DIVISION XVI -- DAMAGES AND REMEDIES
SUBDIVISION F -- PUNITIVE DAMAGES
[Last updated April 9, 2009]
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XVI. Damages and remedies
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- F. Punitive damages
[Nuclear and Environmental Digest XVI F]
PUNITIVE DAMAGES; IMMUNITY OF MUNICIPALITY
In Collins v. Village of Lynchburg, Ohio , ARB No. 07-079, ALJ No. 2006-SDW-3 (ARB Mar. 30, 2009), the ARB affirmed the ALJ's finding that the Respondent had violated the whistleblower provision of the SDWA where it fired the Complainant two hours after learning that he had called the state EPA office about whether a proper procedure had been followed for a bacteria test for the village's water supply, and the Respondent failed to provide a legitimate, non-discriminatory reason for the firing. The ARB, however, reversed the ALJ's award of punitive damages because, although the SDWA permits exemplary damages, the Respondent was a municipality that was immune from liability for punitive damages. The ARB cited in this regard Newport v. Fact Concerts, Inc. , 453 U.S. 247, 270-271 (1981) (holding that in action brought under 42 U.S.C.A. § 1983, a municipality is immune from punitive damages)
[Nuclear and Environmental Whistleblower Digest XVI F]
PUNITIVE DAMAGES; WHETHER RESPONDENT ACTED WITH RECKLESS DISREGARD FOR THE COMPLAINANT'S RIGHTS
In Collins v. Village of Lynchburg, Ohio , 2006-SDW-3 (ALJ May 8, 2007), the ALJ reviewed legal precedent indicating that, when determining whether to impose exemplary damages, a respondent's state of mind should be analyzed to determine whether the respondent acted in reckless disregard for the complainant's rights, and then whether the respondent engaged in a conscious action in the deliberate disregard of those rights. Based on that criteria, the ALJ recommended an award of $20,000 in punitive damages where the village's mayor immediately fired the Complainant, without investigation or even asking the Complainant's side of the story, after the Complainant called the state EPA to report a concern about testing procedures for the village's water supply. Rather, the mayor's immediate reaction was to seek to have the Complainant criminally investigated for making a false report rather than to conduct his own internal investigation. The ALJ found that the mayor acted with reckless disregard for the law and complete indifference to the Complainant's rights.
[Nuclear and Environmental Whistleblower Digest XVI F]
PUNITIVE DAMAGES CANNOT BE AWARDED AGAINST THE FEDERAL GOVERNMENT
In Dixon v. United States Dept. of Interior, Bureau of Land Management , ARB Nos. 06-147, -160, ALJ No. 2005-SDW-8 (ARB Aug. 28, 2008), the Complainant sought punitive damages of one million dollars against the Respondent, a federal agency. The ARB denied the request, holding that although the SDWA permits an award of exemplary (i.e., punitive) damages, punitive damages are not awardable against the federal government. Moreover, the ARB found that the nothing in the record supported any punitive damages, let alone the one million dollars sought by the Complainant.
XVI F Exemplary damages
In Varnadore v. Oak Ridge National Laboratory, 92- CAA-2, 5 and 93-CAA-1 (ALJ June 7, 1993), the ALJ found that compensatory damages for stress caused by the Respondent's having deliberately created a hostile work environment for the Complainant were warranted in the amount of $10,000. The ALJ also concluded that the Respondent "intentionally put [the Complainant] under stress with full knowledge that he was a cancer patient recovering after extensive surgery and lengthy chemotherapy" and recommended an award of $20,000 in exemplary damages in light of prior authority. The ALJ, however, noted that policy arguments in support of breaking this precedent should be addressed to the Secretary of Labor.
The ALJ also ordered reimbursement for psychiatric treatment related to the effects of the discriminatory treatment, continuing until the discrimination abates.
[Nuclear & Environmental Whistleblower Digest XVI F]
EXEMPLARY DAMAGES; SETTING AMOUNT BASED ON COMPARATIVE AWARDS
AND CIRCUMSTANCES OF THE CASE
In Erickson v. U.S. Environmental Protection Agency , 1999-CAA-2, 2001-CAA-9 and 13, 2002-CAA-3 and 18 (ALJ Sept. 24, 2002), the ALJ recommended an award of $250,000 in exemplary damages based on a review of other exemplary damage awards and the circumstances of the instant case. The ALJ took into account Respondent's conduct in not disclosing the results of an OIG investigation of Complainant to Complainant (the OIG had found no grounds for criminal prosecution or administrative discipline), in permanently transferring Complainant out of her career field, in subjecting her to a hostile working environment, and in allowing her to suffer in a position that she was not fully qualified to perform while she attempted to manage personnel who refused to work with her. The ALJ also took into account that Respondents' behavior took place over a long period of time.
See also Hall v. U.S. Army, Dugway Proving Ground , 1997-SDW-5 (ALJ Aug. 8, 2002) (recommending an award of $300,000.00 as exemplary damages where the ALJ found that the case involved an egregious and blatant conspiracy against Complainant that lasted about 10 years); Evans v. Baby Tenda , 2001-CAA-4 (ALJ Sept. 30, 2002) (recommending an award of $20,000 where inter alia , retaliation extended over a 6 month period; Respondent had another employee (then Complainant's boyfriend) steal Complainant's mail, had fellow employees monitor Complainant, isolated Complainant's work area, offered money to workers who could prove that Complainant filed the complaint with OSHA, cut Complainant's Christmas bonus in half and ultimately fired her).
[Nuclear & Environmental Digest XVI F]
EXEMPLARY DAMAGES; RESPONDENT'S REFERRAL OF ALLEGED
MEAL VOUCHER OVERCHARGE TO STATE POLICE FOR INVESTIGATION OF
THEFT
In Jayco v. Ohio Environmental Protection Agency , 1999-CAA-5 (ALJ Oct. 2, 2000), the ALJ recommended an award of exemplary damages of $45,000 under the CAA, TSCA and SDWA, based on his finding that Respondent referred an allegation of theft to the state police related to a meal voucher submitted by Complainant based on an intent to harm Complainant's investigatory function and his reputation. The ALJ earlier in the opinion found that the dispute over the meal voucher was, at most, over a de minimus amount of money and an innocent error by Complainant, and that the extraordinarily harsh suspension of Complainant, who had a good work record, and referral of the matter to the state police (which declined to investigate as the amount in dispute was less than $10) could only be explained as retaliation for Complainant's protected activity.
[Nuclear & Environmental Digest XVI F]
EXEMPLARY DAMAGES; SDWA AMENDMENTS
In Beliveau v. Naval Underseas Warfare Center , 1997-SDW-1 and 4 (ALJ June 29, 2000), the ALJ found that exemplary damages can be imposed against an agency of the United States under the SDWA only since the effective date of P.L. 104-182 The Safe Drinking Water Act Amendments of 1996. The effective date of those amendments was August 6, 1996. The amendments for the first time subjected Federal agencies to the full range of remedies under the SDWA. See 42 U.S.C. § 300j-6(a) and (b).
[Nuclear & Environmental Digest XVI F]
EXEMPLARY DAMAGES; STANDARD; SETTING THE DOLLAR AMOUNT
In Beliveau v. Naval Underseas Warfare Center , 1997-SDW-1 and 4 (ALJ June 29, 2000), the ALJ rendered a default judgment against Respondent because of serious misconduct in failing to respond fully to Complainant's discovery requests. The ALJ therefore ruled in Complainant's favor on the allegation that Respondent had paid so much money to Complainant's former counsel under the terms of a settlement agreement -- under a term that provided for continuing payments to that counsel in assisting Complainant in implementing the settlement -- that he had become Respondent's agent. In considering exemplary damages, the ALJ found that such conduct was shocking, and must be deterred in no uncertain terms. The ALJ found that Respondent demonstrated reckless and callous indifference to Complainant's rights, by leaving him without effective counsel, and the public, by apparently attempting to cover up failures to comply with environmental laws. The ALJ noted that in setting the amount of exemplary damages, the standard is the amount necessary to punish and deter the reprehensible conduct, rather than whether Complainant is deserving. The ALJ found the appropriate sanction to be the amount that Respondent paid to Complainant's former counsel $281,115.50.
[Nuclear & Environmental Digest XVI F]
EXEMPLARY DAMAGES
In Leveille v. New York Air National Guard , ARB No. 98-079, ALJ Nos. 1994-TSC-3 and 4 (ARB Oct. 25, 1999), the ALJ recommended that punitive damages be denied, finding that when Respondent made two negative references about Complainant in response to reference checks, it did not act with reckless or callous disregard of Complainant's rights. The ARB agreed and adopted the ALJ's recommendation, finding that the record did not show that the persons who had given the negative references did so with the purpose or intent to harm Complainant or with reckless disregard for her rights.
[Nuclear & Environmental Digest XVI F]
PUNITIVE DAMAGES
In Sayre v. Alyeska Pipeline Service Co. , 1997-TSC-6 (ALJ May 18, 1999), the ALJ recommended an award of $5,000 in punitive damages where he found that both Respondents intentionally discriminated against Complainant because she engaged in protected activity, and Complainant was harassed, lost her job, and suffered mental and emotional stress as a result. The ALJ moderated the recommended punitive damage award because he found that that the alleged statements concerning future discrimination were unclear at best, and because of the mitigating fact that Complainant was eventually rehired.
[Nuclear and Environmental Digest XVI F]
EXEMPLARY DAMAGES
In Ruud v. Westinghouse Hanford Co. , 1988-ERA-33 (ALJ Dec. 8, 1998), the ALJ recommended exemplary damages of $12,500, based on a comparison with other cases.
[Nuclear & Environmental Digest XVI F]
EXEMPLARY DAMAGES; COMPENSATORY DAMAGES CANNOT BE USED AS
EXEMPLARY OR PUNITIVE
In Smith v. Esicorp, Inc. ,1993-ERA-16 (ARB Aug. 27, 1998), Complainant urged an award of $3,500,000 in "compensatory" damages, arguing that nuclear workers will fear to speak out about pollution problems if Respondent was ordered to pay only "small damages." Complainant suggested employers "unwhipped by justice" may again violate the employee protection provisions of the ERA. The ARB noted that this argument implicitly suggests that the ARB should make large compensatory damage awards in order to "send a message" to the employer community. The ARB held that Complainant's position confuses compensatory damage awards with exemplary (or punitive) damage awards, which the ARB is not award under the ERA.
[Nuclear & Environmental Digest XVI F]
EXEMPLARY DAMAGES; REQUISITE STATE OF MIND; DISCRETIONARY
NATURE OF AWARD
In Jones v. EG & G Defense Materials, Inc. ,1995-CAA-3 (ARB Sept. 29, 1998), Complainant sought $150,000 in exemplary damages; the ALJ awarded . The ARB found that no exemplary damage award was warranted, because mere indifference to the purposes of the environmental acts is not sufficient to constitute the requisite state of mind for an award of exemplary damages. See Johnson v. Old Dominion Security ,1986-CAA-3, 4 and 5 (Sec'y May 29, 1991); Restatement (Second) of Torts 908 (1979). The Board observed in a footnote that where the requisite state of mind (intent and resolve actually to take action to effect harm) exists, the decision whether to award punitive damages still involves a discretionary moral judgment, and that "[i]f the purposes of the statute can be served without resort to punitive measures, the Board does not award exemplary damages." Slip op. at 24-25 n.20.
[N/E Digest XVI F]
EXEMPLARY DAMAGES; BLATANT AND OBVIOUS DISCRIMINATION
BALANCED AGAINST RESPONDENT'S BELIEF THAT IT WAS NOT SUBJECT TO
WHISTLEBLOWER LAWS
In White v. The Osage Tribal Council , 95-SDW-1 (ARB Aug. 8, 1997), the tribal council for the Osage Nation discharged an environmental inspector with responsibility for monitoring and reporting on Respondent's compliance with certain provisions of the SDWA, for "disloyalty" and "misconduct" -- reasons that were found to be pretextual where there was evidence that the reason for the discharge was friction that had developed because of Complainant's conscientious and vigorous enforcement of the SDWA. The ALJ recommended an award of $60,000 in punitive damages in light of his finding of "blatant and obvious discrimination" against Complainant.
The Board agreed with the ALJ's characterization of Respondent's misconduct, but declined to award punitive damages because of its finding that Respondent "was wrongly operating under the assumption that it was not subject to the employee protection provisions of the SDWA." Respondent had contended that it had tribal immunity. The Board wrote that Respondent "is now on notice that it must comply," and that because it fully expects future compliance, punitive damages were not necessary to deter further violations or to punish a few agents of the Osage Nation.
EXEMPLARY DAMAGES; COMPARATIVE AWARD
[N/E Digest XVI F]
In Ruud v. Westinghouse Hanford Co. , 88-ERA-33 (ALJ Mar. 15, 1996), the ALJ recommended that exemplary damages not be awarded because the only statutes under which he found jurisdiction did not provide for such damages. Assuming that it was proper to award exemplary damages, however, the ALJ concluded that an award of exemplary damages of $12,500 was appropriate. The ALJ arrived at this figure by comparing the facts and recommended award in the case of Varnadore v. Oak Ridge National Laboratories , 95-CAA-2 (ALJ June 27, 1993). The ALJ concluded that the retaliation in the instant case was less serious than in Varnadore .
PUNITIVE DAMAGES; NOT ALLOWED IN ERA CASES
[N/E Digest XVI F]
Punitive damages are not allowable absent express statutory authorization, and the ERA whistleblower provision does not provide for such damages. Smith v. Esicorp, Inc. , 93-ERA-16 (Sec'y Mar. 13, 1996).
XVI F Inappropriateness of punitive damages
The remedies under 42 USC § 5851(b)(2)(B), although comprehensive, do not include punitive damages. Norris v. Lumbermen's Mut. Casualty Co., 881 F2d 1144 (1st Cir. 1989).
XVI F TSCA and SDWA permit exemplary damages award
[Editor's note: Unlike the other environmental and nuclear safety employee protection provisions, the Toxic Substances Act, 15 U.S.C. § 2622(b), and the Safe Drinking Water Act, 42 U.S.C. § 300j-9(i)(2)(B)(ii) explicitly permit "where appropriate, exemplary damages." (no case citation)]
XVI F Preemption of state claim
Claimant was discharged after filing complaint with the Federal Government and with General Electric Company's (GE) management that GE was violating provisions of the ERA. Claimant's section 210 claim was dismissed as untimely, so Claimant filed a diversity action against GE in federal court for wrongful discharge (dismissed at trial) and intentional infliction of emotional distress. The Supreme Court held that the claim for intentional infliction of emotional distress does not have a direct or substantial effect on radiological safety aspects involved in the operation of a nuclear facility, so the claim is not within the preempted field. Furthermore, the Court held that Congress did not intend to preempt all state actions that permit the recovery of exemplary damages. English v. General Electric Co., 496 U.S. 72, 110 S.Ct. 2270, 2281, 110 L. Ed. 2d 65 (1990).
XVI F Preemption of state claim
Claimant brought action against former employer alleging retaliatory discharge for his reporting of nuclear safety violations. Court originally held that state law claim was preempted by the whistleblower provisions of the ERA, Masters v. Daniel International Corp., 895 F.2d 1295 (10th Cir. 1990), but the Supreme Court remanded the case for further consideration in light of English . The court held that the state law claim for retaliatory discharge is not preempted by the Act. However, the court held that even though the Act does not provide exemplary damages, the Act precludes recovery under a state-law claim for retaliatory discharge because the Act provides adequate remedies. Masters v. Daniel International Corp., 917 F.2d 455, 457 (10th Cir. 1990).
XVI F Recommended imposition of exemplary damages
In Jenkins v. United States Environmental Protection Agency, 92-CAA-6 (ALJ Dec. 14, 1992), the ALJ recommended imposition of exemplary damages of $10,000, citing 42 U.S.C. § 300j-9(i)(2)(B)(ii), and the Respondent's "flagrant disregard of [the Complainant's] rights." In Jenkins , the Complainant was a scientist who frequently communicated to Congress and other about the carcinogenic effect of Agent Orange, and who criticized a research report commissioned by Monsanto which purported to downplay the harmless effect of Agent Orange, much to the embarrassment of her employer, the Environmental Protection Agency (EPA). There was direct evidence that EPA reassigned the Complainant to a position ill suited to the Complainant's talents, and which left her with little to do -- in effect isolating her. There was also evidence that the Complainant's work was respected, albeit it begrudgingly.