Thomas v. iStar Financial, Inc.
652 F.3d 141
2d Cir.2011Background
- Thomas was terminated by iStar in August 2003, allegedly for racial retaliation and discriminatory reasons.
- A jury found retaliation but not racial animus, and awarded front/back pay, non-economic damages, and $1.6 million in punitive damages.
- The district court later held the punitive award unconstitutionally excessive, offered remittitur to $190,000 or a new trial, and ultimately approved a direct reduction to $190,000 under a joint submission.
- Thomas elected a new trial on punitive damages after declining remittitur; the district court entered final judgment directing payment of $190,000, prompting appeal.
- A separate dispute arose over prejudgment interest, with the district court initially applying New York rate, later corrected to federal rate, and the appeal challenging the correction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the $1.6M punitive award was constitutionally excessive | Thomas argues excessiveness under Gore Campbell framework | iStar contends remittitur or new trial appropriate to fix excessiveness | Yes; award deemed excessive; affirmed remittitur/new-trial path leading to $190,000 |
| Whether the district court could reduce punitive damages without a new trial | Thomas would obtain appellate review of excessiveness without new trial | iStar supported direct reduction as permissible through the joint submission | Yes; the joint submission effectively stipulates a reduced award and permits appeal |
| Whether the district court erred in correcting prejudgment interest rate via a clerical correction | Thomas contested correction without leave after notice of appeal | District court corrected error to federal rate; leave not initially obtained | No; court granted nunc pro tunc leave to correct the clerical error |
| Whether NYCHRL punitive-damages framework affects the due-process analysis | NYCHRL cap considerations bear on reasonableness of punitive award | Cap does not automatically control; analysis centers on Gore factors | No; based on Gore factors the $1.6M award was excessive in context |
| Whether other challenges to trial rulings require reversal | Challenges to hostile environment, expert testimony, and jury-trial on back-pay | District court properly admitted evidence and allowed jury determination of back-pay | No; rulings upheld, with back-pay trial consent implied by conduct |
Key Cases Cited
- Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996) (standard for new-trial remittitur approach in punitive damages)
- BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996) (reprehensibility, ratio, and penalties framework)
- Campbell v. State Farm Mut. Auto. Ins. Co., 538 U.S. 408 (2003) (three Gore guideposts for punitive damages review)
- Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001) (no mechanical cap on punitive awards; due process review)
- Fabri v. United Techs. Int'l, Inc., 387 F.3d 109 (2d Cir. 2004) (conditional remittitur in the Second Circuit)
- DiSorbo v. Hoy, 343 F.3d 172 (2d Cir. 2003) (conditional remittitur on appeal)
- Lee v. Edwards, 101 F.3d 805 (2d Cir. 1996) (punitive damages remittitur precedent in circuit)
- Johansen v. Combustion Eng'g, Inc., 170 F.3d 1320 (11th Cir. 1999) (supports permissibility of remittitur in some punitive cases)
- Donovan v. Penn Shipping Co., Inc., 429 U.S. 648 (1977) (remittitur and appealability context for settlements)
- Hetzel v. Prince William Cnty., 523 U.S. 208 (1998) (Seventh Amendment reexamination limits)
- Marfia v. T.C. Ziraat Bankasi, 147 F.3d 83 (2d Cir. 1998) (federal versus state prejudgment interest on sum damages)