My colleague Evan Tager (Mayer Brown’s Punitive Damages blog) has a very interesting post about the forthcoming Ninth Circuit en banc punitive damages case, Arizona v. ASARCO. When people think about limits on punitive damages, they often think just about the Due Process Clause limits that all courts — including state courts — must apply, under the Supreme Court’s punitive damages proportionality jurisprudence. But when it comes to federal appellate review of federal jury verdicts, the federal court’s common-law review power is also in play. And in Arizona v. ASARCO, Tager argues,

the parties, the district court, and the Ninth Circuit panel all have missed the analytical mark. That is because the Constitution comes into play in a case governed by federal law only if Congress constrained the courts’ common-law authority to reduce a punitive award to an amount the court considers not to be excessive, which Congress did not do in Title VII. As the Second Circuit has recently observed, at least insofar as claims governed by federal law are concerned, there is no need to invoke the Constitution because federal courts have supervisory authority to ensure that punitive-damages awards are not excessive — “considerably more supervisory authority than the Supreme Court has over the decisions of the highest courts of a state” under the Due Process Clause. “It therefore follows that a degree of excessiveness less extreme than ‘grossly excessive’ will justify a finding that supports imposing a remittitur” in cases brought under federal law — including cases that may be subject to a cap….

Indeed, the Seventh Circuit employed just such an approach in a Title VII case that predated the Supreme Court’s articulation of the constitutional excessiveness guideposts. As the court explained in ruling that the Title VII cap does not limit the power of federal courts to reduce awards to amounts below the cap:

When Congress permitted, for the first time, awards of compensatory and punitive damages in Title VII cases, it was concerned with keeping those damages under reasonable control. It did not want Title VII awards, especially of punitive damages, to be excessive as they can be in other areas of the law.

It follows, the court reasoned, that not every punitive award that is 100% of the statutory ceiling is insulated from reduction under the statute. “It would seem logical,” instead, “that the maximum permissible award … should be reserved for egregious cases.” In other words, courts confronted with the question “whether 100 percent of the available damages [under Title VII] can be soaked up by a punitive damage award” must place the defendant’s conduct on a spectrum. If the conduct is among the worst covered by the statute, a punishment at or near the cap would be appropriate. But conduct that is not at the high end of the range of punishable conduct cannot support a punitive exaction at or near the cap. In the case before the Seventh Circuit panel, for example, a punitive award at the cap could not be justified, “given the much more egregious nature of some sex discrimination cases” — for example, the legion of ‘quid pro quo’ sexual harassment cases.”

Notice that this approach does not require courts to track through the five reprehensibility factors identified in State Farm, however inapt they may be for employment cases. Instead, the focus is on comparing the conduct in the case before the court to other conduct punishable under the statute.

Tager also argues that, under this approach, the punitive damages award in this case should be reduced (paragraph break added):

When all relevant circumstances are taken into account, it seems to me highly misguided to treat ASARCO’s conduct in this case as being among the most egregious for which punishment can be imposed under Title VII. Most importantly, there appears to be no evidence that a supervisor … perpetrated any of the acts of harassment at issue. It is not even clear that a supervisor could be blamed for the quality of the response to Aguilar’s complaints.

In addition, the jury awarded Aguilar no damages for emotional distress, which is a significant indication that the harassment itself was not severe, especially as compared to harassment in other cases. It also found that ASARCO neither retaliated against Aguilar nor constructively discharged her; indeed, Aguilar was repeatedly promoted. Needless to say, harassment accompanied by retaliatory conduct or constructive discharge rises higher on the reprehensibility spectrum than harassment that does not lead to any adverse job consequences for the employee.

There also is no evidence of a consistent pattern of harassment at the Arizona facility where Aguilar worked, much less at ASARCO generally. There was evidence that one other woman was subjected to unwelcome advances by the same co-worker about whom Aguilar complained and that pornographic graffiti had been found in a men’s restroom years earlier. But this hardly qualifies as the kind of consistent pattern of hostile conduct that is found in many cases in which punitive damages are awarded.

In any case, this strikes me as a very interesting — and, in my view, persuasive — perspective, and worth passing along. (Note that, as I mentioned, Evan Tager is a colleague of mine at Mayer Brown LLP, where I’m a part-part-part-time Academic Affiliate, but Mayer does not represent either of the parties in this case.)