Weber v. FUJIFILM Med Sys USA Inc et al
Filing
518
ORDER: Plaintiff's Motions 478 479 for Assessment of Prejudgment Interest are GRANTED in part; Plaintiff's 480 Motion for Clarification is DENIED as moot; Defendants' Motion 484 for Judgment as a Matter of Law is DENIED; Defe ndants' Motion 485 for Remittitur is DENIED; Defendants' Motion 486 for New Trial is DENIED; Plaintiff's Motion 488 for Assessment of Lost Wages is GRANTED; Plaintiff's Motion 489 for New Trial is DENIED. Signed by Judge Janet Bond Arterton on 3/19/2013. (Bonneau, J)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
John J. Weber,
Plaintiff,
v.
FujiFilm Medical Systems U.S.A., Inc. et al.,
Defendants.
Civil No. 3:10cv401 (JBA)
March 19, 2013
RULING ON POST–TRIAL MOTIONS
Following a jury trial held May 18 through June 5, 2012, the jury returned a
verdict on June 11, 2012 finding Defendant FujiFilm Medical Systems U.S.A., Inc.
(“FMSU”) liable on Plaintiff John Weber’s claimed breach of contract and breach of the
implied covenant of good faith and fair dealing, and finding Defendants FujiFilm
Holdings America Corporation (“HLUS”) and FujiFilm Corporation liable on Mr.
Weber’s claimed tortious interference with business contract and tortious interference
with business expectancy. The jury found no liability on Mr. Weber’s Title VII national
origin discrimination claim, Connecticut Fair Employment Act (“CFEPA”) national
origin and age discrimination claims, Age Discrimination in Employment Act (“ADEA”)
claim, or defamation claim. The jury awarded $150,000 in compensatory damages for
non–economic injuries caused by Defendants’ unlawful conduct, and $567,357 plus
prejudgment interest for economic injuries caused by FMSU’s breach of contract.
Plaintiff and Defendants have filed a variety of post–trial motions regarding the
validity of these findings.
Defendants HLUS and FujiFilm Corporation move for
judgment as a matter of law on Plaintiff’s tortious interference claims [Doc. # 484] and
for remittitur on the award of non–economic damages [Doc. # 485], and all Defendants
move for a new trial [Doc. # 486]. Plaintiff moves for assessment of lost wages due for
tortious interference with business expectancy [Doc. # 488], for assessment of
prejudgment interest [Doc. ## 478, 479], and for a new trial on his discrimination claims
[Doc. # 489]. For the reasons that follow, Defendants’ Motion [Doc. # 486] for a New
Trial is denied; Defendants’ Motion [Doc. # 484] for Judgment as a Matter of Law is
denied; Defendants’ Motion [Doc. # 485] for Remittitur is denied; Plaintiff’s Motion
[Doc. # 489] for a new trial is denied; Plaintiff’s Motion [Doc. # 488] for Assessment of
Lost Wages is granted; and Plaintiff’s Motion [Doc. ## 478, 479] for Assessment of
Prejudgment Interest is granted in part.
I.
HLUS and FujiFilm Corporation’s Motion for Judgment as a Matter of Law
[Doc. # 484]
HLUS and FujiFilm Corporation move pursuant to Fed. R. Civ. P. 50(b) for
judgment as a matter of law on Plaintiff’s tortious interference with contract and tortious
interference with business expectancy claims. They argue that Mr. Weber based his
tortious interference claims solely on the theory that the improper motive or means
required to establish such claims was the alleged discriminatory intent that underlay his
national origin and age discrimination claims. Because the jury found against Mr. Weber
on the discrimination claims, Defendants claim the jury’s finding on the tortious
interference claims was unsupported by the evidence and could only have resulted from
surmise and conjecture, and therefore those claims fail as a matter of law.
2
Judgment as a matter of law may be rendered if “a reasonable jury would not have
a legally sufficient evidentiary basis to find for the party on that issue.” Fed. R. Civ. Proc.
50(a)(1). A renewed Rule 50(b) motion will be granted “only if the evidence, drawing all
inferences in favor of the non–moving party and giving deference to all credibility
determinations of the jury, is insufficient to permit a reasonable juror to find in his
favor.” Lavin–McEleney v. Marist College, 239 F.3d 467, 479 (2d Cir. 2001). Thus,
“judgment as a matter of law should not be granted unless (1) there is such a complete
absence of evidence supporting the verdict that the jury findings could only have been the
result of sheer surmise and conjecture, or (2) there is such an overwhelming amount of
evidence in favor of the movant that reasonable and fair minded [persons] could not
arrive at a verdict against [it].” Id. at 480 (quoting DiSanto v. McGraw–Hill, Inc., 220 F.3d
61, 64 (2d Cir. 2000)). A movant under Rule 50 “faces a high bar.” Id.
As a preliminary matter, Plaintiff contends that Defendants’ argument may not
properly be considered by the Court on a motion for judgment as a matter of law
pursuant to Rule 50(b), because the pending motion states a different ground for relief
than Defendants’ pre–deliberation motion for judgment as a matter of law pursuant to
Rule 50(a). Because a Rule 50(b) motion is merely a renewal of the movant’s Rule 50(a)
motion, it is “limited only to the grounds specifically raised in the prior motion for
judgment as a matter of law; new grounds may not be added post–trial.” AIG Global
Securities Lending Corp. v. Banc of America Securities, LLC, 386 F. App’x 5, 6 (2d Cir.
2010) (citing Tolbert v. Queens Coll., 242 F.3d 58, 70 (2d Cir. 2001)). However, the
3
Second Circuit has recognized a limited exception to this rule: “The forfeited issue may
be reached if ‘to ignore it would result in manifest injustice’ or if it is a ‘purely legal
error.’” Id. (quoting Fabri v. United Techs. Int’l, Inc., 387 F.3d 109, 119 (2d Cir. 2004)).
Defendants assert that they did properly raise the grounds for their pending Rule
50(b) motion in their pre–deliberation Rule 50(a) motion. Specifically, with respect to
the tortious interference claims, Defendants argued that: “there’s got to be some evidence
on the part of HLUS and FUJIFILM to sustain a finding of malice, improper means, and
improper motives, as with—you know, and evil intent or improper intent as noted in the
Court’s proposed charge. The only thing that plaintiff points to on this regard, your
Honor, is the alleged discriminatory animus of age and/or national origin.” (Trial Tr.
(“Tr.”) at 2097).
Defendants then went on to claim that because this was the only
proffered evidence of malice, the CFEPA preempted Plaintiff’s tortious interference
claims, an argument which they have since dropped in light of the jury’s finding rejecting
Plaintiff’s discrimination claims.
In connection with Plaintiff’s discrimination claims,
Defendants argued: “On Title VII, CFEPA and ADEA, obviously the evidence is as I
think came in at the summary judgment motion that your Honor ruled was sufficient. I
do not believe it is sufficient.” (Id. at 2100.)
Thus, while Defendants do not raise precisely the same arguments in their
pending motion, they did argue in their Rule 50(a) motion that there was insufficient
evidence to support a finding of malice on the tortious interference claims. To the extent
that Defendants’ motion claims that an inconsistency in the jury’s verdict—finding no
4
statutory discriminatory animus but tortious malice—necessitates judgment as a matter
of law, this argument obviously could not have been raised before the verdict was
returned, see White v. Francis Mcdermott, Civil No. 3:08cv634 (JBA), 2010 WL 4687620,
at *1 (D. Conn. Nov. 4, 2010) (permitting defendant to raise an argument based on an
inconsistency in the jury verdict for the first time in a Rule 50(b) motion), and thus the
Court will consider it to prevent manifest injustice. However, even when this argument is
considered, as discussed below, the Court concludes that there was not such a complete
absence of evidence showing that Defendants HLUS and FujiFilm Corporation tortiously
interfered with Plaintiff’s employment contract and business expectancy that the verdict
should be set aside.
The elements of tortious interference with contract and/or business expectancy
claims are: 1) the existence of a contract or a business relationship; 2) defendants’
knowledge of that relationship; 3) defendants’ intentional and tortious interference with
that relationship; and 4) actual loss suffered by the plaintiff. Rioux v. Barry, 283 Conn.
338, 351 (2007) (elements for intentional interference with contractual relations); Hi–Ho
Tower, Inc. v. Com–Tronics, Inc., 255 Conn. 20, 27 (2000) (elements for intentional
interference with business expectancy). To succeed on a tortious interference claim, Mr.
Weber had to “prove at least some improper motive or improper means,” Biro v. Hirsch,
62 Conn. App. 11, 21 (2001), used by HLUS and Fuji Film Corporation, resulting in the
end of his employment relationship with FMSU. The jury was instructed that to prevail
on his tortious interference claims, Mr. Weber had to prove that HLUS and FujiFilm
5
Corporation “wrongfully interfered” with his contract or business expectancy with
FMSU, meaning that these Defendants committed “fraud, misrepresentation,
intimidation or malicious conduct.” (Jury Ins. [Doc. # 469] at 26–27.) The Court further
explained that malicious conduct “is the intentional doing of a wrongful act without just
cause or excuse with an intent to inflict injury or implied evil intent.” (Id.)
Under Connecticut law “a parent company does not engage in tortious conduct
when it directs its wholly–owned subsidiary to breach a contract that is no longer in the
subsidiary’s economic interest to perform,” Boulevard Assocs. v. Sovereign Hotels, Inc., 72
F.3d 1029, 1036 (2d Cir. 1995). However, Boulevard articulates an exception: “We do not
hold that a [parent company] is privileged to employ any means, no matter how
improper, to induce a breach of contract involving its [subsidiary]. . . . [C]ertain behavior
may be sufficiently egregious to cross the line and become tortious.”
Id. at 1037
(emphasis in original). Defendants argue that Plaintiff did not present evidence of any
improper means or motive that would be sufficient to override the qualified privilege that
HLUS and FujiFilm Corporation enjoyed to direct FMSU to breach Plaintiff’s
employment contract, other than his claim of discriminatory animus, which the jury did
not find proved, as shown by their verdicts on the ADEA, Title VII and CFEPA claims.1
1
Defendants provide no legal authority for their claim that the jury was limited to
weighing the theory of “improper means or motive” advanced by Plaintiff on summary
judgment—i.e., discriminatory animus. The Court’s summary judgment ruling [Doc.
# 322] did not hold that discriminatory animus was the only theory on which Plaintiff
could recover for tortious interference, and the jury was instructed broadly as to the
tortious interference claims, without any objection by Defendants. Therefore, the Court
will consider evidence supporting alternative theories of “improper means or motive” in
6
Plaintiff points to evidence from which the jury could conclude that HLUS and
FujiFilm Corporation had improperly targeted Plaintiff for termination, and attempted to
manufacture “cause” to fire him in order to avoid FMSU’s payment obligation under
Plaintiff’s contract for termination without cause. Such conduct could be sufficiently
egregious to constitute tortious interference. The jury also heard evidence that Defendant
FujiFilm Corporation was anxious to terminate Plaintiff as soon as possible and was
actively directing FMSU to investigate potential cause for his termination. For example,
Mr. Tada, the president of FMSU, testified that he had received permission from the
president of FujiFilm Corporation, Mr. Komori, to apply pressure on Plaintiff to secure
Plaintiff’s resignation. (See Tr. at 1520–21.) Mr. Tada also testified that Mr. Komori told
him in a memo that the process for terminating Mr. Weber’s employment was going too
slowly, and that the company, in essence, should check whether misconduct or rules
violations had occurred. (See id. at 1462–63; Tada Dep. Tr. 199–200; Pl.’s Ex. 35.) Based
on these comments, the jury was entitled to infer that FujiFilm Corporation was directing
the head of FMSU to look for cause to fire Plaintiff, and that even if no such cause existed,
ruling on the sufficiency of the evidence. Cf. Sawant v. Ramsey, No. 3:07-cv-980 (VLB),
2012 WL 3265020, at *4–5, (D. Conn. Aug. 9, 2012) (declining to grant judgment as a
matter of law based on a theory advanced at summary judgment where the evidence
presented at trial was more expansive than the summary judgment record and where the
jury was instructed on alternative theories of liability); Butz v. Bliss, No. 84 Civ. 7030
(JMW), 1987 WL 14634, at *26 (S.D.N.Y. 1987) (“These claims were neither raised in the
pleadings nor at trial. But the facts upon which they are based underlie claimants’ fraud
claims and since defendants had an adequate opportunity to respond to these new legal
theories in post–trial briefs, the Court will address them.”).
7
to terminate Plaintiff as soon as possible, designating that termination as “for cause” in
order to reduce Defendants’ financial obligations under the contract.
The jury also heard testimony from Mr. File, the General Counsel of HLUS, that
he selected only FMSU out of all the other subsidiaries he oversaw as the target for an
audit by KPMG. (See Tr. at 1843–85.) Mr. Tada and Mr. File both testified that the
president of HLUS, Mr. Sakai, approved the plan for this KPMG audit and issued a
formal request to have that audit take place. (See id. at 1086–87, 1471.) During trial, Mr.
File testified that he and Mr. Sakai ordered the audit of FMSU to verify that FMSU would
be compliant with a new Japanese regulatory law—JSOX. (See id. at 1083–85.) However,
Mr. File later admitted during cross examination that whether or not a subsidiary would
be subject to JSOX depended on that subsidiary’s profits and sales, but he chose to audit
FMSU, rather than several larger FujiFilm subsidiaries, which would have been more
likely to be subject to JSOX. (See id. 1163–64.) Thus, the jury could have inferred that
there was some other motive for HLUS’s decision to single out FMSU for an audit. The
KPMG audit report that was issued reflected poorly on Mr. Weber’s management skills.
(See id.at 1843–85.) Gehr Brown, a tax consultant for FMSU testified that he was “quite
surprised and astounded” by the manner in which the report was issued, which based on
his experience, did not comport with “common professional courtesy.” (See id. at 675.)
Based on the outcome of the audit and the testimony about the irregular manner in which
the report was issued, the jury could have inferred that the KPMG audit was actually an
attempt by executives at HLUS to manufacture “cause” to fire Mr. Weber.
8
Mr. File also testified that he investigated Mr. Weber’s involvement in the
improper filing of articles of merger with the Secretary of State of North Carolina (the
“Empiric Merger”). (See id. at 1105–25; Defs.’ Exs. 539A–E.) Mr. File stated that Mr.
Weber’s erroneous filing of the Empiric Merger documents was “a huge deal,” that
“caused a huge uproar” at the company. (See Tr. at 1122–23.) However, Mr. File
admitted on cross–examination that for a nominal filing fee, the improperly filed articles
of merger could have been taken off the North Carolina Secretary of State’s website
immediately. (See id. at 1135–36.) Thus, there was evidence based on which the jury
could have questioned the claimed severity of this filing error. Furthermore, the jury
heard testimony that only Mr. Weber was disciplined for this incident, despite the
involvement of at least one other employee, Rick Rohan, who had been asked to perform
a legal review of the documents before they were signed. (See id. at 1195–97, 1204.) The
jury could infer based on Defendants’ decision to discipline only Mr. Weber, a non–
attorney, rather than the legal counsel involved in the incident, for the misfiling of legal
documents, that Mr. File’s stridency regarding the erroneous filing was part of an attempt
to create “cause” to terminate Mr. Weber’s employment. Such an inference would have
been further supported by the fact that Mr. Weber had had a long tenure as an executive
with FMSU.
This evidence is sufficient to give rise to a reasonable inference that FujiFilm
Corporation first targeted Plaintiff for termination and then directed the officers of HLUS
and FMUS to come up with “cause” for his termination such that Defendants could avoid
9
their financial obligations to Plaintiff under his employment contract. The jury could
reasonably infer from Mr. Komori’s impatience regarding Plaintiff’s termination that Mr.
Komori hoped to find some ostensible reason to fire Mr. Weber for cause quickly and
that he had directed his employees to investigate Mr. Weber to identify such a reason.
The jury could infer that Mr. File’s strident focus on Mr. Weber’s conduct for
investigation and disciplinary action was in aid of the plan to identify a purported
justification to terminate Plaintiff “for cause.” Contrary to Defendants’ arguments, such a
conclusion would be consistent with the jury’s other findings: the jury found that FMSU
breached its implied covenant of good faith and fair dealing in its treatment of Plaintiff
(see Jury Verdict [Doc. # 468] at 3), and the evidence of Mr. File’s and Mr. Sakai’s
investigation of Plaintiff’s conduct, and of Mr. Komori’s involving himself in the decision
to terminate and process for terminating Plaintiff is at least minimally sufficient to
support an inference that HLSU and FujiFilm Corporations directed and participated in
FMSU’s bad faith conduct.
This is not to suggest that it would be improper for a parent company to direct its
subsidiary to fire an employee for economic or performance–related reasons, or to
investigate allegations of employee misconduct and perform other “garden–variety
personnel actions.” Malik v. Carrier Corp., 202 F.3d 97, 110 (2d Cir. 2000) (finding no
tortious interference where defendant pursued a review of sexual harassment allegations
against plaintiff over the objection of his supervisor). Thus, under similar circumstances,
a parent company could properly have directed its subsidiary to fire an employee without
10
cause and without severance. However, a parent company’s actions become wrongful
when it directs its subsidiary to falsely designate an employee’s termination with the
damaging label “for cause” just to avoid the financial obligations to pay severance for a
without–cause termination. Falsely terminating an employee for cause has the potential
to damage that individual’s reputation and psyche and to limit his or her future
employment opportunities and earning potential, thus causing him serious injury. The
evidence at trial was sufficient to permit a jury to infer that Defendants FujiFilm
Corporation and HLUS encouraged FMSU to make such an unjustified designation when
terminating Plaintiff, forming the basis of their verdicts on tortious interference.
Therefore, Defendants’ Motion for Judgment as a Matter of Law on Plaintiff’s tortious
interference claims is denied.
II.
Defendants’ Motion for a New Trial [Doc. # 486]
All Defendants move pursuant to Federal Rule of Civil Procedure 59 for a new
trial on the grounds that the Court improperly prevented Defendants from introducing
certain evidence, the jury instructions were erroneous, and Plaintiff’s counsel improperly
and prejudicially referred to a Japanese “sneak attack” in subtle reference to Pearl Harbor
Day in her closing argument.
Rule 59(a) reads in part: “The court may, on motion, grant a new trial on all or
some of the issues—and to any party— . . . after a jury trial, for any reason for which a
new trial has heretofore been granted in an action at law in federal court.” Fed. R. Civ. P.
59(a)(1)(A). “A new trial must be granted if the court determines that the verdict is
11
against the weight of the evidence, that the damages are excessive, or that, for other
reasons, the trial was not fair to the party moving.” Santa Maria v. Metro–North
Commuter R.R., 81 F.3d 265, 273 (2d Cir. 1996).
A.
Evidentiary Rulings2
1.
New York Supreme Court’s Summary Judgment Order
After Mr. Weber filed this case, FMSU sued him in New York Supreme Court,
Westchester County Commercial Division, alleging that he breached his fiduciary duty to
FMSU,
committed
fraudulent
misrepresentation
and
fraudulent
concealment,
constructive fraud, conversion, and violated New York’s Business Corporation Law § 720
by authorizing salary and benefits payments to a former employee, Louise Collins, after
she stopped working at FMSU due to a non–work related back injury, providing salary
advances to other FMSU employees on an interest–free basis, and maintaining an
improper business agreement with Auric Capital Corporation and its President, Kenneth
Ostrowsky. On May 25, 2012, during the course of the jury trial in this case, the New
York court granted summary judgment in Mr. Weber’s favor on all of FMSU’s claims
against him, finding that “it was well known within FMSU that Collins was receiving
salary and health benefits even though she was no longer actively working with FMSU
2
Throughout their briefing, the parties incorrectly refer to certain evidence as
“after–acquired evidence.” While the New York Supreme Court’s summary judgment
order precluded the parties from claiming that this evidence was actually “after” acquired,
in the interest of consistency, the Court will use the parties’ terminology in considering
their arguments.
12
and, further, Weber acted on what he perceived were the instructions from the Presidents
of FMSU,” FMSU v. Weber, No. 50385/11, slip. op. at 39–40 (N.Y. Sup. Ct. May 25, 2012).
At this trial, Defendants sought to introduce evidence of the Collins’s payments,
the Auric/Ostrowsky relationship, and the interest–free salary advances as after–acquired
evidence that would have permitted FMSU to fire Mr. Weber for cause had it been known
prior to his termination, thus limiting Plaintiff’s potential damages and theories of
recovery.
After–acquired evidence, however, is by definition evidence of alleged
misconduct that Defendants did not discover until after terminating Mr. Weber’s
employment and therefore could not have relied on in deciding to fire him.
See
McKennon v. Nashville Banner Publ. Co., 513 U.S. 352, 359–60 (1995). Evidence that was
known at the time of termination could not be deemed “after” acquired and thus would
not be relevant to limit Plaintiff’s recovery. In light of the New York Supreme Court’s
holding that this evidence was known to Defendants while Plaintiff was employed and
thus could not be “after” acquired, this Court determined that the New York decision had
preclusive effect, and excluded the evidence of Mr. Weber’s alleged misconduct for that
purpose. (See Tr. at 1285–86, 1427–32.)
Under New York law,3 collateral estoppel precludes a party “from raising an issue
(1) identical to an issue already decided (2) in a previous proceeding in which that party
had a ‘full and fair opportunity’ to litigate.” Fuchsberg & Fuchsberg v. Galizia, 300 F.3d
3
“[A] state court judgment must be given the same preclusive effect as it would
have under the law of the state in which it is rendered.” Kulak v. City of New York, 88
F.3d 63, 71 (2d Cir. 1996).
13
105, 109 (2d Cir. 2002). “This doctrine applies only if the issue in the second action is
identical to an issue which was raised, necessarily decided and material in the first action,
and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action.”
City of New York v. Welsbach Elec. Corp., 9 N.Y.3d 124, 128 (2007) (internal quotation
marks and citations omitted). Defendants argue that this Court erred in applying the
doctrine of collateral estoppel to preclude evidence of the Collins payments, the interest
free loans, and the Auric/Ostrowsky relationship because the New York Supreme Court
did not decide the issue of whether Mr. Weber’s conduct would have constituted “cause”
under his employment agreement. In so arguing, however, Defendants misinterpret this
Court’s ruling and misstate the issue that was necessarily decided in the New York action
and thus precluded from this case.
The issue to which the Court gave preclusive effect was the New York Supreme
Court’s determination that the evidence of Mr. Weber’s alleged conduct was not “after”
acquired. The New York Supreme Court found in its summary judgment ruling that Mr.
Weber had shown in that action that FMSU and its leadership were aware of the Collins
payments, the interest free loans, and the Auric/Ostrowsky relationship at the time Mr.
Weber authorized or participated in these actions. FMSU v. Weber, slip. op. at 39–43.
Because the New York court’s decision precluded FMSU from arguing to the contrary—
that it did not know of Mr. Weber’s actions with respect to the Collins payments, interest
free loans, and the Auric/Ostrowsky relationship at the time it terminated his
employment—evidence of these actions would merely have been evidence of alleged
14
misconduct by Weber of which Defendants were aware at the time of his firing but upon
which they did not rely in deciding to fire him. Thus, the evidence of Plaintiff’s earlier
conduct is irrelevant as to whether or not the “for cause” termination asserted by
Defendants was legitimate or pretext because, while it was known, it was not used to
justify that termination. Thus the evidence, which was not admissible as “after–acquired”
evidence, was not relevant as evidence of “cause” for Plaintiff’s termination because
Defendants did not rely on it in deciding to fire Mr. Weber, and was properly barred.
2.
After–Acquired Evidence Mitigating Compensatory Damages
Defendants argue that the Court also improperly precluded them from
introducing this evidence on the issue of compensatory damages. In McKennon, 513 U.S.
at 359–61, the Supreme Court held that evidence of employee misconduct discovered by
an employer after that employee has been discharged, i.e. “after–acquired evidence,” does
not excuse the employer from Title VII liability because “[t]he employer could not have
been motivated by knowledge it did not have and it cannot now claim that the employee
was fired for the nondiscriminatory reason.”
After–acquired evidence of employee
wrongdoing may, however, be admissible to limit the available equitable remedy to back
pay up to the date the after–acquired evidence was discovered as long as the employer can
“establish that the wrongdoing was of such severity that the employee in fact would have
been terminated on those grounds alone if the employer had known of it at the time of
the discharge.” Id. at 362–63. According to Defendants, although the Supreme Court did
not address compensatory damages in McKennon, it follows that McKennon’s temporal
15
limitation on back pay damages is equally applicable to compensatory damages. Because
of the difference in the nature of compensatory damages and back pay, this Court
disagrees.
As they did at trial, Defendants rely primarily on Russell v. Microdyne Corp., 65
F.3d 1229 (4th Cir. 1995) and Cross v. Samper, 501 F. Supp. 2d 59 (D.D.C. 2007). In
Russell, the Fourth Circuit held that after–acquired evidence of Ms. Russell’s falsification
of information on her job application did not restrict her ability to recover compensatory
damages under Title VII for her employer’s discriminatory actions occurring prior to the
date her employer discovered application falsification:
“[B]ecause Russell’s complaint contains examples of unlawful activity in
1992, she would be eligible for damages, both compensatory and punitive,
resulting from actions occurring between November 21, 1991 [the effective
date of the Civil Rights Act of 1991], and May 25, 1993 [the date
Microdyne discovered the after–acquired evidence], regardless of whether
the doctrine of after–acquired evidence applies.”
65 F.3d at 1241. In so holding, the Fourth Circuit concluded that the plaintiff could
recover compensatory damages only for discriminatory conduct that occurred before her
employer discovered the after–acquired evidence of her malfeasance, but did not put any
limit on the duration of compensable injury for which recovery could be sought. In other
words, as long as the injury was caused by an employer’s action taken before the after–
acquired evidence was discovered, the plaintiff could recover compensatory damage
resulting from that action.
In Cross, the court permitted the defendant to introduce after–acquired evidence
to the jury to argue that compensatory damages would be cut off as of the date the after–
16
acquired evidence was discovered. 501 F. Supp. 2d at 65. Cross, however, misapplied
Russell, which it characterized as standing for the proposition that “any recovery by Ms.
Russell would be limited to the period between the alleged discrimination and the date on
which the new information was discovered, whether that recovery be in terms of back pay
for discriminatory failure to promote or compensatory or punitive damages.” Id. at 64
(citing Russell, 65 F.3d at 1241). The Cross court reasoned that there was no basis to treat
compensatory damages differently from equitable back pay remedies because “[i]f proven
wrongdoing by Mr. Cross did not limit the period for which he could be considered for
compensatory damages, he would receive an inequitable windfall.” Id. at 65. However,
the only limitation on compensatory damages imposed in Russell was for compensatory
damages for actions taken by her employer after the date the employer discovered the
after–acquired evidence. Russell set no limit on the plaintiff’s recovery for compensatory
damages caused by employer conduct prior to that date.
The essence of other courts’ conclusions to the contrary is that there is a
difference between compensatory damages and equitable remedies such that they should
be treated differently. In Miller v. Beneficial Management Corp., 855 F. Supp. 691, 716–17
(D.N.J. 1994), the court found that the plaintiff employee’s misconduct—misrepresenting
her qualifications on her application—revealed after her termination, did not “diminish
the psychological or emotional injury caused to the employee by the employer’s
violation” of the plaintiff’s “right to be free from racial or ethnic indignity” under the New
Jersey Law Against Discrimination. “There appears to be no principled basis, therefore,
17
for the application of the after–acquired evidence defense in this case to bar
compensatory relief for emotional suffering.” Id. at 717. The Northern District of Illinois
similarly found in Johnson v. G.D.F., Inc., No. 07 C 3996, 2008 WL 4225836, *2 (N.D. Ill.
Sept. 12, 2008), that “[t]he rationale of McKennon, that a plaintiff should not recover
wages after the date his employer would have legitimately terminated him . . . simply does
not apply” to compensatory damages for noneconomic injuries such as pain and
suffering. “Because, unlike lost wages, compensatory damages could continue to accrue
even after an employee's misconduct is discovered, the Court holds that McKennon does
not impose a temporal limit on those damages.” Id.
Defendants attempt to distinguish Miller and Johnson by arguing that those cases
dealt only with claims that compensatory damages were barred in whole by after–
acquired evidence, whereas here the relevant issue is whether the after–acquired evidence
at issue should have been permitted to be introduced as grounds for “cutting off”
compensatory damages as of a certain date. Defendants misconstrue these cases. Johnson
specifically addressed the issue of whether McKennon applied to limit compensatory
damages beyond the date on which an employer “would have legitimately terminated” an
employee and concluded that it did not. 2008 WL 4225836 at *2. If after–acquired
evidence does not mitigate compensatory damage because Plaintiff’s emotional suffering
resulting from Defendants’ misconduct continues, without regard to a later
determination that Plaintiff likely could have been fired for other reasons than those
given, then this evidence has no relevance. See also Miller, 855 F. Supp. at 716–17.
18
The Court is in agreement with the conclusions in Miller and Johnson, which
reflect the sound view that after–acquired evidence is irrelevant to the calculation of non–
economic compensatory damages, and Defendants’ motion for a new trial on the ground
that the Court improperly excluded after–acquired evidence for this purpose is therefore
denied.
3.
After–Acquired Evidence and Breach of Contract
Defendants also argue that the Court improperly excluded after–acquired
evidence on Mr. Weber’s breach of contract claim on the issue of whether he breached his
employment contract first, which FMSU sought to offer in support of its affirmative
defense to breach of contract liability.
Under certain circumstances, after–acquired evidence of an employee’s previously
unknown misconduct may be admissible to demonstrate that the employee materially
breached his or her contract prior to the employer’s breach, and therefore cannot seek to
enforce the terms of the contract against the breaching employer. See Naylor v. Rotech
Healthcare, Inc., 1:08–CV–95, 2009 WL 5206005, *1 (D. Vt. Dec. 23, 2009) (“In wrongful
termination claims alleging breach of express or implied contract, liability depends on the
parties’ actions, not their intent. As a result, after–acquired evidence may show the
employee breached the contract first, and can provide a complete defense to liability.”);
Dobinsky v. Crompton & Knowles Colors, Inc., 3:02CV1291, 2004 WL 2303686, at *6
(M.D. Pa. March 30, 2004) (“[I]f the plaintiffs materially breached the contract first, i.e.
performed in such a way as to provide cause for their termination, they will not be able to
19
enforce the terms of the contract. If, on the other hand, the plaintiffs did not materially
breach the contract first, then the defendants will be liable for the damages provided for
in the employment agreement. The only facet we are adding to the Pennsylvania law is
our holding that after-acquired information can be used by the defendants to justify the
plaintiffs’ terminations. And as explained, this holding is in accord with the majority of
jurisdictions.”). As discussed above, however, the evidence that Defendants sought to
admit on the Auric/Ostrowsky relationship and Mr. Weber’s role in the Collins
payments, was not after–acquired. See FMSU v. Weber, slip. op. at 39–43. Because
FMSU, through its upper management, was aware of Mr. Weber’s conduct in these
matters before Plaintiff was fired for different reasons, Defendants were precluded from
arguing that these actions could constitute prior breach by Mr. Weber of his employment
contract, relieving them of liability, since as determined by the New York Supreme
Court’s summary judgment record they knew of Plaintiff’s activities took no action to
discipline or fire him, thus acquiescing. (See supra Part II.A.1.)
B.
Jury Instructions
Defendants argue that the Court’s jury instructions were fundamentally erroneous
in that (1) they misstated the findings of the New York state summary judgment order in
FMSU v. Weber; (2) the instruction that Mr. Weber prevailed in the New York case was
unfairly prejudicial and improper; (3) the instructions improperly prohibited the jury
from considering whether FMSU would have terminated Mr. Weber when they
discovered the after–acquired evidence of his misconduct; and (4) the instructions should
20
have permitted the jury to consider Mr. Weber’s known and unknown misconduct with
respect to the breach of contract claim.
1.
New York Case Findings
In connection with Mr. Weber’s breach of contract claim, the Court instructed the
jury that “Mr. Weber’s actions regarding the interest free loans and the Auric/Ostrowsky
relationship were known to FMSU and are therefore not after–acquired evidence which
could support Defendants’ claim that Mr. Weber breached his contract first.” (Jury Ins.
at 24.) As discussed above, the New York Supreme Court found from the summary
judgment record that FMSU was aware of the Collins payments, the interest free loans,
and the Auric/Ostrowsky relationship prior to Mr. Weber’s termination. FMSU v. Weber,
slip. op. at 39–43. Specifically, the New York court found that the Collins payments were
“well known within FMSU,” id. at 39, that the evidence demonstrated that the interest–
free salary advances were “an authorized practice by FMSU’s Presidents and the executive
committee,” id. at 40, and that the Auric/Ostrowsky relationship had been approved by
FMSU’s executive committee, id. at 42. Because these findings are entitled to preclusive
effect in this case, establishing for the purposes of Mr. Weber’s breach of contract claim,
that the interest–free loans and Auric/Ostrowsky relationship were already known to
FMSU by the time Plaintiff was fired, the jury was properly instructed in this regard.
2.
Weber’s Success in New York
During trial, on May 22, 2012, Defendants’ counsel referenced FMSU’s case
against Mr. Weber in New York state court. (See Tr. at 638–639.) During the final jury
21
instructions, the Court informed the jury: “You heard Defendants’ attorney reference in a
question a lawsuit brought by FMSU against John Weber in New York state court. This
case has been decided in Mr. Weber’s favor and you are not to consider the existence and
dismissal of that lawsuit as any evidence in this case.” (Jury Ins. at 10.) Because the jury
had already been informed by Defendants’ counsel that FMSU had sued Mr. Weber in a
separate proceeding, it was appropriate to instruct the jury that that other action had been
resolved in Mr. Weber’s favor, but was outside the jurors’ purview.
Defendants’
discontent with respect to this instruction hardly merits a new trial.
3.
After–Acquired Evidence
The Court instructed the jury that it could not consider the after–acquired
evidence of Mr. Weber’s alleged misconduct “as evidence of whether Defendants would
have fired Mr. Weber if and when they learned of this evidence.” (Jury Ins. at 22.)
Defendants argue that this instruction was improper because this after–acquired evidence
was relevant to the determination of compensatory damages. However, as discussed
above, the Court has rejected this argument. (See supra Part II.A.2.)
4.
Known and Unknown Misconduct
With respect to FMSU’s defense to Mr. Weber’s breach of contract claim that Mr.
Weber himself breached his contract and therefore could not enforce the terms of the
contract against FMSU, the Court instructed the jury:
FMSU asserts as a defense to Mr. Weber’s breach of contract claim that
Mr. Weber himself materially breached his employment agreement prior
to his termination, unbeknownst to FMSU. If a party to a contract
materially breaches that contract, that party is barred from enforcing the
22
terms of the contract. Here, Defendants argue that Mr. Weber materially
breached his contract by performing in such a way so as to provide cause
for his termination, i.e. he committed “willful malfeasance which would
tend to have a material adverse effect on the interests of the company,”
when he approved the letter to Louise Collins’ landlord, took no corrective
action knowing of Larry Hart’s actions with respect to the profit sharing
plan, and/or directed profit sharing accruals. If Defendant FMSU proves
by a preponderance of the evidence that, unbeknownst to FMSU at the
time, Mr. Weber breached his contract prior to being fired, then Mr.
Weber cannot enforce his contract against FMSU and cannot recover any
damages for breach of contract.
In order to succeed on this defense, FMSU must show that Mr. Weber
materially breached his contract through any of these actions, and that
FMSU did not become aware until after it terminated Mr. Weber’s
employment. You may consider any conduct of Mr. Weber’s of which
FMSU was aware prior to his termination in evaluating whether FMSU’s
“cause” assessment was legitimate and accurate if FMSU relied on that
conduct in deciding to fire Mr. Weber, but you may not consider conduct
of which FMSU was aware in evaluating this defense. Therefore, the
evidence that you may consider in evaluating this defense is only the after–
acquired evidence that FMSU asserts concerns Mr. Weber’s alleged
misconduct. You may not consider this after–acquired evidence in
determining Defendants’ motivations in firing Mr. Weber or whether they
fired Mr. Weber “for cause”; you may only consider it for the purpose of
deciding whether Mr. Weber breached his employment contract before
FMSU terminated him.
(Jury Ins. at 22–23.)
Again, after–acquired evidence of alleged misconduct by Mr. Weber could be
relevant to the defense that Mr. Weber breached his contract first. See Naylor, 2009 WL
5206005 at *1; Dobinsky, 2004 WL 2303686 at *6. However, any misconduct of which
FMSU was aware prior to terminating Weber, yet did not rely on in deciding to terminate
him, could not constitute prior breach by Plaintiff. If FMSU knew of a material contract
breach by Mr. Weber, but chose not to terminate him for that breach and continued to
accept the benefits of its contract with him, it waived its right to terminate his
23
employment contract for cause based on that conduct. Ed Kimber Heating & Cooling,
Inc. v. Travelers Cas. & Sur. Co., 411 F. Supp. 2d 111, 117 (D. Conn. 2006) (“If a party has
knowledge of the other party’s breach and continues to accept the benefits of the contract,
that acceptance constitutes waiver of the right to terminate based on the prior breaches.”)
Because FMSU effectively waived its claim of Plaintiff’s contract breach by its
acquiescence to his actions, it was not error to instruct the jury that it could not consider
evidence of alleged misconduct by Mr. Weber of which FMSU was aware before he was
terminated in evaluating Defendants’ proof of this defense.
C.
“Sneak Attack” Reference
Defendants lastly argue that they are entitled to a new trial because of the
prejudicial effect of Plaintiff’s counsel’s description of their conduct as a “sneak attack”
during her closing argument. Defendants had moved in limine to exclude from trial any
reference to Pearl Harbor Day, and the Court ruled [Doc. # 411] that “Plaintiff will not be
allowed to refer to Pearl Harbor Day or identify December 7, 2009 as Pearl Harbor Day.”
After Ms. Cortese Costa’s clearly improper use of the phrase “sneak attack” during her
closing, Defendants’ counsel requested that the Court “admonish[]” her in front of the
jury, inform the jury that she violated the Court’s order, and instruct them not to be
influenced by the comment (Tr. at 2185–86), which the Court did: “any argument by
counsel which directly or indirectly alludes to the Pearl Harbor attack is improper and
contrary to the Court’s prior orders to all counsel. It should be disregarded and given no
effect” (id. at 2187).
Although appeals to bias and prejudice may unfairly influence a jury’s verdict and
warrant a new trial, where a trial court immediately gives a curative instruction, such an
extreme remedy is not required. Compare Pappas v. Middle Earth Condo. Ass’n, 963 F.2d
24
534, 540–41 (new trial warranted where defendant’s counsel appealed to regional bias in
his closing, the trial court overruled plaintiff’s objection, and no curative instruction was
given), with Greenbaum v. Handelsbanken, 67 F. Supp. 2d 228, 274 (S.D.N.Y. 1999) (new
trial unwarranted where there was “only one potentially race–based remark in the context
of an eleven–day trial, which contained extensive witness testimony and opening and
summation remarks and ended with a jury verdict that displayed a level of thoroughness
that belies any suggestion of passion–based judgment”).
Since the prejudice to
Defendants of the “sneak attack” remark was that it could inflame potential anti–Japanese
bias for the Pearl Harbor surprise attacks, the curative instruction directly addressed it.
In light of this instruction, the length of the trial, and the limited nature of the comment,
the Court is satisfied that Ms. Cortese Costa’s deplorable use of the term “sneak attack”
during her closing argument does not warrant a new trial.
III.
HLUS and FujiFilm Corporation’s Motion for Remittitur [Doc. # 485]
“If a district court finds that a verdict is excessive, it may order a new trial, a new
trial limited to damages, or, under the practice of remittitur, may condition a denial of a
motion for a new trial on the plaintiff’s accepting damages in a reduced amount.” Tingley
Systems, Inc. v. Norse Systems, Inc., 49 F.3d 93, 96 (2d Cir. 1995). A judgment cannot be
upheld where the damages awarded are “so excessive that it shocks the judicial
conscience.” Phillips v. Bowen, 278 F.3d 103, 11 (2002). In assessing whether an award is
excessive, it is appropriate to review “awards in other cases involving similar injuries,
bearing in mind that any given judgment depends on a unique set of facts and
circumstances.” Scala v. Moore McCormack Lines, Inc., 985, F.2d 680, 684 (2d Cir. 1993).
25
HLUS and FujiFilm Corporation move for remittitur on the jury’s award of non–
economic damages, arguing that the $150,000 award should be reduced because Mr.
Weber’s emotional distress was relatively minor, and other cases with similar
circumstances have reduced compensatory damages awards to far below what the jury
awarded here.
Because Plaintiff was awarded compensatory damages on his state
common law tortious interference claims, Defendants’ motion is governed by
Connecticut’s substantive law. See Gagne v. Town of Enfield, 734 F.2d 904, 905 (2d Cir.
1984); McInnis v. Town of Weston, 458 F. Supp. 2d 7, 16 (D. Conn. 2006).
Under
Connecticut law:
The size of the verdict alone does not determine whether it is excessive.
The only practical test to apply is whether the award falls somewhere
within the necessarily uncertain limits of just damages or whether the size
of the verdict so shocks the sense of justice as to compel the conclusion
that the jury was influenced by partiality, prejudice, mistake or corruption.
Bracey v. Bd. of Educ. of City of Bridgeport¸368 F.3d 108, 117–18 (2d Cir. 2004) (quoting
Gaudio v. Griffin Health Servs., Corp., 249 Conn, 523, 551 (1999)). “The Court views the
evidence concerning damages in the light most favorable to the plaintiff, determining
whether the verdict returned was reasonably supported thereby.” Id. (internal citations
and quotation marks omitted).
During trial, Plaintiff testified that his termination for cause came as a “total
shock,” which stayed with him “for quite some time.” (Tr. at 178.) He felt “isolated” and
“cut off from the company that [he] helped build.” (Id.) Mr. Weber also reported that he
had trouble sleeping, lost approximately twenty–five pounds, and “kind of lost interest in
26
everything.” (Id. at 178–79.) Plaintiff also testified that several of his colleagues and
customers contacted him regarding his departure from FMSU and asked whether he had
been terminated for cause (see id. 193–94, 199–200), which he found “devastating because
[his] whole career was based on integrity” (id. at 200). Plaintiff sought treatment from his
family physician, Dr. Kelly, who diagnosed him with “depression secondary to job loss”
and prescribed Lexapro for depression and Ambien as a sleep aid. (Id. at 179, 417.) Dr.
Kelly did not refer Mr. Weber for follow–up treatment, and Mr. Weber stopped taking
his prescribed medication after several days. (See id. at 430, 1913–14.) Plaintiff’s expert,
Dr. Levin, testified that he diagnosed Plaintiff as suffering from major depressive
disorder, based on Plaintiff’s “drop in self–esteem,” “decrease in his pleasure and interest
in activities,” “low energy,” and “diminished concentration” (id. at 2013),
and
categorized Plaintiff’s condition as “severe” (see id. at 2021). Dr. Levin also stated that
while Plaintiff was in “relatively good spirits” at the beginning of their interview, when he
began to discuss his job loss “he was clearly sad and distraught.” (Id. at 2018.)
Defendants contend that the evidence of Plaintiff’s emotional distress amounts to
no more than a “garden variety” claim, for which courts in this state have typically limited
verdicts to the $50,000 range. See Craine v. Trinity College, No. CV 950555013S, 1999
WL 1315017, at *15 (Conn. Super. Ct. Dec. 27, 1999) (“In ‘garden variety,’ discrimination
cases in which the plaintiff suffers depression, sadness, and loss of pride, the maximum
amount for pain and suffering appears to be roughly $50,000.” (internal citations and
quotation marks omitted)).
Defendants argue that the evidence of Mr. Weber’s
27
emotional distress is similar to the evidence presented in Schnazer v. United Technologies
Corp., 120 F. Supp. 2d 200 (D. Conn. 2000), in which this Court remitted a jury award of
$175,000 in compensatory damages to $40,000 and $45,000 respectively for the two
plaintiffs. In Schnazer, the Court found that the evidence showed “neither extreme
trauma nor permanent injury.” Id. at 218. The plaintiffs in Schnazer did not seek medical
help for their emotional distress, suffered no physical symptoms, and failed to support
their own, subjective testimony with evidence from medical experts. See id. at 218–19.
The Court found that while the plaintiffs suffered shock and humiliation,
there was no evidence of workplace mistreatment or humiliation. They
were laid off, not terminated for individual performance deficiencies. No
somatic manifestations of distress or behavioral changes were described,
and there was no evidence of serious or traumatic consequences or impact
on the plaintiffs’ family or personal relationships.
Id. at 219. Both the circumstances of Plaintiff’s termination and its emotional impact are
markedly distinguishable from Schnazer. Unlike the plaintiffs in Schnazer, who were laid
off as a part of a reduction in force, Plaintiff was summarily terminated for cause, which
the jury later determined to be unfounded, and he credibly testified that he was shocked
by the loss of his long–term employment and deeply humiliated by the rumors
surrounding his termination. (See Tr. at 200.) Furthermore, Plaintiff suffered physical
manifestations of his emotional distress, including difficulty sleeping and weight loss.
(See id. at 178–79.) Unlike the plaintiffs in Schnazer, Plaintiff sought medical treatment
for his symptoms (see id. at 179, 417), and the medical testimony that the jury heard was
28
far from the suffering of “garden variety” depression, but rather was a clinical diagnosis of
severe major depressive disorder (see id. at 2013, 2021).
Plaintiff’s evidence of emotional distress was similar to that presented in McInnis
v. Town of Weston, 458 F. Supp. 2d 7 (D. Conn. 2006), in which this jury also rejected the
plaintiff’s age discrimination claims, and in which this Court remitted a jury verdict for
emotional damages to $150,000. In McInnis, as here, although the evidence “included no
proof of permanency of injury nor any pre–existing condition disposing plaintiff to
exceptional severity of emotional injury,” the plaintiff had testified that his “emotional
distress was sufficiently serious for him to seek counseling,4 and produced somatic
manifestations, including observable sleep impairment and social withdrawal.” Id. at 18.
Mr. Weber’s situational depression, while not permanent, caused him acute suffering,
some of which he feels at present. (See Tr. at 187–88.) Of particular note, although the
jury in McInnis rejected the plaintiff’s age discrimination claims, the Court found
evidence was consistent with the plaintiff having been deprived of his “professional
identity and job satisfaction” by the defendant’s actions in subjecting him to a series of
unfounded investigations and disciplinary procedures. See id. Here, while Plaintiff’s age
discrimination claims were also rejected, there was sufficient evidence for the jury to find
that Plaintiff had similarly suffered a loss of professional identity based on Plaintiff’s
4
Mr. Weber sought treatment for his symptoms, did not attend additional
counseling sessions, and shortly stopped taking the medication he was prescribed. (See
Tr. at 430, 1913–14.) This testimony was not dissimilar to the evidence in McInnis, where
the plaintiff’s treating physician did not recommend that he see a psychiatrist to obtain
medication. See McInnis, 458 F. Supp. 2d at 18 n.6.
29
testimony about the shock and hurt of being terminated from the company to which he
had dedicated decades of his life.
Thus, while an award of $150,000 is not insubstantial for the circumstances of this
case, it was amply supported by the evidence at trial, is not out of line with other
approved verdicts in Connecticut based on similar circumstances, and certainly does not
“shock the conscience” of the Court. See, e.g., Tomick v. United Parcel Service, Inc., 135
Conn. App. 589, 616–17 (2012) (upholding a verdict of $300,000 where plaintiff testified
to a sense of loss of self–worth, had difficulty sleeping, and lost weight after his
termination); Howell v. New Haven Bd. of Educ., No. 3:02CV736 (JBA), 2005 WL 217952,
at *8–10 (D. Conn. Sept. 8, 2005) (declining to remit a verdict of $200,000 based on the
“emotional timbre of plaintiff’s testimony” and “the deep trauma and pain of his
experience”); Ragin v. Laidlaw Transit, Inc., 3:97CV0024 (GLG), 1999 WL 977603, at *4–
5 (D. Conn. Oct. 4, 1999) (remitting a verdict from $250,000 to $150,000 where plaintiff
had no evidence of medical treatment or physical symptoms, and did not suffer direct
humiliation with co–workers as a result of failure to receive a promotion); Gaudio v.
Griffin Health Servs. Corp., 249 Conn. 523, 529 (1999) (upholding a verdict of $100,000
where plaintiff testified that a romantic relationship ended as a result of his depression, he
was “emotionally devastated” by his discharge, he suffered low self–esteem, and he lost a
substantial amount of weight). Defendants’ Motion for Remittitur is without merit and is
therefore denied.
30
IV.
Plaintiff’s Motion for Assessment of Lost Wages [Doc. # 488] 5
Following the jury’s verdict, Plaintiff’s counsel requested that the Court assess lost
wages, including back pay and front pay, resulting from Defendant HLUS and FujiFilm
Corporation’s tortious interference with business expectancy, and submitted a
memorandum [Doc. # 466] in support of the request. Mr. Weber now moves pursuant to
Fed. R. Civ. P. 59(e) to amend the Court’s judgment to include an award of lost wages for
Defendants’ tortious interference.
While Plaintiff argues that lost wages are the
appropriate measure of damages in an action for tortious interference in the employment
context, as Defendants note in their briefing, Plaintiff cites no Connecticut case law that
expressly holds that a plaintiff may recover front pay and back pay in an action for
tortious interference with contract or business expectancy. Defendants thus contend that
an award of lost wages is not available in this action.6
Under Connecticut law, “the appropriate measure of damages in an action for
tortious interference with a business expectancy is . . . the pecuniary loss to the plaintiff of
5
Plaintiff also moves [Doc. # 480] for clarification as to whether the Court will
consider Defendants’ arguments as to the legal sufficiency of Plaintiff’s tortious
interference claims, which Defendants raised in their reply briefing to Plaintiff’s motion
for assessment of lost wages. Because the parties had the opportunity to fully brief and
respond to these arguments in connection with Defendants’ motion [Doc. # 484] for
judgment as a matter of law, Plaintiff’s motion for clarification is DENIED as moot.
6
Defendants also argue that because the jury awarded zero economic damages in
relation to Plaintiff’s tortious interference claims, the jury has affirmatively concluded
that Plaintiff suffered no economic damages. However, the Court instructed the jury,
with the consent of the parties, not to consider lost wages when determining Plaintiff’s
economic damages on those claims because the Court would determine the amount of
lost wages in a separate proceeding. (See Jury Ins. at 29.) The Court presumes “that the
jury followed the court’s instructions,” United States v. Joyner, 201 F.3d 61, 69 (2d Cir.
2000), and therefore the jury’s finding of zero economic damages has no bearing on the
issue of whether Plaintiff is entitled to lost wages in relation to his tortious interference
claims.
31
the benefits of the business relation.” American Diamond Exchange v. Alpert, 101 Conn.
App. 83, 103 (2007); see also Restatement (Second), Torts, § 774A (“One who is liable to
another for interference with a contract or prospective contractual relation is liable for
damages for . . . the pecuniary loss of the benefits of the contract or the prospective
relation.”).
In the employment context, the pecuniary loss of the benefit of the
employment relationship can be measured by lost wages. See Chandler v. Bombardier
Capital, 44 F.3d 80, 83–84 (2d Cir. 1994) (upholding an award of back pay for a tortious
interference claim brought under Vermont law);7 see also 44B Am. Jur. 2d Interference
§ 61 (“The damages . . . that an employee whose employment is terminable at will is
entitled [to], if discharged because of interference by another, are those damages that can
be reasonably established, taking into account the type and stability of the employment;
the past employment record; the employee’s age, health, ability to labor; and the
probability that the employment would otherwise have continued. The sum that an
employee would have earned had such employment continued is prima facie the measure
of damages. Where it appears that a discharged employee has lost considerable time
without being able to secure work and that this condition will continue for some time in
the future, the damages may include loss of employment, not only up to the time of the
action, but also future unemployment.”). Cf. Herman v. Endriss, 187 Conn. 374 (1982)
(finding that plaintiff’s claim for damages for tortious interference was not mooted by her
employer’s death, where plaintiff claimed damages for lost wages and benefits). Thus,
conceptually, an award of front pay and back pay may be appropriate in a tortious
7
Under Vermont law “[i]n an action for interference with the business relations
of another, the plaintiff may recover such damages sustained by him as are a natural and
proximate consequence of the interference. This includes such loss as the plaintiff can
prove to have resulted directly and proximately from the defendant’s wrongful acts.”
Giroux v. Lussier, 127 Vt. 520 (1969).
32
interference case in the employment context and Plaintiff’s motion for assessment of lost
wages is granted. The Court will determine the amount, if any, of economic damages to
which Plaintiff is entitled on his tortious interference claims in a separate proceeding to
be scheduled.
V.
Plaintiff’s Motion for Assessment of Prejudgment Interest [Docs. ## 478, 479]
Plaintiff moves pursuant to Fed. R. Civ. P. 59(e) and Conn. Gen. Stat. § 37-3a, for
an assessment of ten percent compound prejudgment interest on the economic damages
awarded for his breach of contract claim. (See Jury Verdict at 6 (“What amount of
damages do you find will reasonably compensate Mr. Weber for the economic injuries
proximately caused by FMSU’s breach of contract?
$565,357 plus prejudgment
[interest].”).) Defendant argues that an award of compounding interest is not proper
under Connecticut law, and that prejudgment interest at a rate of one percent is more
appropriate in this case.
State law applies to the calculation of prejudgment interest on state law claims.
See Marfia v. T.C. Ziraat Bankasi, 147 F.3d 83, 90 (2d Cir. 1998). Under Conn. Gen. Stat.
§ 37-3a, Plaintiff may recover “interest at the rate of ten per cent a year, and no more.”
“[T]he primary purpose of § 37-3a [] is not to punish persons who have detained money
owed to others in bad faith but, rather, to compensate parties that have been deprived of
the use of their money.” Sosin v. Sosin, 300 Conn. 205, 230 (2011). The Connecticut
Supreme Court has held that an award of interest under this statute is discretionary, id. at
229, and that ten percent is “the maximum rate of interest that a trial court, in its
discretion, can award,” Gianetti v. Meszoros, 268 Conn. 424 (2004). “Simply to choose
10.0% as the interest rate because that is the only number referenced in § 37-3a is not the
proper exercise of judicial discretion.” Owens, Shine & Nicola, P.C. v. Travelers Cas. &
33
Sur. Co. of America, No. CV095024601S, 2011 WL 3200296, at *13 (Conn. Super. Ct. June
24, 2011).
Defendants argue that the Court should look to the rate for one–year United
States Treasury Bills during the recent past, which has remained below one percent, to
determine what rate would be sufficient to compensate Plaintiff. (See Defs.’ Opp’n [Doc.
# 481].) While Defendants do not cite any case in which a court awarded prejudgment
interest based on the prevailing rate on Treasury Bills, the Court “may consider all
relevant information [including] evidence relative to the rate of interest available during
the [relevant] period” in determining the rate of interest to award. Sears Roebuck and Co.
v. Bd. of Tax Review of the Town of West Hartford, 241 Conn 749, 766 (1997). In support
of his claim for ten percent compounded interest, Plaintiff has submitted evidence that
the total return on the S&P 500 for the period from January 1, 2010 to June 30, 2012 was
10.6%. (See Ex. B to Pl.’s Reply [Doc. # 482].) Plaintiff further argues that because the
jury found that Defendants acted in bad faith, an award of compounded interest is
appropriate. See Harris v. Harris, No. FA920513790, 2007 WL 3038234, at *1–2 (Conn.
Super Ct. Oct. 2, 2007). But see Northeast Connecticut Economic Alliance, Inc. v. ATC
Partnership, 2005 WL 3292122 (Conn. Super. Ct. Nov. 9, 2005) (noting that § 37-3a “is
generally understood to contemplate simple interest”). However, in light of Defendants’
evidence of the low interest rate climate in the recent past, the Court finds that awarding
ten percent compounded interest would provide an unwarranted windfall to Plaintiff. See
Daimlerchrysler Ins. Co., LLC v. Pambianchi, No. 3:08cv943 (MRK), 2011 WL 721630, at
*2 (D. Conn. Feb. 23, 2011) (“Awarding prejudgment interest at a 10% annually
compounded rate during a recession would result in a significant windfall.”).
34
Courts in Connecticut have recently found that awarding simple interest at a rate
of four to six percent appropriately compensates a plaintiff for deprivation of the use of
his or her money. In Bernhard—Thomas Bldg. Sys., LLC v. Weitz Co., LLC, 3:04-cv-1317
(CFD), 2011 WL 5222682, at *3 (D. Conn. Oct. 31, 2011), Judge Droney surveyed recent
case law from the District of Connecticut and Connecticut state courts and found that an
interest rate of four percent was appropriate. See also Hartford Steam Boiler Group, Inc. v.
SVB Underwriting, Ltd., 3:04CV2127 (SRU), 2011 WL 1899392, at *11 (D. Conn. May 19,
2011) (awarding prejudgment interest at a rate of four percent); Kasper v. Valluzzo, No.
FSTCV075004383S, 2011 WL 8883574, at *16 (Conn. Super. Ct. Dec. 23, 2011) (awarding
prejudgment interest at a rate of six percent); DiLustro v. Pascarella, No. CV106015451S,
2011 WL 4424756, at *4 (Conn. Super. Ct. Sept. 7, 2011) (awarding prejudgment interest
at a rate of five percent). Furthermore, as Defendant points out, Plaintiff’s own report of
the total return on the S&P 500 over the relevant time period equates to 4.24 percent
annual simple interest. (See Def.’s Sur–reply [Doc. # 483-1] at 2.) In consideration of the
economic context for time–frame of Plaintiff’s discharge, the Court concludes that
Plaintiff should be awarded prejudgment interest at a simple annual rate of four percent
from January 1, 2010, the date of Plaintiff’s termination, to June 15, 2012, the date of the
entry of judgment in this case, for a total award of $32,899.13 in prejudgment interest.
VI.
Plaintiff’s Motion for a New Trial on Discrimination Claims [Doc. # 489]
Plaintiff moves pursuant to Fed. R. Civ. P. 59 for a new trial on his national origin
and age discrimination claims, arguing that (1) the evidence at trial established that Mr.
Weber’s national origin and age were motivating factors in his termination, and there was
no adequate basis for the jury finding of no liability on his discrimination claims; (2) the
Court’s admission of after–acquired evidence of alleged misconduct by Mr. Weber was
35
incorrect and prejudicial; and (3) the Court’s jury instructions improperly suggested to
the jury that Defendants had established that Mr. Weber committed misconduct while
employed at FMSU.
A.
Evidence of Discrimination
Mr. Weber argues that the jury’s verdict on his discrimination claims was “clearly
and substantially erroneous” because there was direct evidence that the decision to
terminate him was based on age and national origin and Defendant’s evidence did not
counter this direct evidence of discriminatory intent.
Mr. Weber claims as direct
evidence of discrimination a November 2007 internal Fuji audit prepared by Masahiro
Miki that suggested re–evaluation of the “old” management at FMSU (Trial Ex. 31), the
“two–year plan” to terminate Mr. Weber, who was referred to by Hiroaki Tada, President
of FMSU, as the “top American” (Trial Ex. 33), and Mr. Tada’s plan to hand over
management to the “younger generation” (Trial Ex. 40). At trial, however, Mr. Miki
testified that his word choice in the November 2007 audit report did not have “anything
to do with age.” (Tr. at 1004–05.) Mr. Tada testified that Mr. Weber was fired because of
poor management, the KPMG audit, and the improper Empiric filing (Tr. at 1502), and
that he referred to Mr. Weber as the “top American” for no “particular reason other than .
. . the American was Mr. Weber, equal to Mr. Weber” (id. at 1340).
“A court considering a Rule 59 motion for a new trial must bear in mind,
however, that the court should only grant such a motion when the jury’s verdict is
egregious.” DLC Management Corp. v. Town of Hyde Park, 163 F.2d 124, 134 (2d Cir.
1998) (internal quotation marks and citations omitted). “Accordingly, a court should
rarely disturb a jury’s evaluation of a witness’s credibility.” Id. All of the supposedly
“direct” evidence of discrimination relied on here by Plaintiff was explained and/or
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rebutted by witnesses at trial, whose testimony, as reasonably relied on by the jury,
established that Mr. Weber’s national origin and/or age were not motivating factors in the
decision to terminate his employment. The Court will not disturb the jury’s evaluation of
this evidence, and Mr. Weber is not entitled to a new trial on this ground.
B.
After–Acquired Evidence of Alleged Misconduct
Mr. Weber argues that the admission of after–acquired evidence of his alleged
misconduct at FMSU was erroneous and highly prejudicial, and that this error warrants a
new trial on his discrimination claim. He claims that the Court’s decision to admit after–
acquired evidence on the discrimination claims violated the “law of the case” insofar as
the Court previously dismissed FMSU’s counterclaims that related to this after–acquired
evidence of misconduct. Mr. Weber, however, fails to point to any particular piece of
after–acquired evidence that prejudiced his discrimination claims, and he ignores the fact
that the Court explicitly instructed the jury that it was not permitted to consider any
after–acquired evidence in deciding those claims. The Court instructed the jury:
You heard evidence during trial of alleged actions by Mr. Weber, which
Defendants claim they were not aware of at the time they made the
decision to terminate Mr. Weber’s employment, also known as “after–
acquired evidence.” As I have previously instructed you, if Defendants
were not aware of this evidence at the time they fired Mr. Weber, they
could not have been motivated by it in reaching their decision to fire Mr.
Weber and you may not consider it as having any bearing on Defendants’
intent or motivations in making that termination decision. You may not
consider it as evidence relevant to Mr. Weber’s discrimination claims, nor
may you consider it as evidence of whether Defendants would have fired
Mr. Weber if and when they learned of this evidence.
(Jury Ins. at 22.)
37
In light of this instruction, and Plaintiff’s failure to point to what evidence he
believes the Court improperly admitted, Mr. Weber is not entitled to a new trial on this
ground.
C.
Jury Instructions and Mr. Weber’s Alleged Misconduct
Mr. Weber lastly argues that he is entitled to a new trial because the Court’s jury
instructions improperly suggested to the jury that Defendants had established that he
committed certain misconduct while employed at FMSU. He specifically objects to the
following instruction:
Defendants argue that Mr. Weber materially breached his contract by
performing in such a way so as to provide cause for his termination, i.e. he
committed “willful malfeasance which would tend to have a material
adverse effect on the interests of the company,” when he approved the
letter to Louise Collins’ landlord, took no corrective action knowing of
Larry Hart’s actions with respect to the profit sharing plan, and/or directed
profit sharing accruals. If Defendant FMSU proves by a preponderance of
the evidence that, unbeknownst to FMSU at the time, Mr. Weber breached
his contract prior to being fired, then Mr. Weber cannot enforce his
contract against FMSU and cannot recover any damages for breach of
contract.
In order to succeed on this defense, FMSU must show that Mr. Weber
materially breached his contract through any of these actions, and that
FMSU did not become aware until after it terminated Mr. Weber’s
employment.
(Jury Ins. at 23.) Plaintiff argues that this instruction suggested that Defendants had
actually proven that he approved the Collins letter and acted improperly with respect to
the profit sharing plan and accruals.
Contrary to Plaintiff’s objection, the instruction above makes clear that these
examples of alleged misconduct are what “Defendants argue” Mr. Weber did in breach of
his contract, not what Defendants had proven Mr. Weber did. Further, even if the jury
38
had been confused by this instruction, the Court further instructed the jury, as discussed
above, that it “may not consider” after–acquired evidence of alleged misconduct “as
evidence relevant to Mr. Weber’s discrimination claims.”
(Id. at 22.)
Given this
instruction, and the presumption “that the jury followed the court’s instructions,” United
States v. Joyner, 201 F.3d 61, 69 (2d Cir. 2000), Mr. Weber is not entitled to a new trial on
this ground.
VII. Conclusion
For the reasons discussed above, Defendants’ Motion [Doc. # 486] for a New Trial
is DENIED; Defendants’ Motion [Doc. # 484] for Judgment as a Matter of Law is
DENIED; Defendants’ Motion [Doc. # 485] for Remittitur is DENIED; Plaintiff’s Motion
[Doc. # 489] for a new trial is DENIED; Plaintiff’s Motion [Doc. # 488] for Assessment of
Lost Wages is GRANTED; Plaintiff’s Motion [Doc. # 480] for Clarification is DENIED as
moot; and Plaintiff’s Motion [Doc. ## 478, 479] for Assessment of Prejudgment Interest is
GRANTED in part. The Court will issue an order setting the schedule for the parties’
briefing on the amount of lost wages to be assessed in relation to Plaintiff’s tortious
interference damages forthwith.
IT IS SO ORDERED.
/s/
Janet Bond Arterton, U.S.D.J.
Dated at New Haven, Connecticut this 19th day of March, 2013.
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