Hounshel v. Battelle Energy Alliance, LLC

Filing 124

MEMORANDUM DECISION AND ORDER, Defendant's Renewed Motion for Directed Verdict Regarding Punitive Damages (Dkt 103 is GRANTED. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
DEREK HOUNSHEL,
Case No.: 4:11-cv-00635-BLW
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
BATTELLE ENERGY ALLIANCE,
LLC,
Defendant.

INTRODUCTION
The Court has before it three motions. Battelle's Renewed Motion for Directed
Verdict Regarding Punitive Damages (Dkt. 103), Plaintiff’s Motion For Attorneys’ Fees
and Costs (Dkt. 113), and Defendant's Motion for Stay of Execution on Judgment (Dkt.
119). For the reasons explained below, the Court will grant Defendant's Renewed Motion
for Directed Verdict Regarding Punitive Damages (Dkt. 103). The remaining motions
will be addressed separately.
BACKGROUND
Plaintiff Derek Hounshel filed this action against Battelle Energy Alliance LLC,
alleging that Battelle engaged in unlawful adverse employment actions against him based
on a perceived disability. Hounshel alleged that his perceived disability was either the

MEMORANDUM DECISION AND ORDER - 1

sole reason or a motivating factor for Battelle’s decision to take these adverse actions
against him.
Hounshel asserted that Battelle’s adverse employment actions against him
included: (1) giving him a negative performance evaluation, (2) placing him on a
performance improvement plan, (3) requiring him to attend mandatory counseling, (4)
subjecting him to a psychological assessment, (5) placing him on unpaid administrative
leave, (6) suspending him, (7) moving his office, (8) restricting his building access, (9)
restricting his access to coworkers, (10) denying him training and work opportunities, and
(11) constructively discharging him.
At trial, the jury found in favor of Hounshel. The jury found that Battelle did take
adverse actions against Hounshel and they were motivated, in part, by Hounshel’s
perceived disability. However, the jury found that Hounshel’s perceived disability was
not the sole reason for the adverse actions taken against him; they found that they were
also motivated by lawful reasons.
In addition to compensatory damages, the jury also awarded punitive damages
against Battelle in the amount of $10,000. Battelle argues that punitive damages are not
appropriate in this case as a matter of law, and requests a directed verdict setting aside the
jury’s award of punitive damages.

MEMORANDUM DECISION AND ORDER - 2

LEGAL STANDARD
The same legal standard applies to a renewed motion for a directed verdict as to
the original motion. Under Rule 50(b), when a court does not grant a motion for
judgment as a matter of law made under Rule 50(a), the court is considered to have
submitted the action to the jury subject to the court's later deciding the legal questions
raised by the motion. Fed.R.Civ.P. 50(b). The party may then file a renewed motion for
judgment as a matter of law and may include a request for a new trial. Id. The Court may
resolve the issue in one of three ways: (1) allow judgment on the verdict if the jury
returned a verdict; (2) order a new trial; or (3) direct the entry of judgment as a matter of
law. Id. “Judgment as a matter of law is appropriate when the evidence presented at trial
permits only one reasonable conclusion.” Torres v. City of Los Angeles, 548 F.3d 1197,
1205 (9th Cir.2008) (internal citation omitted). Thus, “[a] motion for a judgment as a
matter of law is properly granted only if no reasonable juror could find in the non-moving
party's favor.” Id. (Internal citation omitted). Evidence must be viewed in the light most
favorable to the nonmoving party, with all reasonable inferences drawn in favor of that
party. Id. at 1205–06. Judgment as a matter of law is not appropriate if conflicting
inferences may be drawn from the facts. LaLonde v. Cnty. of Riverside, 204 F.3d 947,
959 (9th Cir. 2000).
Punitive damages, however, are only appropriate when “employer has engaged in
intentional discrimination and has done so ‘with malice or with reckless indifference to
the federally protected rights of an aggrieved individual.’” Kolstad v. Am. Dental Assn.,

MEMORANDUM DECISION AND ORDER - 3

527 U.S. 526, 530 (1999) (quoting 42 U.S.C. § 1981a(a)(1)). A finding of intentional
discrimination is not a sufficient condition for punitive damages, “[t]here will be
circumstances where intentional discrimination does not give rise to punitive damages
liability under this standard.” Id. at 536. In some cases, “the employer may simply be
unaware of the relevant federal prohibition." Id. at 536-7. Moreover, there will be other
cases “in which the employer discriminates with the distinct belief that its discrimination
is lawful.” Id. at 537. Perhaps “[t]he underlying theory of discrimination may be novel or
otherwise poorly recognized, or an employer may reasonably believe that its
discrimination satisfies a bona fide occupational qualification defense or other statutory
exception to liability.” Id. Thus, the standard to prove that punitive damages are
warranted is high; a plaintiff must put on evidence proving that an employer acted with
malicious intent or with recklessness disregard for the plaintiff’s rights.
ANALYSIS
Battelle claims that Hounshel has put forth no evidence that it “acted maliciously,
oppressively, or in reckless disregard of his rights,” and thus has not met his burden of
proving, by clear and convincing evidence, that punitive damages are appropriate. Def.
Br. at 2, Dkt. 103-1. In support of its argument, Battelle asserts that its conduct towards
Hounshel was simply a product of following standard company procedure. Id. Battelle
claims that when concerns were raised by Hounshel’s supervisors and coworkers,
concerning his behavior issues, it followed its standard policies on workplace violence.
Id. In Battelle’s view, the complaints of Hounshel’s co-workers were investigated

MEMORANDUM DECISION AND ORDER - 4

thoroughly and when they were found to be unsupported, they were dismissed; when they
were found to be supported, Battelle took appropriate action. Id. at 2-3. Battelle also
asserts that it gave Hounshel opportunities to respond to the concerns, and tried to find a
position or work location that would meet Hounshel’s needs. Id. at 3.
Additionally, Battelle notes that the nature of the complaints against Hounshel
(intimidation and harassment,) warranted serious investigation. Given these realities,
Battelle argues that it “was required to perform a delicate balancing act between
Plaintiff’s rights, the rights of his coworkers to an environment free of intimidation and
harassment, and its own responsibility to provide a safe workplace.” Id. In its response to
these serious complaints, Battelle argues that it simply “followed its own policies and
guidelines in a professional manner.” Id.
Hounshel counters, in part, by listing a series of hypothetical factual
determinations that the jury could have found that support an award of punitive damages.
These include, among others, that: (1) the jury could have found that Utterbeck's
allegations that Hounshel had mental issues was based on malicious and discriminatory
intent, Pl.’s Br. at 2, (2) the jury could have found that Utterbeck’s involvement in
Hounshel’s mandated counseling, as a result of the Performance Improvement Plan that
Utterbeck put him on, was motivated by malicious intentions, Id. at 3, (3) [t]he jury could
believe BEA’s failure to maintain confidentiality regarding the medical examination
constituted reckless indifference to Hounshel’s federally protected rights,” Id. at 4, and
(4) the jury could believe “Dr. Weinrich lied about the consent form he alleged existed

MEMORANDUM DECISION AND ORDER - 5

for mandated evaluations, contrary to Hounshel’s testimony regarding the consent form
he signed that claimed he was there voluntarily.” Id. at 4-5.
The above arguments are simply a series of hypothetical rationales (that cannot be
proven or disproven) for why the jury awarded punitive damages. One could come up
with an endless supply of facts that the jury “could have found” that support an award of
punitive damages. However, the Court is constrained with what the jury actually found
(as indicated on the verdict form) and what was established by the testimony at trial.
Here, although the jury found that the adverse actions taken against Hounshel
were motivated, in part, by a perceived disability, they also found that Battelle had lawful
reasons for taking these actions. The undisputed evidence was that there were complaints
made by co-workers about Hounshel’s behavior. Additionally, the nature of the
complaints against Hounshel were serious – he was accused of intimidation and
harassment. These are serious concerns to any employer. Employers have a strong
interest in ensuring a safe and civil workplace. It is not unusual (nor is it malicious,
oppressive, or in reckless disregard of an employee’s rights) for an employer to
thoroughly investigate allegations of this kind. Although the managers at Battelle may
have been overzealous in investigating the complaints against Hounshel, and the jury’s
verdict on the underlying claim is fully supported by the evidence, the facts do not
support the jury’s finding that Battelle’s actions were so severe as to warrant punitive
damages. The Court concludes that from evidence at trial no reasonable jury could
conclude by clear and convincing evidence that Battelle acted with malicious intent or

MEMORANDUM DECISION AND ORDER - 6

with recklessness disregard for Hounshel’s rights. Th
d
r
herefore the Court wil grant
e
ll
Defenda
ant’s Renew Motion for Directe Verdict R
wed
ed
Regarding P
Punitive Da
amages.
ORDER
O
IT IS ORDE
T
ERED:
1.

Defen
ndant’s Ren
newed Moti for Dire
ion
ected Verdict Regardin Punitive
ng
Dama
ages (Dkt. 103) is GRA
1
ANTED.

TED: July 10, 2014
DAT

__________
__________
_____
___
B. L
Lynn Winm
mill
Chief Judge
ited
District Cou
urt
Uni States D

MEMORA
ANDUM DECI
ISION AND ORDER - 7
R