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5 PJI 4.2 | Third Circuit (US)
HB-PJI-CA03-05S0402 Download


[Plaintiff] claims the acts of [defendant] were done with malice or reckless indifference to [plaintiff's] federally protected rights and that as a result there should be an award of what are called “punitive” damages. A jury may award punitive damages to punish a defendant, or to deter the defendant and others like the defendant from committing such conduct in the future. [Where appropriate, the jury may award punitive damages even if the plaintiff suffered no actual injury, and so receives nominal rather than compensatory damages.]

An award of punitive damages is permissible in this case only if you find by a preponderance of the evidence that a management official of [defendant] personally acted with malice or reckless indifference to [plaintiff's] federally protected rights. An action is with malice if a person knows that it violates the federal law prohibiting discrimination and does it anyway. An action is with reckless indifference if taken with knowledge that it may violate the law.

[For use where the defendant raises a jury question on good-faith attempt to comply with the law:

But even if you make a finding that there has been an act of discrimination with malice or reckless disregard of [plaintiff’s] federal rights, you cannot award punitive damages if [defendant] proves by a preponderance of the evidence that it made a good-faith attempt to comply with the law, by adopting policies and procedures designed to prevent unlawful discrimination such as that suffered by [plaintiff].]

An award of punitive damages is discretionary; that is, if you find that the legal requirements for punitive damages are satisfied [and that [defendant] has not proved that it made a good-faith attempt to comply with the law], then you may decide to award punitive damages, or you may decide not to award them. I will now discuss some considerations that should guide your exercise of this discretion.

If you have found the elements permitting punitive damages, as discussed in this instruction, then you should consider the purposes of punitive damages. The purposes of punitive damages are to punish a defendant for a malicious or reckless disregard of federal rights, or to deter a defendant and others like the defendant from doing similar things in the future, or both. Thus, you may consider whether to award punitive damages to punish [defendant]. You should also consider whether actual damages standing alone are sufficient to deter or prevent [defendant] from again performing any wrongful acts it may have performed. Finally, you should consider whether an award of punitive damages in this case is likely to deter others from performing wrongful acts similar to those [defendant] may have committed.

If you decide to award punitive damages, then you should also consider the purposes of punitive damages in deciding the amount of punitive damages to award. That is, in deciding the amount of punitive damages, you should consider the degree to which [defendant] should be punished for its wrongful conduct, and the degree to which an award of one sum or another will deter [defendant] or others from committing similar wrongful acts in the future.

[The extent to which a particular amount of money will adequately punish a defendant, and the extent to which a particular amount will adequately deter or prevent future misconduct, may depend upon the defendant’s financial resources. Therefore, if you find that punitive damages should be awarded against [defendant], you may consider the financial resources of [defendant] in fixing the amount of those damages.]

COMMENT 42 U.S.C. § 1981a(b)(1) provides that “[a] complaining party may recover punitive damages under this section [Title VII] against a respondent (other than a government, government agency or political subdivision) if the complaining party demonstrates that the respondent engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to the federally protected rights of an aggrieved individual.” Punitive damages are available only in cases of intentional discrimination, i.e., cases that do not rely on the disparate impact theory of discrimination.

In Kolstad v. American Dental Association, 527 U.S. 526, 534-35 (1999), the Supreme Court held that plaintiffs are not required to show egregious or outrageous discrimination in order to recover punitive damages under Title VII. The Court read 42 U.S.C. § 1981a to mean, however, that proof of intentional discrimination is not enough in itself to justify an award of punitive damages, because the statute suggests a congressional intent to authorize punitive awards “in only a subset of cases involving intentional discrimination.” Therefore, “an employer must at least discriminate in the face of a perceived risk that its actions will violate federal law to be liable in punitive damages.” Kolstad, 527 U.S. at 536. The Court further held that an employer may be held liable for a punitive damage award for the intentionally discriminatory conduct of its employee only if the employee served the employer in a managerial capacity and committed the intentional discrimination at issue while acting in the scope of employment, and the employer did not engage in good faith efforts to comply with federal law. Kolstad, 527 U.S. at 545-46. In determining whether an employee is in a managerial capacity, a court should review the type of authority that the employer has given to the employee and the amount of discretion that the employee has in what is done and how it is accomplished. Id., 527 U.S. at 543.

Affirmative Defense to Punitive Damages for Good-Faith Attempt to Comply With the Law

The Court in Kolstad established an employer’s good faith as a defense to punitive damages, but it did not specify whether it was an affirmative defense or an element of the plaintiff’s proof for punitive damages. The instruction sets out the employer’s good faith attempt to comply with anti-discrimination law as an affirmative defense. The issue has not yet been decided in the Third Circuit, but the weight of authority in the other circuits establishes that the defendant has the burden of showing a good-faith attempt to comply with laws prohibiting discrimination. See Medcalf v. Trustees of University of Pennsylvania, 71 Fed. Appx. 924, 933 n.3 (3d Cir. 2003) (noting that “the Third Circuit has not addressed the issue of whether the good faith compliance standard set out in Kolstad is an affirmative defense for which the defendant bears the burden of proof, or whether the plaintiff must disprove the defendant's good faith compliance with Title VII by a preponderance of the evidence”; but also noting that “[a] number of other circuits have determined that the defense is an affirmative one”); Romano v. U-Haul Int'l, 233 F.3d 655, 670 (1st Cir. 2000) (“The defendant... is responsible for showing good faith efforts to comply with the requirements of Title VII”); Zimmermann v. Associates First Capital Corp., 251 F.3d 376, 385 (2d Cir. 2001) (referring to the defense as an affirmative defense that “requires an employer to establish both that it had an antidiscrimination policy and made good faith effort to enforce it”); Bruso v. United Airlines, Inc., 239 F.3d 848, 858-59 (7th Cir. 2001) (“Even if the plaintiff establishes that the employer's managerial agents recklessly disregarded his federally protected rights while acting within the scope of their employment, the employer may avoid liability for punitive damages if it can show that it engaged in good faith efforts to implement an antidiscrimination policy.”); MacGregor v. Mallinckrodt, Inc., 373 F.3d 923, 931 (8th Cir. 2004) (“A corporation may avoid punitive damages by showing that it made good faith efforts to comply with Title VII after the discriminatory conduct.”); Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 516 (9th Cir. 2000) (under Kolstad, defendants may “establish an affirmative defense to punitive damages liability when they have a bona fide policy against discrimination, regardless of whether or not the prohibited activity engaged in by their managerial employees involved a tangible employment action.”); Davey v. Lockheed Martin Corp., 301 F.3d 1204, 1208 (10th Cir. 2002) (under Kolstad, “even if the plaintiff establishes that the employer's managerial employees recklessly disregarded federally-protected rights while acting within the scope of employment, punitive damages will not be awarded if the employer shows that it engaged in good faith efforts to comply with Title VII.”).

Caps on Punitive Damages

Punitive damages are subject to caps in Title VII actions. See 42 U.S.C. § 1981a(b)(3). But 42 U.S.C. §1981a(c)(2) provides that the court shall not inform the jury of the statutory limitations on recovery of punitive damages.

Due Process Limitations

The Supreme Court has imposed some due process limits on both the size of punitive damages awards and the process by which those awards are determined and reviewed. In performing the substantive due process review of the size of punitive awards, a court must consider three factors: “the degree of reprehensibility of” the defendant’s conduct; “the disparity between the harm or potential harm suffered by” the plaintiff and the punitive award; and the difference between the punitive award “and the civil penalties authorized or imposed in comparable cases.” BMW of North America, Inc. v. Gore, 517 U.S. 559, 575 (1996).

For a complete discussion of the applicability of the Gore factors to a jury instruction on punitive damages, see the Comment to Instruction 4.8.3.

(Last Updated July 2019)

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