Reprehensible Conduct

By John R. Byrne

Curious about what level of racial discrimination will give rise to a punitive damages award? Look no further than the Eleventh Circuit's recent decision in Faulk v. Dimerco Express USA Corp. The jury awarded Faulk $390,000 in compensatory damages and a whopping $3,000,000 in punitive damages for Dimerco withdrawing his job offer when Dimerco's president, Herbert Liou, discovered Faulk was black. But there was more to it than just the withdrawal of the offer.

• When Liou was interviewing for the president position with the company's founder, one of his proposals was “[h]iring Caucasian Sales & Marketing Manager/VP in LAX/NYC respectively";
• At trial, Liou testified that Dimerco needed “Caucasian” managers to “attract the Caucasian market";
• At trial, another Dimerco employee testified that Liou told her that "his preference was “Caucasian, young, white men” because “they were . . . work horses";
• Later, that same Dimerco employee emailed Liou, noting that “it’s discriminating to search for [a] candidate based on race." Liou's proposed response, which he actually sent to the company's director of compliance for review, was that Dimerco "is focusing on [the] Caucasian Market." The director's response to Liou (which proved somewhat prescient): "[i]f [you] put[] in writing that you want a specific race . . . , [b]oth you and the company are guilty of discrimination and if we ever get a legal complaint, these emails will result in a guilty verdict and large damage award.” 

Writing for the Court, Judge Pryor described Dimerco's conduct as "reprehensible" and affirmed the punitive damages award, reasoning that it wasn't constitutionally excessive.

The opinion is also worth a read for how the district judge (and later the Eleventh) handled inappropriate arguments made by Faulk's attorney during opening and closing. The district judge, Judge Michael Lawrence Brown out of Northern District of Georgia, reprimanded the attorney in real time but didn't issue a requested curative instruction or grant a new trial. The Eleventh Circuit held the trial judge acted within his discretion. That seems right. I feel like curative instructions can sometimes make matters worse in the "don't think of a pink elephant" sense. Opinion here.