Wednesday, November 2, 2016

2d Circuit certifies City punitive damages issue to State Court of Appeals

When the New York City Council passed its own civil rights law, it wanted broader protections against employment discrimination than provided by Title VII. The question in this case is whether the City law's punitive damages standard is co-terminus with Title VII, or whether plaintiffs under the City law may recover them even without proof that the employer acted in reckless or wanton disregard of the civil rights laws.

The case is Chauca v. Abraham, decided on November 1. I argued the appeal. Anne Donnelly Bush tried the case in the Eastern District of New York, convincing a jury that the defendant terminated plaintiff's employment because of her pregnancy. At trial, the judge declined to charge the jury on punitive damages on the City law claim, reasoning that, even if the employer discriminated against plaintiff, there was no evidence that the employer acted in reckless disregard of plaintiff's civil rights. In other words, the district judge applied the federal standard. Chauca argues that the federal standard does not apply to City law claims.

Chauca prevailed at trial because she was not allowed to return to work after she had a baby. Her less senior co-workers were able to keep their jobs. Plaintiff's boss testified that he did not return her to work because she had filed an EEOC charge against her employer. The jury gave Chauca $60,500 in damages.

The Court of Appeals (Katzmann, Sack and Hall) cannot decide the punitive damages issue just yet. The Court says that no binding state court ruling has definitively resolved what legal standard governs punitive damages claims under the City law.  Chauca argued that the City law presumes that discrimination victims are entitled to a punitive damages jury charge even without evidence that the discrimination was wanton and reckless. She grounds that argument in statutory construction and the City Council's directive that courts liberally apply the City law. Defendant notes in response that the Second Circuit in 2001 held that punitive damages claims are governed by the Title VII standard. But the Court of Appeals wonders whether that case, Farias, remains good law after the City Council said in 2005 that courts were not liberally applying the City law.

What does the Second Circuit do when it has an unresolved issue of state law? It can certify that issue to the state Court of Appeals, which presumably knows more about state law than federal judges do. That is what the Second Circuit does here. The issue is sent to the state's highest court to issue a definitive ruling. When that happens, the case returns to the Second Circuit to resolve the appeal once and for all, benefiting from the state Court of Appeals' statutory interpretation.

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