Court Opinion

ID: 2757238
Source: CourtListenerOpinion
Date Created: 2014-12-03 21:00:58.271568+00
Date Added: 2024-06-11T12:38:06.282847
License: Public Domain

FILED
                            NOT FOR PUBLICATION                            DEC 03 2014

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

ALFONSO W. JANUARY, an individual,               No. 12-56171

              Plaintiff-Appellee,                D.C. No. 2:09-cv-03279-DMG-
                                                 CW
  and

ROBERT M. WARD, an individual;                   MEMORANDUM*
ROBERT E. JONES, an individual; JOSE
M. VALADEZ, an individual; LEONARD
TALTON, an individual; GARY SUHAY,
an individual,

              Plaintiffs,

  v.

DR PEPPER SNAPPLE GROUP, INC., a
business entity, form unknown,
erroneously sued as Dr. Pepper Snapple
Group; THE AMERICAN BOTTLING
COMPANY, a business entity, form
unknown, erroneously sued as American
Bottling Company,

              Defendants-Appellants,

  and

CADBURY SCHWEPPES BOTTLING

        *
         This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
GROUP; CADBURY SCHWEPPES
HOLDINGS INC.; 7-UP/RC BOTTLING
COMPANY OF SOUTHERN
CALIFORNIA,

           Defendants.

ALFONSO W. JANUARY, an individual,       No. 12-56608

           Plaintiff-Appellee,           D.C. No. 2:09-cv-03279-DMG-
                                         CW
 and

ROBERT M. WARD, an individual;
ROBERT E. JONES, an individual; JOSE
M. VALADEZ, an individual; LEONARD
TALTON, an individual; GARY SUHAY,
an individual,

           Plaintiffs,

 v.

DR PEPPER SNAPPLE GROUP, INC., a
business entity, form unknown,
erroneously sued as Dr. Pepper Snapple
Group; THE AMERICAN BOTTLING
COMPANY, a business entity, form
unknown, erroneously sued as American
Bottling Company,

           Defendants-Appellants,

 and

                                    2
CADBURY SCHWEPPES BOTTLING
GROUP; CADBURY SCHWEPPES
HOLDINGS INC.; 7-UP/RC BOTTLING
COMPANY OF SOUTHERN
CALIFORNIA,

              Defendants.

                  On Appeal from the United States District Court
                       for the Central District of California
                     Dolly M. Gee, District Judge, Presiding

                     Argued and Submitted November 20, 2014
                               Pasadena, California

Before: TASHIMA, W. FLETCHER, and BYBEE, Circuit Judges.

      Defendants-Appellants Dr Pepper Snapple Group, Inc. (Dr Pepper) and The

American Bottling Co. (ABC) appeal following a jury verdict awarding Plaintiff-

Appellee Alfonso January $1,140,000 in compensatory damages and $1,335,400 in

punitive damages for age discrimination under California’s Fair Employment and

Housing Act (FEHA), Cal. Gov’t Code § 12900 et seq. We have jurisdiction under

28 U.S.C. § 1291, and we reverse.

      1.     Defendants first claim prejudicial error based on the district court’s

interpretation of the parties’ stipulation that “Plaintiffs are or were employed by

Defendants.” We review the district court’s interpretation of a stipulation de novo,

United States v. Lawton, 193 F.3d 1087, 1094 (9th Cir. 1999), superseded by

                                           3
statute on other grounds, and we review the district court’s refusal to modify a

pretrial order to relieve a party of a stipulation for abuse of discretion, Byrd v.

Guess, 137 F.3d 1126, 1131 (9th Cir. 1998), superseded by statute on other

grounds.

      The district court correctly interpreted the stipulation as establishing that Dr

Pepper, not just ABC, was Plaintiffs’ employer. The stipulation unambiguously

refers to “Defendants” in the plural, and the pretrial conference order clearly

provides that “Defendants” are ABC and Dr Pepper. The district court did not

abuse its discretion in refusing to modify the pretrial conference order to relieve

Defendants of the stipulation. Defendants did not formally move for modification

of the pretrial conference order, and even if they had, they have not shown that

enforcement of the stipulation resulted in manifest injustice.

      Although the district court correctly interpreted the stipulation as

establishing that Dr Pepper was Plaintiffs’ employer, the district court erred in

interpreting the stipulation as establishing Dr Pepper’s joint liability with ABC for

compensatory and punitive damages. The stipulation does not expressly provide

that Defendants are joint employers. But even if it did, joint employment merely

establishes that two entities may be considered employers under FEHA. See

Bradley v. Cal. Dep’t of Corr. & Rehab., 71 Cal. Rptr. 3d 222, 230–32 (Ct. App.

                                            4
2008), cited with approval in Patterson v. Domino’s Pizza, LLC, 333 P.3d 723, 740

(Cal. 2014). California courts have indicated that joint employers are not

necessarily jointly liable for discrimination in violation of FEHA. See Mathieu v.

Norrell Corp., 10 Cal. Rptr. 3d 52, 59–60 (Ct. App. 2004) (holding that the

plaintiff’s general employer was not liable under FEHA for harassment and

discrimination by an agent of the plaintiff’s special employer). And nothing in the

relevant statutes suggests otherwise. See Cal. Gov’t Code § 12940(a) (providing

that “[i]t is an unlawful employment practice . . . [f]or an employer” to

discriminate against a person because of a protected ground (emphasis added));

Cal. Civ. Code § 3294(b) (providing that punitive damages can only be imposed on

a corporate employer if “an officer, director, or managing agent of the corporation”

committed, authorized, or ratified wrongful conduct (emphasis added)).

      We therefore reverse and remand for a new trial.1 On retrial, the stipulation

shall not be interpreted to relieve January of the burden of proving each

Defendant’s liability for compensatory and punitive damages.

      2.     Defendants next claim prejudicial error based on the district court’s

exclusion of evidence and argument regarding the existence and amount of ABC’s

      1
      We must remand for a complete new trial because the compensatory
damages verdict did not identify which defendant was liable for what portion of the
damages.

                                          5
workers’ compensation settlements with January and his co-plaintiffs. Because the

district court excluded this evidence under Federal Rule of Evidence 403 without

explicitly weighing the settlements’ probative value as to issues of intent and

punitive damages, we review the exclusion de novo. United States v. Leo Sure

Chief, 438 F.3d 920, 925 (9th Cir. 2006).

      Evidence that ABC paid hundreds of thousands of dollars to settle Plaintiffs’

workers’ compensation claims would have been highly probative. The jury could

have believed that such evidence discredited Plaintiffs’ “profits over people”

theory of the case. The jury also could have found such evidence to be relevant to

its determination whether Dr Pepper acted with malice and oppression or in its

determination of the amount of punitive damages to impose. By contrast, the

potential for prejudice—that the jury might deduct the workers’ compensation

settlements from the damages award—could have been mitigated by instructing the

jury not to consider the settlements when determining the amount of damages. The

dangers of unfair prejudice and confusion therefore do not substantially outweigh

the evidence’s probative value. See Fed. R. Evid. 403.

      This error was not harmless. Although Defendants were allowed to tell the

jury that Plaintiffs’ claims were “accepted” and to introduce evidence of ABC’s

historical workers’ compensation payments, such evidence was not comparable in

                                            6
strength to the excluded evidence. See Obrey v. Johnson, 400 F.3d 691, 701–02

(9th Cir. 2005).

      We therefore reverse and remand for a new trial on this ground as well. On

retrial, Defendants shall be permitted to introduce evidence of the existence and

amount of their settlements of Plaintiffs’ workers’ compensation claims.2

      3.     Defendants claim several additional errors. Because the resolution of

these claims may affect any retrial, we will address them. We conclude that

Defendants’ arguments are without merit.

      First, Defendants argue that the district court erred in allowing January to

testify about his depression and mental distress. Defendants are incorrect. As the

district court correctly explained, an expert medical opinion would have been

required to establish that discrimination caused clinical depression for purposes of

economic damages, but was not required to establish that January experienced

mental distress and depression for purposes of noneconomic damages. January

was entitled to prove the latter type of damages by testifying about his own

perceptions. See Fed. R. Evid. 701.

      2
         We leave it to the sound discretion of the district court to decide if a
cautionary instruction is necessary on the limited purposes for which such evidence
is introduced, as well as the wording of such an instruction.

                                          7
      Second, Defendants argue that January failed to produce sufficient evidence

at trial that discrimination was a substantial factor in causing his injuries. To the

contrary, there is sufficient evidence in the record from which a jury could

conclude that Defendants’ agents engaged in discrimination and thereby caused

January to injure his shoulder and to experience mental distress, anxiety, and

depression. See Fisher v. City of San Jose, 558 F.3d 1069, 1074 (9th Cir. 2009).

      Third, Defendants argue that the district court erred in allowing Plaintiffs’

damages expert to opine that January suffered damages in the form of lost overtime

payments. We review for abuse of discretion a district court’s decision to allow

expert testimony under Federal Rule of Evidence 702. Estate of Barabin v.

AstenJohnson, Inc., 740 F.3d 457, 460 (9th Cir. 2014) (en banc). The district court

did not abuse its discretion. The damages expert’s methodology—extrapolating

from January’s past W-2s and wage statements to estimate his lost overtime

pay—was sufficiently reliable. See id. at 463. Defendants’ arguments to the

contrary go the weight of the testimony, not its admissibility.

      Lastly, Defendants argue for the first time on appeal that the second and

third categories of compensatory damages in the verdict form permitted double

recovery of mental-distress damages. Because Defendants failed to raise this issue

below, the argument is waived. See Bolker v. Comm’r of Internal Revenue, 760

                                           8
F.2d 1039, 1042 (9th Cir. 1985). In any event, the third category of compensatory

damages recovered by January did not include mental-distress damages; rather, it

included only damages for “past and future physical impairment, including

shoulder, stress & strain.”3

      4.     Because we reverse and remand for a new trial, we also vacate

January’s attorneys’ fees award, pending the outcome of the new trial.

      REVERSED and REMANDED.

      3
         Because Plaintiffs were not required to prove Dr Pepper’s separate liability
at the first trial, but will have the opportunity to do so on retrial, we decline to
decide at this point whether Plaintiffs presented sufficient evidence at the first trial
that a managing agent of Dr Pepper ratified age discrimination.

                                           9