773 F.3d 1050
9th Cir.2014Background
- Angela Aguilar sued ASARCO under Title VII for sexual harassment after working at ASARCO’s Mission Mine (Dec 2005–Nov 2006); jury found ASARCO liable for sexual harassment but awarded only $1 nominal damages and punitive damages.
- Jury originally awarded $868,750 in punitive damages; district court reduced it to $300,000 because 42 U.S.C. § 1981a(b)(3)(D) caps combined compensatory and punitive damages for large employers at $300,000.
- ASARCO challenged the punitive award as unconstitutionally excessive under the Due Process Clause (BMW v. Gore guideposts), sought further reduction/new trial, and challenged admission of evidence and attorneys’ fees.
- A three-judge panel reduced the award to $125,000 based on Gore ratio analysis; the court granted en banc rehearing.
- En banc Ninth Circuit held § 1981a’s punitive damages regime satisfies due process, declined rigid application of Gore ratio where statutory scheme and nominal damages govern, affirmed $300,000 award, evidentiary rulings, and fee award.
Issues
| Issue | Plaintiff's Argument (Aguilar) | Defendant's Argument (ASARCO) | Held |
|---|---|---|---|
| Whether $300,000 punitive award violates due process | Statutory punitive award under §1981a is permissible and supported by statute and record | Award is grossly excessive under Gore guideposts and single-digit ratio principle | Court: §1981a satisfies due process; statutory cap + malice/recklessness standard obviate rigid Gore ratio; $300,000 upheld |
| Applicability of Gore ratio when only nominal damages awarded | Nominal damages plus statutory cap justify a larger punitive award to deter misconduct | Gore ratio still governs; high punitive-to-compensatory ratio is unconstitutional | Court: Ratio guidepost has limited applicability where Congress set culpability standard and a consolidated cap; ratio analysis not controlling with nominal damages |
| Sufficiency of evidence for punitive damages under §1981a (malice or reckless indifference) | Evidence showed management knew of harassment, failed to act, and workplace patterns supported punitive award | ASARCO argued insufficient evidence of malice/recklessness | Held: District court’s factual findings not clearly erroneous; record supports punitive award under statute |
| Admission of other employees’ sexually explicit graffiti | Such evidence shows pattern/serial violations and is probative of harassment environment | Evidence was temporally remote, prejudicial, and should have been excluded under Rule 403 | Held: District court did not abuse discretion; probative value and limiting instruction justified admission |
| Award of attorneys’ fees to prevailing plaintiff who received nominal damages | Prevailing party entitled to fees; substantial punitive recovery and injunctive relief justify fees | Farrar v. Hobby limits fees where plaintiff obtained only nominal moral victory | Held: Fees not an abuse of discretion—Aguilar obtained significant punitive recovery and relief, and claims overlapped |
Key Cases Cited
- BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (constitutional limits on punitive damages; three guideposts)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (clarifying Gore guideposts; reprehensibility and ratio guidance)
- Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (standard of review for punitive-damages constitutionality and deference to district fact findings)
- Exxon Shipping Co. v. Baker, 554 U.S. 471 (statutory/regulatory context can alter punitive-damages analysis)
- Abner v. Kansas City S. R.R. Co., 513 F.3d 154 (Fifth Cir. holding that §1981a caps make Gore ratio analysis irrelevant in Title VII context)
- Mendez v. County of San Bernardino, 540 F.3d 1109 (9th Cir. punitive damages discussion where only nominal damages were awarded; partially overruled here)
- Farrar v. Hobby, 506 U.S. 103 (fee awards and relevance of degree of success)
- Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020 (upholding substantial punitive damages in discrimination case)