purpose of punitive damages, however,

we reverse the district court’s award of prejudgment interest on

plaintiffs’ punitive damages award.

      We set forth our reasons for the reversal of the district

court’s assessment of prejudgment interest on plaintiffs’ punitive

damages award.        We   have   established    a   two-step   analysis   for

determining whether prejudgment interest should be awarded under

federal statutes.      Employing this analysis, the court must ask:

“[D]oes the federal act creating the cause of action preclude an

award of prejudgment interest, and if not, does an award of

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prejudgment interest further the congressional policies of the

federal act.”1     If prejudgment interest can be awarded under this

test, the award of such interest is within the discretion of the

trial    court.2     As   Title    VII   is   silent     on   the   question   of

prejudgment interest in general, the crucial question here is

whether an award of prejudgment interest on punitive damages would

advance the policy goals of § 1981a(b)(1) of the Civil Rights Act

of 1991 (the Act) by punishing an employer who discriminates “with

malice or with reckless indifference to the federally protected

rights” of an employee. Plaintiffs argue that prejudgment interest

would advance this punitive goal by (1) further punishing those who

violate the Act and (2) encouraging employers to settle meritorious

claims.

     In    West    Virginia   v.    United    States,3    the   Supreme    Court

explained   the    purpose    of   prejudgment    interest:         “Prejudgment

interest serves to compensate for the loss of use of money due as

damages from the time the claim accrues until judgment is entered,

thereby achieving full compensation for the injury those damages

are intended to redress.”4         We have not specifically addressed the

     1
          Carpenters Dist. Council of New Orleans and Vicinity v.
Dillard Dep’t Stores, 15 F.3d 1275, 1288 (5th Cir. 1994), cert.
denied, 513 U.S. 1126, 115 S. Ct. 933, 130 L. Ed. 2d 879 (1995).
     2
            Id.
     3
            479 U.S. 305, 107 S. Ct. 702, 93 L. Ed. 2d 639 (1987).
     4
            Id. at 310 n. 2, 107 S. Ct. at 706 n. 2.

                                         3
issue of prejudgment interest on punitive damages under Title VII,

but we have held that awards that are penal in nature do not draw

interest.5          As we noted in Illinois Central Railroad Co. v. Texas

Eastern Transmission Corp.:

        The rationale of the rule that penalties do not draw
        prejudgment interest is that a penalty does not reflect
        damages to the plaintiff but is assessed to encourage
        certain conduct on the part of the party penalized.
        Interest on a penalty does not further the purpose of
        making an injured party whole.6

Most        other   courts   that   have   addressed   the   issue   agree   that

prejudgment interest is basically compensatory and generally should

not be granted on punitive damages.7             We adopt the view of these

   5
          Illinois Central R.R. Co. v. Texas E. Transmission Corp.,
551 F.2d 943, 944 (5th Cir. 1977) (citing Rodgers v. United States,
332 U.S. 371, 373, 68 S. Ct. 5, 7, 92 L. Ed. 3 (1947) and United
States v. West Texas Cottonoil Co., 155 F.2d 463, 466 (5th Cir.
1946)).
        6
                Id.
    7
          See United States v. Reul, 959 F.2d 1572, 1578 (Fed. Cir.
1992); Wickham Contracting Co. v. Local Union No. 3, Int’l
Brotherhood of Elec. Workers, AFL-CIO, 955 F.2d 831, 834-35 (2d
Cir. 1992), cert. denied, 506 U.S. 946, 113 S. Ct. 394, 121 L. Ed.
2d 302 (1992) (“prejudgment interest should not be awarded if the
statutory obligation on which interest is sought is punitive in
nature” or the “statute itself already provides for . . . punitive
damages”) (citing Rodgers v. United States, 332 U.S. 371, 374-76,
68 S. Ct. 5, 7, 92 L. Ed. 3 (1947)); Fortino v. Quasar Co., 950
F.2d 389, 397-98 (7th Cir. 1991) (prejudgment interest not
available for punitive damages in age discrimination case); Emmel
v. Coca-Cola Bottling Co. of Chicago, Inc., 904 F. Supp. 723, 734
(N.D. Ill. 1995), aff’d, 95 F.3d 627 (7th Cir. 1996) (prejudgment
interest not available for punitive damages in Title VII sexual
harassment case); Nu-Life Constr. Corp. v. Board of Educ. of City
of New York, 789 F. Supp. 103, 104 (E.D.N.Y. 1992); In re Marshall,
132 B.R. 904, 906 (C.D. Ill. 1991), aff’d, 970 F.2d 383 (7th Cir.
1992).

                                           4
courts   and   hold   that    the   district   court    erred   in   awarding

prejudgment interest on plaintiffs’ punitive damages award.

     Accordingly,     we     reverse   the   district   court’s      award   of

prejudgment interest on plaintiffs’ punitive damages award.                  We

dismiss plaintiffs’ cross-appeal, and in all other respects we

affirm the judgment of the district court.               AFFIRMED in part;

REVERSED in part; cross-appeal DISMISSED.

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