788 F. Supp. 2d 83
W.D.N.Y.2011Background
- EEOC sues Sterling Jewelers for gender-based pay and promotion discrimination nationwide (≈20,000 class members).
- Alleged pattern or practice: subjective promotion/compensation decisions leading to pay gaps and fewer promotions for women.
- EEOC seeks class-wide injunctive relief and damages; requests bifurcation of discovery/trial into liability and damages stages.
- EEOC proposes Stage I with liability, injunctive relief, and punitive-damages determination; Stage II for individual relief and damages.
- Sterling agrees to two-stage bifurcation but opposes punitive damages at Stage I as unconstitutional; seeks Stage II for punitive damages.
- Court grants bifurcation in part, denying Stage I punitive-damages determination; Stage I focuses on liability/injunctive relief; Stage II handles individualized relief including damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bifurcation into Stage I and II is appropriate. | EEOC supports bifurcation for efficiency and to establish pattern. | Sterling opposes punitive damages at Stage I but agrees to two-stage process. | Bifurcation granted in part; Stage I covers liability/injunctive relief; Stage II covers individual relief. |
| Whether punitive damages may be determined in Stage I. | State Farm/Philip Morris support early punitive-damages consideration to promote economy. | Punitive damages must await Stage II to ensure proportionality to compensatory damages. | Punitive damages will not be determined at Stage I; to be decided in Stage II with individualized analysis. |
| Whether Stage I can include evidence of punitive damages or require a per-claimant cap analysis. | Overlap in evidence supports early punitive-damages assessment. | Due process and Seventh Amendment protections require linking punitive to compensatory damages. | Stage I cannot include class-wide punitive damages; remain tied to Stage II, per State Farm/Philip Morris. |
Key Cases Cited
- International Bhd. of Teamsters v. United States, 431 U.S. 324 (Supreme Court, 1977) (two-stage pattern-or-practice framework; liability then remedial relief)
- Robinson v. Metro-North Commuter R.R., 267 F.3d 147 (2d Cir. 2001) (two-phase pattern-or-practice approach; burden-shifting after liability)
- Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998) (punitive damages must follow proof of liability to individuals; not at liability stage)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (Supreme Court, 2003) (punitive damages must be reasonable and proportional to compensatory damages)
- Philip Morris USA v. Williams, 549 U.S. 346 (Supreme Court, 2007) (due process limits on punitive damages; cannot punish for nonparties' harms)
- McLaughlin v. American Tobacco Co., 522 F.3d 215 (2d Cir. 2008) (skepticism of aggregate class-wide punitive damages)