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6 PJI 4.2 | Third Circuit (US)
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6 PJI 4.2 | SECTION 1981 | PUNITIVE DAMAGES

[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.]

For Individual Defendant:

[An award of punitive damages is permissible against [name(s) of individual defendant(s)] in this case only if you find by a preponderance of the evidence that [name(s) of individual defendant(s)] 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 Employer-Defendant:

[However, punitive damages cannot be imposed on an employer where its employees acted contrary to the employer's own good faith efforts to comply with the law by implementing policies and procedures designed to prevent unlawful discrimination in the workplace.

An award of punitive damages against [employer] is therefore 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-employer 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-employer] 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 [employer-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(s)]. You should also consider whether actual damages standing alone are sufficient to deter or prevent [defendant(s)] from again performing any wrongful acts that may have been 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(s)] 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(s)] should be punished for the wrongful conduct at issue in this case, and the degree to which an award of one sum or another will deter [defendant(s)] 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 a defendant’s financial resources. Therefore, if you find that punitive damages should be awarded against [defendant(s)], you may consider the financial resources of [defendant(s)] in fixing the amount of those damages.]



COMMENT In Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 460 (1975), the Supreme Court held that a plaintiff in a Section 1981 action is entitled to punitive damages "under certain circumstances.” Unlike Title VII, which places caps on punitive damage awards, there is no such statutory cap for Section 1981 actions.

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, 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.

The Kolstad decision construed a 1991 amendment to Title VII that made punitive damages available in Title VII actions for the first time. Thus it is not explicitly applicable to Section 1981 actions, as to which punitive damages have always been available. Nonetheless, the analysis in Kolstad seems readily applicable to discrimination claims brought under Section 1981. As with Title VII, the plaintiff should do something more than prove race discrimination to justify punitive damages; otherwise every violation of Section 1981 would automatically qualify for a punitive damages award. Similarly, punitive damages in a Section 1981 action should not be found against an employer solely on the basis of respondeat superior.

Accordingly, the pattern instruction incorporates the Kolstad standards in the same fashion as the instruction for Title VII actions. See Instruction 5.4.2. See also Ross v. Kansas City Power & Light Co., 293 F.3d 1041, 1048 (8th Cir. 2002) (holding that the Kolstad standards apply to an award of punitive damages under Section 1981); Lowery v. Circuit City Stores, Inc., 206 F.3d 431, 441 (4th Cir. 2000) (stating that “any case law construing the punitive damages standard set forth in § 1981a, for example Kolstad, is equally applicable to clarify the common law punitive damages standard with respect to a § 1981 claim”); Swinton v. Potomac Corp., 270 F.3d 794, 817 (9th Cir. 2001) (applying Kolstad in a Section 1981 action and affirming a punitive damages award of $1,000,000 against an employer, where highly offensive language was directed at the plaintiff, coupled by the abject failure of the employer to combat the harassment).

However, the instruction differs in one important respect from that to be employed in Title VII cases: it takes account of the possibility that an employee might be subject to punitive damages under Section 1981. In contrast, only employers can be liable under Title VII. Unlike employers, employees would not be entitled to a defense for good faith attempt to comply with federal law.

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 March 2018)

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Please get the justice you deserve.

Sincerely,



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