BURNETT v. OCEAN PROPERTIES LTD et al

REPLY to Response to Motion re MOTION for New Trial

D. Me.March 1, 2019

1 13893256.1 UNITED STATES DISTRICT COURT DISTRICT OF MAINE RYAN BURNETT, Plaintiff, v. OCEAN PROPERTIES, LTD., and AMERIPORT, LLC, Defendants. ) ) ) ) ) ) ) ) ) ) ) CASE NO. 2:16-cv-00359-JAW DEFENDANT’S REPLY MEMORANDUM TO PLAINTIFF’S OPPOSITION TO DEFENDANT OCEAN PROPERTIES, LTD’S MOTION FOR NEW TRIAL Defendant Ocean Properties, Ltd. (“OPL”), pursuant to Federal Rules of Civil Procedure 50 and 59 and District of Maine Local Rule7(c), offers this memorandum in reply to Plaintiff’s Opposition.1 It is appropriate for the Court to order a new trial, when the verdict is against the clear weight of the evidence or will result in a clear miscarriage of justice. Colon–Millin v. Sears Roebuck De Puerto Rico, Inc., 455 F.3d 30, 35 (1st Cir.2006) (quoting Ahern v. Scholz, 85 F.3d 774, 780 (1st Cir.1996)). A Rule 59 motion for a new trial is governed by a more lenient standard than a motion for judgment as a matter of law. A. There is a Clear, Reasonable Basis for Excusing Defendants’ Counsel’s Failure to Raise the Jury’s Incompatible Determinations Following Delivery of Its Verdict. In response to its receipt of a note from the jury concerning whether they could answer both Questions 3 and 4 in the affirmative, the Court conveyed a preference to allow them to proceed, but it also implied that, depending on the outcome, the Court and legal counsel for the 1 OPL joins and adopts those portions of AmeriPort, LLC’s separate Reply Memorandum filed in response to Plaintiff’s Opposition to AmeriPort, LLC’s Motion for New Trial, filed on February 5, 2019. Case 2:16-cv-00359-JAW Document 223 Filed 03/01/19 Page 1 of 7 PageID #: 2577 2 13893256.1 parties might well have to give special further consideration to the jury’s determination. In characterizing its position as to how to respond to the question, the Court stated: I think my answer to that is yes. I think they can answer the questions any way they wish to and then we can figure out what to make of it if they answer both questions yes. Tr. Trans. III at 375 (emphasis added). By agreeing with that approach, id., Defendants’ legal counsel was not waiving her objection as much as simply concurring with the Court’s recommended approach – if the jury answered both questions in the affirmative the Court planned to work with the parties to figure out how to process that issue. After the jury returned its verdict, rendering incompatible findings by answering both Questions 3 and 4 in the affirmative, there was no effort by the Court to “figure out what to make of it” and, in fact, the Court did not even reference the issue, immediately following the jury’s initial verdict on liability and compensatory damages. See Tr. Trans. III at 385-387. At that point, the Court’s priority was to move the jury into the punitive damages phase of their deliberations as quickly as possible. What followed was an unfocused, brief exchange with counsel leading up to the jury instructions on punitives. Thus, there was no real consideration of the inconsistent verdicts among the Court and the parties right after the jury returned its answers. At minimum, given the expectation shared by the Court with legal counsel at the time the jury’s initial question was tendered, which was subsequently not acted upon, to Defendants’ detriment, Defendants’ legal counsel’s failure to object and raise the issue before the jury was discharged ought to be excused. The circumstances here are more akin to those in Downs v. Gulf & Western Mfg. Co., Inc., 677 F. Supp. 661, 670-672 (D. Me. 1987), as compared with Toucet v. Maritime Overseas Corp., 991 F.2d 5 (1st Cir. 1993), McIsaac v. Didriksen Fishing Corp., 809 F.2d 129 (1st Cir. 1987) and Merchant v. Ruhle, 740 F.2d 86 (1st Cir. 1984).2 2 Other circuit courts have recognized that if an inconsistency between special verdict answers is noticed prior to the dismissal of the jury, the trial court has the discretion to resubmit the issues to the jury with a Case 2:16-cv-00359-JAW Document 223 Filed 03/01/19 Page 2 of 7 PageID #: 2578 3 13893256.1 B. The Jury’s Findings that OPL was Both a Joint Employer and Integrated Employer Cannot be Reconciled. Because a jury's determinations provide the basis for the ultimate resolution of a dispute, its findings “must be consistent with each other.” 5A Moore's Federal Practice ¶ 49.03[4], at 49– 28 to 49–29 (2d ed. 1986). Here, there is not a view of the case that makes the jury’s answers consistent. The Court’s charging instructions offered jurors two (2) separate formulations with respect to the relationship between OPL and AmeriPort, and the jury found that OPL was both a joint employer alongside AmeriPort, LLC and that they were a single, integrated employer.3 The Court expressed an expectation that, if this transpired, further special consideration of those determinations would follow. They never did. It is factually and legally impossible for OPL to have been both a joint employer with AmeriPort and an integrated employer.4 In his Opposition brief, Plaintiff tries to challenge this request for clarification, see Guidry v. Kem Manufacturing Co., 604 F.2d 320 (5th Cir.1979), whether or not the parties themselves request clarification. If the court elects not to seek clarification from the jury, or if the inconsistency is not noticed until after the jury has been dismissed, the court must take one of two actions. "It is the duty of the court to attempt to harmonize the answers, if it is possible under a fair reading of them." C. Wright & A. Miller, Federal Practice and Procedure Sec. 2510, at 515 (2d ed. 1971). Thus, "[w]here there is a view of the case that makes the jury's answers to special interrogatories consistent, they must be resolved that way." Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 364 (1962); see 5A Moore's, ¶ 49.03, at 49-29 (“When the jury's findings appear to be inconsistent with each other, the Seventh Amendment requires that if there is a view of the case which makes the jury's answers to special interrogatories consistent, the court must adopt that view and enter judgment accordingly.” (footnote omitted)). If there is no way to harmonize the jury's answers, as exists here, the court must order a new trial. 3 Defendants’ trial counsel brought the potential for this issue to the Court’s attention during the charging conference, see Trial Tr. (III) charging conference at 36, in which she asked whether the Court intended to revise Question 3 of the Verdict Form “to say was Ocean Properties, Ltd. integrated or joint employer of Mr. Burnett?” and the Court responded in the negative. After the Court clarified his intended formulation and trial counsel inquired again -- “or joint employers” – the Court responded: No….I’ve done it in two separate instructions. The first involves joint employers. The second involves integrated employment. So I’ll have a question that says four, were Ocean Properties, Ltd., and AmeriPort, LLC, integrated employers of Ryan Burnett; yes or no? All right? Id. Before counsel could respond, the Court proceeded to a discussion of punitive damages instructions (emphasis added). 4 It was admitted that the evidence established that AmeriPort, LLC was Mr. Burnett’s employer. However, there appears to have been no consideration given to the fact that, in addition to the possibility Case 2:16-cv-00359-JAW Document 223 Filed 03/01/19 Page 3 of 7 PageID #: 2579 4 13893256.1 assertion, but offers distinguishable, unpersuasive cases in support of the claim that the jury’s determinations “can be read together consistently.” Perhaps the clearest articulation of the irreconcilability of joint employer and integrated employer status was stated in Arculeo v. On-Site Sales & Marketing, LLC, 425 F. 3d 193 (2d Cir., 2005), where the Court explained: Aggregation of employees under the joint employer doctrine would function quite differently from aggregation of employees under the single employer doctrine. In the single employer context, the court draws the conclusion that, although nominally and technically distinct, several entities are properly seen as a single integrated entity. Accordingly all the employees of the constituent entities are employees of the overarching integrated entity, and all of those employees may be aggregated to determine whether it employs fifteen employees. In contrast, when the circumstances of one employee's employment justify the conclusion that she is being employed jointly by two distinct employers, it does not follow that all the employees of both employers are part of an integrated entity encompassing both. A joint undertaking by two entities with respect to employment may furnish justification for adding to the employees of one employer those employees of another who are jointly employed by the first, but such joint undertaking does not furnish logical justification for adding together all the employees of both employers, unless the circumstances justify the conclusion that all the employees of one are jointly employed by the other. Id. at 199 (emphasis added). Moreover, the “flexible approach” referenced by the Plaintiff from Romano v. U-Haul, 233 F.3d 655 (1st Cir. 2000), was not intended to refer to whether a jury could reasonably find a business to be both an integrated employer and joint employer, as suggested by the Plaintiff, see Plntf’s Opp. Brief at 4. By contrast, the First Circuit was referencing the relative importance of the four factors of the integrated employer test and the particular significance of one of those factors in the overall determination. See Romano, 233 F.3d at 666. Plaintiff also misreads Ashe v. Distribuidora Norma, Inc., 7 F. Supp. 3d 134 (D. P.R. 2014), which fails to support his argument that integrated employers and joint employers “can be of the jury finding that Ocean Properties was “either a joint employer, employer or an integrated employer,” see Trial Tr. (III); charging conference at 38-39, the way the verdict form was structured also permitted the jury to reach inconsistent determinations. Case 2:16-cv-00359-JAW Document 223 Filed 03/01/19 Page 4 of 7 PageID #: 2580 5 13893256.1 read together consistently.” See Plntf’s Opp. Brief at 4. In Ashe, the plaintiff argued that summary judgment should not be entered against any of three separate defendants since sufficient disputed facts existed to show they were acting in unison as a single entity when he was terminated. Id. at 147. In evaluating summary judgment, the Court characterized “the three single entity doctrine tests that have been identified by the First Circuit” for determining when separate legal entities could be considered to be acting in an integrated fashion. Id. at 145-146. Then, denying defendants’ motions, the Court held that determining “the appropriate test to apply to the present case [was] irrelevant,’ because sufficient disputed material facts existed in the records such that all three defendants could “comfortably pass each of [the] three tests.” Id. at 148. In no way can this holding be interpreted to justify the jury’s incompatible determinations. C. The Jury’s Irreconcilable Determinations Prejudiced OPL With Respect to its Punitive Damages Award. The First Circuit has held that not raising the fact of an inconsistent verdict before the jury is discharged does not waive a party's right to a new trial where the inconsistent verdict is not the sole reason a new trial is warranted. See Cool Light Co., Inc. v. GTE Prods. Corp., 973 F.2d 31, 34 n. 4 (1st Cir. 1992) (“Cool Light also urges that GTE is barred from challenging any inconsistency between the special interrogatory answers and the verdict because of its failure to object… As Judge Keeton observed, however, Judge McNaught did not base his grant of a new trial solely on the inconsistency of the special interrogatories and the general verdict. Thus, the waiver rule recognized in this circuit with respect to Rule 49(b) does not apply….”). Here, there are multiple, intertwined reasons the Court should grant the post-trial motions. After its liability determination, the jury reached mutually exclusive determinations on the identity of Mr. Burnett’s employer or employers, and their relationship. The gravity of that defect was magnified when the jury subsequently found, see [DE 179], Question 5, that Mr. Case 2:16-cv-00359-JAW Document 223 Filed 03/01/19 Page 5 of 7 PageID #: 2581 6 13893256.1 Burnett’s “employer” had “more than 500 employees.” Then, based upon a review of the exchanges that occurred during multiple chambers conferences, Trial Tr. (III); chambers conference, at 378-382; charging conference; 37-39, that finding at least partially motivated the Court to offer separate questions5 to the jury as to the Defendants’ liability for punitive damages, which resulted in a duplicative award. That award, indeed, represents the miscarriage of justice at issue as applied to OPL, which followed from the jury’s inconsistent determinations. The docketed Judgment against both Defendants stands at $650,000, subject to reduction either by the Court’s post-trial application of the applicable statutory damage caps, remittitur, or both. However, with respect to OPL in its capacity as a joint employer, the application of statutory damage caps pursuant to the jury’s response to Question 5 cannot stand where there was not an ounce of evidence could be relied upon to establish that it had more than 200 employees. Trial Tr. (I) 43:9-44:3; 127:18-124; 224:7-17; 223:18-234:519; 240:19-20. Moreover, considering OPL as part of an integrated employer is even more preposterous, since the evidence concerning “the number of hotels under the ‘Ocean Properties Hotels Resorts & Affiliates’ marketing umbrella,” the hiring by an unspecified entity of “a hundred additional call center employees,” and general references to several different entities whose names appeared on employment records, taken together, does not infer either “interrelation of operations” or “centralized control of labor relations,” between OPL and AmeriPort. Although where there is a view of the case that makes the jury's answers to special interrogatories consistent, they must be resolved that way, Auwood v. Harry Brandt Booking Office, Inc., 850 F.2d 884, 891 (2d Cir. 1988), in the case at bar, that is not possible. Englehardt 5 There was a recognition that the statutory damages caps differ as between the MHRA and Section 1981(a) if it is determined that an employer has more than 200 employees. Cf. 42 U.S.C. §§ 1981a(b)(3)(C), 3(D), and 5 M.R.S.A. §§ 4613(2)(B)(8)(e)(iii), (e)(iv). Case 2:16-cv-00359-JAW Document 223 Filed 03/01/19 Page 6 of 7 PageID #: 2582 7 13893256.1 v. S.P. Richards Company, Inc., 472 F. 3d 1, 8 n. 2 (1st Cir. 2006) makes clear that “integrated employer” and “joint employer” are factually and legally mutually inconsistent theories. A finding of joint employer necessarily implies the existence of two independent legal entities, which means that for a fair damages award to have been entered against OPL, the jury had to have made a determination on the size of its workforce sufficient to allow the Court to apply the appropriate statutory caps. Even if the Court determines that the jury could have determined on the trial evidence that OPL had more than 15 employees, nothing in the evidence can reasonably support the jury’s determination -- assuming OPL’s status as a joint employer -- that OPL had “more than 500 employees,” as reflected in its response to Question 5. Respectfully submitted this 1st day of March 2019. Respectfully submitted, /s/ Timothy J. Bryant Timothy J. Bryant PRETI, FLAHERTY, BELIVEAU & PACHIOS, LLP One City Center P.O. Box 9546 Portland, ME, 04112-9546 (207) 791-3000 tbryant@preti.com Attorney for the Defendant Ocean Properties, Ltd. Case 2:16-cv-00359-JAW Document 223 Filed 03/01/19 Page 7 of 7 PageID #: 2583