Lois E. Jenson, v. Eveleth Taconite Company
UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
130 F.3d 1287
December 5, 1997, Filed
JUDGES: Before McMILLIAN, FLOYD R. GIBSON and LAY, Circuit Judges.
OPINION BY: LAY
[*1290] LAY, Circuit Judge.
This case has a long, tortured, and unfortunate history. In August 1988, Lois Jenson and Patricia Kosmach filed a class action suit against Eveleth Mines 1 alleging sex discrimination in violation of Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000e-2, and the Minnesota Human Rights Act (MHRA), Minn. Stat. § 363.03, subd. 1(2). Three years later, the district court certified a class of plaintiffs that includes those who have been employed at Eveleth Mines in Eveleth, Minnesota, after December 30, 1983.
On May 13, 1993, the district court found Eveleth Mines liable on plaintiffs' classwide claims of (1) sex discrimination in promotions to the position of "step-up foreman" and foreman, and (2) sexual harassment. Jenson v. Eveleth Taco-nite Co., 824 F. Supp. 847, 889 (D. Minn. 1993) (Jenson II). 3 On July 29, 1993, in accordance with 42 U.S.C. § 2000e-5(f)(5) and Federal Rule of Civil Procedure 53, the court appointed a Special Master to consider the compensatory damages and punitive damages claims under the MHRA raised by sixteen female employees of Eveleth Mines. 4 The compensatory damages plaintiffs sought included back pay, front pay, and damages for past and future mental anguish
The MHRA does not, however, define mental anguish. In his Report, the Special Master said mental anguish includes mental suffering caused by painful emotions such as indignation, wounded pride, shame, public humiliation and des-pair. . . . The Special Master thereafter allowed extensive discovery, took 7469 pages of testimony during a seven-week trial, and issued a 416-page Report and Recommendation. The Special Master awarded damages for mental anguish to various members of the class. 5
Plaintiffs thereafter filed objections to the Special Master's Report. The district court affirmed the Special Master's Report and Recommendation. This appeal followed.
On appeal, the plaintiffs generally attack the analysis and rationale the Special Master used in awarding damages. Plaintiffs also raise individual claims as to constructive discharge, the statute of limitations, whether one claim has survived one of the plaintiff's death, and the Special Master's failure to award punitive damages. We address these claims separately, infra. Plaintiffs assert the damages awards do not make the women whole and are totally inadequate and "shocking." We share plaintiffs' concern regarding the inadequacy of the damages. We are most concerned, however, with the Special Master's erroneous application of legal principles governing the award, and his restrictive rulings limiting the testimony of plaintiffs' expert witnesses. Therefore, we focus our analysis on these legal errors.
Although the defendant does not question liability on appeal, we briefly mention it for historical relevance to our review of the award of compensatory damages and the denial of punitive damages. Any fair reading of the record requires this court to acknowledge that the sexual harassment conducted against the member class, individually and as a whole, is, to say the least, egregious. In certifying the class, Judge Rosenbaum summarized the preliminary evidence as follows:
Sexually explicit graffiti and posters were found on the walls and in lunchroom areas, tool rooms, lockers, desks, and offices. Such material was found in women's vehicles, on elevators, in women's restrooms, in inter-office mail, and in locked company bulletin boards.
Women reported incidents of unwelcome touching, including kissing, pinching, and grabbing. Women reported offensive language directed at individuals as well as frequent "generic" comments that women did not belong in the mines, kept jobs from men, and belonged home with their children.
Judge Kyle, in finding liability, held that "Eveleth Mines engaged in a pattern or practice of maintaining [a work] environment sexually hostile to women." Jenson II, 824 F. Supp. at 888. The court found sexual harassment was a "standard operating procedure" at Eveleth Mines. Id. at 888. In finding Eveleth Mines liable for creating or condoning a hostile work environment, the district court found:
sexual harassment at Eveleth Mines was so pervasive that an inference of knowledge ] arises. . . . In addition, many of Eveleth Mines' first-line supervisors had actual knowledge of the harassing behaviors: some foremen participated in them and others worked closely with those who did. Further, management personnel testified that they saw photos and graffiti of a sexual nature.
Judge Kyle made numerous findings regarding the nature of the working environment at Eveleth Mines. He found Eveleth Mines male-dominated in terms of power, position, and atmosphere. Jenson II, 824 F. Supp. at 879. Judge Kyle found that male-focused references to sex and to women as sexual objects created a sexualized work place. Id. These references included graffiti, photos, and cartoons that male employees, including bargaining unit and salaried employees such as foremen, displayed throughout Eveleth Mines. Id. at 879-880. Other references included "verbal statements and language reflecting a sexualized, male-oriented, and anti-female atmosphere." Id. at 880. Some male employees subjected female employees to physical conduct of a sexual nature. In one incident, a male employee pretended to perform oral sex on a sleeping female co-worker. Id. at 880. Other incidents involved men touching women in an objectionable manner. Id. Some women were presented with various sexual materials. Id. Judge Kyle concluded "the presence of sexual graffiti, photos, language and conduct . . . told women that the sex stereotypes reflected in and reinforced by such behavior were part and parcel of the working environment at Eveleth Mines." Id. at 884.
The district court concluded that "Eveleth Mines made no effort [to] eradicate the hostile environment existing within its facilities." Id. at 888. We emphatically reject the Special Master's conclusion in his Report that the fact that the culture of the Iron Range mining industry allowed sexual harassment is a mitigating factor for Eveleth Mines. See Appellants' Addendum at 461. Instead, we find this observation underscores the overall culpability of Eveleth Mines.
The Special Master's report reflects prodigious effort. Nonetheless, the Special Master's written findings contain numerous statements that lead us to question whether the Special Master fairly evaluated the plaintiffs' claims. 8 We make this observation to support our conclusion that on remand, the district court must approach the recorded testimony and any supplemental testimony on a de novo basis.
Our review and vacation of the district court's findings primarily turn on the Special Master's misapplication of legal principles regarding causation and admissibility of expert testimony. We review these conclusions of law de novo. See Pullman-Standard v. Swint, 456 U.S. 273, 290 n.19, 72 L. Ed. 2d 66, 102 S. Ct. 1781 (1982).
In his Report, the Special Master stated that "[a] sexual harassment case based upon a hostile work environment, not quid pro quo, is founded on principles of negligence and conventional rules of civil litigation, including the doctrine of proximate cause, apply." Plaintiffs claim the Special Master misapplied the burden of proof regarding the issue of causation. Confusion about the correct burden of proof set in at the early stages of discovery. Before trial, the defendants sought discovery of the personal background of each of the plaintiffs relating to events that allegedly affected plain-tiffs' emotional well-being. Personal events defendants sought to discover included detailed medical histories, childhood experiences, domestic abuse, abortions, and sexual relationships, etc. The plaintiff class describes this as the "scorched earth" defense.
We would agree that much of the discovery (e.g., domestic abuse, earlier illnesses, and personal relationships, etc.) was not relevant or was so remote in time, that it should not have been allowed. Plaintiffs sought protective orders, but the Special Master denied the requested orders. The Special Master appears to have based this denial, in part, on Eveleth Mines' concession that it had the burden of proof to show plaintiffs' various personal experiences outside of the work environment caused plaintiffs' emotional injuries. The concession arose from defendants' pleading that plaintiffs' injuries were caused by the conduct of "plaintiffs and/or others over whom [Eveleth Mines] had no control
Somehow, and without explanation, between the time of discovery and the time of trial, the Special Master found it was plaintiffs who had the burden to show aggravation of a pre-existing condition, and that under Minnesota law "the damages recoverable are limited to additional injury directly caused by the aggravation." The Special Master observed:
the issues inevitably raised are whether or not the total harm can be apportioned between two or more direct causes, and, if so, the ascertainment of the portion of harm which was caused by each of the direct causes. Both issues pose mixed questions of law and fact, and must be determined on evidence presented, but the evidence may be enhanced by an assumption that if the party bearing the burden of proof fails to produce evidence showing that the total damage is capable of reasonable apportionment between causes the issues will be resolved adversely to that party. If the aggravation of a pre-existing disability or defect issue is raised as a defense, or by the defense as bearing upon reasonable damages, the burden of proof on apportionment rests on defendant. If, however, the issue is raised by plaintiff, the burden of proof rests upon plaintiff. See Marshall v. Galvez, 480 N.W.2d 358, 362 (Minn. Ct. App. 1992). Here, the issue was raised by plaintiffs, and plaintiffs were impressed with the burden of proving that total damage can be reasonably apportioned. Plaintiffs have offered no evidence on this issue, and, consequently, the contention must fail for lack of proof.
In affirming the Special Master, the district court concluded the Special Master did not commit clear error in finding "plaintiffs had raised the question [of aggravation of pre-existing condition] and had not borne the burden of proving that the pre-existing condition and the total damage could be sorted out." Appellants' Addendum at 34-35. In this regard, the district court erred.
It is fundamental that a party pleading a claim or defense has the burden of proof to establish that claim or defense. See Fed. R. Civ. P. 8 (requirements for pleading claims and defenses); Fed. R. Civ. P. 9 (requirements for pleading special matters). Neither the Special Master nor the district court relate how the plaintiffs ever asserted or pled aggravation of a pre-existing condition. Indeed, it appears plaintiffs made no such claim. As such, plaintiffs bear no burden to prove apportionment. Apportionment of damages is akin to an affirmative defense.
Although it is not clear, it appears the Special Master reasoned that plaintiffs failed to show the extent of harm caused by Eveleth Mines in contrast to past emotional harm caused by other emotional experiences. We can think of no other purpose for the Special Master's exhaustive discussion of plaintiffs' personal backgrounds. On this basis, the Special Master appears to have reduced the damages awarded to the plaintiffs on the ground that plaintiffs failed to apportion (i.e., separate) their overall harm. Under the record presented, it is difficult to understand why plaintiffs would attempt to urge any apportionment of damages. More importantly, they did not have the duty to do so.
Obviously, if this was the Special Master's rationale, it misapplies the doctrine of apportionment. Assuming the doctrine is applicable, it is the defendant who must prove that any damage caused by other factors was divisible, and if so, what portion of damages the defendant caused.
Plaintiffs argue that Eveleth Mines must take the plaintiffs as it found them. Plaintiffs' position arises from Eveleth Mines' failure to prove that plaintiffs' injuries were an aggravation of a pre-existing condition.
The "eggshell skull" principle plaintiffs assert is simply another way of stating that foreseeability is not an element of proximate cause. See Christianson v. Chicago, St. Paul, Minneapolis & Omaha Ry. Co., 67 Minn. 94, 69 N.W. 640, 641 (Minn. 1896). In Minnesota, it is well-settled that a tortfeasor is liable for all of its natural and proximate con-sequences. . . .
In conclusion, we find that by whatever synergistic reasoning utilized, the Special Master did not apply proper principles of causation to plaintiffs' claims of emotional harm. We believe the Special Master's erroneous approach played a significant and unfortunate role in limiting plaintiffs' damages. Moreover, as we now discuss, we find the court unduly limited the testimony and opinion evidence of plaintiffs' experts relating to that damage.
II. Expert Testimony
The Special Master excluded the testimony of plaintiffs' expert witnesses regarding causation.
Without need to further elaborate on the record, we find the trial court erred in restricting and rejecting the testimony of these expert witnesses. The Special Master made two questionable observations which we believe are at the root of his rulings excluding the opinions of plaintiffs' expert witnesses. First, the court found: "There is, therefore, [*1297] no scientifically developed psychiatric model or procedure for determining whether a particular stress caused a particular symptom or mental state." Appellants' Addendum at 83. Second, the court, perhaps misled by its erroneous application of principles of causation, found:
The evidence establishes that, while working at Eveleth Mines and previously, most of the claimants were subjected to outside stresses or trauma, or suffered from emotional problems, which could have had psychological impact and caused symptomatology. No one advanced a validated theory which furnishes a scientific basis for distinguishing be-tween the causal effect of multiple psychological stresses or trauma, or for assigning relative impact or degree of impact to different trauma or stresses. This Court is persuaded by unanimous testimony of psychiatrists and psychologists, called by both sides, that there is no scientific method for determining the cause of a mental disorder or for allocating proportionate cause when more than one possible cause exists.
The Special Master rejected all opinion evidence proffered by the plaintiffs' experts. Ironically, the Special Master, notwithstanding the above observation, generally accepted the opinions of the expert witnesses produced by the defendants. The imbalance in its rulings is difficult to explain.
The Special Master viewed the psychiatric proof as to causation of mental harm and prognosis as being incompetent. Without the ability to offer expert testimony regarding causation, the plaintiffs were denied the ability to meet the bur-den of proof assigned to them in regard to their emotional damage.
Upon a reading of the record, ineluctably we are led to conclude that the Special Master's exclusion of this testimony did not rest upon any recognized area of discretion. The record strongly suggests the Special Master foreclosed consideration of the evidence based on his own preconceived notions relating to psychiatric proof. The Special Master did not attempt to hide his hostility toward psychological evidence in sexual harassment claims, stating: "'Experts' . . . know no more than judges about what causes mental changes -- which is to say that they know almost nothing."
. . .
The record indicates the opinion evidence offered by the plaintiffs' expert witnesses was thorough and meticulously presented. The methodology for arriving at their opinions was laid out clearly by each witness. The key question in this damages phase of the trial was the causal link between the actions of the defendants and the claimed emotional injuries of the plaintiffs. The expert testimony was therefore without doubt relevant to the issue before the court.
For these reasons, we find that the overall testimony was erroneously excluded under Rule 702 of the Federal Rules of Evidence and established precedents of this court.
In summary, our review of the record leads us to conclude that the testimony of plaintiff class' expert witnesses, who were well-qualified, should have been admitted into evidence. In doing so and in our remand, we emphasize that the weight and credibility of this evidence is left to the trier of fact, which in this case is the district court. However, there is little doubt that exclusion of such evidentiary proof could appreciably affect the damages awarded to the plaintiff class.
We now turn to the other claims raised on appeal by the plaintiff class.
III. Constructive Discharge Claims
During the damage phase of this litigation, plaintiffs Alaspa, Anderson and Jenson sought compensatory damages in the form of lost wages. The Special Master treated these damages claims as claims of constructive discharge. The Special Master concluded: (1) plaintiffs failed to prove the working conditions and Eveleth Mines' conduct actually caused them to resign; and (2) plaintiffs' evidence of future lost wages was too speculative to allow recovery. The district court affirmed, without discussion, the Special Master's conclusions of law and findings of fact rendered in connection with these claims. Appellants' Addendum at 44. We reverse and remand this issue to the district court for reconsideration.
We find the Special Master did not apply the appropriate burden-shifting principles in its analysis of the constructive discharge claims. Specifically, the Special Master failed to place the burden of proof on Eveleth Mines to show that the plaintiffs' resignations were not caused by the hostile working environment once the Special Master determined the individual plaintiff had established the requisite subjective element of their hostile environment claim.
. . .
Applying the Franks framework to this case, to make a prima facie case the three plaintiffs have the burden of showing that the working conditions at the mine were so intolerable that they were compelled to resign. The district court already had found that an extremely hostile work environment existed at the mines. See Jenson II, 824 F. Supp. at 887. We believe the district court's findings in Jenson II show that the working conditions at the mines were so hostile as to be intolerable.
. . .
We find the Special Master abrogated his fact-finding duties by refusing to use either Dr. Foster's or Dr. Gunderson's methodology to calculate lost wages. The Special Master did not provide any valid reasons for not using one of the two alternative formulations before it to estimate the plaintiffs' damages.
IV. Punitive Damages
All plaintiffs asserted claims for punitive damages against Eveleth Mines under state law. The MHRA allows a plaintiff to seek punitive damages under Section 549.20 for a violation of the MHRA. The pre-1990 Section 549.20, subd. 1, provided: "Punitive damages shall be allowed in civil actions only upon clear and convincing evidence that the acts of the defendant show a willful indifference to the rights or safety of others." Minn. Stat. § 549.20, subd. 1 (1988).
The Special Master concluded plaintiffs had failed to prove, by clear and convincing evidence, that Eveleth Mines should be held vicariously liable for the acts of its employees. Under Section 549.20, subd. 2, a principal may be held liable for punitive damages based on the acts of its agents if (1) the agent worked in a managerial capacity and acted in the scope of employment, or (2) the principal ratified or approved of the acts of the agent. The Special Master found plaintiffs failed to submit sufficient evidence to identify which managers at Eveleth Mines knew of the discriminatory acts. Appellants' Addendum at 455-56. He also found the foremen who sexually harassed the plaintiffs or who knew of the harassment were not "managerial employees" and therefore Eveleth Mines could not be held vicariously liable for their actions. Id. at 455. We find the Special Master erred as a matter of law by examining the plaintiffs' punitive damages claims under the vicarious liability standard in § 549.20, subd. 2. Given the posture in which the case was presented to the Special Master, we hold the appropriate legal standard for the plaintiffs' punitive damages claims is the direct liability standard of § 549.20, subd. 1.
In Jenson II, the district court found Eveleth Mines violated Title VII and the MHRA by engaging in "a pattern or practice of discriminating against women in promotions to step-up foreman," 824 F. Supp. at 874, and "a pattern or practice of maintaining an environment sexually hostile to women." Id. at 888. This type of systemic discrimination has been defined as:
Employment policies or practices that serve to differentiate or to perpetuate a differentiation in terms or conditions of employment of applicants or employees because of their status as members of a particular group. . . . Systemic discrimination . . . concerns a recurring practice or continuing policy rather than an isolated act of discrimination.
Lindemann & Grossman, Employment Discrimination Law 1142, n.258 (3rd ed. 1996) (quoting 1 Aff. Action Compl. Man. (BNA) § 2:0005.)
Only an employer can commit this type of discrimination. In Jenson II, the district court determined that the wrongful act at issue was not the individual harassing acts of the employees at the mine, but rather Eveleth Mines' pattern and practice of discriminating against women and maintaining a hostile working environment.
The Special Master mistakenly believed plaintiffs had to impute the "wilful indifference" of the supervisory employees to Eveleth Mines. Appellants' Addendum at 454. The district court found that Eveleth Mine had maintained a sexually hostile working environment both before and during the class period, spanning in total eighteen years. 20 Jen-son II, 824 F. Supp. at 877-78, 888. The sexual harassment occurring at the mines was so common, continuous and pervasive that Eveleth Mines knew or should have known of the problems. Id. at 887. In fact, the district court found first-line supervisors had actual knowledge of the harassment. Id.
The district court found that notwithstanding such knowledge, Eveleth Mines took no meaningful action to remedy these problems. 824 F. Supp. at 888. The defendants failed to investigate whether the sexual harassment complaints lodged were indicative of a larger, company-wide problem. Id. at 887. The court also found that Eveleth Mines did not implement a system for handling sexual harassment complaints. Id. Eveleth Mines did not attempt to remove or control the display of sexually offensive visual materials, even though management knew of its existence. Id. Finally, Eveleth Mines never tried to speak with the male employees about what is considered unacceptable con-duct in the workplace. Id. at 888. The district court concluded that "Eveleth Mines failed to take prompt remedial action to alleviate the hostile environment," id., and thereby facilitated the hostile environment. The district court observed: "It is undisputed that, aside from the policy statement in the CBA [collective bargaining agreement], Eveleth Mines has not made any effort to control or prevent, on company-wide basis, acts of sexual harassment." Jenson II, 824 F. Supp. at 888, n.96.
Whether an award of punitive damages is appropriate is, in essence, a factual determination. Therefore, we remand the punitive damages claims for reconsideration under the appropriate legal standard set forth in Section 549.20, subd. 1.
It should be obvious that the callous pattern and practice of sexual harassment engaged in by Eveleth Mines inevitably destroyed the self-esteem of the working women exposed to it. The emotional harm, brought about by this record of human indecency, sought to destroy the human psyche as well as the human spirit of each plaintiff. The humiliation and degradation suffered by these women is irreparable. Although money damage cannot make these women whole or even begin to repair the injury done, it can serve to set a precedent that in the environment of the working place such hostility will not be tolerated.
In view of our rulings, we remand this case to the district court for a trial de novo on the issue of damages. The parties may stipulate as to the use of any testimony previously given. The district court may supplement any testimony given. At this stage, we feel the district court should decide the damage issues and not make further reference to any Special Master. We recognize this places a tremendous burden on the court, but in view of the record, we hesitate to introduce any new fact finder into the case.
In our supervisory role, we make the following observation. Our purpose in making this observation is to express our concern about the inordinate delay encountered by the parties to this case. This case has been pending for almost ten years. The final chapter is yet to be written. No one can expect that justice will be rendered to any of the parties when a final opinion is issued more than ten years after this litigation commenced. Even worse, the judiciary must now try to provide reparation for harm dating back to 1983.
The executive and legislative branches of our government bear some responsibility for this delay. During much of the intervening time, the District of Minnesota was short-handed because of the delayed appointments of two district judges. The problem is a continuing one, from the far past to the present. Much of the responsibility for judicial vacancies is attributable to the political process and the refusal to expedite judicial appointments. This delay only serves to aggravate the litigation crunch Article III judges confront on a daily basis. The ultimate victims of this delayed process are the American people.
Responsibility also lies with the bar whose members are officers of the court. The lawyers in this case delayed its resolution by exercising senseless and irrelevant discovery, and by making endless objections at trial. But "the buck stops here;" the judicial system allowed the lawyers to do what they did. If our goal is to persuade the American people to utilize our courts as little as possible, we have furthered that objective in this case. If justice be our quest, citizens must receive better treatment. The judiciary must somehow afford more efficacious monitoring of delayed cases. We must achieve this goal through action, not just by words.
Upon remand, we require the district court to expedite a new trial. We also implore the parties to sincerely make every effort to resolve their differences.
] JUDGMENT OF DISMISSAL OF PATRICIA S. KOSMACH'S CLAIM IS AFFIRMED.
THE JUDGMENT AWARDING DAMAGES FOR THE PLAINTIFFS IS HEREBY VACATED AND THE CAUSE IS REMANDED FOR A NEW TRIAL ON PLAINTIFFS' COMPENSATORY AND PUNITIVE DAMAGES CLAIMS.