Opinion
Docket No. 20,678.
Filing Date: November 30, 2001. Certiorari granted, No. 27,272, January 15, 2002.
Appeal from the District Court of Santa Fe County, Art Encinias, District Judge.
Daniel J. O'Friel, Law Offices of Daniel J. O'Friel, Ltd., Steven L. Tucker, Tucker Law Firm, P.C., for Appellee.
Lisa Mann, Jennifer A. Noya, Valerie V. Vigil, Modrall, Sperling, Roehl, Harris Sisk, P.A., for Appellant.
OPINION
{1} This is a retaliatory discharge case. Plaintiff Stacy Seitzinger (Seitzinger) alleged in her complaint that she had been terminated because she reported to her employer allegations of sexual harassment of minor female employees by a management-level employee. The employer, Trans-Lux Corporation (Trans-Lux), appeals from a judgment entered against it pursuant to a jury verdict awarding Seitzinger compensatory and punitive damages. Trans-Lux raises six issues:
1. The trial court erred in denying summary judgment on the retaliatory discharge claim;
2. Seitzinger failed to present substantial evidence in support of her claim of retaliatory discharge;
3. Seitzinger failed to present substantial evidence supporting her emotional distress damages claim;
4. Seitzinger's improper closing arguments and invocation of racial prejudice warrants a new trial;
5. Punitive damages should not have been submitted to the jury; and
6. The amount of punitive damages award is excessive.
Addressing each issue in turn, including its relevant factual context, we affirm.
I. Denial of Summary Judgment
{2} Trans-Lux filed a motion for summary judgment asserting, among other things, that Seitzinger's action failed as a matter of law because there was no substantial evidence that she had performed an act that public policy would encourage. In her response, Seitzinger filed an affidavit which could be deemed to be at odds with her prior deposition testimony. The trial court noted the variance and based its decision to deny summary judgment, at least in part, on the question of fact created by the perceived variance.
{3} Trans-Lux now argues the trial court improperly relied on the factual question assertedly created by the variance in Seitzinger's sworn statements, citing Rivera v. Trujillo, 1999-NMCA-129, ¶ 12, 128 N.M. 106, 990 P.2d 219 (holding that "post-hoc efforts to nullify unambiguous admissions under oath will not create a factual dispute sufficient to evade summary judgment"). We do not question the holding of Rivera, but it does not control this case.
{4} Rivera was a direct appeal from a summary judgment granted by the trial court. Here, we have an appeal from judgment entered after a full-blown trial. In this context, the proper approach is provided byGreen v. General Accident Insurance Co., 106 N.M. 523, 527, 746 P.2d 152, 156 (1987) (holding that denials of summary judgment are generally "not reviewable after final judgment on the merits"). The difference Trans-Lux perceives in Seitzinger's pretrial statements under oath — gray and indistinct as they are implicate potential factual questions only. That is, did Seitzinger appropriately report the allegations of sexual harassment to the right persons in the management structure or not? Posing the question in terms of the Rivera holding — did plaintiff try to create a sham question of fact — does not change the analysis or the result. Both versions of the issue pose a question of fact, not law. Thus, the rationale of Green — that it would be unfair to second-guess a summary judgment decision necessarily made on a limited factual presentation after a verdict presumably based on a full airing of the facts at trial has led to a verdict — applies fully here.
II. Was There Substantial Evidence to Support the Jury Verdict of Retaliatory Discharge?
{5} In a closely related argument, Trans-Lux asserts that even at trial Seitzinger did not sufficiently prove she performed an act public policy encouraged, in that the Trans-Lux managers who decided to terminate her did not know she had reported the alleged sexual harassment to another manager. Seitzinger responds by arguing that Trans-Lux is simply too narrow in its definition of what a "report" can be in these circumstances. We agree with Seitzinger.
{6} Seitzinger acknowledges that she was an "at-will" employee. In fact, the jury was instructed that she was at-will and could be "discharged at any time for any reason or for no reason at all, unless an exception to this rule applies." The potential exception to the at-will rule applicable here is retaliatory discharge. New Mexico has allowed employees to recover in tort when their discharge contravenes a "clear mandate of public policy." Vigil v. Arzola, 102 N.M. 682, 688, 699 P.2d 613, 619 (Ct.App. 1983), rev'd in part on other grounds by 101 N.M. 687, 687 P.2d 1038 (1984), overruled in part on other grounds by Chavez v. Manville Prods. Corp., 108 N.M. 643, 777 P.2d 371 (1989). The basic burden on the employee in such a case is to prove that she was discharged because she performed an act that public policy has authorized or would encourage or that she refused to perform an act that public policy would condemn. Id. at 689, 699 P.2d at 620. Later cases have refined the elements of the cause of action to require the employee to prove that her actions were not "merely private or proprietary" but rather were undertaken to "further the public good." Gutierrez v. Sundancer Indian Jewelry, Inc., 117 N.M. 41, 48, 868 P.2d 1266, 1273 (Ct.App. 1993) (citation omitted); accord Garrity v. Overland Sheepskin Co., 1996-NMSC-032, ¶¶ 15-16, 121 N.M. 710, 917 P.2d 1382. In addition, the employee must prove that the employer was aware of the employee's acts and discharged the employee, at least in part, because of the protected conduct. Weidler v. Big J Enters., Inc., 1998-NMCA-021, ¶¶ 25, 34-35, 124 N.M. 591, 953 P.2d 1089; Lihosit v. I W, Inc., 121 N.M. 455, 458, 913 P.2d 262, 265 (Ct.App. 1996). The jury instructions given in this case properly reflected all these facets of a retaliatory discharge cause of action.
{7} Seitzinger was an assistant manager at the Grand Illusion movie theater in Santa Fe. Her immediate supervisor was Oscar Lucero. In early 1998 Seitzinger received reports from young female employees that Lucero was acting inappropriately toward them. The details of the allegations are not necessary to resolve this issue, though Trans-Lux does not dispute that if accurate, the reported conduct would constitute sexual harassment. As framed by Trans-Lux, the operative dispute on appeal is whether Seitzinger reported the allegations appropriately — that is, in furtherance of public policy — and whether Trans-Lux knew of the report.
{8} Seitzinger asserts that she "reported" Lucero's improper behavior in three ways: (1) by telling Lucero directly to "knock it off;" (2) by reporting the complaints to Amy Barbee, the manager at another Trans-Lux theater in Santa Fe; and (3) by testifying before the Trans-Lux investigation committee convened to review the allegations.
{9} Trans-Lux argues that none of these reports is sufficient for various reasons. Trans-Lux asserts that the admonition directly to Lucero cannot qualify as a protected report because it was not to an outside authority, and cannot be deemed to have been done for public purposes. Trans-Lux asserts that the report to Barbee is not sufficient because there is no evidence that the persons who actually decided to fire Seitzinger knew of this conversation. And, in Trans-Lux's view, the testimony given during the investigation cannot qualify as a report because as a matter of law it can only serve a private purpose, and because it was not reported to an outside authority.
{10} We need not address the issues arising from the first two reports because answering the third argument resolves the question.
{11} We do not agree that reporting to an outside authority is, or should be, an element of the tort. Reporting to an outside authority has never been required in New Mexico. There was no report to an outside authority in Vigil, the case which recognized the tort of retaliatory discharge in New Mexico. Id. at 684, 689, 699 P.2d at 615, 620. Similarly, there was no report to an outside agency in Boudar v. E.G. G., Inc., 106 N.M. 279, 742 P.2d 491 (1987), or in Chavez.
{12} Further, there is nothing in the nature of the tort which mandates or even recommends requiring reporting to an outside authority. The tort encourages right conduct in both employers and employees. Requiring reporting to outside authorities does nothing to further this broad goal. Rather, it tends to defeat it. If an employer can act with impunity before an outside report is made, there is no incentive to attempt to correct the problem internally where it exists. As a general proposition, the law should encourage addressing and resolving issues at the most basic level possible. Requiring outside reporting runs directly counter to this approach.
{13} In addition, we do not agree that testimony during an internal investigation can only be deemed to serve an employee's private interest. The real life effect of participating in an internal inquiry — and thus its legal import — depends on the surrounding circumstances in each case. Given the variability of the work place, it is impossible and improper to say that such participation can only implicate private interests. To the contrary, dependence on context for meaning argues strongly for leaving the issue to the jury for determination in the first instance. Guided by proper instructions, the jury in this case clearly found that Seitzinger had acted with a public purpose. There is no basis to disagree with that conclusion.
{14} The out-of-state authority Trans-Lux relies on does not support its argument. One case that Trans-Lux cites in support of its position actually supports our result. Graves v. Komet, 982 S.W.2d 551 (Tex.App. 1998), was an appeal from a summary judgment granted against a plaintiff. The trial and appellate court both agreed that the plaintiff had failed to make a prima facie case that she had protested the sexual harassment of another employee in any manner. The court did note that a claim sufficient to escape summary judgment could have been made if plaintiff had at least shown that she protested to the employer the request to the harassed employee to sign a release or other "oppressive or unreasonable" document. Id. at 556. The plaintiff in Graves simply failed in her proof. That cannot be said here.
{15} Finally, Trans-Lux cites Fox v. MCI Communications Corp., 931 P.2d 857 (Utah 1997), for its apparent holding that internal reporting cannot raise public policy considerations. Trans-Lux fails to cite Ryan v. Dan's Food Stores, Inc., 972 P.2d 395, 408 (Utah 1998), in which the same Utah Supreme Court specifically clarified Fox and held that internal reporting would be sufficient if it "furthers a clear and substantial public policy." Trans-Lux's other cases are best characterized as instances of failed proof, rather than as disapprovals of internal reporting. See, e.g., Prince v. St. John Med. Ctr., 957 P.2d 563 (Okla.Ct.App. 1998).
III. Was There Substantial Evidence Supporting Emotional Distress Damages?
{16} The jury awarded Seitzinger $15,048 in compensatory damages. In closing argument, Seitzinger's counsel asked the jury to award $2,048 in back pay and $13,000 for emotional distress. Trans-Lux argues that "Seitzinger failed to substantiate her claim that she suffered emotional distress." Trans-Lux does not argue that the award for emotional distress was excessive. Rather, its argument is that there is a total failure of proof supporting any award for emotional distress damages.
{17} Trans-Lux admits that Seitzinger provided testimony describing her personal emotional reaction to the termination. Trans-Lux does not argue that Seitzinger's testimony should be disbelieved, rather it argues that her testimony, by itself, is simply not enough to support an award of any damages. The question thus becomes whether New Mexico requires evidence above and beyond the testimony of the Plaintiff herself — expert or non-expert — to corroborate her testimony. The answer to that is: "No."
{18} Relying exclusively on federal case law, Trans-Lux argues that Seitzinger's testimony alone is insufficient to support any grant of damages for emotional distress. Trans-Lux points out that these cases impose a standard of review involving scrupulous analysis of awards or damages for emotional distress. See Price v. City of Charlotte, 93 F.3d 1241, 1251 (4th Cir. 1996). Trans-Lux also notes that other cases simply refuse to affirm damages for mental distress which are not corroborated by medical or other testimony separate from the plaintiff's. See Brady v. Fort Bend County, 145 F.3d 691, 697-98 (5th Cir. 1998); see also Nekolny v. Painter, 653 F.2d 1164, 1172 (7th Cir. 1981).
{19} The short answer to Trans-Lux's argument is that New Mexico has not imposed a requirement of independent corroboration in order to find substantial evidence supporting compensatory damages, including damages for emotional distress. New Mexico case law has consistently held that substantial evidence is "such relevant evidence that a reasonable mind would find adequate to support a conclusion." Landavazo v. Sanchez, 111 N.M. 137, 138, 802 P.2d 1283, 1284 (1990). We are not aware of any New Mexico case which has stated that the testimony of a plaintiff is insufficient by itself to support compensatory damages, including damages for emotional distress. Even the dissent in Jacobs v. Meister, 108 N.M. 488, 502, 775 P.2d 254, 268 (Ct.App. 1989) (Bivins, C.J., concurring in part, and dissenting in part) which urged adoption of an approach similar to that found in Nekolny, acknowledged that medical or other expert testimony is not essential to prove a claim for emotional distress.
{20} Thus we are left with a pure substantial evidence issue. We hold that the evidence, while not strong, is sufficient under our standard of review to support the jury's verdict. Seitzinger testified that she suffered because of the termination. She was out of work for approximately three months afterwards. The experience left her feeling inadequate and wondering whether the episode was her fault. The morning she was fired she felt "crushed." She was called into a meeting with the person she had accused of sexual harassment and his supervisor, and was fired. The atmosphere was very accusatory, making her feel very defensive and awful. She sought counseling from her pastor, her parents, and her husband. Finally, she testified that a year after the termination, "every time they call me in to talk to me and most of the time it's not about my work performance at all, I get that feeling in the pit of my stomach."
{21} We hold this testimony is substantial evidence of emotional distress. The amount of damages attributable to emotional distress — $13,000 — is certainly not "so grossly out of proportion to the injury received as to shock the conscience" of the court. Martinez v. Ponderosa Prods., Inc., 108 N.M. 385, 386, 772 P.2d 1308, 1309 (Ct.App. 1988). We will not second-guess the jury's valuation of the injury.
IV. Propriety of Closing Arguments
{22} Trans-Lux urges us to reverse the judgment because of improper closing argument by counsel for Seitzinger. The most serious of the charges is that counsel for Seitzinger sought to appeal to the racial prejudices of the jury by emphasizing that the victims of sexual harassment were "American children," knowing full well that the harasser was a Mexican national. We agree that counsel's arguments were improper; and, in fact, at the hearing for a new trial, Seitzinger's counsel agreed that on reflection his choice of words was unfortunate.
{23} The difficulty with the argument, however, is that Trans-Lux failed to raise any objections to any statements made during closing argument. Thus, under our case law, Trans-Lux simply has not preserved the issue for review. Lopez v. Southwest Cmty. Health Servs., 114 N.M. 2, 833 P.2d 1183 (Ct.App. 1992). Such failure to object during closing arguments precludes appellate review. Id. at 8, 833 P.2d at 1189.Hunter v. Kenney, 77 N.M. 336, 340, 422 P.2d 623, 625 (1967) andMcCauley v. Ray, 80 N.M. 171, 178, 453 P.2d 192, 199 (1968).
{24} Recognizing that it made no objection to the closing, Trans-Lux urges us to apply the "rule" of Griego v. Conwell, 54 N.M. 287, 291-92, 222 P.2d 606, 608-09 (1950), where in dictum, our Supreme Court observed that errors in summation could reach a point requiring a new trial even in the absence of timely objection. In Grammer v. Kohlhaas Tank Equip. Co., 93 N.M. 685, 604 P.2d 823 (Ct.App. 1979), we characterized the Griego rule as one of last resort not to be applied unless "we are satisfied that the argument presented to the jury was so flagrant and glaring in fault and wrongdoing as to leave the bounds of ethical conduct." Id. at 693, 604 P.2d at 831. We do not believe that counsel's argument exceeded the bounds of ethical conduct requiring reversal and a new trial.
{25} The statements of primary concern involve counsel's asserted emphasis on the involvement of young American girls. In order to provide context for our discussion, we quote the statements made by counsel and relied upon by Trans-Lux.
That is why punitive damages should be awarded in this case, because they don't get it. They put him right back in close quarters with vulnerable children who cannot consent to anything, ladies and gentlemen. They are not permitted to consent to anything because they are kids, but they don't get. That, Oscar didn't get.
Now, Mr. Sanchez was right again, okay. He was right in his analysis of what was and was not sexual harassment, and he said that a child can't consent. Thank you, but he didn't tell Oscar. A child in America may not consent to inappropriate touching.
The challenge to my opponent is to explain this to you and explain why when a man fundamentally doesn't understand American kids, why they put him right back in front of them, if you will, the temptation. The company hasn't taken the time to explain this to Oscar. They haven't done it yet to the minute, so how are they going to get it? They are going to get it when you award substantial punitive damages against him. They are going to know that you are the public conscience. It's wrong.
They could have trained him. They could have supervised him properly. Don't misunderstand me. He is wrong, okay. He is flat dead wrong in the way he acts, but if this company embraces him, well, more power to him. This is still the United States, but don't put him right back in the room with kids. That's wrong. That's exactly what they did. Close contact with high school girls, bingo. They could have demoted him under the sexual harassment policy. They could have transferred him. They could have done a lot of things. They didn't do any of those.
In the context of this case, we cannot say these statements are so inflammatory as to require a new trial. We do note that Trans-Lux also complains that Seitzinger's counsel "peppered" his cross-examination of Lucero and other of its witnesses with references to "American children." We also note that throughout the trial Trans-Lux did not object to any of these questions or characterizations. Thus, Trans-Lux failed to preserve any objections it might have had to this usage. In addition, the lack of objection to the questions makes it easier to understand why counsel for Seitzinger felt it was proper to make the same point in closing. Had objection been raised earlier, the problem could have been addressed. It was not, and it is simply too late to make the objection now.
{26} Trans-Lux also asserts that counsel for Seitzinger improperly argued by injecting his own opinions in closing argument. Once again, Trans-Lux failed to object to any of these statements at trial and has waived any error they might represent. Again, we do not believe these statements are beyond the bounds of ethical conduct and do not require reversal absent objection. We further note that while some of counsel's statements include expressions of personal opinion, none of them is based on assertion of personal knowledge. That is an important distinction because counsel was not purporting to insert new information into the proceedings. Thus, while we can generally say it is not proper for counsel to say "I don't think he was telling you the truth," it is not an inappropriate argument for counsel to assert in more neutral tones that a witness was not telling the truth. These statements of counsel, while unfortunate and in-artful, do not shake our confidence in the validity of the jury's deliberations.
"I don't think he was telling you the truth." "I would like to come into the case from the point of view of the children because it seems to me that their testimony is the most reliable in this case and the most understandable." "I think Nick is biased." "I think Oscar needs some help, and I think they should have structured his environment a lot better than they did."
V. Was the Issue of Punitive Damages Properly Submitted to the Jury?
{27} Trans-Lux contends the trial court made a mistake when it submitted the question of punitive damages to the jury because it applied the wrong legal standard and there was no evidence of culpable conduct related to the firing itself. We disagree.
A. Legal Standard
{28} Trans-Lux moved for a directed verdict on the issue of punitive damages at the close of evidence. In ruling on the motion, the trial court noted that retaliatory discharge is an intentional tort. It went on to rule that Plaintiff's ability to satisfy the elements of retaliatory discharge was sufficient in and of itself to allow instructing the jury on punitive damages.
{29} Trans-Lux argues that under recent New Mexico case law, punitive damages in retaliatory discharge cases should not be presumed. Rather, as in other intentional tort cases, conduct sufficient to impose liability for the tort may not be sufficient to merit punitive damages. Trans-Lux cites our opinion in Teague-Strebeck Motors, Inc. v. Chrysler Ins. Co., 1999-NMCA-109, 127 N.M. 603, 985 P.2d 1183, for the proposition that New Mexico requires the "presence of aggravated conduct beyond that necessary to establish the basic cause of action in order to impose punitive damages." Id. ¶ 78; see also Allsup's Convenience Stores, Inc. v. North River Ins. Co., 1999-NMSC-006, ¶ 53, 127 N.M. 1, 976 P.2d 1 ("Liability and the existence of compensatory damages are an adequate basis for punitives, if there coexists a `culpable mental state' indivisible from the conduct constituting liability.") (citations omitted).
{30} Trans-Lux also cites a number of cases from other states holding that the mere existence of a retaliatory discharge will not automatically give rise to a right to punitive damages. See Jackson v. Bunge Corp., 40 F.3d 239, 246 (7th Cir. 1994); Dunlop Tire Corp. v. Allen, 725 So.2d 960, 968 (Ala. 1998); Willard v. Paracelsus Health Care Corp., 681 So.2d 539, 543 (Miss. 1996); Mace v. Charleston Area Med. Ctr. Found., Inc., 422 S.E.2d 624, 634 (W.Va. 1992).
{31} In response, Seitzinger refers us to the Supreme Court's observation in Rhein v. ADT Auto., Inc., 1996-NMSC-066, ¶ 30, 122 N.M. 646, 930 P.2d 783 ("Plaintiffs are correct in their assertion that punitive damages are allowable in all retaliatory discharge cases."). The Court in Rhein noted that retaliatory discharge is an intentional tort and observed that, without punitive damages, there might be little incentive to employers to engage in right conduct. Id.
{32} We do not need to decide whether the approach we elucidated inTeague-Strebeck Motors, Inc. applies in retaliatory discharge cases. We assume, without deciding, that our case law requiring more than proof of the basic cause of action applies to retaliatory discharge cases. Given that assumption, the trial court erred. However, we believe the error was harmless in this case. Our review of the evidence convinces us there was sufficient evidence of a culpable mental state to support giving the punitive damages instruction. In re Estate of Heeter, 113 N.M. 691, 695, 831 P.2d 990, 994 (Ct.App. 1992) ("On appeal, error will not be corrected if it will not change the result.").
B. Relevant Evidence
{33} Trans-Lux argues there is no evidence to support any willfulness, wantonness, bad faith, or maliciousness in connection with the firing itself. Trans-Lux's theory is based on the assertion that the evidence adduced at trial concerning the particular sexual harassment Seitzinger reported and Trans-Lux's response to the revelations of sexual harassment are irrelevant to the retaliatory discharge question. We disagree with Trans-Lux's basic proposition.
{34} Trans-Lux's position is similar to the position of the defendant in Rhein. In Rhein, two employees of a paint and body shop sued their employer. 1996-NMSC-066, ¶ 1. One asserted that he had been fired because he reported safety violations to the Department of Occupational Health and Safety, the other because he was planning to file a worker's compensation claim for injuries resulting from the same violations. Id. Much of the testimony during trial apparently revolved around the safety violations themselves. The defendant in Rhein argued to the trial court and the Supreme Court, that the OSHA violations were not relevant to the discharge claims as such. The trial court apparently agreed with the defendant. Id. ¶ 20 n. 2. The Supreme Court rejected the defendant's assertion saying, "We cannot agree with the trial court that evidence of OSHA violations is irrelevant to Plaintiffs' claim of retaliatory discharge." Id. The Supreme Court's approach answers Trans-Lux's argument.
{35} Here, the impetus for the report which the jury found led to Seitzinger's termination was information received by Seitzinger of improper conduct by her supervisor with the teenage female employees of the theater. The nature of the evidence proving or disproving the allegations and the employer's response to the substance of the allegations provide context for Plaintiff's complaint. It also provides context for measuring Trans-Lux's response to the reports of sexual harassment. Seitzinger's theory at trial was that the evidence of sexual harassment by an adult supervisor of teenage girls was strong and that the response including her termination — was entirely improper, thus providing proof of Trans-Lux's willfulness and culpable state of mind. In short, Seitzinger argues that, rather than acting substantively to correct a real problem, Trans-Lux instead fired her and others who brought the problem to management's attention. This is a proper and rational theory of litigation for Plaintiff in this case.
{36} Reviewing the evidence in the light most favorable in support of the verdict reveals the following. Two of the teenage employees testified concerning their own experiences with Lucero. One of the girls testified Lucero would ask for hugs. The other testified to hugging and kisses on the cheek. The same girl testified that Lucero would "grab . . . and pull" her so she would have to "bend down." She also testified Lucero would rub against her in the wrong places including her "back side" and that he would kiss her on the lips and blow kisses to her. The witness also testified that at work Lucero discussed his "genital area" and his sexual interactions with his wife. She further testified that she had stated a desire to speak Spanish better. In response, Lucero inquired "Do you have any Mexican in you?" When the girl said she did not, Lucero stated "Do you want some?" At one point, Lucero had physically pinned her against the wall of the theater. This particular incident was witnessed by one of the male employees of the theater. She further testified she was intimidated and offended by Lucero and that his actions interfered with her ability to do her job. She stated she was afraid that if she said something she would get reprimanded. The other female witness testified to seeing Lucero's interaction with her female co-workers, as well as experiencing her own encounters with him. Both girls testified Lucero had pet names for some of the female employees, including "sweetie," "cupcake," and "brat."
{37} There was testimony that these actions of Lucero were reported by the girls to Plaintiff and to another manager, Amy Barbee. The report reached the corporate structure above the theater managers through Amy Barbee. Trans-Lux conducted an investigation of the report consisting of interviews with two of the young female employees, one of the male employees, Amy Barbee, Plaintiff, and Lucero. The young employees described the above incidents to a panel consisting of the vice-president of Trans-Lux, a human relations manager from Connecticut, a local human relations representative, and the district operations manager of Trans-Lux Theaters in the Santa Fe area. The vice-president — and the father of one of the complaining girls — testified at trial that he and the other members of the panel who conducted the interviews felt Lucero had not been truthful with the panel when he denied touching the girls as they had described.
{38} Despite the panel's feeling that Lucero had not been truthful, the human relations manager testified at trial that she thought the atmosphere at the theater was friendly.
{39} The panel issued Lucero a warning which was placed in his file. He did not receive any penalty in terms of pay or leave, although he was assigned away from the Grand Illusion Theater for a period of time.
{40} Two months later, Lucero participated in terminating Seitzinger from her position. The termination was ostensibly based on infractions of work rules by Seitzinger, including sending a subordinate employee on a personal errand, taking an unauthorized personal loan from petty cash, and improperly destroying product. Seitzinger presented testimony in response that the progressive discipline policy which was in effect and normally followed was not followed in her case, and that Lucero himself had engaged in all of the activities which ostensibly formed the basis for her termination. Trans-Lux does not argue there was no question of fact whether Trans-Lux's stated reasons for terminating Seitzinger were pretextual, and, in any event, the jury clearly decided the issue against Trans-Lux. Thus, there is no need to recite the testimony in full.
{41} Nick Sanchez, Trans-Lux's district operations manager and one of the persons on the investigation team, recommended terminating Plaintiff solely on the basis of factual allegations made by Lucero. He did not seek verification or explanation from Seitzinger before he recommended her termination. During cross-examination, it was revealed that Sanchez had previously been fired because of accusations of sexual harassment made against him, and that he had filed his own retaliatory discharge claim against that employer seeking compensatory and punitive damages.
{42} There was further testimony that one of the girls who testified at the investigation, a long-time employee, was later terminated one week before she was to leave for college for a minor violation of rules.
{43} A rational jury could review this sequence of events and determine that Trans-Lux essentially ignored the strong evidence of sexual harassment by one of its managers of its teenage female employees. A rational jury could also conclude that, instead of acting to remedy the situation, Trans-Lux decided to terminate some of the persons responsible for bringing the allegations to the attention of the corporate structure. That rational view of the evidence would support a conclusion that Trans-Lux management acted willfully, wantonly, and with a sufficiently culpable state of mind to merit punishment in the form of punitive damages. Thus, it was not error for the trial court to give a punitive damages instruction to the jury.
VI. Is the Punitive Damage Award Excessive?
{44} Trans-Lux argues the punitive damage award is "unquestionably excessive." The argument is based on Trans-Lux's application of the three factor evaluative framework of BMW of North America, Inc. v. Gore, 517 U.S. 559, 591 (1996) and — in language more tailored to New Mexico law — that the award was the result of jury passion and prejudice. We disagree.
A. Standard of Review
{45} New Mexico has traditionally afforded latitude to juries in setting punitive damage awards if the issue is properly submitted.Weidler, 1998-NMCA-021, ¶¶ 45, 50 (refusing to hold that the "jury acted improperly in exercising its community judgment" in setting punitive damage award in wrongful discharge case and noting that "[t]his Court will rarely disturb a punitive damages award"); Chavez-Rey v. Miller, 99 N.M. 377, 379, 658 P.2d 452, 454 (Ct.App. 1982) (noting that the amount of punitive damages "is left to the sound discretion of the jury based on the nature of the wrong, [and] the circumstances of each case"). We have already determined the issue of punitive damages was properly submitted to the jury. Our task now is to review the size of the award.
{46} The ultimate question on appeal is whether the punitive damages award is excessive in light of the evidence found in the record. Whether a damage award is excessive is a question of law. Richardson v. Rutherford, 109 N.M. 495, 503, 787 P.2d 414, 422 (1990); Sandoval v. Chrysler Corp., 1998-NMCA-085, ¶ 14, 125 N.M. 292, 960 P.2d 834. A determination of excessiveness flows from two distinct but very closely related inquiries. First, whether viewed in the light most favorable to the verdict there is substantial evidence supporting the jury verdict; and, second, whether the verdict evinces passion and prejudice. The concept of passion and prejudice includes notions of partiality, sympathy, undue influence, and corrupt motives or causes. Richardson, 109 N.M. at 503, 787 P.2d at 422; Hall v. Stiles, 57 N.M. 281, 285, 258 P.2d 386, 389 (1953). We are counseled not to disturb jury damage awards except in extreme cases. Id. Thus, a finding of lack of support in the evidence for the award does not necessarily require a determination that passion and prejudice infected the verdict.Richardson, 109 N.M. at 503, 787 P.2d at 422. A lack of support in the evidence still allows use of the remittitur device; while a finding of passion and prejudice requires a new trial. Id.
{47} Earlier this year, the United States Supreme Court held that the federal circuit courts of appeal should apply a de novo standard of review when considering appeals from trial court rulings refusing to find punitive damage awards excessive under the United States Constitution.Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 121 S.Ct. 1678 (2001). Of great relevance to this case, the Court held that the "jury's award of punitive damages does not constitute a finding of `fact'" and therefore de novo review does not implicate Seventh Amendment concerns.Id. at 1686. As a result, the Cooper Industries, Inc. standard accords no deference to the jury's decision on the amount of punitive damages. In contrast, New Mexico recognizes that juries may be better situated to answer the question of what encompasses an appropriate punitive damage award in a particular case. Thus, our case law requires courts to provide reasonable deference to the jury's verdict. As such, our approach is structurally different.
{48} Trans-Lux urges us to accept and adopt the Cooper Industries, Inc. approach. We decline the invitation because New Mexico has a well-developed, familiar, and successful standard of review which we are loathe to discard absent some compelling reason to do so. We do not interpret Cooper Industries, Inc. to impose de novo review as a matter of federal constitutional imperative. Rather, it appears to be an appellate procedural option for the federal courts. See Johnson v. Fankell, 520 U.S. 911, 916 (1997). We are thus free to apply our own standard as a matter of constitutional law. Furthermore, New Mexico's standard treats the ultimate question of excessiveness as an issue of law. As such, our standard serves the Cooper Industries, Inc. normative goals of providing content to the notion of excessiveness and ensuring stable control of the legal principles at work.
B. Evidentiary Support BMW v. Gore Factors
{49} The first review factor under the Supreme Court's Gore decision is the degree of reprehensibility of the conduct. Gore, 517 U.S. at 575. This factor mirrors the inquiry into the nature of the wrong and any aggravating circumstances found in New Mexico case law. Green Tree Acceptance, Inc. v. Layton, 108 N.M. 171, 174, 769 P.2d 84, 87 (1989). This factor requires appraisal of the evidence presented at trial in the light most favorable to the verdict. The majority of the evidence presented at trial has already been outlined above. The jury could have found based on that evidence that: (1) the report of sexual harassment had a basis in fact and Trans-Lux management knew it, (2) Trans-Lux reacted by firing persons who reported the harassment rather than by attempting to fix the problem, or (3) Trans-Lux was willing to create false reasons to fire Seitzinger and others who reported the problem.
{50} Given our strong societal concern about and condemnation of sexual harassment in the work place, these factors would be sufficient by themselves to support a conclusion that Trans-Lux acted willfully and wantonly. When the age of female employees is factored in, the matter becomes that much more serious and aggravated. The jury could reasonably have concluded that Trans-Lux flagrantly flouted state and national policy against sexual harassment and that Seitzinger's firing was indicative of a larger problem in Trans-Lux's attitude toward that policy. We cannot say that it would be improper for the jury to use its punitive damage award to impress on Trans-Lux the impropriety of its reaction to credible reports of sexual harassment. Rather, it would be more accurate to say that the jury had the duty to exercise its community judgment appropriately.
{51} Trans-Lux also argues that there is no evidence of any pattern of misconduct by Trans-Lux. In our view, Trans-Lux interprets the evidence too narrowly. Apart from Seitzinger, there is evidence that one of the young female employees who testified at the investigation was later terminated under questionable circumstances. In addition, another manager of a Trans-Lux theater in Colorado testified that a few months after Seitzinger's termination, she reported that Lucero was sexually harassing her employees, and she was terminated within two weeks of her report. This testimony came in without objection by Trans-Lux, and it could have been used by the jury to find a pattern of retaliatory discharge by Trans-Lux.
{52} The view of the evidence we articulate above is sufficient to respond to Trans-Lux's arguments that the jury verdict was the result of passion and prejudice. There was ample room for the jury to demonstrate its disapproval of Trans-Lux's behavior. We are not impressed by the fact that the jury awarded more punitive damages than Seitzinger's attorney requested. The amount of damages in most circumstances is the sole province of the jury. See Hall, 57 N.M. at 285, 258 P.2d at 389. That Plaintiff's counsel underestimated the community judgment appropriate here is not relevant to the issues of excessiveness.
{53} The second Gore factor is the ratio of punitives to compensatory damages. Here the ratio is twenty-six to one. We generally agree the ratio is high. But, is it too high? Trans-Lux notes that no New Mexico employment termination case has upheld a punitive damage ratio of this magnitude. Trans-Lux also reminds us that in Weidler we stated that, "if the damages are significant and the injury not hard to detect, the ratio of punitive damages to the harm generally should not exceed ten to one."Id. ¶ 48.
{54} Trans-Lux's observations are accurate as far as they go, but they do not resolve the issue. The United States Supreme Court observed inGore that "it is not possible to draw a mathematical bright line between the constitutionally acceptable and the constitutionally unacceptable." 517 U.S. at 560. Context and circumstances must be taken into account. There will be cases, for example, where the harm likely to result from unchecked activity will be more important than the harm actually incurred by a particular plaintiff. Id. at 581; Garcia v. Coffman, 1997-NMCA-092, ¶¶ 2, 7-8, 124 N.M. 12, 946 P.2d 216 (upholding a $50,000 punitive damage award based on improper treatment and billing practices of chiropractor when plaintiff was awarded nominal damages of $1). Cases which implicate health and safety may in certain circumstances justify a higher ratio than the presumptively acceptable standard of ten to one. Weidler, 1998-NMCA-021, ¶ 48.
{55} In our view, given the strong public policy against sexual harassment in the work place and the inappropriateness of Trans-Lux's response, we cannot say as a matter of law that the ratio is too high. Certainly this award will stand as an example to this employer and others that reports of sexual harassment should be taken seriously, and that those reporting sexual harassment should not suffer because of their report.
CONCLUSION
{56} Finding no error, we affirm the jury verdict.
{57} IT IS SO ORDERED.
________________________________ MICHAEL D. BUSTAMANTE, Judge
WE CONCUR: ________________________________ JONATHAN B. SUTIN, Judge ________________________________ CYNTHIA A. FRY, Judge