Court Opinion

ID: 9490112
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:33:05.646718+00
Date Added: 2024-06-11T17:53:54.086900
License: Public Domain

STEPHEN F. WILLIAMS, Circuit Judge,
concurring in part and dissenting in part.
I concur in much of the decision, but not in the conclusion that in a Title VII suit the minimum standard of evidence for punitive damages is, with narrow exceptions, no higher than the standard for liability. See Maj. Op. at 1437-39.
*1441The 1991 Civil Rights Act authorizes punitive damage awards in Title VII eases where the defendant engaged in the discriminatory act “with malice or with reckless indifference to the [plaintiffs] federally protected rights.” 42 U.S.C. § 1981a(b)(l) (1994). The majority concludes that in the ordinary claim of sex discrimination, which must be intentional to be actionable (except for “disparate impact” liability, for which the statute expressly precludes punitive damages), the jury is automatically empowered to find malice or reckless indifference. Maj. Op. at 1487-38. The ruling may seem to manifest impeccable logic, as an intent to discriminate seems to encompass “reckless indifference” to the rights of the discrimination victim. But the upshot of the majority’s view is that punitive damages are available in every case of garden-variety Title VII discrimination, excepting only a few. rather unusual ones such as claims dependent on an employer’s miscalculation of the bona fide occupational qualification exception. See Maj. Op. at 1438-89. But if this were Congress’s intent, why would there be a separate provision purporting to describe a special standard for punitive damages?
Every circuit to address the question thus far has read § 1981a to demand proof of a more culpable state of mind for punitive damages than the ordinary intent necessary for a violation of Title VII. Emmel v. Coca-Cola Bottling, 95 F.3d 627, 636 (7th Cir.1996) (characterizing standard for punitive damages as a “higher hurdle” than that for proving the underlying discrimination); Turic v. Holland Hospitality, Inc., 85 F.3d 1211, 1216 (6th Cir.1996) (despite sufficiency of evidence for liability and “duplicitous” actions of defendant’s employees, evidence insufficient for punitive damages); Karcher v. Emerson Electric Co., 94 F.3d 502, 509 (8th Cir.1996) (although jury could properly infer intentional sex discrimination from inconsistent nature of hiring process and failure to select and train women, it could not find malice or deliberate indifference); Pandazides v. Virginia Bd. of Educ., 13 F.3d 823, 830 n. 9 (4th Cir.1994) (stating in dictum that “[w]hile ‘intentional discrimination’ suffices to recover compensatory damages, Congress requires a heightened showing of discriminatory action ... to recover punitive damages”); McKinnon v. Kwong Wah Restaurant, 83 F.3d 498, 507-09 (1st Cir.1996) (endorsing concept of a higher standard for punitive damages; rejecting district court’s denial of punitive damages solely on basis of cultural factors, but acknowledging that cultural factors would “likely have an impact on [a defendant’s] consciousness of wrongdoing”). None of these opinions, to be sure, offers much by way of explanation, although McKinnon points to a comparatively useful piece of legislative history, the House Report on language almost identical to that of the final bill:
Plaintiffs must first prove intentional discrimination, then must prove actual injury or loss arising therefrom to recover compensatory damages, and must meet an even higher standard (establishing that the employer acted with malice or reckless or callous indifference to their rights) to recover punitive damages.
Id. at 507, quoting H.R.Rep. No. 40(1), 102d Cong., 1st Sess. at 72 (1991) (emphasis added) (“House Report”).1 To justify creating a split with five sister circuits (particularly in light of this item of legislative history), we ought to have a powerful reason. I don’t see it.
I agree with the majority’s general proposition that it is sensible to look to standards rooted in the common law to understand what Congress meant when using the phrase “malice or reckless indifference.” But in what seems to me the relevant context, namely decisions relating to intentional torts and of roughly the vintage of the 1991 Act, the common law appears to require a state of mind more extreme than what is required for *1442the intentional tort on which the punitive claim is piggybacked.
In Smith v. Wade, 461 U.S. 30, 103 S.Ct. 1625, 75 L.Ed.2d 682 (1988), the Court addressed the right of plaintiffs to punitive damages in cases arising under 42 U.S.C. § 1983. The claim was that the defendant prison guard had failed to protect the plaintiff inmate from harassment, beatings and sexual assault by fellow inmates. The plaintiff had proved gross negligence on the part of the guard, and thus a violation of plaintiffs Eighth Amendment right. Id. at 33, 103 S.Ct. at 1628. As § 1983 made no reference to punitive damages, the Court looked to the common law for the appropriate standard. It rejected the proposition that “actual malicious intent — ‘ill will, spite, or intent to injure’,” id. at 37, 103 S.Ct. at 1630, was required for punitive damages, and held instead that they were allowable when the defendant’s conduct was “motivated by evil motive or intent, or when it involve[d] reckless or callous indifference to the federally protected rights of others.” Id. at 56, 103 S.Ct. at 1640. The Court reasoned that “the rule in a large majority of [states] was that punitive damages ... could be awarded without a showing of actual ill will, spite, or intent to injure.” Id. at 41, 103 S.Ct. at 1632. A dissent by Justice Rehnquist, joined by Chief Justice Burger and Justice Powell, read the historic record differently, arguing that “at least some degree of bad faith or improper motive” was required. Id. at 56, 103 S.Ct. at 1640. Justice O’Connor also dissented. Finding that the historical record provided no real guidance on the intent of Congress at the time of enactment in 1871, she reasoned that the majority’s standard was inconsistent with the purposes of § 1983.
Obviously it is not our place to replay this argument. I make only a narrower point. In the area of intentional torts, the common law analog of intentional discrimination, courts generally require an especially egregious intent, even when they are applying punitive damage standards phrased the same as the one set forth in Smith v. Wade and echoed in § 1981a(b)(l). In doing so, they apply the general principle that “[sjomething more than the mere commission of a tort is always required for punitive damages.” W. Page Keeton et al., Prosser & Keeton on the Law of Torts § 2, at 9 (5th ed.1984); see also id. at 11 (“it is not so much the particular tort committed as the defendant’s motives and conduct in committing it”). To be sure, the Smith v. Wade majority’s reading of the “rules of ordinary tort law” in substance rejected Prosser & Keeton’s. 461 U.S. at 53, 103 S.Ct. at 1638-39. But in the realm of intentional torts such a rejection has little support.
The Restatement (Second) of Torts, Section 908, for instance, asserts a generality similar to the wording of Smith v. Wade and of § 1981a, saying that punitive damages are allowable “for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others.” One might expect that under this formula plaintiffs asserting any intentional tort could automatically get to the jury on punitive damages. But the comments to the Restatement draw such a claim in question. Comment b says that damages are only appropriate where there is “some element of outrage similar to that usually found in crime.” See also comment d (although award of punitive damages left to jury discretion, “[i]t is error ... to award punitive damages if there has been no bad motive or wanton indifference”).
Some state courts have explicitly interpreted the Restatement to require some evidence of bad motive in the intentional tort context. The Missouri Supreme Court in Burnett v. Griffith, 769 S.W.2d 780 (1989) (en banc), said that it “is not so much the commission of the intentional tort as the conduct or motives — the defendant’s state of mind — which prompted its commission that form the basis for a punitive damage award.” Id. at 787. “Plaintiff must prove that defendant’s evil hand was guided by an evil mind.” Id. The court rejected a jury instruction stating that malice “does not mean hatred, spite or ill will, as commonly understood, but means the doing of a wrongful act intentionally without just cause or excuse,” id. at 788, explaining that the language failed to explain to jurors that “a bad motive or reckless disregard for the rights of others is required.” Id. at 789; see also Ryburn v. General Heating & Cool*1443ing, Co., 887 S.W.2d 604, 609 (Mo.App.1994) (interpreting Burnett as focusing “on the matter of moral culpability so that the jury would not impose punitive sanction on a defendant for the mere commission of an intentional tort”).
Similarly, the D.C. Court of Appeals has construed language at least as loose as that of § 1981a (“fraud, ill will, recklessness, wantonness, willful disregard of the plaintiff’s rights, or other circumstances tending to aggravate the injury”) to require, for the tort of intentional interference with contract, something more than the intent necessary for the tort itself. Dyer v. William S. Bergman & Assocs., 657 A.2d 1132, 1139 n. 10 (D.C.1995). Given the “overlap” between the state of mind needed for punitive damages and that needed for tortious interference with contract, the court said:
[T]rial judges must be alert to the need to frame their instructions to the jury in a way that makes it clear that proof of intentional interference [with contract] does not automatically entitle the plaintiff to an award of punitive damages.
Arguably, where the tort alleged is an intentional one, inherently containing elements of willfulness, an award of punitive damages must rest upon that tort being committed in an outrageous way; in other words,' the “outrageousness” cannot be supplied by the conduct required to commit the tort itself.
Id. And Alaska, which at least nominally allows punitive damages for “reckless indifference” to others’ interests, Alyeska Pipeline Service Co. v. O’Kelley, 645 P.2d 767 (Alaska 1982), in fact denies them where an intentional tort is not accompanied by evidence supporting an inference of “actual malice or conduct sufficiently outrageous to be deemed equivalent to actual malice”. Id. at 774.
Similarly, Vermont courts have used “reckless” language, but seem to require bad motive on top of the intentional tort. Vermont limits “exemplary” or punitive damages to cases of “malice, ill will, or wanton conduct,” but includes within those terms action that is “reckless with regard to the plaintiffs rights.” Bruntaeger v. Zeller, 147 Vt. 247, 515 A.2d 123, 127 (1986) (emphasis added). Yet, when applying the same formulation in State Agency of Natural Resources v. Riendeau, 157 Vt. 615, 603 A.2d 360 (1991), it held that under a statute imposing ordinary liability for “willful” violations, punitive damages could be awarded only for “bad spirit and wrong intention,” and that therefore plaintiff must show “some ... bad motive [that makes the] knowing and intentional conduct malicious.” Id. 603 A.2d at 365; cf. id. (distinguishing between the meaning of “willful” in civil cases, where it is “a synonym for ‘intentional’ ” and in criminal cases, where it has a “different and darker shade of meaning”).
Cases of an insurer’s bad faith denial of insured’s claims pose a related issue. The tort’s label suggests that it requires a more culpable state of mind than mere “intention,” but courts in some jurisdictions allow recovery where the insurer has acted in “reckless disregard” of its lack of a reasonable basis for denial. McCullough v. Golden Rule Insurance Co., 789 P.2d 855, 860 (Wyo.1990); Anderson v. Continental Insurance Co., 85 Wis.2d 675, 271 N.W.2d 368, 376 (1978). In any event, courts appear to have reacted with the same impulse to reserve punitive damages for egregious eases. When the Wyoming Supreme Court embraced the tort, it hastened to refute the suggestion that every such claim would entail a possibility of punitive damages, saying that plaintiff must also show “wanton or willful misconduct,” McCullough, 789 P.2d at 861, even though Wyoming nominally allows punitive damages for “reckless indifference,” id. at 860 n. 11. The court quoted decisions from other jurisdictions requiring not only intentional breach of the duty of good faith, but “oppression, fraud, or malice.” Id. at 861.
Wisconsin courts similarly demand an extra notch of evil:
[T]here is a distinction between the intent or malice necessary to maintain an action for intentional tort (such as bad faith) and the intent which must be shown to recover punitive damages.... [T]here must be a showing of an evil intent deserving of punishment or something in the nature of *1444special ill-will or wanton disregard of duty or gross or outrageous conduct.
Anderson, 271 N.W.2d at 379; see also Mid-Continent Refrigerator Co. v. Straka, 47 Wis.2d 739, 178 N.W.2d 28, 32-33 (1970) (noting distinction between “the intent or malice necessary to maintain an action for an intentional tort and that necessary to recover punitive damages” and stating that “something must be shown over and above the mere breach of duty for which compensatory damages can be given”).
Some courts, to be sure, take the view that where the elements of an intentional tort entail characteristics justifying punitive damages in other contexts, they are freely available even though the effect is to make punitive damages possible wherever liability is found. See, e.g., Ellerin v. Fairfax Savings, F.S.B., 337 Md. 216, 652 A.2d 1117, 1126 (1995) (“elements of the tort of [intentional] fraud or deceit in Maryland ... include the type of deliberate wrongdoing and evil motive that has traditionally justified the award of punitive damages”); Owens v. Parker Drilling Co., 207 Mont. 446, 676 P.2d 162, 165 (1984) (‘“where a statute is designed to protect the substantial interests of a person from a high degree of risk, and the statute is violated either intentionally or recklessly, a jury question of punitive damages is raised”); McMullin v. Murphy, 89 Or.App. 230, 748 P.2d 171, 173 (1988) (“evidence sufficient to establish intentional fraud is also necessarily sufficient to support the requisite findings for the imposition of punitive damages, without additional or independent evidence pertaining to the culpability of the defendant’s conduct or state of mind”).
Perhaps lining up citations on both sides of this question is just another “unilluminating, exegesis of the common law” similar to that in Smith v. Wade, which Justice O’Connor there described as yielding only “inexact and contradictory language” unhelpful in interpreting a statute. 461 U.S. at 92-93, 103 S.Ct. at 1658-59 (O’Connor, J., dissenting). But that was the Court’s approach in Smith v. Wade, and in this search for analysis by state common law courts I find the weight of authority against the idea that just because the governing formula allows punitives for “reckless” behavior it follows that all intentional torts are eligible for punitive damages. In addition, to the extent that there appears to be a split of authority on the question, the split is less close than it appears in view of other measures taken to constrain the award of punitives.
The concern that punitive damages ought not be awarded in every case is reflected in a variety of devices designed to reduce their incidence. See generally Restatement (Second) of Torts, § 908, comment f; see also BMW of North America, Inc. v. Gore, — U.S. -, -, 116 S.Ct. 1589, 1618, 134 L.Ed.2d 809 (1996) (Ginsburg, J., dissenting) (appendix summarizing recent state legislative activity designed to reduce the incidence of punitive damages). More than half the states require that evidence supporting punitive damages be “clear and convincing,” most of them doing so by statute but several by common law adjudication. See Brian T. Beasley, “North Carolina’s New Punitive Damages Statute: Who’s Being Punished, Anyway?” 74 N.C. L.Rev. 2174, 2201 (1996) (appendix providing survey of punitive damage provisions in all 50 states). Although the standard of proof is not at issue in this case, the reasons for adoption of a clear and convincing standard suggest a widespread understanding that the award of punitive damages should not be an everyday event. See, e.g., Masaki v. General Motors Corporation, 71 Haw. 1, 780 P.2d 566, 574-75 (1989) (more exacting standard because punitive damages are stigmatizing punishment of a “quasi-criminal” type); Linthicum v. Nationwide Life Insurance Co., 150 Ariz. 326, 723 P.2d 675, 681 (1986) (en banc) (applying higher standard because punitive damages are “only to be awarded in the most egregious of eases, where there is reprehensible conduct combined with an evil mind over and above that required for commission of a tort”); Tuttle v. Raymond, 494 A.2d 1353, 1363 (Me.1985) (adopting clear and convincing standard because of the risk posed by punitive damages if they can be “loosely assessed”).
In light of this common law background, it seems improbable that in adopting § 1981a Congress intended to adopt a punitive damage standard creating near-universal availability, despite its use of “recklessness” in the statutory formulation.
* * *
*1445As the majority opinion makes clear, the common law is not the only source for interpretation. We can also look to how courts have interpreted a kindred provision, 42 U.S.C. § 1981.2 Here the circuits are split, with three demanding more than mere intent to discriminate and three not doing so; of the latter, the First and Seventh decline to extend the reasoning to § 1981a.
In Beauford v. Sisters of Mercy-Province of Detroit, 816 F.2d 1104 (6th Cir.1987), the court cited language from Smith v. Wade but then stated that punitive damages in civil rights actions have “generally been limited to eases involving egregious conduct or a showing of willfulness or malice on the part of the defendant.” Id. at 1109. Although finding enough evidence of intentional discrimination, the court said there was no evidence of “the requisite malice or reckless or callous indifference of an egregious character,” so punitive damages could not be awarded. Id. The court in Stephens v. So. Atlantic Canners, Inc., 848 F.2d 484 (4th Cir.1988), followed Beauford, observing that an award of punitive damages “is an extraordinary remedy and is designed to punish and deter particularly egregious conduct.” Id. at 489. Though the evidence was adequate for plaintiff to get to the jury on intentional discrimination, and though noting that any form of discrimination “constitutes reprehensible and abhorrent conduct,” id., the court found the evidence inadequate for punitive damages. And in Walters v. City of Atlanta, 803 F.2d 1135 (11th Cir.1986), a § 1983 action based upon racial discrimination, after finding the evidence adequate on liability, the court held that several of the defendants who had denied plaintiff employment had nonetheless not “acted with either the requisite ill will or callous disregard” to justify punitive damages.
In the opposite camp are this circuit, the First and the Seventh. In Barbour v. Merrill, 48 F.3d 1270 (D.C.Cir.1995), cert. granted, - U.S.-, 116 S.Ct. 805, 133 L.Ed.2d 752, cert. dismissed, - U.S. -, 116 S.Ct. 1037, 134 L.Ed.2d 113 (1996) (voluntary settlement by parties), we held that under § 1981 the jury’s (sustainable) “finding of intentional racial discrimination permitted it to find” the requisite ill will or reckless or callous indifference for punitive damages. Id. at 1277. The First Circuit may have a similar rule. In Rowlett v. Anheuser-Busch, Inc., 832 F.2d 194, 205-07 (1st Cir.1987), it declined to adopt an aggravation requirement for punitive damages under § 1981, leaving to the trier of fact “discretion to determine whether punitive damages are necessary” where punitive damages are authorized for intentional violations. Id. at 205. But in McKinnon v. Kwong Wah Restaurant the Circuit quoted and followed the “higher standard” requirement set forth in the House Report, as noted above. See 83 F.3d at 507.
The Seventh Circuit is yet harder to characterize. In Yarbrough v. Tower Oldsmobile, Inc., 789 F.2d 508 (7th Cir.1986), the court upheld the verdict of intentional discrimination, finding the case basically a “swearing contest,” id. at 514, and then upheld the award of punitive damages, but only after characterizing it as “a close case,” id. Unless there was a higher standard for punitive damages, it is hard to see why that case was “close” and the liability issue not. But in Williamson v. Handy Button Machine Co., 817 F.2d 1290 (7th Cir.1987), the court appeared to say that punitive damages were available for racial discrimination under § 1981 so long as “the application of the law to the facts at hand was so clear at the time of the act that reasonably competent people would have agreed on its application.” Id. at 1296. The position is not unlike that of the panel here, which likewise makes limited allowance for a defendant’s mistake on an obscure issue of law. It may be more precise, however, to describe 7th Circuit law as in flux; as noted above, Emmel v. Coca-Cola Bottling, 95 F.3d 627, 636 (7th Cir.1996), says that an award of punitive damages under § 1981a itself must surmount a “higher hur-*1446die” than mere proof of intentional discrimination.
* * *
With this background in hand, I return to the legislative history of § 1981a. I have already noted the language of the House Report asserting that § 1981a demands of plaintiff “an even higher standard” than simple proof of intentional discrimination. See supra p. 1441 above. The panel quotes what appear as contradictory glosses on § 1981a urged by a senator and a representative. While Senator Dole said for himself and others that plaintiffs can recover for punitive damages only in “extraordinarily egregious cases,” see 137 Cong. Rec. S 15473 (Oct. 30, 1991) (Interp. Memo of Sen. Dole et al.), Representative Edwards said that “[pjunitive damages are available under [§ 1981a] to the same extent and under the same standards that they are available to plaintiffs under 42 U.S.C. § 1981.” See 137 Cong. Rec. H 9527 (Nov. 7, 1991) (Interp. Memo of Rep. Edwards). Compare Maj. Op. at 1437-38.
It is not clear to me that these views are in conflict. In light of the circuit split, Representative Edwards’s comment is indeterminate. For those circuits that have required “egregious” discrimination in the § 1981 context, the two observations fit handily. Of course Representative Edwards’s remark may be said to invite us to follow our own view of the law derived from § 1981. But that approach seems unduly self-referential. We can reconcile the otherwise disparate items of legislative history (the House Report and the Edwards and Dole statements) by following the courts that have, in applying § 1981, followed the current common law trend that, as to intentional torts, demands for punitive damages something substantially more blameworthy than the intention required for liability. This approach would also avoid creating a split with all the circuits that have addressed the § 1981a issue.
Because I agree with the panel that the parties agreed to have liability tried to the jury, id. at 1439-40,1 do not dissent from the view that the jury verdict was binding as to liability. But the remand to the district court should not, in my view, include any direction to hold a trial on punitive damages.
Before: EDWARDS, Chief Judge, WALD, SILBERMAN, WILLIAMS, GINSBURG, SENTELLE, HENDERSON, RANDOLPH, ROGERS, TATEL and GARLAND,* Circuit Judges.
ORDER
May 28, 1997
PER CURIAM.
The suggestion for rehearing in banc of the American Dental Association has been circulated to the full court. The taking of a vote was requested. Thereafter, a majority of the judges of the court in regular, active service voted in favor of the suggestion insofar as it pertains to the issue of punitive damages. Accordingly, it is
ORDERED that this matter will be reheard by the court sitting in banc. It is
FURTHER ORDERED that the judgment of the court filed on March 21, 1997, is vacated as to the issue of punitive damages.
A future order will govern further proceedings.

. The majority dismisses the House Report as involving “the unadopted House version of the 1991 Act.” Maj. Op. at 1438. But the only conceivably material difference in wording is that the House bill allowed punitive damages on a broader basis than the ultimate legislation, as it permitted them where defendant engaged in discriminatory practices "with malice, or with reckless or callous indifference to [plaintiff's] federally protected rights,” House Report at 12 (emphasis added), the key difference being addition of the word “callous” in the alternative.

. Section 1981 prohibits discrimination on the basis of race in the making and enforcement of contracts. In the employment context, it overlaps substantially with Title VII, but the two differ in important respects (e.g., § 1981 applies only to racial discrimination while Title VII covers sex discrimination as well). Until 1991 one of the most important differences was the availability of compensatory and punitive damages under § 1981 but not under Title VII, a difference that made juries available for the former but not the latter. The Civil Rights Act of 1991 brings these two discrimination statutes closer together, but they remain distinct. For example, punitive damage claims under Title VII are capped, while those under § 1981 are not.