U.S. Urges High Court to Ease Bias Damage Standard
Washington Post Staff Writer
Tuesday, March 2, 1999; Page
A Justice Department lawyer yesterday urged the Supreme Court to ease the standard for employees to collect large punitive damages for sexual or racial discrimination in a case with significant financial implications for many businesses.
The case, the latest saga in the extended debate over the breadth of civil rights laws governing the workplace, involves a woman who was passed over for a promotion with the American Dental Association in favor of a man with less experience.
Solicitor General Seth P. Waxman, siding with the woman, said that Congress wanted to make sure that employers who ignored their obligation under civil rights law were punished. The federal government and civil rights advocates argue that the threat of punitive damages can deter discrimination from even occurring in the first place.
But a lawyer for the dental association urged the justices to uphold a strict standard from the D.C. Circuit Court of Appeals requiring that workers seeking big-money punitive damages show that the employer's conduct was "egregious."
Employers fear that if the courts lower an aggrieved worker's threshold of proof they will be at risk of large awards for comparatively minor rights violations.
Yesterday's dispute traces to Congress's 1991 Civil Rights Act, which was designed to broaden protections for victims of job bias and to reverse the effects of several earlier Supreme Court rulings that narrowly interpreted federal anti-discrimination statutes.
Lawmakers passed the statute after two years marked by partisan squabbles over racially sensitive issues, and its delicately negotiated terms have been subject to earlier high court cases.
At issue now is a provision in the statute that would entitle employees who prove their cases to compensatory and punitive damages. Before 1991, workers who faced intentional discrimination were allowed only what are known as "equitable" remedies, such as back pay and reinstatement on the job.
Once a worker has successfully made a case that the company intentionally discriminated, the law says he or she can win punitive damages if it is shown the employer acted "with malice or with reckless indifference to the federally protected rights of an aggrieved individual." By a 6 to 5 vote, the D.C. Circuit interpreted that to mean "particularly egregious violations" of Title VII of the 1964 Civil Right Act.
Seeking a reversal, University of Washington law professor Eric Schnapper – representing Carole Kolstad, who was turned down for the dental association job – said Congress explicitly avoided such a lofty threshold. According to Schnapper, Congress opted instead to say that "reckless indifference" to civil rights law is enough to trigger punitive damages.
Both Schnapper and Waxman told the justices that the new law requires only that employers know what they are doing is wrong.
But Raymond C. Fay, representing the dental association, said punitive damages should be allowed only when "the conduct is outrageous or egregious." He pointed to the American legal tradition of an especially high standard of proof for such damages.
The justices themselves appeared frustrated by the law's muddle. Chief Justice William H. Rehnquist exclaimed at one point, "This statute is simply confusing." Rehnquist also suggested, however, that he might be inclined to uphold the D.C. Circuit in Kolstad v. American Dental Association because punitive damages traditionally have been an extreme remedy.
Justice Sandra Day O'Connor questioned whether Kolstad's interpretation of the statute would have the effect of allowing anyone who wins an intentional discrimination case to get punitive damages. But Schnapper argued that a bias victim would have to show that the employer actually knew he was violating civil rights law.
Justice Stephen G. Breyer observed that the law already restricts the opportunities for punitive damages awards by setting limits on the amount ($50,000 to $300,000, depending on the size of the company) and gives juries room to decline to give the higher awards.
"Why should we fight so hard to resist eligibility for punitives in a statute that has two other checks?" Breyer asked.
Kolstad had applied to be director of legislation with the association. When the job went to a man her junior, she sued for discrimination, claiming that the office director had denied her other job opportunities. She also said the boss told offensive jokes and used the epithet "bitch."
Kolstad prevailed, winning $52,718 in back pay, but lower courts said she could not seek punitive damages without proving that her employer's conduct was "egregious."
In a separate case, the justices rejected a challenge based on free speech grounds to Kentucky campaign finance restrictions. The justices let stand a lower appeals court ruling finding most of the law constitutional. The court's action sets no national standard, and indeed leaves in its wake a confusing and conflicting array of lower court interpretations of how far states can go to regulate campaign financing.
The Kentucky statute provides two-for-one public matching funds to any gubernatorial slate that agrees to limit its private contributions to $600,000 in each primary and general election and overall expenditures to $1.8 million (including the $1.2 million total public match.) The law also bars all slates of candidates from accepting campaign contributions in the 28 days before a primary or a general election. (Gable v. Patton)
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