Federal cap on damages in discrimination cases should not have been used to reduce recovery under state law

Law Reporter, Dec 2001

DAMAGES

Federal cap on damages in discrimination cases should not have been used to reduce recovery under state law.

Channon v. United Parcel Serv., Inc., 629 N.W.2d 835 (Iowa 2001).

The Iowa Supreme Court held that a damages cap in a federal civil rights statute should not have been used by a trial court to reduce a plaintiff's recovery under concurrent state law.

Here, a woman filed suit against her former employer for sex discrimination and retaliation under both Title VII of the Civil Rights Act of 1964, 42 U.S.C. sec 2000e et seq., and the Iowa Civil Rights Act, Iowa Code sec 216. A jury awarded her approximately $528,000 in compensatory damages, plus punitive damages, on her Title VII claims. On her state civil rights claim, the trial court awarded plaintiff the same compensatory damages that the jury had awarded on the Title VII claims. The court then proceeded to reduce this to $300,000 based on the damages caps imposed by the Civil Rights Act of 1991, 42 U.S.C. sec 1981a.

Plaintiff appealed, arguing that the cap should not be imposed on damages awarded under the state law.

Reversing, the state high court found that the trial court was unnecessarily concerned about duplication of damages. The lower court erred when it ruled that payment of the judgment on the state claims satisfied the judgment for all damages, including punitive damages. The jury did not make a punitive award under the Iowa law, as none is permitted by that statute, the court explained.

Following the trial court's reasoning would limit the ability of Iowa courts to provide greater remedies under state law than those available under Title VII, which is contrary to the express terms of the federal statute, the court said. The better approach is to allow an employment discrimination plaintiff to recover under the liability theory that permits the most complete recovery, as the purpose of damages in civil cases traditionally has been to place the injured party in as favorable a position as though no wrong had occurred.

Consequently, the court concluded that plaintiff was entitled to the full amount awarded under the Iowa statute, plus punitive damages capped at $300,000 under Title VII.

Plaintiff's Counsel

*Roxanne Barton Conlin, Des Moines, Iowa

*Tiffany B. Klosener, Des Moines, Iowa

An asterisk (*) appearing beside the name of plaintiff's counsel indicates that the attorney is an ATLA member. To obtain additional information about a case report, contact counsel through your ATLA membership directory.