Court Opinion

ID: 9796197
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:51:48.67483+00
Date Added: 2024-06-11T08:48:03.100650
License: Public Domain

WERDEGAR, J.,
Concurring and Dissenting. — I fully concur in part IIA and B of the majority opinion. I dissent from part IIC, in which the majority concludes a punitive damages award of $1,905,000, the same amount plaintiff is to recover in compensatory damages, is the maximum award consistent with federal due process. While I agree with much of the majority’s analysis of this issue and with its conclusion the jury’s $15 million punitive award was constitutionally excessive, I believe the evidence strongly suggests a significantly higher degree of reprehensibility on the corporate defendant’s part than the majority acknowledges. In light of that interpretation of the evidence and other relevant factors, I disagree that the punitive award must be reduced to a one-to-one ratio with the compensatory award. Our task here is only to determine the maximum permissible award under the Constitution, which is not necessarily the same award we would reach as jurors. (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1188 [29 Cal.Rptr.3d 379, 113 P.3d 63] (Simon).) Keeping that limited role in mind, I would locate the constitutional limit at a two-to-one ratio between compensatory and punitive awards, yielding a maximum punitive damages award of $3.8 million.
As the majority explains (maj. opn., ante, at p. 712), the United States Supreme Court has directed state courts to review punitive damages awards for constitutional excessiveness by examining three “guideposts”: the degree of reprehensibility shown in the defendant’s misconduct, the relationship of the award to the amount of harm or potential harm done to the plaintiff, and the civil penalties available in similar cases. (State Farm Mut. Automobile Ins. Co. v. Campbell (2003) 538 U.S. 408, 418 [155 L.Ed.2d 585, 123 S.Ct. 1513]; see Simon, supra, 35 Cal.4th at pp. 1172-1174.)
Our assessment of reprehensibility in this context is undertaken de novo, or independently, in that we do not defer to findings implied from the jury’s *721award. (Simon, supra, 35 Cal.4th at pp. 1172-1173.) Making such culpability assessments independently on the basis of a detailed factual record is, to say the least, an unusual task for an appellate court. While appellate judges commonly use their own judgments of comparative culpability to formulate general rules for categories of factual situations, their appraisal of the facts in a particular case is usually directed at deciding whether the evidence supports a finding made by the jury or the trial court. Moreover, an appellate court, relying on a cold record rather than hearing the testimony live, is not as well situated as the jury or trial court to make a fine-tuned culpability judgment about conduct that has been the subject of a trial. While some form of independent assessment is necessary to the constitutional review we are required to conduct, therefore, it should be performed modestly and with caution. As this court unanimously observed in Simon, “[i]n enforcing federal due process limits, an appellate court does not sit as a replacement for the jury but only as a check on arbitrary awards.” (Id. at p. 1188.)
The majority assigns a relatively low degree of reprehensibility to the conduct of defendant McKesson Corporation (McKesson) toward plaintiff Charlene J. Roby. (Maj. opn., ante, at pp. 717-718.) As to McKesson’s wrongdoing in regards to the harassment supervisor Karen Schoener inflicted on Roby, I tend to agree. As to discrimination and failure to accommodate Roby’s medical condition, I disagree.
Concerning McKesson’s culpability for discrimination with regard to its attendance policy, the majority observes that the evidence does not suggest McKesson adopted the policy with a purpose to discriminate, and thus concludes McKesson’s wrongdoing was “more a failure to prevent the foreseeable discriminatory consequences flowing from” the policy than an act rooted in “ ‘intentional malice.’ ” (Maj. opn., ante, at p. 716.) What the majority overlooks is that in McKesson’s rigid application of the policy, the record suggests a greater degree of corporate culpability than mere failure to foresee. As the Court of Appeal below observed, the evidence surrounding application of the attendance policy — the company’s failure to accommodate Roby’s medical condition, leading to her termination — supported a conclusion McKesson’s conduct “consisted of more than a careless failure to investigate absences, and was rather a deliberate plan to rid itself of the inconvenience of accommodating a mentally disabled employee.”
McKesson’s managers, including the head of the distribution center in which Roby worked and the regional director of human resources, knew of Roby’s chronic medical condition, knew she was under treatment for it, and were informed it was the cause of at least some of the absences they counted as “occasions” under the attendance policy. They also knew that employees cannot be punished for taking medical leave to which they are entitled under state and federal law.
*722The responsible McKesson managers twice purported to investigate Roby’s attendance record to determine if her termination was proper, once while she was suspended and then again when she appealed her termination, yet in doing so they never tried to determine, other than by looking for paperwork in the file, whether she was entitled to have some of the “occasions” consolidated or excused as due to a medical condition requiring accommodation. Their explanations for this limitation on their investigation suggested they regarded it as the employee’s burden to expressly and specifically seek accommodation under one or more laws. Even so, they failed to respond to Roby’s oral request that some of her absences be classified, retroactively, as medical leave under federal law.
McKesson’s managers were also aware that Roby alleged her supervisor had deceived her about application of the attendance policy by falsely promising a “new start” if she had no more unanticipated absences for a certain period of time, and that the attendance policy had been applied less strictly to other employees than to her. Although the managers apparently did not determine these claims were false, they did not consider them in making the decision to terminate Roby because of her absences.
The record thus could reasonably be read as showing, if not an intent to injure Roby by denying her accommodation, certainly a pattern of willful blindness to the likelihood she was entitled to accommodation for her medical condition. In corporate managers exercising decisive power over the career of a financially and emotionally vulnerable employee, such conscious indifference to the employee’s rights and health would reflect considerable culpability. While this may not be the only reasonable way to read the record, it is one reasonable reading. Without having heard the live testimony of Roby and McKesson’s managers and observed their demeanors under examination, we should not reject this reading as a basis for assessing reprehensibility. As we said in Simon, an appellate court’s due process analysis must allow “some leeway for the possibility of reasonable differences in the weighing of culpability.” (Simon, supra, 35 Cal.4th at p. 1188.)
To the extent labels are important in this context, I would judge McKesson’s reprehensibility as moderate rather than low, even relative to the range of conduct warranting exemplary damages under California law. Beyond this difference over appraisal of reprehensibility, two other points lead me to diverge from the majority’s determination as to the constitutionally permissible award.
First, while I agree with the majority that a large noneconomic damages award may reflect the jury’s indignation at the defendant’s conduct and thus contain a punitive component (maj. opn., ante, at p. 718), I would not assume *723this was true in the present case. As the majority acknowledges, Roby presented evidence she was “devastated emotionally and financially” by her termination, becoming agoraphobic and suicidal as well as completely disabled from employment. (Id. at p. 697.) The jury was certainly indignant at McKesson’s conduct, as shown by their award of $15 million in punitive damages, but they also could have believed that only a sizeable compensatory award could make Roby whole from the noneconomic injuries she sustained.
Second, the majority fails to adequately consider McKesson’s financial condition in determining the constitutional maximum. As we explained in Simon, California law has long recognized the importance of the defendant’s wealth in the use of exemplary damages for deterrence, a function the federal high court has endorsed. (Simon, supra, 35 Cal.4th at p. 1185.) Thus, “[b]ecause a court reviewing the jury’s award for due process compliance may consider what level of punishment is necessary to vindicate the state’s legitimate interests in deterring conduct harmful to state residents, the defendant’s financial condition remains a legitimate consideration in setting punitive damages.” (Ibid.) In 2000, the year it fired Roby, McKesson ranked No. 38 on Fortune Magazine’s list of the 500 largest American corporations, reportedly having a market value of more than $5 billion, more than $30 billion in revenues, and almost $85 million in profits. (See <http://money.cnn.com/ magazines/fortune/fortune500_archive/snapshots/2000/850.html> [as of Nov. 30, 2009].) While McKesson’s wealth alone cannot justify a high award, a somewhat larger award may be warranted in order to effectively deter such a large and profitable corporation from repeating its (at the least) conscious disregard of employees’ rights.
Again, a court reviewing punitive damages for consistency with due process must keep in mind that its “constitutional mission is only to find a level higher than which an award may not go; it is not to find the ‘right’ level in the court’s own view.” (Simon, supra, 35 Cal.4th at p. 1188.) Our constitutional determination, though independent of the jury’s judgment on the appropriate amount of exemplary damages, should at the same time be conducted with an awareness that reasonable views may differ on the degree of reprehensibility involved, the amount of harm done or threatened, and the likely deterrent effect of any particular award in light of the defendant’s financial condition.
The fixing of a constitutional maximum under the federal high court’s due process analysis is a lamentably inexact enterprise, and I cannot demonstrate that the majority reaches a legally incorrect result or that mine is precisely correct. But assessing reprehensibility with an eye to the appropriate “leeway” for differing judgments based on the evidence (Simon, supra, 35 Cal.4th at p. 1188), viewing the compensatory award without the unsupported *724assumption it contains a punitive element, and considering defendant McKesson’s financial condition at the time of its culpable conduct, I conclude an exemplary damages award twice the compensatory award, around $3.8 million, would not be so grossly excessive as to violate defendant’s constitutional right to due process of law.
Moreno, J., concurred.
The petitions of both respondent and appellants for a rehearing were denied February 10, 2010, and the opinion was modified to read as printed above.