No. 10-1639 ____________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT ____________________________________________ EDNA HERNÁNDEZ-MIRANDA, Plaintiff-Appellant, v. EMPRESAS DÍAZ MASSÓ, INC., et al., Defendants-Appellees. ____________________________________________ On Appeal From the United States District Court for the District of Puerto Rico, Case No. 06-2018 ____________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE IN SUPPORT OF APPELLANT AND REVERSAL ____________________________________________ P. DAVID LOPEZ EQUAL EMPLOYMENT General Counsel OPPORTUNITY COMMISSION Office of General Counsel CAROLYN L. WHEELER 131 M St. NE, 5th Fl. Acting Associate General Counsel Washington, D.C. 20507 (202) 663-4724 LORRAINE C. DAVIS Annenoel.Occhialino@EEOC.gov Assistant General Counsel ANNE NOEL OCCHIALINO Attorney TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii STATEMENT OF INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE ISSUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A. Nature of the Case and Course of Proceedings Below. . . . . . . . 2 B. Statement of Facts. . . . . . . . . . . . . . . . . . . . . . . . 2 C. District Court Opinion. . . . . . . . . . . . . . . . . . . . . . 5 SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 THE WORDS "CURRENT OR PRECEDING CALENDAR YEAR" IN 42 U.S.C. § 1981a(b)(3) REFER TO THE YEAR OF THE DISCRIMINATION, MAKING THE APPROPRIATE COMPENSATORY DAMAGES AWARD IN THIS CASE $200,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 A.The Supreme Court and this Court uniformly have interpreted "current or preceding calendar year" in 42 U.S.C. § 2000e(b) as referring to the year of the discrimination. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 B.Courts that have addressed this issue have held consistently that Section 1981a(b)(3) refers to the year of the discrimination. . . . . . . . . . 11 C.Because DM admits it had more than 200 employees during the years of the discrimination, the damage award should have been reduced to $200,000. . . . . . . . . . . . . . . . . . . . . . . . . . 13 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 TABLE OF CONTENTS (con't) CERTIFICATE OF COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 TABLE OF AUTHORITIES Cases page(s) Dep't of Revenue of Ore. v. ACF Indus., 510 U.S. 332 (1994). . . . . . . . . . 8-9 Depaoli v. Vacation Sales Assoc., L.L.C., 489 F.3d 615 (4th Cir. 2007). . . . 9,11 Dumas v. Town of Mount Vernon, 612 F.2d 974 (5th Cir. 1980). . . . . . . . . . . . 9 Hennessey v. Penril Datacomm Networks, Inc., 69 F.3d 1344 (7th Cir. 1995). . . . 11 Pulse v. Larry H. Miller Grp., 2008 WL 821949 (D. Colo. Mar. 25, 2008). . . . . . 11 Salveson v. Douglas County, 2001 WI 100, 245 Wis. 2d 497, 630 N.W.2d 182. . . . 11 Vance v. Union Planters Corp., 209 F.3d 438 (5th Cir. 2000). . . . . . . . . . 11,12 Vera-Lozano v. Int'l Broad. Co., 50 F.3d 67 (1st Cir. 1995). . . . . . . . . . . . 9 Walters v. Metro. Enters., 519 U.S. 202 (1997). . . . . . . . . . . . . . . . . . 9 Statutes 42 U.S.C. § 1981a(b)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 42 U.S.C. § 2000e et seq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 42 U.S.C. § 2000e(b). . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8, 9, 10 Rules Fed. R. App. P. 29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Other Bryan Hart, Burden of Proof for Employee Numerosity under § 1981a Statutory Damage Caps, 75 U. Chi. L. Rev. 1657 (2008). . . . . . . . . . . . . . . . . . . .12 STATEMENT OF INTEREST The Equal Employment Opportunity Commission was established by Congress to administer, interpret, and enforce Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. This appeal raises an important issue regarding the proper application of the statutory caps of 42 U.S.C. § 1981a(b)(3) on compensatory and punitive damages under Title VII-whether the cap depends upon the number of employees an employer has at the time of the discrimination, or at the time of the judgment. Because of the importance of this issue to the effective enforcement of Title VII, the Commission respectfully offers its views to the Court. See Fed. R. App. P. 29. STATEMENT OF THE ISSUE Section 1981a(b)(3) imposes monetary caps for awards of compensatory damages depending upon the number of employees an employer has "in the current or preceding calendar year." Does "current or preceding calendar year" refer to the year of the discrimination, or the year of the judgment? STATEMENT OF THE CASE A. Nature of the Case and Course of Proceedings Below This is a Title VII sexual harassment case brought by Plaintiff Edna Hernández-Miranda against Defendant Empresas Díaz-Massó, Inc. ("DM"). After the case went to trial, the jury found in Hernández-Miranda's favor and awarded her $300,000 in compensatory damages. R.175 at 2 (order). DM subsequently filed a motion to reduce the award pursuant to 42 U.S.C. § 1981a(b)(3). Id.; R.143. The district court granted DM's motion and reduced the award to $50,000. Order at 46. Hernández-Miranda timely appealed to this Court. R.178. B. Statement of Facts Hernández-Miranda worked for DM from August 2003 until her termination on March 10, 2005. R.175 at 3-4 (order). Although Hernández-Miranda started as a laborer, she subsequently became a Safety Officer and worked at various labor sites. Id. at 3. In this position, Hernández-Miranda was responsible for ensuring that DM's employees complied with safety regulations and procedures. Id. At one project site, however, laborers responded to Hernández-Miranda's comments about safety "by telling her to go to hell and saying, 'Tell Pancho,'" one of DM's founders, "'to suck my dick.'" Id. at 13. This happened "'many, many times.'" Id. When Hernández-Miranda complained to her supervisor, he also told her to go to hell. Id. at 13-14. Another supervisor forced Hernández-Miranda to place her hand on his penis and said "'[l]ook how you turn me on.'" Id. at 14. When she pushed him away and said she would report his conduct, he told her that DM would not believe her. Id. Hernández-Miranda complained; nothing was done. Id. At another project site, Hernández-Miranda's supervisor told her he was horny and that because he was her boss, she had to do whatever he said or she would be sent to an undesirable project; he then instructed her "'to suck him off.'" Id. at 14-15. The supervisor held Hernández-Miranda's head near his genitals until she performed the requested oral sex. Id. at 15. This happened at least one other time. Id. at 4, 16. Another supervisor also made repeated sexual comments to and about Hernández-Miranda, telling her things like "'she had huge tits" and he could make her "'have fun,'" and telling others that Hernández-Miranda's "'pussy was large on top and slim on the bottom [and] that it was great for him sticking it inside'" her. Id. at 15. Although Hernández-Miranda complained to another supervisor, he said he was too busy to respond to her complaints. Id. On March 10, 2005, DM fired Hernández-Miranda. Id. at 4. Hernández- Miranda filed a charge of discrimination and then this Title VII suit alleging sexual harassment. Id. at 7, 1-2. Following a five-day jury trial, the jury returned a verdict for Hernández-Miranda and awarded $300,000 in compensatory damages. Id. at 2. DM then filed a Motion for Application of Statutory Damages Cap to Compensatory Damages Award. R.143. The motion requested that the court reduce the award to conform with 42 U.S.C. § 1981a(b)(3), which sets statutory damage caps depending upon the number of employees an employer has "in each of 20 or more calendar weeks in the current or preceding calendar year." DM argued that "current or preceding calendar year" referred to the year of the judgment. Citing an affidavit from its vice-president stating that DM had no more than 98 employees in 2007 and 2008 (the years prior to and of the judgment), DM argued that the applicable cap under Section 1981a(b)(3)(A) was $50,000. R.143 at 3; Ex. A to R.143. DM also argued that in the event the court determined that the damages caps depended upon the number of DM employees at the time of the alleged discrimination, the court should still reduce the award. R.143, p.4. Again citing the vice-president's affidavit, DM asserted that it had fewer than 300 employees in 2004 and 2005, making the appropriate award $200,000 if the cap were to be based on the number of employees it had at the time of the discrimination. R.143, p. 4 (citing Ex. A). The affidavit attached to DM's response also states that DM employed a maximum of 241 employees in 2003. R.143, Ex. A. Hernández-Miranda filed a response to DM's motion. R.158. She did not contest that "current or preceding year" under Section 1981a(b)(3) referred to the year of the judgment. Instead, she suggested that DM had waived this issue by failing to raise it before the jury. Id. at 2,¶3. Hernández-Miranda also argued that DM had failed to offer any evidence at trial as to its actual number of employees and that the court had prevented her from offering this evidence. Id. at 1,¶¶1-2; at 2,¶¶3-4. But Hernández-Miranda asserted "upon information and belief" that DM had merged with another company and now had 1,300 employees. Id. at 3,¶6. She also pointed to testimony at trial of DM's president that DM had grown to 250 or 300 employees. Id. at 3,¶7. Hernández-Miranda also suggested that any damages exceeding the cap should be assigned to various state law claims brought in her complaint. Id. at 2-3,¶5. C. District Court Opinion The district court rejected Hernández-Miranda's suggestion that DM had waived the statutory caps argument by failing to raise it before the jury. R.175 at 44 (order). The court pointed out that Section 1981a(c) explicitly provides that juries are not to be informed of the statutory limits on damages. Id. The court similarly rejected Hernández-Miranda's argument that any excess damages could be allotted to her state law claims. Id. at 44-45. The court explained that it had dismissed those claims, which meant that they could not serve as the basis for an award of damages beyond the statutory caps of Section 1981a(b)(3). Id. at 45. Next, the court turned to the dispute over the number of employees DM actually had. Citing the vice-president's affidavit stating that DM had no more than 98 employees during the year before and of the judgment, the court concluded that the appropriate statutory damages cap under Section 1981a(b)(3) was $50,000. Id. See 42 U.S.C. § 1981a(b)(3) (setting $50,000 as damages cap for employers with fewer than 100 employees). Accordingly, the court reduced the damages award from $300,000 to $50,000. R.175 at 46 (order). SUMMARY OF ARGUMENT The district court erred when it calculated the Section 1981a(b)(3) damages cap based on the number of employees DM had in 2007-2008, the year prior to and the year of the judgment, instead of 2003-2005, the years of the alleged discrimination. Section 1981a(b)(3) caps Title VII compensatory and punitive damages awards based on the number of employees an employer "has" "in each of 20 or more calendar weeks in the current or preceding calendar year." 42 U.S.C. § 1981a(b)(3) (emphasis added). Neither this Court nor the Supreme Court has previously determined whether the "current" "calendar year" in Section 1981a(b)(3) refers to the year of the discrimination or the year of the judgment. But both Courts have interpreted identical language, which appears in 42 U.S.C. § 2000e(b), to refer to the year of the discrimination. The courts of appeals that have addressed this issue have all held that Section 1981a(b)(3) refers to the year of the discrimination. Further, ruling that the Section 1981a(b)(3) caps depends on the number of employees an employer has at the time of judgment would allow employers to use "gamesmanship" and delay tactics to manipulate the judgment date to minimize damages awards. ARGUMENT THE WORDS "CURRENT OR PRECEDING CALENDAR YEAR" IN 42 U.S.C. § 1981a(b)(3) REFER TO THE YEAR OF THE DISCRIMINATION, MAKING THE APPROPRIATE COMPENSATORY DAMAGES AWARD IN THIS CASE $200,000. The district court erred when it calculated the statutory damages cap of 42 U.S.C. § 1981a(b)(3) based on the number of employees DM had at the time of the judgment rather than at the time of the discrimination. Section 1981a(b)(3) caps Title VII compensatory and punitive damages awards based on the number of employees an employer "has" "in each of 20 or more calendar weeks in the current or preceding calendar year." The caps are: (A) $50,000 for employers with more than 14 and fewer than 101 employees; (B) $100,000 for employers with more than 100 or fewer than 201 employees; (C) $200,000 for employers with more than 200 or fewer than 501 employees; and (D) $300,000 for employers with more than 500 employees. 42 U.S.C. § 1981a(b)(3) (A)-(D). Neither this Court nor the Supreme Court has determined whether the "current year" in Section 1981a(b)(3) refers to the year of the discrimination or the year of the judgment. But both Courts have interpreted identical language in 42 U.S.C. § 2000e(b) defining "employer" to refer to the year of the discrimination. Additionally, the courts that have addressed this issue-with the exception of the district court below-have held uniformly that Section 1981a(b)(3) refers to the year of the discrimination. Accordingly, this Court should reverse the district court's ruling that the "current or preceding calendar year" refers to the year of the judgment. Because it is undisputed that DM had more than 200 employees during the years of the discrimination, this Court should reduce the jury's compensatory damage award to $200,000 in accordance with Section 1981a(b)(3)(C). A. The Supreme Court and this Court uniformly have interpreted "current or preceding calendar year" in 42 U.S.C. § 2000e(b) as referring to the year of the discrimination. Elementary rules of statutory interpretation dictate that the words "current or preceding calendar year" in Section 1981a(b)(3) must refer to the year of the discrimination. As the Supreme Court has said, identical words used in the same statute are presumed to have the same meaning. Dep't of Revenue of Ore. v. ACF Indus., 510 U.S. 332, 342 (1994). Here, Section 1981a(b)(3) shares identical language with Section 2000e(b), which defines an "employer" as having "fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year." 42 U.S.C. § 2000e(b) (emphasis added). The Supreme Court has implicitly held that this language refers to the date of the discrimination. See Walters v. Metro. Enters., 519 U.S. 202, 205 & n.* (1997) (adopting the "payroll method" for determining who is an "employer" under Section 2000e(b) and stating that the "'current' and 'preceding' calendar years" referred to the years of and before the retaliation and discrimination). Consistent with the Supreme Court's interpretation of Section 2000e(b), this Court has also interpreted "current or preceding calendar year" under Section 2000e(b) to refer to the year prior to and of the discrimination. See Vera-Lozano v. Int'l Broad. Co., 50 F.3d 67, 69 (1st Cir. 1995) ("[Defendant's] denial of employment was ongoing during [1991]. The 'current year' then, as defined by the statute, is 1991.") (citing Dumas v. Town of Mount Vernon, 612 F.2d 974, 979 n.4 (5th Cir. 1980)); see also Depaoli v. Vacation Sales Assocs., 489 F.3d 615, 622 (4th Cir. 2007) ("2000e(b) unquestionably references the year of the alleged violation"). Because Section 2000e(b)'s "current or preceding calendar year" refers to the year of the discrimination, the identical language in Section 1981a(b)(3) must also refer to the year of discrimination. Indeed, because Section 2000e(b) and Section 1981a(b)(3) are interdependent-Section 2000e(b) defines "employer" while Section 1981a(b)(3) sets the damages caps for employers-"current or preceding calendar year" must be interpreted the same way under both provisions. To do otherwise would lead to inconsistent results. Under the district court's interpretation of Section 1981(a)(b)(3) as depending upon the number of employees an employer has at the time of judgment, some small employers who discriminate could escape the imposition of any compensatory or punitive damage awards at all. For example, if a company had fifteen or more employees at the time of the discrimination but fewer than fifteen at the time of judgment, it would be an "employer" under Section 2000e(b)-and therefore could be found to have violated the statute-but would escape liable for any compensatory or punitive damages under Section 1981(a)(b)(3) because it would have too few employees to warrant even the minimum award of $50,000 in damages. This outcome would make no sense at all. Thus, this Court should hold that "current or preceding calendar year" under Section 2000e(b) and Section 1981a(b)(3) have the same meaning-they refer to the year of the discrimination. B. Courts that have addressed this issue have held consistently that Section 1981a(b)(3) refers to the year of the discrimination. The district court below failed to cite any authority for the proposition that "current or preceding year" under Section 1981a(b)(3) refers to the year of the judgment. There is none. To the contrary, the courts that have considered the issue have held uniformly that Section 1981a(b)(3) refers to the year of discrimination, not the year of the judgment. The Fourth and the Fifth Circuits have explicitly reached this conclusion. See Depaoli, 489 F.3d at 622 (holding that "§ 1981a(b)(3)'s language 'current or preceding year' refers to the year of the Title VII violation"); Vance v. Union Planters Corp., 209 F.3d 438, 446 (5th Cir. 2000) (stating that "there is no reason to define 'current year' to mean one thing in one part of title VII and something else in another," and holding that Section 1981a(b)(3) refers to the year of the discrimination). Although the Seventh Circuit has not explicitly decided the issue, it has implicitly held the same. See Hennessey v. Penril Datacomm Networks, Inc., 69 F.3d 1344, 1354-55 (7th Cir. 1995) (calculating cap on punitive damages award based on the number of employees at the time of the discrimination). Other courts and commentators also agree that "current year" in Section 1981a(b)(3) refers to the year of the discrimination. See, e.g., Pulse v. Larry H. Miller Group, 2008 WL 821949, at *2 (D. Colo. March 25, 2008) (unpublished) (damages cap is determined based on number of employees at time of discrimination) (attached as Addendum); Salveson v. Douglas County, 2001 WI 100, 82, 245 Wis. 2d 497, 537, 630 N.W.2d 182, 201 (same); Bryan Hart, Burden of Proof for Employee Numerosity under § 1981a Statutory Damage Caps, 75 U. Chi. L. Rev. 1657, 1663 (2008) (same). Anchoring the damages cap calculation to the year of the discrimination also makes for good policy. It prevents employers from "engag[ing] in gamesmanship by structuring companies, or timing the progress of lawsuits, to . . . minimize loss." Vance, 209 F.3d at 446. Additionally, limiting an employer's liability for damages depending upon its size at the time of the discrimination crystallizes an employer's exposure at the outset of the lawsuit. Instead of having to guess what the employer's liability might be at the time of some future judgment, the parties know it for certain at the start of litigation. With this information, litigants will be better able to value and settle cases. Finally, small employers-who presumably "cannot afford to hire the specially trained human-resource personnel required to negotiate the shoals of modern employment law"-are shielded from the weightiest damages award, even if they experience growth after the discrimination occurs. Vance, 209 F.3d at 446. "This purpose would be defeated," however, "if the size of the company were measured at the date of verdict rather than the date of commission of the [discriminatory] act." Id. C. Because DM admits it had more than 200 employees during the years of discrimination, the damage award should have been reduced to $200,000. The jury's award of $300,000 in compensatory damages should have been reduced to $200,000. It is undisputed that DM had more than 200 employees during 2003-2005, which were the years before and during Hernández-Miranda's sexual harassment. See R.143, Ex. A (Affidavit of Lizette L. Diaz Masso 7-9). Pursuant to Section 1981a(b)(3), the appropriate damages cap for an employer with more than 200 but fewer than 501 employees is $200,000. 42 U.S.C. § 1981a(b)(3)(C). Therefore, Hernández-Miranda should be awarded $200,000 in compensatory damages for the sexual harassment she endured. CONCLUSION For the foregoing reasons, the EEOC asks this Court to reverse the district court's decision and hold that "current" "calendar year" under Section 1981a(b)(3) refers to the year of the discrimination, not the year of the judgment. Because it is undisputed that DM had more than 200 employees during the years of the discrimination, this Court should also adjust the compensatory damages award to $200,000, which is the appropriate limit under Section 1981a(b)(3)(C). Respectfully submitted, P. DAVID LOPEZ General Counsel CAROLYN L. WHEELER Acting Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel ________________________ /s/ ANNE NOEL OCCHIALINO Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St. NE, 5th Fl. Washington, D.C. 20507 (202) 663-4724 Annenoel.Occhialino@EEOC.gov CERTIFICATE OF COMPLIANCE I hereby certify that this brief complies with the type-volume requirements set forth in Federal Rules of Appellate Procedure Rule 32(a)(7)(B). This brief contains 2,890 words, from the Statement of Interest through the Conclusion, as determined by the Microsoft Word 2003 word processing program, with 14-point proportionally spaced type for text and 14-point proportionally spaced type for footnotes. ________________________ ANNE NOEL OCCHIALINO Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St. NE, 5th Fl. Washington, D.C. 20507 (202) 663-4724 Annenoel.Occhialino@EEOC.gov CERTIFICATE OF SERVICE I hereby certify that on September 14, 2010, per the instructions of the clerk's office, I sent ten copies of this brief by overnight mail to the United States Court of Appeals for the First Circuit. I further certify that I caused two copies of this brief to be sent overnight mail to the following counsel of record: Counsel for Plaintiff-Appellant Francisco M. Lopez-Romo National Plaza, Suite 1500 431 Ponce de Leon Avenue San Juan, Puerto Rico 00917 Counsel for Defendant-Appellee Miguel Simonet Sierra, Esq. Simonet Sierra Law Maramar Plaza 101 Ave. San Patricio Suite 1120 Guaynabo, PR 00968 Direct: 787-620-5300 Fax: 787-620-5305 _________________________ ANNE NOEL OCCHIALINO Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St. NE, 5th Fl. Washington, D.C. 20507 (202) 663-4724 Annenoel.Occhialino@EEOC.gov ADDENDUM *********************************************************************** <> <1> The Commission expresses no opinion on any other issues presented in this appeal. It is unclear from the district court's opinion whether the harassment began in 2003 or 2004. If the former, the "preceding calendar year" of the discrimination would be 2002, but apparently there is no record evidence as to how many employees DM had in 2002. Because it appears that the harassment did not begin until after Hernández-Miranda was promoted to Safety Officer, it appears more likely that the harassment did not begin until 2004, which would make the "preceding calendar year" of the discrimination 2003.