Steffens v. Regus Group, PLC et al, No. 3:2008cv01494 - Document 176 (S.D. Cal. 2013)

Court Description: ORDER denying Regus's 153 Motion for a New Trial. Signed by Judge Larry Alan Burns on 8/16/13.(kaj)(order modified as to format only)

Download PDF

Steffens v. Regus Group, PLC et al Doc. 176 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DENISE STEFFENS, 12 vs. 13 14 15 16 17 CASE NO. 08cv1494-LAB (BLM) Plaintiff, ORDER DENYING REGUS’S MOTION FOR A NEW TRIAL REGUS GROUP, PLC; REGUS MANAGEMENT GROUP, LLC; REGUS EQUITY BUSINESS CENTERS, LLC; REGUS BUSINESS CENTER, LLC; HQ GLOBAL WORKPLACES, LLC; THE REGUS GROUP, PLC; SANDE GOLGART; SHARON EDMONSON; and DOES 1-10, 18 Defendants. 19 20 This case went to trial and Regus lost—badly. The jury awarded Denise Steffens 21 $296,252 in economic damages, $850,000 in non-economic damages, and $3.5 million in 22 punitive damages. Now, with $4,646,252 on the line, Regus has filed a motion for a new trial 23 that tries to blame its loss on legal missteps by the Court, improper statements by Steffens’s 24 counsel, and misconduct by the jury, rather than the actual testimony and arguments the jury 25 heard. The motion is DENIED. The Court’s only error in this case, apparently, was giving 26 Regus false hope that Steffens had no case by initially entering summary judgment in its 27 favor, a ruling that in retrospect was obviously mistaken. 28 // -1- 08cv1494 Dockets.Justia.com 1 I. Subject Matter Jurisdiction 2 Regus first argues—and argues for the first time—that this entire case is preempted 3 under the National Labor Relations Act, and that the Court therefore lacks subject matter 4 jurisdiction. The basis for this argument is Romero v. DirecTV, 2013 WL 453883 (Cal. Ct. 5 App., Feb. 7, 2013). Romero, however, was decided before this case even went to trial, and 6 Regus concedes it “is not published and not binding on this court.” (Doc. No. 152-1 at 1.) 7 2013 WL 453883 (Cal. Ct. App., Feb. 7, 2013). Indeed it is not. The Court doesn’t have to 8 rely on these technical points to reject Regus’s preemption argument, though, because it 9 fails on the merits. 10 Romero dealt with so-called Garmon preemption, a reference to the Supreme Court’s 11 decision in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959). The plaintiff 12 in Garmon was an employer in the lumber industry. The defendant was a picketing union, 13 interested in organizing its employees. Id. at 237. The employer sued for both injunctive 14 relief (to stop the picketing) and damages (lost earnings, essentially), and the question 15 before the Supreme Court was whether the National Labor Relations Act precluded a 16 California court from finding that the picketing was an unfair labor practice and awarding the 17 employer damages. The Supreme Court held that it did, because the picketing activity at 18 issue was “arguably subject” to sections 7 and 8 of the Act. Id. at 245. 19 Section 7 of the Act establishes a sphere of protected employee activity: 20 23 Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized. 29 U.S.C. § 157. 24 Section 8, on the other hand, defines a number of unfair labor practices by both employers 25 and unions. For example, it’s an unfair labor practice for an employer “to interfere with, 26 restrain, or coerce employees in the exercise of the rights guaranteed in section 157 . . . .” 27 29 U.S.C. § 158. As the Supreme Court saw it, because the core claim in Garmon was that 28 the union’s picketing was an unfair labor practice, it was arguably “within the compass of 21 22 -2- 08cv1494 1 section 7 or section 8 of the Act.” Id. at 246. And that meant “the States as well as the 2 federal courts must defer to the exclusive competence of the National Labor Relations Board 3 if the danger of state interference with national policy is to be averted.” Id. at 245. 4 Reading Garmon by itself, one would never think it’s relevant here and that Steffen’s 5 claim against Regus is preempted under the NLRA. The best evidence of this is Regus’s 6 own failure to assert Garmon preemption until now, almost five years after this case was filed 7 and after a jury verdict against it. And it’s not just the substantive differences between the 8 claims in the cases—a company alleging unfair labor practices against a picketing union in 9 Garmon versus an individual alleging a wrongful termination against her employer here. 10 There is more. First, section 7 of the NLRA, at least at its core, protects the collective action, 11 or “concerted activities,” of employees, not the one-off and mostly self-interested grievance 12 of a single employee. See N.L.R.B. v. City Disposal Sys., 465 U.S. 822, 830 (1984) (“The 13 term ‘concerted activity’ is not defined in the Act but it clearly enough embraces the activities 14 of employees who have joined together in order to achieve common goals.”); N.L.R.B. v. 15 Mike Yurosek & Son, Inc., 53 F.3d 261, 264 (9th Cir. 1995) (“To be engaged in ‘concerted 16 activity,’ an employee must act with or on behalf of other employees, and not solely by and 17 on behalf of the . . . employee himself.”) (internal quotations and citation omitted). Second, 18 supervisors aren’t considered employees under the NLRA, meaning their activities aren’t 19 protected by section 7. See 29 U.S.C. § 152(3). Both of these points cut strongly against 20 the application of Garmon to this case. 21 This is where Romero comes in. In essence, Romero bridges the ostensible gap 22 between Garmon and this case by finding Garmon preemption of what was basically a 23 wrongful termination claim. The plaintiff was a supervisor with DirecTV who alleged that he 24 was fired for complaining to upper management that technicians were being paid by the 25 project rather than by the hour, in violation of the labor laws. The same two barriers to 26 preemption the Court just identified in this case were present, however: (1) the NLRA 27 protects only concerted activity; and (2) supervisors aren’t “employees” under the Act. So 28 why was the case preempted under the NLRA nonetheless? -3- 08cv1494 1 On the concerted action point, it noted that “courts have found that an individual 2 employee who complains to management on behalf of others may be engaged in concerted 3 activity.” 2013 WL 453883 at *3. That’s true. See N.L.R.B. v. Talsol Corp., 155 F.3d 785, 4 796 (6th Cir. 1998) (“For an individual’s complaints to constitute concerted action . . . they 5 must not have been made solely on behalf of an individual employee, but they must be 6 made on behalf of other employees or at least with the object of inducing or preparing for 7 group action.”) (internal quotations and citation omitted); Haney v. Aramark Uniform Servs, 8 Inc., 121 Cal.App.4th 623, 635 (Cal. Ct. App. 2004). More importantly, Romero’s complaint 9 did allege concerted action under this definition. He alleged, specifically, that he complained 10 to management on behalf of “the concerns of the production technicians,” and from this the 11 court reasoned that “[i]t can reasonably be inferred that management was aware Romero 12 was complaining on behalf of other employees and not himself because he was a supervisor 13 and not one of the production technicians who was allegedly underpaid.” Id. at *2. It was 14 even part of his job description, he alleged, to do just this. Id. at *1. 15 Context is everything here, and in its proper context it’s very clear that Steffens’s 16 complaint about meal and rest breaks wasn’t concerted action in any conceivable way. 17 Steffens “complained” about employees not receiving their meal and rest breaks not on the 18 employees’ behalf, and not to call them to action, but rather to defend herself against the 19 charge that the Regus center she was managing was underperforming. Here’s the relevant 20 testimony: 21 22 23 24 25 26 27 28 Q: At some point, did the issue of the legality of not giving meals — lunch and rest breaks come up? A: Yes. Q: Would you tell the jury how that came up? A: When we were discussing sales and how I was going to reach my target goals, I explained that my focus on sales sometimes wasn’t what I wanted it to be because I would get drawn into a lot of the operational issues in the center. And with the heavy workload in the center, I felt like we were understaffed to take care of the work for the clients. And as a result of that understaffing, my hourly employees were not able to take their rest breaks and sometimes their meal breaks . . . . -4- 08cv1494 1 Q: So what did you say about the legality or illegality of lunch breaks and rest breaks? 2 A: I told him that I thought due to the understaffing, we couldn’t take — they couldn’t take their meal breaks and rest breaks and that I knew it was against California law, and I wanted to bring it to his attention and see if we could do something about that. (3/19/13 Tr. at 54:11–55:11.) 3 4 5 6 In other words, Steffens raised the meal and rest break issue in the context of explaining 7 that, in her view, understaffing at the center prevented her from doing her actual job. She 8 didn’t raise it to initiate a conversation about Regus’s labor practices, or out of concern for 9 the rights and well-being of the center’s employees.1 While Sande Golgart, Steffens’s 10 surpervisor, denied that she ever raised meal and rest breaks, his own testimony 11 corroborates that she complained of being spread thin at the center and unable to focus on 12 sales work: Q: There was a discussion about staffing and about her doing the work of her CSR’s? 13 14 16 A: Yes. I wouldn’t call it a discussion. She said she couldn’t get the work done. I asked some questions about the team and the staff and directed her to call Mark Sorum. (3/20/13 Tr. at 188:15–23.) 17 The testimony of another witness, Shannon Jones, also confirmed that Steffens raised the 18 meal and rest break issue in the broader context of a conversation about the center’s 19 performance and her own sense that understaffing diverted her attention away from her own 20 responsibilities. 15 21 Q: What did you start talking about in that meeting? 22 A: Sure. So we started off talking in the meeting about work stations, the offices that were open, what we had coming up as far as renewals. That’s what the conversation was . . . . 23 Q: His discussion with Denise regarding work stations wasn’t any different than discussions he was having that day with other general managers that you attended with him? 24 25 26 27 28 1 Yes, Steffens did say “I wanted to bring [the meal and rest breaks] to his attention and see if we could do something about that.” But even there, it’s clear enough that Steffens was more concerned about the center’s own performance, her own productivity, or perhaps Regus avoiding a lawsuit, than she was about the collective interests of the center employees. -5- 08cv1494 1 A: Same conversation . . . . 2 Q: Did Denise Steffens raise the issue of understaffing with Mr. Golgart during this meeting? 3 A: Yes, she did. 4 Q: What did she say? 5 A: She stated that the center was understaffed, we’re having turnover in the staff, the staff was not able to take breaks, the staff was not able to have meals all the time, and that the process was illegal and that — I mean, she really laid it out there. (3/19/13 Tr. at 195:19–196:24.) 6 7 8 9 Yes, Steffens did testify, “I wanted to bring [the meal and rest breaks] to his attention and 10 see if we could do something about that.” But even there, it’s clear enough in context that 11 Steffens was more concerned about the center’s own performance, her own productivity, or 12 perhaps Regus avoiding a lawsuit, than she was about the collective interests of the center 13 employees. 14 Romero stresses that an individual’s complaints may constitute concerted action only 15 when they’re made on behalf of other employees, or made to further some collective 16 purpose. But the testimony here cuts against such a finding with respect to Steffens’s 17 complaints, which were motivated by her concerns about the center’s own performance, her 18 ability to do her job, and Regus avoiding a lawsuit. So, this takes care of the “concerted 19 activities” point; the Court finds that Ms. Steffens’s complaint doesn’t concern “concerted 20 activities” such that it implicates the NLRA and is preempted under Garmon. And this is 21 assuming—a huge assumption, the Court must stress—that the Court is obligated to 22 consider Romero, an unpublished decision from the California Court of Appeal, in the first 23 instance. 24 Even if the Court were to find that Romero is authoritative, and were to find that 25 Steffens’s complaint about meal and rest breaks was “concerted” activity, it would still face 26 the law that supervisors aren’t considered employees under the NLRA. The court in Romero 27 got around this by recognizing that “federal and state courts have found that firing a 28 supervisor can constitute a section 8(a)(1) violation when such firing has the effect of -6- 08cv1494 1 interfering, not with the supervisor’s rights, but with the section 7 rights of nonsupervisors, 2 for example their right to seek collective redress for their mutual aid or protection.” Romero, 3 2013 WL 453883 at *3. Those aren’t even remotely the facts of this case, though. 4 Steffens’s termination didn’t impact in any way the ability of Regus employees to come 5 together to complain about not receiving meal and rest breaks. She wasn’t representing 6 them when she raised the lack of meal and rest breaks with Golgart, nor was she necessarily 7 the person they would have rallied behind had they wanted to force the issue. The motion 8 to dismiss for lack of subject matter jurisdiction is DENIED. 9 II. Jury Instructions and Verdict Form 10 Regus’s first crack at a new trial seizes on the instructions and verdict form the jury 11 received, which Regus argues were erroneous in a number of ways. Considering that Regus 12 leads with these arguments in its motion for a new trial, and led with them at oral argument, 13 the Court presumes they represent Regus’s deepest grievances. Indeed, during the recent 14 hearing on Regus’s motion, counsel said, without holding back, that Regus believes 15 fundamentally it was denied a fair trial by the allegedly hasty manner that the Court 16 assembled and drafted the jury instructions, as well as by assorted evidentiary rulings. At 17 that time that seemed like hyperbole, and quite frankly it still does. Several preliminary 18 observations. First, Regus was represented in this case, and at trial, by a number of 19 experienced lawyers, and certainly invested great resources in its defense. So, the Court 20 is quite skeptical that Regus couldn’t keep up with the Court’s pacing or various rulings at 21 trial (particularly bearing in mind that time limits for the trial had been discussed with counsel 22 and set at the pretrial conference). Second, if Regus really believes it was denied a fair trial 23 by the Court, it would have—or at least should have—filed a motion for a new trial that made 24 a limited number of arguments it could truly stand behind. Regus didn’t do that, though. 25 Instead, it combed through the record (as well as the jury’s deliberations to the extent it was 26 able) and then filed a 50-page motion for a new trial that crammed as many arguments as 27 would fit, some of which are absolute non-starters. That is not the brief of a party that 28 sincerely believes it wasn’t given a fair trial; it is the brief of a party that lost at trial and will -7- 08cv1494 1 now say or argue anything to avoid the result. Third, many of the arguments Regus makes 2 in its motion were never made at trial. The Court has gone out of its way to consider all 3 arguments in the motion for a new trial on their merits, but it does so very mindful that it is 4 considering those arguments now for the first time and, in so doing, is largely overlooking 5 the question of waiver. Fourth, the spirit of Regus’s motion for a new trial on these issues 6 is that it had some kind of right to have its instructions given to the jury and its verdict form 7 used. This is obviously wrong. As the Court will reiterate below, jury instructions have to get 8 the law right, but how they’re arranged and styled, and how they relate to the verdict form, 9 is largely left to the Court’s discretion. The Court never gives every instruction that a party 10 requests, or the exact verdict form it submits. With those preliminary points in mind, the 11 Court will answer Regus’s arguments in order. 12 A. 13 The instruction the jury received on Steffens’s substantive claim—wrongful 14 termination in violation of public policy—required her to prove by a preponderance of the 15 evidence that “Plaintiff’s reports about meal and/or rest breaks were a motivating reason for 16 her termination. A motivating reason is one that is substantial or non-trivial, even if other 17 reasons also contributed to the decision.” (Doc. No. 144 at 12.) Regus argued at trial, and 18 argues now, that “motivating reason” isn’t enough, and that Steffens’s report must have been 19 a substantial motivating reason for her termination. It makes this argument even though the 20 CACI instruction for a wrongful discharge in violation of public policy claim requires only that 21 the plaintiff’s conduct “was a motivating reason” for her termination. See CACI 2430. “Substantial Motivating Reason” 22 Initially, Regus relied on Horsford v. Bd. of Trs. of Cal. State Univ., 132 Cal.App.4th 23 359, 377 (Cal. Ct. App. 2005), which held that “[a] plaintiff’s burden is . . . to produce 24 evidence that, taken as a whole, permits a rational inference that intentional discrimination 25 was a substantial motivating factor in the employer’s actions toward the plaintiff.” (Doc. No. 26 146 at 6.) But this statement in Horsford pertained to a racial discrimination claim brought 27 under the Fair Employment and Housing Act, not a claim of wrongful termination in violation 28 of public policy (although there was such a claim asserted in the case). Id. at 375 (“A plaintiff -8- 08cv1494 1 in a racial discrimination action has the burden of proving . . . that the plaintiff’s race was a 2 substantial factor in the adverse employment decision.”). 3 During trial—and now—Regus cited Harris v. City of Santa Monica, 56 Cal.4th 203, 4 232 (2013), which held that “[r]equiring the plaintiff to show that discrimination was a 5 substantial motivating factor, rather than simply a motivating factor, more effectively ensures 6 that liability will not be imposed based on evidence of mere thoughts or passing statements 7 unrelated to the disputed employment decision.” Like Horsford, however, Harris was an 8 FEHA discrimination case, and in fact, the holding Regus latches onto turned entirely on a 9 rigorous analysis of the FEHA’s language and purpose. Id. at 223–32. 10 Nonetheless, the Court effectively gave the jury the very instruction Regus asked for, 11 and now criticizes the Court for not giving. The relevant CACI instruction defines a 12 motivating reason as “a reason that contributed to the decision to take certain action, even 13 though other reasons also may have contributed to the decision.” See CACI 2507. The 14 Court modified this somewhat, however, instructing that “[a] motivating reason is one that 15 is substantial or non-trivial, even if other reasons also contributed to the decision.” (Doc. No. 16 144 at 12.) It based this decision largely on Grant-Burton v. Covenant Care, Inc., 99 17 Cal.App.4th 1361 (Cal. Ct. App. 2002), which, unlike the cases cited by Regus, actually was 18 a retaliation case; the employee-plaintiff alleged that she was fired for discussing bonus 19 structures during a corporate meeting. (3/21/13 Tr. at 110:17–112:17.) Regus can try to 20 argue that defining a motivating reason as “substantial or non-trivial” isn’t the same thing as 21 requiring that the reason itself be a “substantial motivating” one, but even if that’s true: (1) 22 that level of nuance is almost certainly lost on a jury; and (2) Regus still fails to offer a single 23 wrongful termination in violation of public policy case that commands the “substantial 24 motivating reason” language. Steffens’s preferred “motivating reason” language, on the 25 other hand, finds direct support in the CACI instruction and cases that have adopted it. See, 26 e.g., Casella v. SouthWest Dealer Servs., Inc., 157 Cal.App.4th 1127, 1140 n.4 (Cal. Ct. 27 App. 2007). 28 // -9- 08cv1494 1 The Court didn’t err in instructing the jury that Steffens’s reports about meal and rest 2 breaks had to have been “a motivating reason” for her termination rather than “a substantial 3 motivating reason for her termination. Regus’s request for a new trial on this ground is 4 DENIED. 5 B. 6 Regus requested that the substantive instruction on Steffens’s claim require her to 7 prove “That Regus intended to discharge Ms. Steffens because of her report that Regus 8 violated the law by not providing hourly employees meal and rest breaks.” (Doc. No. 146 at 9 9.) The instruction the Court gave, however, required Steffens to prove that “Defendant 10 Regus’s Intent terminated Plaintiff in retaliation for making the reports.” (Doc. No. 144 at 12.) 11 Once again, Regus cited to a FEHA case for its preferred language, albeit an FEHA 12 case closer to this one because it involved a retaliation rather than a discrimination claim. 13 See Joaquin v. City of Los Angeles, 202 Cal.App.4th 1207, 1230 (Cal. Ct. App. 2012) (“As 14 we have noted, retaliatory intent is an essential element of a cause of action for unlawful 15 retaliation under FEHA.”). Still, even though the CACI instruction, CACI 2430, doesn’t 16 explicitly require a showing of intent, the Court accommodated Regus: 20 Also, the Joaquin case does suggest that it’s error not to tell the jury that the retaliation was intentional. So I’ve modified that without using the word ‘intentional.’ I’ve changed the second element. I think it’s the — the third element, actually, that defendant terminated plaintiff in retaliation for making reports, which conveys, of course, an intentional act that is cause-driven. (3/21/13 Tr. at 113:9–15.) 21 The Court stands by that ruling now. By instructing the jury that Regus’s termination of 22 Steffens had to be in retaliation for her complaints about meal and rest breaks, it was giving 23 the very intent instruction that Regus asked for. A defendant is entitled to a jury instruction 24 that reflects the law, but “he is not entitled to his choice of wording in the instruction.” U.S. 25 v. Iverson, 162 F.3d 1015, 1025 (9th Cir. 1998). Regus’s request for a new trial because the 26 relevant jury instruction left out the word “intended” is therefore DENIED. 27 // 28 // 17 18 19 - 10 - 08cv1494 1 C. 2 Regus next argues that the verdict form was inadequate because it failed to require 3 separate, individualized findings on these elements of Steffens’s claim. The verdict form 4 simply read, “Did Defendant wrongfully terminate Plaintiff in violation of public policy? Yes 5 or no?” It then asked the jury to award economic and non-economic damages, if any. (Doc. 6 No. 143 at 1.) The Verdict Form 7 Rule 49 of the Federal Rules of Civil Procedure broadly contemplates two kinds of 8 verdicts: general verdicts that announce a legal conclusion and special verdicts that 9 announce findings of fact. Zhang v. American Gem Seafoods, Inc. 339 F.3d 1020, 1031 (9th 10 Cir. 2003). The Court has broad discretion to decide which kind of verdict to ask for, and this 11 discretion “extends to determining the content and layout of the verdict form, and any 12 interrogatories submitted to the jury, provided the questions asked are reasonably capable 13 of an interpretation that would allow the jury to address all factual issues essential to 14 judgment.” U.S. v. Real Property Located at 20832 Big Rock Dr., Malibu, Cal. 902655, 51 15 F.3d 1402, 1408 (9th Cir. 1995); see also Mateyko v. Felix, 924 F.2d 824, 827 (9th Cir. 16 1991). In this case, leaving the punitive damages aside, the Court asked the jury to return 17 a general verdict on Steffens’s claim and announce damages, which is a perfectly proper 18 thing to do. See Zhang, 339 F.3d at 1031. 19 But even more important, as long as a jury instruction properly defines the elements 20 of a claim—and the Court has found that its instruction properly defined the elements of 21 Steffens’s claim—it is enough for the verdict form to ask only if the claim has been proven. 22 The verdict form Regus submitted, by contrast, took each element of Steffens’s claim and 23 asked the jury to make a special finding with respect to it. (See Doc. No. 147.) This was 24 simply unnecessary. At best it was superfluous, and at worst it sets up a series of forks in 25 the jury’s deliberations that prevent it from reaching a verdict. The Court stands by its 26 explanation at trial: 27 28 I’m not inclined to parse this thing. I get these verdict forms all the time that are multi-pages. It’s like an S.A.T. test. I’m not going to do that here. Once they’re properly defined on the elements of the claim, I don’t see the need for a special verdict - 11 - 08cv1494 1 beyond one that says, ‘Do you find that they retaliated against her in terminating her?’ (3/20/13 Tr. at 271: 12–18.) 2 3 Given that the elements are set forth in the charge, if they don’t find them, then the answer is no. (3/20/13 Tr. at 272:19–21.) 4 Regus’s request for a new trial because the verdict was not special enough, as it were, is 5 DENIED. 6 Regus also argues that the verdict form was improper because the critical 7 question—“Did Defendant wrongfully terminate Plaintiff in violation of public policy?”—didn’t 8 line up with the jury instructions. 9 instruction—the same one the Court has been discussing—didn’t refer to the claim by its 10 formal name. It merely said, “Plaintiff claims she was terminated by Defendant in retaliation 11 for reporting that hourly workers were not receiving meal and rest breaks as required by 12 California law. To establish this claim . . . .” (Doc. No. 144 at 12.) It didn’t say “Plaintiff 13 claims she was wrongfully terminated in violation of public policy. Here are the elements of 14 that claim . . . .” Regus claims this invited the jury to “decide the case based on their own 15 belief as to the meaning of ‘wrongfully terminate,’ which could have been simply a belief that 16 the termination was ‘wrong’ in their eyes, regardless of whether it was unlawful.” (Doc. No. 17 153 at 16.) And this is because the critical, substantive jury 18 The Court disagrees. In the context of the entire trial, and looking at the jury 19 instructions as a whole, it was made adequately clear to the jury that the only claim in this 20 case was a claim alleging a wrongful termination in violation of public policy, and that the 21 instruction at issue defined the elements of that claim. See U.S. v. Doe, 705 F.3d 1134, 22 1148 (9th Cir. 2013) (“Taking the instructions as a whole, and presuming, as we must, that 23 the jurors followed the instructions as given . . . .”); Swinton v. Potomac Corp., 270 F.3d 794, 24 802 (9th Cir. 2001) (“In evaluating jury instructions, prejudicial error results when, looking to 25 the instructions as a whole, the substance of the applicable law was [not] fairly and correctly 26 covered.”). In fact, in further instructions the Court did reference the claim by its official 27 terms. In explaining that Steffens was an at-will employee, the Court said, “However, at-will 28 employees may not be terminated for reasons that violate public policy such as reporting - 12 - 08cv1494 1 violations of the law. That’s against the law to do that.” (3/21/13 Tr. at 169:7–9.) In 2 instructing on damages, the Court said, “If you find that the defendant terminated the plaintiff 3 in violation of public policy and is entitled to lost earnings, then you should ask yourselves 4 the following questions . . . .” (3/21/13 Tr. at 170:19–24.) And when the Court finally 5 submitted the case to the jury, it identified the first question on the verdict form as “a 6 preliminary determination of whether the plaintiff’s proved her case,” a clear reference to the 7 instruction. Even in their respective closing arguments, counsel for Steffens and Regus 8 impliedly connected the formal claim at issue to the substantive instruction setting forth its 9 elements. (See, e.g., 3/21/13 Tr. at 192:7, 204:5–23, 210:18, and 211:20.) Regus’s request 10 for a new trial because a particular jury instruction didn’t explicitly repeat that Steffens’s claim 11 was for a “wrongful termination in violation of public policy” claim is DENIED. 12 D. 13 Steffens and Regus agree, and the Court agrees, that Steffens’s wrongful termination 14 claim didn’t require her to prove that Regus was actually failing to give its employees meal 15 and rest breaks. She needed to prove only that she had a good faith basis for believing it 16 wasn’t when she allegedly reported as much to Golgart. This is the law behind the Court’s 17 instruction that “Plaintiff must prove the following . . . . Plaintiff had a reasonably based 18 suspicion that Defendant was denying its hourly workers meal and/or rest breaks in violation 19 of California law, and she reported this to Defendant.” (Doc. No. 144 at 12.) At trial, Regus 20 also wanted an instruction that laid out the basics of California’s meal and rest break law, 21 and the Court refused to give it. (See 3/20/13 Tr. at 270:6–271:2.) Regus now argues that 22 this was error, its theory being that the jury had to know what the law required in order to 23 decide whether Steffens’s had a reasonably based suspicion that Regus was violating it. Meal and Rest Break Instruction 24 This isn’t a frivolous argument, but the Court still rejects it. First, Regus cites no 25 authority for the proposition that in a case of this kind the jury must be given a miniature 26 lesson in the underlying law pertaining to the plaintiff’s reports or complaints. Second, the 27 Court doesn’t believe that it’s critical to the question whether Steffens reported the meal and 28 rest break violations in good faith that the jury be instructed on the relevant, underlying law. - 13 - 08cv1494 1 In fact, it may serve to only confuse their deliberations by suggesting that a plaintiff has to 2 actually show that a defendant was engaged in unlawful conduct, in effect turning a wrongful 3 termination case into a true meal and rest break case. The Court stands by its refusal to 4 instruct the jury on the substance of California’s meal and rest break law, and it DENIES 5 Regus a new trial on this ground. 6 E. 7 Regus accuses the Court of not properly instructing the jury that Steffens’s damages, 8 if any, had to have been caused by her allegedly wrongful termination. This is baseless. In 9 defining the elements of Steffens’s wrongful termination claim, the Court said that Steffens 10 had to prove she “suffered damages as a result of her termination.” (Doc. No. 144 at 12.) 11 The very next instruction, pertaining to damages, said, “The economic damages in this case 12 are the lost earnings incurred by Plaintiff as a result of Defendant’s alleged conduct.” (Doc. 13 No. 144 at 14.) As for non-economic damages, the Court said, “It is entirely up to you, 14 based on the evidence you have heard and your own common sense, to determine an 15 amount that is fair compensation for the injuries Plaintiff alleges.” (Doc. No. 144 at 15.) 16 Implicit in these instructions, if not explicit—“as a result” does, after all, mean “caused 17 by”—was that Steffens is entitled to damages only for injuries that were actually caused by 18 Regus’s alleged misconduct, itself clearly defined for the jury as terminating Steffens for her 19 reports about employees not being given meal and rest breaks. 20 instructions, as the Court has said previously, there was no need for the verdict form to 21 reiterate the obvious. Causation And given those 22 The Court understands Regus to be suggesting that the language “as a result of her 23 termination” in the claim instruction wasn’t clear that the termination actually had to be 24 wrongful, and that the language “as a result of Defendant’s alleged conduct” in the damages 25 instruction” wasn’t clear what the alleged conduct was. “As a result,” Regus claims, “the jury 26 was not instructed to calculate only the damages for the harm that was caused by Regus’s 27 wrongful conduct.” (Doc. No. 153 at 10.) Here is how the Court translates that: the Court 28 allowed for the jury to find against Regus not because it did anything wrong, but simply - 14 - 08cv1494 1 because someone had to compensate Steffens for the financial and emotional fallout of 2 losing her job. That is preposterous. Nevermind that the actual instructions were plenty 3 clear that this is a wrongful termination case and that any damages the jury awarded had to 4 have been caused by such a termination, it would have been an outright insult to the jury’s 5 intelligence to further admonish it that its job wasn’t to make Steffens whole irrespective of 6 any misconduct on Regus’s part. This was, after all, an adversarial civil trial in a court of law, 7 with one party named the “Plaintiff” and another labeled the “Defendant.” 8 As for the verdict form, the Court need only return to Mateyko, cited above, and make 9 clear that its discretion “extends to determining the form of the special verdict, provided the 10 questions asked are adequate to obtain a jury determination of the factual issues essential 11 to judgment.” 924 F.2d at 827. The form first asked, “Did Defendant wrongfully terminate 12 Plaintiff,” and only if it answered that question in the affirmative was the jury instructed to 13 consider damages: “If you answered ‘no,’ stop. Date and sign this form. If you answered 14 ‘yes,’ go on to the next question.” (Doc. No. 143 at 1.) The clear message here was that 15 Regus was responsible only for those damages caused by a wrongful termination, itself 16 adequately defined by the Court in the substantive instructions. Regus’s motion for a new 17 trial on this issue is DENIED.2 18 F. 19 At trial, Regus wanted the following instruction, essentially telling the jury that Steffens 20 could not recover if Regus could show it would have fired her anyway for some other reason, 21 independent of her report and meal and rest breaks: Same Decision Defense If Denise Steffens proves that a substantial motivating factor in Regus’s decision to discharge Denise Steffens was making a report that Regus violated the law by not providing meal and rest breaks to employees, Denise Steffens may not recover any 22 23 24 25 26 2 27 28 In their respective briefing of this issue, the parties locate the Court’s trial ruling in the March 20, 2013 transcript, between pages 248 and 258. As the Court reads those pages, however, they pertain to the instruction on the causal relationship between Steffens’s reports about meal and rest breaks to her termination (basically, whether to give a Harris instruction), not on the causal relationship between any damages she suffered and misconduct on Regus’s part. - 15 - 08cv1494 1 2 damages if Regus proves that Regus would have made the same decision to discharge Denise Steffens even if Denise Steffens had not made the report. (Doc. No. 130 at 3.) 3 Regus’s request was based on Harris, which the Court has already explained isn’t controlling 4 here because it involved a discrimination claim brought under the FEHA. This case, by 5 contrast, involves a claim for wrongful termination in violation of public policy—a common 6 law tort—premised on retaliation. Because of that difference, and in line with Steffens’s 7 objection, the Court was initially conflicted on whether to give the Harris instruction Regus 8 requested or one similar to it. It heard extensive argument on this point, with Regus arguing 9 that Harris applies and Steffens arguing that CACI instruction 2430 is all the law there really 10 is. (See 3/20/13 Tr. at 243:7–259:10.) In the end, leaning not on Harris but other retaliation 11 cases in California, the Court gave what was essentially a Harris instruction.3 12 The instruction was as follows: If you find that Plaintiff’s reports about meal and/or rest breaks were a motivating reason for her termination, then the burden of proof shifts to Defendant to establish, also by a preponderance of the evidence, that it would have made the same decision even if it had not taken into account the invalid motivating reason. In other words, Defendant must prove that it would have terminated Plaintiff regardless of the retaliatory reason. 13 14 15 16 19 If you find that Defendant terminated Plaintiff for both valid and invalid reasons, Defendant would not be liable for wrongful termination if it proves that it would have terminated Plaintiff regardless of the invalid reasons. (Doc. No. 144 at 12–13; see also 3/21/13 Tr. at 110:15–113:8.) 20 Regus now takes the position that this wasn’t good enough. First, it used the words “a 21 motivating reason” rather than “a substantial motivating reason.” Second, the Court didn’t 22 define “liable for wrongful termination” in a way that tied it to the elements of Steffens’s 17 18 23 24 25 26 27 28 3 The other case was Davis v. L.A. Unified Sch. Dist., 152 Cal.App.4th 1122 (2007)—although the Court would later clarify that this wasn’t clearly a retaliation case and that the better authority was General Dynamics Corp. v. Superior Court, 7 Cal.4th 1361, 1379 (Cal. Ct. App. 2002). (See 3/21/13 Tr. at 118:8–15.) The Court gave this instruction despite its sense—which frankly is still its sense—that unlike Grant-Burton and Davis this is not a mixed motive case. Steffens claimed she was fired for complaining about meal and rest break violations in an October 2006 meeting with Golgart and Jones, and Regus denied that she made the complaint or that it had anything to do with her termination. As the Court said at the time, “The evidence is pretty stark here. Either she was fired for a legitimate reason wholly independent and disavowing and denying any illegitimate reason or she was fired for an illegitimate reason. It seems like it’s one of those two choices. This doesn’t seem like a mixed-motive case to me.” (3/21/13 Tr. at 112:22–113:2.) - 16 - 08cv1494 1 claim. Third, it didn’t define the terms “valid” and “invalid.” Related to this, it didn’t clarify for 2 the jury that merely disagreeing with Regus’s decision to terminate Steffens wasn’t grounds 3 for finding against it. And fourth, the verdict form asked only if Regus wrongfully terminated 4 Steffens without defining “wrongfully terminate” or asking if Regus would have reached the 5 same decision for other, lawful reason. The Court addressed the first of these complaints 6 above; it was enough to modify CACI 2430 and define “a motivating reason” as “one that is 7 substantial or non-trivial.” 8 The next argument, that the instruction “Defendant would not be liable for wrongful 9 termination if it proves that it would have terminated Plaintiff regardless” was problematic, 10 and runs into the same problem as Regus’s grievances with the verdict form addressed 11 above in section C. It is true that the lead-in to the instruction on Steffens’s substantive 12 claim was “Plaintiff claims she was terminated in retaliation for reporting that hourly workers 13 were not receiving meal and/or rest breaks as required by California law” rather than “Plaintiff 14 claims she was wrongfully terminated . . . .” (Doc. No. 144 at 12.) But the jury well knew, 15 from the opening of this case through the presentation of evidence and closing arguments, 16 that Steffens’s claim was a wrongful termination claim.4 And the instruction itself was as 17 clear as it needed to be that the five elements Steffens had to prove were the elements of 18 a wrongful termination claim. So, when the Court read the final line of the instruction, 19 notwithstanding Regus’s argument that the word “liable” requires further definition, it was 20 plenty clear to the jury what it intended to say: Even if Steffens proved the five elements of 21 her claim, she still loses if Regus can prove it would have fired her for some other, 22 independent reason. Now, the Court could have actually said, “Steffens still loses,” just like 23 it could have said “Defendant wins,” or “Steffens’s claim fails,” or “Steffens cannot recover,” 24 or “You must find for the Defendant,” or, or any number of things. They are all synonymous, 25 // 26 4 27 28 The Court has given evidence of this above. Steffens points, too, to the Court’s description of this case to the jury at the outset: “In this lawsuit, Ms. Steffens claims that her employment was wrongfully terminated. She maintains that she was fired in retaliation because she reported to her managers that hourly employees, whom she supervised, were not receiving meal and rest breaks in violation of California law.” (3/18/13 Tr. at 9:14–18.) - 17 - 08cv1494 1 though, with what the Court did choose to say: “Defendant would not be liable for wrongful 2 termination.” 3 Regus argues that the Court’s use of “valid” and “invalid” to describe motivating 4 reasons for Steffens’s termination was improper because the terms are not a proper legal 5 standard and were undefined anyway. 6 Davis—which Regus cited, by the way, in arguing for a same decision instruction5—used 7 “valid” and “invalid” to differentiate legally permissible grounds for a termination: “Similarly, 8 where an employee has been discharged for both a valid reason (wrongful conduct) and an 9 invalid reason (engaging in protected activity), the courts will not grant a remedy if the same 10 decision would have been made for the valid reason.” Davis, 152 Cal.App.4th at 1136. 11 True, it defined them briefly in parentheticals, but Regus can’t seriously insist that in context 12 their meaning wasn’t clear to the jury here. The Court said, “If you find that Plaintiff’s reports 13 about meal and/or rest breaks were a motivating reason for her termination, then the burden 14 of proof shifts to Defendant to establish, also by a preponderance of evidence, that it would 15 have made the same decision even if it had not taken into account the invalid motivating 16 reason.” The words “the invalid motivating reason” in that sentence are obviously a 17 reference back to “Plaintiff’s reports about meal and/or rest breaks.” And because Steffens 18 alleged no other improper basis for her termination—her retaliation for whistleblowing and 19 age discrimination claims didn’t make it to trial—a “valid” reason was obviously any reason 20 other than her reports about meal and rest breaks. The Court didn’t need to spell this out 21 in any greater detail for the jury. It is wrong on both counts. The court in 22 Up next is Regus’s grievance that the Court deprived it of a “business judgment” 23 instruction that would have explicitly told the jury it wasn’t to judge the general wisdom or 24 fairness of Steffens’s termination.6 In fact, Regus submitted a full-page instruction titled “At 25 26 27 5 It was Regus that brought Grant-Burton and Davis to the Court’s attention, both of which convinced it to give a same decision instruction. (Doc. No. 130 at 4.) 6 28 The Court acknowledges that Regus submitted a “business judgment” instruction but it doesn’t see in the transcript—nor does Regus cite in its motion for a new trial—where Regus actually argued for one at trial. - 18 - 08cv1494 1 Will Employment and Business Judgment Rule,” and the Court gave a modified portion of 2 it: “In this case, Defendant employed Plaintiff ‘at-will.’ At-will employees may be terminated 3 for any lawful reason, or for no reason at all. However, at-will employees may not be 4 terminated for a reason that violates public policy, such as reporting violations of the law.” 5 (See Doc. No. 146 at 7; Doc. No. 144 at 12.) In the context of the entire instruction, this 6 communicated exactly what a “business judgment” instruction would have communicated, 7 namely that the jury was to find for Steffens only if it believed Regus terminated her because 8 of her reports about meal and rest breaks and for no other reason. And counsel for Regus 9 hammered this very point in closing argument, telling the jury, “Even if you disagree with how 10 we conduct our business, if it has nothing to do with somebody complaining about a violation 11 of law, then Mr. Stormer can sit up here all day and talk about profits and profits and profits.” 12 (3/21/13 Tr. at 211:8–11; see also 3/21/13 Tr. at 21–23 (“And because we may not agree 13 with the decision, because we think, ‘Well, it could have been done in a different way,’ does 14 not make it a public policy termination.”).) Finally, Regus is right that courts have found 15 reversible error in the refusal to give a “business judgment” instruction, even where an 16 instruction about at-will employment was given, see Veronese v. Lucasfilm Ltd., 212 17 Cal.App.4th 1, 20–24 (Cal. Ct. App. 2012), but the Court rejects the suggestion here that the 18 totality of the instructions given didn’t make plain for the jury that its only task was to 19 determine whether Steffens’s termination was unlawful, as opposed to wise, or mistaken, 20 or cosmically unfair. Indeed, the court in Veronese reached its decision in part because the 21 absence of a “business judgment” instruction wasn’t mitigated by any other instruction, a 22 finding that can’t be made in this case. 23 Finally, Regus objects that the verdict form didn’t have a “same defense” 24 question—that is, it didn’t ask the jury specifically whether Regus would have terminated 25 Steffens anyway for some reason unrelated to her alleged reports about meal and rest 26 breaks. Again, because the actual claim instruction contained a “same defense” instruction, 27 there was no need to ask a “same defense” question on the verdict form itself. The jury well 28 knew that if it found Regus would have fired Steffens anyway for reasons having nothing to - 19 - 08cv1494 1 do with reports about meal and rest breaks, her termination could not have been a wrongful 2 one in violation of public policy. See Mateyko, 924 F.2d at 827. 3 Regus’s motion for a new trial based on the Court’s “same defense” instruction is 4 DENIED. 5 G. 6 The Court bifurcated the punitive damages phase of this case. (Doc. No. 123 at 2.) 7 During the liability phase, before it began to deliberate, the jury was instructed simply on the 8 factual predicate to a punitive damages award: 9 10 11 Punitive Damages If you find for the Plaintiff and award damages, you must further determine whether Defendant acted with malice, oppression, or fraud. Plaintiff must prove malice, oppression, or fraud by clear and convincing evidence, which means that you must find it is ‘highly probable’ that Defendant acted in this way. 16 Conduct is ‘malicious’ if it is accompanied by ill will or spite, or if it intended to injure someone. Conduct is ‘oppressive’ if it injures or damages or otherwise violates someone’s rights with unnecessary harshness or severity, such as the misuse or abuse of authority or power or by taking advantage of someone’s weakness, disability, or misfortune. And finally, conduct is ‘fraudulent’ if it intentionally misrepresents or conceals material facts with the intent to harm. (Doc. No. 144 at 17.) 17 The verdict form, following up on this instruction, asked, “In terminating Plaintiff, did 18 Defendant, as proved by clear and convincing evidence, act with malice, oppression, or 19 fraud? Yes or no?” (Doc. No. 143 at 1; see also 3/21/13 Tr. at 173:16–174:25.) After the 20 jury returned its verdict answering that question in the affirmative, the Court gave a more 21 detailed, supplemental instruction on punitive damages: 12 13 14 15 22 23 24 25 26 27 28 The purpose of punitive damages are to punish a defendant and to deter similar acts in the future. Punitive damages may not be awarded to compensate a plaintiff. The plaintiff has the burden of proving by clear and convincing evidence that punitive damages should be awarded, and if so, the amount of any such damages. If you find that punitive damages are appropriate, you must use reason in setting the amount. Punitive damages, if any, should be in an amount sufficient to fulfill their purposes but should not reflect bias, prejudice, or sympathy toward any party. In considering the amount of any punitive damages, consider the degree of reprehensibility of the defendant’s conduct, including - 20 - 08cv1494 1 whether the conduct that harmed the plaintiff was particularly reprehensible because it also caused actual harm or posed a substantial risk of harm to people who are not parties to this case. You may not, however, set the amount of any punitive damages in order to punish the defendant for harm to anyone other than the plaintiff in this case. 2 3 4 In addition, you may consider the relationship of any award of punitive damages to any actual harm inflicted on the plaintiff. (Doc. No. 144 at 21–22; see also 3/22/13 Tr. at 3:18–5:25.) 5 6 7 Regus now raises three problems with these instructions. 8 First, Regus says, the Court’s definitions of malice and oppression were wrong; it 9 used Ninth Circuit Model Jury Instruction 5.5 rather than CACI 3946. This matters because, 10 according to Regus, the Ninth Circuit definitions are easier to meet. For example, while both 11 instructions say conduct is malicious if it’s intended to cause injury, the Ninth Circuit 12 instruction says it’s also malicious if it’s accompanied by “ill will or spite” whereas the 13 California instruction says it’s also malicious if was “despicable and was done with a willful 14 and knowing disregard of the rights or safety of another.”7 Likewise, while the Court defined 15 conduct as oppressive if it “injures or damages or otherwise violates someone’s rights with 16 unnecessary harshness or severity,” the California instruction defines it as conduct that “was 17 despicable and subjected the plaintiff to cruel and unjust hardship in knowing disregard of 18 her rights.” Regus’s second complaint is that the Court didn’t instruct the jury that the acts 19 constituting malice or oppression had to have been committed by a Regus officer, director, 20 or managing agent.8 And third, Regus criticizes the Court for not instructing the jury to 21 consider Regus’s financial condition in settling on a punitive damages amount (and not 22 23 24 25 26 27 7 The emphasis on also here is important. Both instructions are given in the disjunctive, meaning conduct is malicious if it was intended to injure or, under the Ninth Circuit instruction if it was accompanied by ill will or spite and under the California instruction if it was despicable and done with a knowing disregard for another’s rights or safety. 8 28 Actually, CACI 3946 doesn’t require that the malicious or oppressive acts be committed by an officer, director, or managing agent. It is also sufficient under the instruction if an officer, director, or managing agent authorized the acts, or knew about them and subsequently adopted or approved them. - 21 - 08cv1494 1 allowing for new evidence on this matter), as required by CACI 3949.9 To be clear, the first 2 and second complaints are directed at the first punitive damages instruction, while the third 3 claim is directed at the supplemental instruction. 4 As a threshold matter, the Court questions whether Regus ever specifically objected 5 to the instructions at trial. It’s true that Regus’s proposed instructions, particularly Q and R, 6 contained the language it now argues the Court erred by not using, and Regus noted its 7 objections to Steffens’s proposed instructions on copies submitted to chambers. (See Doc. 8 No. 146 at 16–19.) But when the time first arrived to discuss the instructions in open court, 9 Regus really said nothing more than, feebly, that it had submitted instructions of its own that 10 the Court wasn’t using. (See 3/20/13 Tr. at 263:17–265:4.) It certainly did not say, clearly 11 and on the record, that the Court had to give the CACI instructions verbatim as a matter of 12 law10, nor did it attempt to explain any specific objections to using the Ninth Circuit 13 instructions. The following day, during another instructions conference, Regus was similarly 14 shy. (See 3/21/13 Tr. at 114:1–120:6.) Before a noon recess, the Court gave the parties 15 a final set of proposed jury instructions and said, “If you can look over those. And if you 16 have any other changes, note those, and I’ll take formal objections to the instructions or 17 refusal to give other instructions when we come back.” (3/21/13 Tr. at 116:19–22.) After 18 the break, when the Court informed the parties it had changed the punitive damages 19 instruction, pursuant to Regus’s request, to require Steffens’s to prove malice, oppression, 20 or fraud by clear and convincing evidence, it said, “So I think with these changes, I’m happy 21 to hear from you any additional requests or objections that you have, but I would consider 22 9 23 24 25 26 27 28 CACI 3949 instructs a jury to consider each of three factors, separately, in determining the amount of punitive damages. The third is “In view of that defendant’s financial condition, what amount is necessary to punish the defendant and discourage future wrongful conduct?” See also Adams v. Murakami, 54 Cal.3d 105, 109 (Cal. 1991) (“Our prior decisions, constitutional considerations, and the importance of appellate review indicate that an award of punitive damages cannot be sustained on appeal unless the trial court record contains meaningful evidence of the defendant’s financial condition.”). 10 Regus cites two cases for this proposition, both from the Tenth Circuit: Alley v. Gubser Dev. Co., 785 F.2d 849 (10th Cir. 1986) and Miller v. Cudahy Co., 858 F.2d 1449 (10th Cir. 1988). Alley actually doesn’t make the point explicitly; it simply acknowledges that in Colorado exemplary damages are a creature of statute and then follows Colorado law. Alley, 785 F.2d at 855. Miller is a bit more firm: “In a diversity case, the circumstances under which punitive damages are available are governed by state law, as are the substantive elements upon which such an award may be based.” Miller, 858 F.2d at 1457. - 22 - 08cv1494 1 this a settled set subject to taking your final comments.” (3/21/13 Tr. at 119:14–17.) 2 Regus’s only response was, “There were a number of instructions that we proposed that you 3 did not give. I was just going to file a pleading defendant proposed instructions not given by 4 the Court.” The Court said “That’s fine” and then explained “The reason I’m not giving any 5 that are not in this packet is I find that they’re subsumed and the principles are already 6 covered by existing pattern instructions, or alternatively, I find that they include elements that 7 are not elements.” Regus’s response was “Thank you.” (3/21/13 Tr. at 119:14–120:6.) 8 The Court should be clear here and say that the above applies only to the first 9 punitive damages instruction. The second punitive damages instruction was drafted and 10 presented to the parties after the jury notified the Court that it had reached a verdict but 11 before the verdict was read—basically, during the down time that the Court contacted 12 counsel and told them to return to the courtroom, and readied itself for the verdict. That 13 said, Regus still made no specific objection to the second punitive damages instruction on 14 the record once court had been reconvened. Counsel for Steffens, Cindy Panuco, has 15 submitted a declaration with her recollection of this quasi-conference on the second punitive 16 damages instruction, and it is not inconsistent with the Court’s own. At the time that jury 17 reported it had reached a verdict, the Court had not prepared a follow-up instruction for 18 determining the amount of punitive damages. The law clerk did that relatively quickly, 19 because it was the Court’s announced intent, assuming the jury did find that Regus 20 terminated Steffens with malice or oppression, to immediately give the second punitive 21 damages instruction and move into a second phase of arguments. Regus did not specifically 22 object that the Court was using a Ninth Circuit rather than CACI instruction, nor did it object 23 to the protocol of moving straight into further argument without putting on additional evidence 24 of Regus’s net worth or financial condition. Nor, finally, did Regus object on the record when 25 the jury returned a verdict for Steffens and the Court explained, “I have another instruction, 26 and there is a final phase of the trial that I think at least the presentations will involve no 27 presentation of evidence, just some further argument.” (3/22/13 Tr. at 3:20–23.) 28 // - 23 - 08cv1494 1 The general rule is that objections to jury instructions must be made “on the record, 2 stating distinctly the matter objected to and the grounds for the objection.” Fed. R. Civ. P. 3 51(c)(1). A limited exception arises “where the district court is aware of a party’s concerns 4 and further objection would be unavailing.” Medtronic, Inc. v. White, 526 F.3d 487, 495 (9th 5 Cir. 2008) (citation omitted). 6 throughout the trial the party argued the disputed matter with the court, (2) it is clear from the 7 record that the court knew the party’s grounds for disagreement with the instruction, and (3) 8 the party offered an alternative instruction.” Id. (internal quotations and citation omitted). 9 These rules are a problem for Regus here. First, Regus never raised at trial, specifically and 10 on the record, the objections it raises now. The most it argued was that some of its 11 instructions weren’t given, which in and of itself is completely unremarkable; the Court never 12 gives every instruction a party asks for, but rather does its best to reconcile the parties’ 13 proposed instructions into a concise and workable set for the jury. Second, Regus can’t 14 benefit from the exception to the general rule because its present objections weren’t argued 15 throughout the trial (in fact, they weren’t argued at all), nor is it at all clear from the record 16 that the Court understood exactly what Regus’s problems with the punitive damages 17 instruction were. The Court finds that Regus’s objections to the punitive damages instruction 18 were waived at trial, and it therefore DENIES the motion for a new trial on this ground. More specifically, the exception is available when (1) 19 Even assuming the Court were to allow Regus’s objections now, it would still find them 20 to be substantively weak and the Court’s alleged errors insufficiently prejudicial to warrant 21 a new trial. See Huff v. Sheahan, 493 F.3d 893, 899 (7th Cir. 2007) (“[W]e shall reverse 22 when the instructions misstate the law or fail to convey the relevant legal principles in full and 23 when those shortcomings confuse or mislead the jury and prejudice the objecting litigant.” 24 (internal quotations and citations omitted) (emphasis added); Reed v. Hoy, 909 F.2d 324, 25 326 (9th Cir. 1989) (“We review jury instructions to determine whether, taken as a whole, 26 they mislead the jury or state the law incorrectly to the prejudice of the objecting party.”); 27 Nava v. Seadler, 2011 WL 6936341 at *3 (N.D. Cal. Dec. 30, 2011) (“Even assuming that 28 // - 24 - 08cv1494 1 the jury instruction as given was incomplete and therefore incorrect, the court finds that a 2 new trial is not warranted because the error was more probably than not harmless.”). 3 First, the difference between the Ninth Circuit instruction’s definitions of “malice” and 4 “oppression” and California’s definition of those terms is so nuanced, and so much a matter 5 of semantics, that it is largely imaginary. Second, on the matter of a “managing agent” 6 instruction, CACI 3946 requires that the conduct at issue was committed by, authorized by, 7 or adopted and approved after the fact by, “one or more officers, directors, or managing 8 agents.” Steffens’s claim at trial, for which she put on evidence, was that Golgart, at the time 9 Regus’s regional vice president for the west and Canada (see 3/20/13 Tr. at 129:8–9), 10 orchestrated her termination in retaliation for her reports about meal and rest breaks. On 11 any definition of “officer” or “managing agent,” Golgart was one. Even a case that Regus 12 relies on, as Steffens points out, supports this. See White v. Ultramar, Inc., 21 Cal.4th 563 13 (1999). The court in White recognized that “the Legislature intended that principal liability 14 for punitive damages not depend on employees’ managerial level, but on the extent to which 15 they exercise substantial discretionary authority over decisions that ultimately determine 16 corporate policy.” Id. at 577. It then found that a zone manager of eight convenience stores 17 and 65 employees, to whom other store managers reported, who reported to corporate 18 management, and who herself fired the plaintiff met the definition of a managing agent. Id. 19 at 577. It’s hard to see how, following White, Golgart could not be considered a managing 20 agent. 21 Finally, with respect to Regus’s net worth and financial condition, the jury did hear 22 evidence as Steffens notes. For example, Golgart testified that before the October 2006 23 meeting the Regus’s Emerald Plaza center had revenues of about $230,000 a month. 24 (3/20/13 Tr. at 166:3–8.) The jury heard that Emerald Plaza was just one of seven centers 25 in San Diego alone, and one of fifty-seven centers in California. (3/20/13 Tr. at 140:16–21.) 26 The irony of this argument, of course, is that Regus filed a motion in limine to exclude 27 evidence of its financial condition at trial, which the Court granted. (See Doc. Nos. 86, 123 28 at 2.) While the Court did say that financial records would be admissible in the punitive - 25 - 08cv1494 1 damages phase of this case, Regus never requested or affirmatively argued this as much 2 as it reluctantly conceded that the information would be relevant if the jury found for Steffens 3 on the liability question. (See Doc. Nos. 123 at 2.) This makes perfect sense, too, because 4 Regus admits it is “a large, international company,” and the clear spirit of its motion in limine 5 regarding its financial condition is that the information could only prejudice Regus at trial. 6 (Doc. No. 86 at 3.) While Regus seizes now on the fact that the jury didn’t hear evidence 7 of its finances, it certainly doesn’t argue that if the jury had received evidence of its finances 8 the punitive damages award would have been less. 9 III. Evidentiary Rulings 10 Moving on from allegedly erroneous jury instructions, Regus believes that a number 11 of the Court’s evidentiary rulings were so erroneous as to have cost it this case. “A new trial 12 is only warranted when an erroneous evidentiary ruling substantially prejudiced a party.” 13 Ruvalcaba v. City of Los Angeles, 64 F.3d 1323, 1328 (9th Cir. 1995) (internal quotations 14 and citation omitted). 15 A. 16 To rebut the element of Steffens’s wrongful termination claim that she had some 17 reasonable and good faith belief that Regus wasn’t providing employees with meal and rest 18 breaks, Regus tried to introduce at trial the results of an internal audit it conducted after 19 learning Steffens was pursuing a lawsuit. According to Regus, the audit confirmed that no 20 hourly employees missed their breaks at the Emerald Plaza center, and this would have both 21 diminished Steffens’s credibility, and, just as important, showed that her report of meal and 22 rest breaks had no reasonable or good faith basis. Steffens objected, and the Court 23 sustained the objection. Initially, the stated basis for excluding the evidence was simple 24 relevance: Regus wasn’t being accused in this case of not providing meal and rest breaks 25 to employees, but of firing an employee for alleging as much. 26 143:21–145:10; 146:2–8.) But during a subsequent sidebar, when Regus made clear that 27 it wanted to show Steffens had no reason to make the allegation, the Court added that the 28 audit was hearsay and Regus had no rebuttal to that: Evidence of Meal and Rest Breaks - 26 - (See 3/21/13 Tr. at 08cv1494 1 2 Court: I’m not going to allow it. We’re conducting our own investigation. The only thing is hearsay. She didn’t catch the hearsay. 3 Mr. Carothers: She did. 4 Court: How can she competently testify whether these breaks would be given when she wasn’t there? You have to reconstruct it. People told me they were getting their breaks or they weren’t. I’m not going to permit it. That’s what this is about. (3/21/13 Tr. at 157:21–158:4.) 5 6 7 Regus now argues that this was reversible error. 8 The counterpoint to Regus’s argument is that it was never Regus’s defense to 9 Steffens’s claim that she had no reasonable or good faith basis for believing employees 10 weren’t being provided meal and rest breaks. Had that been Regus’s defense, presumably 11 the trial would have gone very differently. Regus would have essentially conceded that 12 Steffens reported meal and rest break violations, but it then would have argued that these 13 reports were a baseless deflection of her responsibility for running the Emerald Plaza center 14 to its satisfaction and therefore an adequate ground for her termination. That wasn’t Regus’s 15 theory of the case. Instead, Regus, through Golgart’s testimony, argued that Steffens never 16 reported meal and rest break violations in the first place: 17 18 19 20 21 22 23 24 25 26 27 28 Q: During this meeting while you — the three of you are in Denise Steffens’s office before you go to the luncheon down the hall, did Ms. Steffens say anything about wage and hour violations? A: No. Q: Did she say anything — did Ms. Steffens say anything during this meeting about Regus violating California law by not giving the hourly employees meal and rest breaks? A: No. Q: Did she read some legal language or quote some legal language during the meeting about California law concerning meal and rest breaks? A: Did she read? Q: Or did she recite? A: No. - 27 - 08cv1494 1 2 3 Q: Did she specifically say that her team members, the CSR’s or the hourly employees, weren’t getting meal and rest breaks? A: No. (3/20/13 Tr. at 187:22–188:14.) 4 Indeed, when Golgart first took the stand and counsel for Regus asked him up front if he 5 fired Denise Steffens because she reported that Regus was violating the law, he said “No.” 6 (3/20/13 Tr. at 130:6–8.) So, to the extent Regus criticizes the Court for not letting the 7 internal audit in, it is trying to present a different case now than it presented at trial. 8 Looking past this, Steffens’s good faith was still an element of her wrongful 9 termination claim, and whether Regus actually provided meal and rest breaks to employees 10 is somewhat relevant to that element. It may not be a determinative fact, and probing it does 11 risk a kind of mini-trial on a peripheral issue, but it may nonetheless have been a fair rebuttal 12 to Steffens’s claim that she sincerely believed meal and rest breaks weren’t being provided 13 to provide proof that they were. Even when evidence is relevant, though, it must also be 14 competent. Here, Regus proposed to introduce the evidence through a witness, Sharon 15 Edmondson, a Regus human resources vice president based in Dallas, Texas who received 16 the results of a third-party audit after Regus got sued. The third party auditors purportedly 17 had spoken with Regus employees in San Diego, although Regus has never been clear on 18 this point. What is clear is that statements made to the auditors, as well as testimony from 19 Edmondson about what the audit revealed, would have plainly been hearsay. Nothing 20 precluded Regus from calling witnesses from the San Diego center who had personal 21 knowledge, for example hourly employees who could have testified that they were never 22 denied a meal or rest break, if that were true. Regus didn’t do that. 23 At the time the Court raised the hearsay problem with the audit, Regus had no 24 answer, but it now says “the Court did not give Regus the opportunity to present testimony 25 to establish that the audit was a business record or qualified under any other hearsay 26 exception.” (Doc. No. 153 at 19 n.9.) The Court presumes that if Regus really had some 27 other plausible hearsay exception in mind it would simply have given it and not given the 28 point a footnote’s attention. The business records exception can’t get the job done, though. - 28 - 08cv1494 1 It’s available where the record is “(1) made or based on information transmitted by a person 2 with knowledge at or near the time of the transaction; (2) made in the ordinary course of 3 business; and (3) trustworthy, with neither the source of information nor method or 4 circumstances of preparation indicating a lack of trustworthiness.” S.E.C. v. Jasper, 678 5 F.3d 1116, 1122 n.2 (9th Cir. 2012). The audit fails (1) and (2), and perhaps even (3). See 6 Paddack v. Dave Christensen, Inc., 745 F.2d 1254, 1259 (9th Cir. 1984) (“A document 7 prepared for purposes of litigation is not a business record because it is lacking in 8 trustworthiness. This is because where the only function that the report serves is to assist 9 in litigation or its preparation, many of the normal checks upon the accuracy of business 10 records are not operative.”) (international quotations marks and citation omitted). Regus’s 11 request for a new trial based on the Court’s unwillingness to allow testimony about the audit 12 is DENIED. 13 B. 14 During trial Regus tried to introduce actual notes Edmondson took during a June 2007 15 phone call with Steffens in which she wrote that Steffens was “not engaged” in her job at the 16 Emerald Plaza center. (See 3/21/13 Tr. at 140:14–141:10; Doc. No. 148 at 10.) Regus 17 wanted not only to rebut Steffens’s charge that she was a strong performer, but to show that 18 this defense wasn’t concocted after she was fired and it found itself the recipient of a lawsuit. 19 The Court sustained an objection to the admission on Edmondson’s notes on the ground 20 they were hearsay, and when counsel for Regus maintained they were a business record 21 the Court disagreed. (See 3/21/13 Tr. at 126:20–127:4.) Now, Regus renews its argument 22 that the notes are a business record under Federal Rule of Evidence 803(6), and adds that 23 they were the non-hearsay statement of a party-opponent under Rule 801(d)(2) and a 24 present sense impression under Rule 803(1). Edmondson’s Notes 25 Notes from a telephone conversation, to be fair, may satisfy the business records 26 exception to the hearsay rule. See, e.g., U.S. v. Kingston, 971 F.2d 481, 486 (10th Cir. 27 1992). But notes may also not satisfy the exception, particularly where “the source of 28 information [ ]or the method or circumstance of preparation indicate a lack of - 29 - 08cv1494 1 trustworthiness.” they also may not. Fed. R. Ev. 803(6); see also In re Cirrus Logic 2 Securities Litig., 946 F.Supp. 1446, 1469 (N.D. Cal. 1996). The Court finds that here with 3 respect to Edmonson’s impression of Steffens’s engagement—an impression recorded over 4 the telephone after Steffens had been put on an improvement plan and allegedly after Regus 5 made the decision to fire her. When the Court denied that the notes were a business record 6 at trial, Regus had no rebuttal. (3/21/13 Tr. at 127:1–4.) Now, in its motion for a new trial, 7 Regus still has no rebuttal; it just asserts in a conclusory fashion that the business records 8 exception applies. (Doc. No. 153 at 29.) 9 Regus’s argument that the notes were a statement of a party-opponent under Rule 10 801(d)(2) is perplexing. Regus is challenging the refusal to admit the notes of Edmondson, 11 its own witness, to the effect that Steffens was “not engaged.” But those aren’t the 12 statements of a party-opponent. The non-hearsay rule covers statements offered against 13 an opposing party that were made by that opposing party, and therefore wouldn’t cover 14 Edmondson’s own statements about Steffens’s lack of engagement here. 15 The notes also aren’t a present sense impression—an argument Regus makes here 16 for the first time and has therefore likely waived. See Fed. R. Ev. 103(a)(2). As with the 17 business records exception to the hearsay rule, notes from a conversation or meeting may 18 satisfy the present sense impression exception. See U.S. v. Perl, 492 Fed.Appx. 37, 40 19 (11th Cir. 2012); Tracinda Corp. v. DaimlerChrysler AG, 362 F.Supp.2d 487, 502 (D. Del. 20 2005); U.S. v. Ferber, 966 F.Supp. 90, 97 (D. Mass. 1997). They also might not. See Cody 21 v. Harris, 2004 WL 1254129 at *3 (N.D. Ill. June 8, 2004); Newark Group, Inc. v. Sauter, 22 2004 WL 5623944 at *6 (S.D. Ohio Mar. 26, 2004); Cirrus Logic, 946 F.Supp. at 1469. 23 Cirrus Logic may be the most relevant of all of these cases. The court in that case held that 24 notes taken by a stock analyst during a call with company executives were the analyst’s own 25 interpretations and analyses of those conversations, and therefore constituted “subjective 26 input in clear violation of the theory underlying Rule 803(1).” Id. Something similar could be 27 said of Edmondson’s note that Steffens was “not engaged.” The present sense impression 28 exception limits the subject matter of the hearsay to a description or explanation of an event - 30 - 08cv1494 1 or condition, and it must be made with little chance for reflection. See Fed. R. Ev. 803(1); 2 Bemis v. Edwards, 45 F.3d 1369, 1372 (9th Cir. 1995). Regus doesn’t do anything other 3 than assert the present sense impression exception here, so the Court has no understanding 4 of what its actual argument is, but it would stand by its initial ruling. If that ruling was 5 mistaken, the Court would still find that Regus waived the argument at trial and that there is 6 no prejudice from the exclusion considering that Edmondson testified about what her notes 7 said, and all the actual notes would have done is establish that she was not lying. Regus’s 8 motion for a new trial is therefore DENIED. 9 C. Financial Documents 10 Regus criticizes the Court for not allowing it to present financial documents that, it 11 says, would have shown the Emerald Plaza center was not performing well under Steffens’s 12 leadership. (See Doc. No. 148 at 14–17.) Counsel for Steffens represented that the 13 documents were given to him that morning (of the third day of trial) for the first time, that they 14 were printed out the night before, and that the data was formatted and even calculated 15 differently than in previous disclosures he’d received. Regus conceded all but the final point, 16 and the Court refused to allow Regus to present the documents. 17 100:12–102:18.) Now, for the first time, Regus argues that the documents were business 18 records and impeachment evidence, and that the Court’s exclusion of them was prejudicial 19 because it resulted in the evidence being one-sided—none of which, of course, overcome 20 the fact the Regus presented the documents to Steffens on the morning of trial. (3/20/13 Tr. at 21 But even if the Court overlooks the timeliness of the disclosures, Regus’s reasons for 22 allowing them come up short. First, calling them business records presumes there was 23 some sort of hearsay objection to their use, which there was not, and also overlooks that 24 they were generated for the purposes of litigation, which disqualifies them as business 25 records in the first place. See Millenkamp v. Davisco Foods Int’l Inc., 562 F.3d 971, 980 (9th 26 Cir. 2009). Second, impeachment evidence is evidence that goes to a witness’s credibility 27 or potential bias. Here, Steffens and Jones testified that the Emerald Plaza center was 28 doing well; Regus may have had financial documents suggesting the opposite, but those - 31 - 08cv1494 1 documents would just be Regus’s side of the story; they wouldn’t be introduced to show that 2 Steffens and Jones can’t be trusted on the witness stand. Third, Regus can’t seriously argue 3 that without the documents it suffered a “complete absence” of documentation to make its 4 case, as in the case it cites, Phoenix Assoc. III v. Stone, 60 F.3d 95, 105 (2d Cir. 1995). In 5 fact, Regus itself cites to Golgart’s testimony where various financial documents were 6 discussed and the jury heard Regus’s account of how the Emerald Plaza center was truly 7 performing when Steffens was employed to manage it. (See 3/20/13 Tr. at 231:7–235:21; 8 see also Doc. No. 156-4 at 35, 65–75.) Regus’s motion for a new trial because of the 9 exclusion of the financial documents is DENIED. 10 IV. Weight of the Evidence 11 Moving on from the Court’s alleged errors, Regus next focuses its attention on the 12 evidence presented at trial and tries to argue that it can’t possibly support the jury’s verdict. 13 Obviously, this is a strenuous argument to make considering the legal standard. “A motion 14 for a new trial [based on insufficiency of the evidence] may be granted . . . only if the verdict 15 is against the great weight of the evidence or it is quite clear that the jury has reached a 16 seriously erroneous result.” Venegas v. Wagner, 831 F.2d 1514, 1519 (9th Cir. 1987). 17 In a way, it’s worth noting, the Ninth Circuit’s own remand order in this case 18 forecloses Regus’s argument that the verdict can’t stand on the evidence presented. The 19 Ninth Circuit recognized that: (1) Steffens was a longstanding employee of HQ and Regus 20 who consistently received positive reviews; (2) Steffens and Jones testified that when she 21 brought up meal and rest breaks during the October 2006 meeting Golgart was immediately 22 and awkwardly silent; (3) Jones testified that Golgart directed him to get rid of Steffens after 23 the October meeting because of her meal and rest break report and that they put together 24 an aggressive improvement plan with this purpose in mind. Based on this evidence, the 25 Ninth Circuit said, “we conclude that Steffens presented sufficient evidence of pretext to 26 create a genuine issue of material fact as to the real reason for her termination.” Steffens 27 v. Regus Group, PLC, 485 Fed. Appx. 187, 189 (9th Cir. 2012). This same evidence that 28 the Ninth Circuit said warranted a trial was established at trial, and while Regus tried to rebut - 32 - 08cv1494 1 it, it is perfectly comprehensible that the jury simply believed Steffens’s and Jones’s story 2 more than Regus’s. 3 A. 4 Regus begins by claiming there was no evidence that Steffens was terminated in 5 actual retaliation for her report about meal and rest breaks in the October 2006 meeting. 6 What Regus really means, though, is that there was no “smoking gun,” which of course there 7 doesn’t need to be. But the Court disagrees with Regus’s characterization of the evidence: 8 there was a smoking gun in this case. The jury heard testimony from both Steffens and 9 Jones that Steffens brought up meal and rest breaks during the October 2006 meeting and 10 that Golgart abruptly grew silent. (3/19/13 Tr. at 54:19–56:3; 196:20–198:7.) Jones further 11 testified that the moment the meeting ended and Steffens had left, Golgart said they needed 12 to get rid of her. (3/19/13 Tr. at 200:8–2-1:5.) This testimony, if believed (as it obviously 13 was), amounted to a smoking gun that Steffens was terminated for reporting her belief that 14 Regus was violating California law. The jury also heard evidence that the performance 15 improvement plan Steffens was subsequently placed on was both formulaic and virtually 16 unattainable; Jones even testified that “i[t] was not a plan for improvement, but to have her 17 fired.” (3/19/13 Tr. at 220:6–7.) Golgart and Edmondson had to concede, in relatively plain 18 terms, that the plan was unrealistic to accomplish in its entirety. (3/21/13 Tr. at 75:16–76:15, 19 146:13–146:24. ) On top of all of this, Steffens presented evidence that she’d received only 20 positive performance reviews while employed at the Emerald Plaza center, which Steffens 21 cites to in her opposition brief. (Doc. No. 156 at 35–37.) Regus tried to argue during trial 22 that Golgart simply wasn’t impressed with Steffens during the October 2006 meeting, 23 thought she lacked drive, and thought the center could benefit from new leadership. But it 24 was certainly the jury’s prerogative to accept the direct and circumstantial evidence Steffens 25 presented and believe the story she was telling, namely that she was fired for making a 26 report about meal and rest breaks. The Court can’t toss that verdict simply because it’s not 27 the only reasonable interpretation of the evidence. 28 // Evidence of Retaliation - 33 - 08cv1494 1 B. 2 There’s no dispute that Steffens’s wrongful termination claim required her only to 3 prove she had a reasonable and good faith belief that employees at the Emerald Plaza 4 center weren’t getting their meal and rest breaks. She did not need to prove this to actually 5 be true. Regus argues, however, that Steffens offered no evidence to prove even the 6 former, lesser point. Regus argues, “There was no other evidence from which the jury could 7 have inferred that Steffens had a reasonable and good faith belief that Regus was violating 8 the law. Hence, there was no testimony presented by Plaintiff that showed her statement 9 had any reasonable or good faith basis in fact.” (Doc. No. 153 at 26.) Steffens’s Reasonable and Good Faith Belief 10 Regus overlooks Steffens’s own testimony, though, which the jury was entitled to 11 accept as sincere, truthful, and therefore indicative of a reasonable and good faith belief. 12 She testified that during 2005 and 2006, the issue of meal and rest breaks had become 13 important to her, that she found there was no formal policy laid out in the employee 14 handbook, that her center was understaffed, and that she had raised the issue with her 15 supervisors prior to the October 2006 meeting with Golgart. (3/19/13 Tr. at 33:9--36:21.) 16 Then, there was the October 2006 meeting itself, during which Steffens reported that the 17 Emerald Plaza center was understaffed—she even spoke to specific reductions in the 18 workforce there—and that employees weren’t getting their meal and rest breaks. (3/19/13 19 Tr. at 54:11–55:11.) Regus is apparently of the mind that Steffens needed to present some 20 independent, corroborating evidence of meal and rest break violations in order to prove her 21 allegations of such were reasonable and made in good faith. 22 disagrees—although the “staffing model” discussed by Regus in its brief would be such 23 evidence. (See Doc. No. 156 at 27.) The jury was entitled to infer from Steffens’s own 24 testimony, and from her and Jones’s description of the October 2006 meeting, that she 25 lodged a non-frivolous complaint and meal and rest break violations at the Emerald Plaza 26 center—a complaint, that is, that was made in reasonably and in good faith based on her 27 observations at the center. The jury’s verdict was not against the clear weight of the 28 evidence, and Regus’s motion for a new trial is DENIED. - 34 - The Court 08cv1494 1 C. 2 Regus argues that the evidence didn’t support the jury’s emotional distress damages 3 award of $850,000. It cites Mockler v. County of Orange, 157 Cal.App.4th 121 (Cal. Ct. App. 4 2007), a whistleblower retaliation and sexually-based hostile work environment case, in 5 which the court found that a non-economic damages award of $1,681,823 was excessive. 6 The Court of Appeal in Mockler affirmed the trial court’s granting of a new trial on damages, 7 quoting its reasoning at length: 8 9 10 11 12 13 14 15 Emotional Distress Damages After weighing this entire record, including reasonable inferences, the Court finds that as to the County of Orange only, (1) there were no damages due for the harassment, (2) no physical pain and suffering, requiring medical or professional attention, (3) no evidence as to loss of reputation, (4) no evidence plaintiff had trouble finding a new job, (5) no evidence the public scorned plaintiff, (6) no evidence of any future damages or injury. Therefore, the non-economic damages herein in the amount of $1.6 million were excessive. Although the jury may not have intended to ‘punish’ the County, that is what such an inflated award represents. The Court therefore exercises its duty to set aside the verdict pursuant to its independent appraisal of the evidence. The motion is granted unless the plaintiff agrees to accept $125,000. Id. at 147. 16 As Regus sees it, if a new trial on damages was warranted in Mockler a new trial is 17 warranted here. 18 The Court disagrees. There was plenty of testimony from Steffens, some of it 19 corroborated by her friend Linda Reid, that from the October 2006 meeting on through her 20 termination and relocation to Wichita Steffens suffered intense emotional distress. Some 21 of that related to on-the-job pressures, and some of it related to the emotional hit in leaving 22 San Diego, amassing credit card debt, declaring bankruptcy, and moving home with her 23 family. (See, e.g., 3/19/13 Tr. at 68:8–71:14, 72:7–75:16; 3/20/13 Tr. at 116:3–22.) There 24 was a dispute at trial, of course, as to how much of Steffens’s financial troubles were 25 attributable to her termination versus a general economic downturn, but the jury was entitled 26 to credit Steffens’s testimony and evidence that the termination marked a horrific turning 27 point in her life. The Court therefore disagrees that the evidence doesn’t support the jury’s 28 non-economic damages award, and it DENIES Regus’s motion for a new trial on this basis. - 35 - 08cv1494 1 D. 2 Having argued that the evidence was insufficient for the compensatory and non- 3 economic damages the jury awarded, Regus last argues that the evidence doesn’t support 4 the jury’s punitive damages award of $3.5 million. It makes three points here. First, Regus 5 didn’t act maliciously. Second, the award has no potential to deter similar conduct in the 6 future. And third, Steffens elicited no evidence, and the jury saw no evidence, of Regus’s 7 financial condition. Evidence for Punitive Damages Award 8 Regus’s assertion that it didn’t act maliciously falls very flat. To start with, it claims 9 there was no evidence that hourly employees as Emerald Plaza were actually missing their 10 meal and rest breaks, which of course has nothing to do, really, with the merits of Steffens’s 11 claim and therefore nothing to do with whether punitive damages are appropriate. Regus 12 also claims there was no evidence that Steffens was terminated because of her comments 13 about meal and rest breaks during the October 2006 meeting, which the Court has 14 addressed above. To the contrary, there was evidence from which the jury could infer that 15 Steffens was terminated precisely because of her comments about meal and rest breaks, 16 which is to say maliciously. 17 The assertion that the punitive damages award has no potential to deter similar 18 conduct going forward falls even flatter. Here, Regus tries to argue that Shannon Jones, 19 who was the only Regus employee to relate Steffens’s termination to her comment about 20 meal and rest breaks, is no longer with the company and therefore there’s no deterrence 21 work to be done. This completely misunderstands the nature of Steffens’s claim and the 22 likely reasoning behind the jury’s verdict. Steffens argued at trial that it was really Golgart 23 who essentially ordered Steffens terminated for complaining about employees not being 24 given meal and rest breaks—and Regus itself that let him get away with it. If Golgart were 25 no longer employed by Regus, or if Regus no longer existed, maybe this would argument 26 would have a bit more traction. But it has none now. A $3.5 million award is a sit-up-and- 27 take-notice amount, and surely it’s plausible that such an award will impact the manner in 28 which Golgart and Regus handle accusations of labor law violations going forward. - 36 - 08cv1494 1 The Court has already addressed Regus’s contention that evidence of its financial 2 condition was wrongfully excluded. The same analysis applies here, and the Court finds that 3 there was certainly an adequate evidentiary basis for the punitive damages award. The jury 4 may not have received an extended tutorial on Regus’s accounting books, but it was made 5 aware of the scale of Regus’s operations, and even made aware of Regus’s revenue stream 6 at Emerald Plaza in 2006 and 2007. (3/20/13 Tr. at 203:15–206:6.) The Ninth Circuit has 7 even recognized that some evidence of a defendant’s financial condition will do, and that 8 there’s no precise data set that has to be brought to the jury’s attention. See Freund v. 9 Nycomed Amersham, 347 F.3d 752, 763–64 (9th Cir. 2003). It bears repeating, finally, that 10 Regus failed to object when the Court went straight into the punitive damages arguments 11 without additional evidence, as indicated above. The motion for a new trial is DENIED. 12 V. Excessive Damages 13 In addition to arguing that the evidence presented at trial didn’t support the jury’s non- 14 economic and punitive damages award, Regus also argues that the damages were 15 excessive based on the evidence. It’s not entirely clear how these arguments differ, but the 16 Court presumes that while Regus just argued that the damages should be rejected outright 17 by the Court, it is now arguing that the Court should at least reduce them. It cites Fenner 18 v. Dependable Trucking Co., Inc., 716 F.2d 598, 603 (9th Cir. 1983) (“When the court, after 19 viewing the evidence concerning damages in a light most favorable to the prevailing party, 20 determines that the damages award is excessive, it has two alternatives. It may grant 21 defendant’s motion for a new trial or deny the motion conditional upon the prevailing party 22 accepting a remittitur.”).11 23 The Court can reverse a jury’s damages award “if the amount is grossly excessive or 24 monstrous.” Lambert v. Ackerly, 180 F.3d 997, 1011 (9th Cir. 1999). There’s no doubt that 25 // 26 27 28 11 Regus opens its argument, probably correctly, by asserting that whether a jury verdict is excessive is a question of state law. But it then cites Fenner, a Ninth Circuit case, and in discussing the non-economic damages award it relies on Fourth Circuit cases. In any event, the Court doubts that anything turns here on where the legal standard comes from. - 37 - 08cv1494 1 the jury award in this case was high, but the Court is unwilling to call it “grossly excessive” 2 or “monstrous,” and therefore unwilling to throw out the award or reduce it accordingly. 3 A. 4 Citing two Fourth Circuit cases, Regus argues that Steffens’s claims of emotional 5 distress rested too heavily on conclusory statements—and too little on demonstrable 6 injuries—to justify a, $850,000 award. See Sloane v. Equifax Info. Sys., 510 F.3d 495 (4th 7 Cir. 2007); Price v. City of Charlotte, 93 F.3d 1241 (4th Cir. 1996). Indeed, the Fourth Circuit 8 in Sloane recognized that emotional distress is “easily susceptible to fictitious and trivial 9 claims,” and it emphasized the need for plaintiff testimony that “sufficiently articulate true 10 emotional distress” over testimony that “amounts only to conclusory statements.” Sloane, 11 510 F.3d at 503. Likewise, the Fourth Circuit in Price, discussing a Seventh Circuit case, 12 emphasized the need for demonstrable evidence or objective manifestations of emotional 13 distress, over and above a plaintiff’s mere assertions of emotional distress. Price, 93 F.3d 14 at 1252. Drawing on Sloane and Price, Regus argues that Steffens’s offered only conclusory 15 statements that she was distraught by her termination, and that any objective evidence cuts 16 the other way: (1) she found a job three months after she was fired; (2) she suffered no 17 medical or reputational harms; (3) she didn’t lose any friends or sleep; and (4) her salary 18 would have been cut anyway had she stayed with Regus. Emotional Distress Damages 19 As Steffens points out, however, the law on which Regus relies has been expressly 20 disavowed by the Ninth Circuit. And in terms that could not be any more clear: “The holding 21 of Price that ‘the evidence of the emotional distress must be demonstrable, genuine, and 22 adequately explained’ is not the law of this Circuit.” Zhang v. American Gem Seafoods, Inc., 23 339 F.3d 1020, 1040 (9th Cir. 2003). See also Passantino v. Johnson & Johnson Consumer 24 Prods., Inc., 212 F.3d 493, 513 (9th Cir. 2000) (“While objective evidence requirements may 25 exist in other circuits, such a requirement is not imposed by case law in . . . the Ninth Circuit, 26 or the Supreme Court.”); Johnson v. Hale, 13 F.3d 1351, 1352 (9th Cir. 1994) 27 (“”[C]ompensatory damages may be awarded for humiliation and emotional distress 28 established by testimony or inferred from the circumstances, whether or not plaintiffs submit - 38 - 08cv1494 1 evidence of economic loss or mental or physical symptoms.”). The Ninth Circuit in Zhang 2 upheld an emotional distress award in an employment discrimination case based solely on 3 a plaintiff’s testimony that his termination killed his dream of working in America and 4 impacted his dignity and reputation. “[T]he jury obviously could have gleaned that he was 5 greatly hurt and humiliated by his termination and the manner in which it was carried out,” 6 the Court said, and this Court would say the same here. Zhang, 339 F.2d at 1041. 7 Even if the Court were to import the law of Price and Sloane here, it would still find, 8 for the reasons given above, that the emotional distress award was not so excessive that it 9 must be either thrown out or a remittitur ordered. Regus’s motion for either is DENIED. 10 B. 11 Relying on constitutional limits the Supreme Court has set on punitive damages 12 awards, Regus argues that the jury’s award in this case was so high that it violates due 13 process. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003); BMW of 14 North America, Inc. v. Gore, 517 U.S. 559 (1996). The legal standard isn’t in dispute. 15 Courts must consider “(1) the degree of reprehensibility of the defendant’s misconduct; (2) 16 the disparity between the actual or potential harm suffered by the plaintiff and the punitive 17 damage award; and (3) the difference between the punitive damages awarded by the jury 18 and the civil penalties authorized or imposed in comparable cases.” State Farm, 538 U.S. 19 at 418. Of these factors, the most important is the first. Id. at 419. 20 Punitive Damages 1. Reprehensibility 21 The reprehensibility inquiry asks whether: “the harm caused was physical as opposed 22 to economic; the tortious conduct evinced an indifference to or a reckless disregard of the 23 health or safety of others; the target of the conduct had financial vulnerability; the conduct 24 involved repeated actions or was an isolated incident; and the harm was the result of 25 intentional malice, trickery, or deceit, or mere accident.” Id. Naturally, Regus argues that 26 these factors cut in its favor, and Steffens argues the opposite. 27 First, the Court disagrees with Regus’s argument that Steffens’s termination was a 28 purely economic harm, analogous to State Farm’s misconduct in the insurance dispute at - 39 - 08cv1494 1 issue in State Farm, just because it didn’t involve some physical assault or trauma. It’s 2 certainly true that Steffens’s injury was largely economic—although an injury that affects 3 someone’s emotional and mental health is also physical in some sense, see Roby v. 4 McKesson Corp., 47 Cal.4th 686, 713 (Cal. 2009)—but a wrongful termination certainly cuts 5 much closer to the bone than the bad faith denial of coverage by an insurance company. 6 The Ninth Circuit recognized as much in Zhang, when it held that “[a]lthough BMW held that 7 ‘purely economic’ harms are less likely to warrant substantial punitive damages awards, 8 intentional discrimination is a different kind of harm, a serious affront to personal liberty.” 9 Zhang, 339 F.3d at 1043. True, the Court has previously distinguished this wrongful 10 termination case from a discrimination case brought under the Fair Employment and 11 Housing Act, but it’s not unreasonable to lump, for reprehensibility purposes, a wrongful 12 termination for alleging unlawful labor practices with racial discrimination. In Zhang, it’s 13 worth noting, the Ninth Circuit upheld a $2.6 million punitive damages award where 14 compensatory damages were $360,000. 15 The next two factors—whether Steffens’s termination evinced an indifference to her 16 health and safety and whether she was vulnerable—can be lumped together here. Regus 17 seems to interpret the first of these as an inquiry into whether the alleged misconduct 18 affected more than one person, simply because State Farm says “health or safety of others,” 19 in the plural. The Court doesn’t adopt this self-serving reading of the case. To be sure, 20 “[evidence of actual harm to nonparties can help to show that the conduct that harmed the 21 plaintiff also posed a substantial risk of harm to the general public, and so was particularly 22 reprehensible.” Philip Morris USA v. Williams, 549 U.S. 346, 355 (2007). But that doesn’t 23 mean that single-victim misconduct is inherently non- or less reprehensible, and there’s 24 certainly no requirement in State Farm that for the second reprehensibility factor to be 25 satisfied a defendant must have harmed more than one party. The question, after all, is 26 whether Regus was indifferent to Steffens’s health or safety. Regus also misreads the third 27 reprehensibility factor, taking it to mean a defendant must have targeted a plaintiff because 28 that plaintiff was vulnerable. In fact, the factor simply looks to whether a plaintiff was - 40 - 08cv1494 1 vulnerable, not whether that plaintiff’s vulnerability motivated the defendant’s action. With 2 that understanding, the Court is inclined to say the factors are satisfied. Regus could have, 3 and perhaps should have, anticipated that firing Steffens would cause her emotional distress 4 and suffering, which would constitute indifference to her health, and it could have anticipated 5 that she would suffer financially under the circumstances, which speaks to her vulnerability. 6 See Roby, 47 Cal.4th at 713. 7 That brings the analysis to the question whether Regus’s misconduct was a single, 8 isolated incident and whether it was the result of malice or deceit versus a mere accident. 9 Maybe the first of these factors favors Regus. Steffens did allege, after all, a single wrongful 10 termination based upon a single report of meal and rest break violations in October 2006. 11 Although, as Steffens points out, there was arguably a series of wrongful acts that led to the 12 termination, including Golgart’s immediate decision after the October 2006 meeting to fire 13 Steffens. The second, factor, though, certainly does not favor Regus, because there was 14 adequate evidence presented for the jury to conclude that Steffens’s termination was 15 malicious rather than accidental or some kind of administrative oversight. 16 Considering the above, the Court finds that the actions Steffens’s complained of, 17 which the jury found Regus committed, were sufficiently high on the reprehensibility scale 18 to support a severe punitive damages award. At least, the Court isn’t inclined to adjust the 19 award downward based on its own judgment that the reprehensibility of Regus’s conduct 20 wasn’t what the jury appeared to believe. The Court therefore considers the first prong of 21 the due process analysis satisfied in this case. 22 2. Ratio 23 The jury awarded Steffens $1,146,252 in compensatory damages and $3.5 million in 24 punitive damages, a ratio of approximately 3:1. At least on its face, that ratio isn’t even 25 remotely constitutionally problematic. The ratio in State Farm was 145:1—$145 million in 26 punitive damages and $1 million in compensatory damages—and in Gore it was 500:1—$2 27 million in punitive damages and $4,000 in compensatory damages. See State Farm, 538 28 U.S. at 412; Gore, 517 U.S. at 582. Moreover, the Supreme Court suggested in State Farm - 41 - 08cv1494 1 that so long as the ratio is in the single digits, it’s presumptively reasonable and needn’t be 2 subject to constitutional scrutiny. State Farm, 538 U.S. at 425 (“We declined again to 3 impose a bright-line ratio which a punitive damages award cannot exceed. 4 jurisprudence and the principles it has now established demonstrate, however, that, in 5 practice, few awards exceeding a single-digit ratio between punitive and compensatory 6 damages, to a significant degree, will satisfy due process.”). Our 7 Drawing on this, the Ninth Circuit in Zhang—which, again, was a wrongful termination 8 case—said, “We are aware of no Supreme Court or Ninth Circuit case disapproving of a 9 single-digit ratio between punitive damages and compensatory damages, and we decline to 10 extend the law in this case.” Zhang, 339 F.3d 1020. (The ratio in Zhang was 7:1, $2.6 11 million in punitive damages and $360,000 in compensatory damages.) When the Ninth 12 Circuit has found that a punitive damages award was excessive, it has remanded it for a 13 “constitutionally acceptable” ratio in the single digits. See Bains LLC v. Arco Prods.Co., 405 14 F.3d 764 (9th Cir. 2005). 15 compensatory damages in a breach-of-contract case, $1 in compensatory damages on a 16 related racial discrimination claim, and $5 million in punitive damages. Id. at 769. The Ninth 17 Circuit remanded for punitive damages to be set somewhere in the $300,000 to $450,000 18 range. The jury in Bains had awarded a company $50,000 in 19 Faced with this caselaw, Regus seizes on a statement in State Farm that “[w]hen 20 compensatory damages are substantial, then a lesser ratio, perhaps only equal to 21 compensatory damages, can reach the outermost limit of the due process guarantee.” State 22 Farm, 538 U.S. at 425. It even cites a case in which the California Supreme Court, following 23 State Farm, concluded “a one-to-one ratio between compensatory and punitive damages is 24 the federal constitutional limit here.” Roby, 47 Cal.4th at 719. Roby was a wrongful 25 termination case. The plaintiff alleged that she was fired on account of a disabling medical 26 condition, and the jury awarded her $3,511,000 in compensatory damages and $15 million 27 in punitive damages against her employer, as well as $500,000 in compensatory damages 28 and $3,000 against a supervisor who harassed her. Id. at 692–93. The question the - 42 - 08cv1494 1 California Supreme Court faced–skipping over adjustments by the trial court and Court of 2 Appeal—was where to cap punitive damages, or if to cap them, when the compensatory 3 damages were $1,905,000. Id. at 712–20. It held that a ratio of 1:1 was the limit, and it 4 found this ratio was compelled in part because the non-economic damages were sufficiently 5 high in relation to the compensatory damages—$605,000 in economic damages, $1.3 million 6 in non-economic damages—that they included a punitive component anyway. Id. at 797. 7 While the ratio of non-economic to economic damages in this case is slightly higher 8 than in Roby, and therefore open to the interpretation that it included a punitive component, 9 there is a meaningful difference between that case and this one—going more to the 10 reprehensilbility prong of the analysis—the counsels against imposing a 1:1 ratio on the 11 punitive damages award. In Roby, the California Supreme Court saw some reprehensibility 12 but not a lot; in fact, it was “at the low end of the range of wrongdoing that can support an 13 award of punitive damages under California law.” This in large part because the plaintiff’s 14 termination resulted from the one-time application of an ostensibly neutral attendance policy 15 that didn’t accommodate the plaintiff. Id. at 714–15. The Supreme Court, unlike the Court 16 here, even went as far as to say there was no evidence of malice: Nevertheless, the corporate conduct falls short of “intentional malice.” The evidence does not suggest that employer McKesson adopted the attendance policy in question—and in particular the requirement of 24-hour advance notice for all absences—with a purpose or motive to discriminate. Rather, McKesson’s apparent purpose in requiring 24-hour advance notice was to enable advance planning by its supervisors and thus ensure adequate staffing levels on a daily basis. McKesson’s wrongdoing was more a failure to prevent the foreseeable discriminatory consequences flowing from its otherwise appropriate attendance policy than it was an act rooted in “intentional malice.” Id. at 796. 17 18 19 20 21 22 23 24 The California Supreme Court even found certain demerits to the plaintiff’s case, for example 25 that she had missed a lot of work, with no notice and with progressive disciplinary warnings, 26 without invoking her disability. Id. at 716–17. Also, her employer wasn’t substantially 27 informed as to the nature of her disability and the accommodations it required. Id. at 717. 28 // - 43 - 08cv1494 1 Nothing comparable to that must be said in this case. The jury heard evidence 2 suggesting that Golgart wanted Steffens fired because of her complaints about meal and 3 rest breaks, and it heard evidence that Regus even tried to cover this up, first with a phony 4 performance improvement plan and then by Golgart in his own deposition. Indeed, if the jury 5 believed Steffens and Jones that she raised meal and rest breaks during the October 2006 6 meeting, it necessarily found that Golgart perjured himself by testifying that she ever raised 7 the issue. The point here is simply that the California Supreme Court’s holding in Roby 8 rested chiefly on its finding that the defendant’s conduct was at the low end of the 9 reprehensibility scale, and that’s a finding the evidence doesn’t necessarily compel in this 10 case. The Court therefore finds no problem with the 3:1 ratio of punitive to compensatory 11 damages in this case, and in fact finds it to be in line with other ratios upheld by the Ninth 12 Circuit. See Zhang, 339 F.3d at 1044; Bains, 405 F.3d at 777. 13 3. Comparable Penalties 14 The California Supreme Court in Roby noted that if the plaintiff had pursued her 15 FEHA claim administratively before the California Fair Employment and Housing 16 Commission, it could have assessed a fine not exceeding $150,000. Given that this amount 17 was “tiny by comparison to the jury’s punitive damages award . . . of $15 million,” the court 18 said this final guidepost weights in favor of a constitutional limit. Regus tries to make that 19 very argument here: “Steffens, like the plaintiff in Roby, could have pursued an 20 administrative claim for retaliation under the FEHA before California’s Fair Employment and 21 Housing Commission.” (Doc. No. 153 at 37.) 22 This is flat wrong, though. The claim here was a common law tort for wrongful 23 termination in violation of public policy. It wasn’t brought under the FEHA, and indeed 24 couldn’t have been brought under the FEHA, because Steffens’s didn’t allege that she was 25 terminated on the basis of a protected characteristic such as race or sex. Considering the 26 three guideposts for assessing the constitutionality of a punitive damages award, the Court 27 simply doesn’t find that the jury’s award in this case violated due process. Regus’s motion 28 for a new trial, or a remittitur, is DENIED. - 44 - 08cv1494 1 VI. Misconduct 2 Regus’s final set of arguments for a new trial allege misconduct on the part of 3 opposing counsel, a witness, and a juror. The Court will consider these arguments one at 4 a time. 5 A. 6 Regus has identified four instances in which, during opening and closing statements, 7 counsel for Steffens suggested that this case is about Regus’s policy of denying meal and 8 rest breaks to employees, rather than about its alleged termination of Steffens for speaking 9 up about that. For example, Ms. Panuco opened her opening statement by saying: Misconduct of Opposing Counsel The evidence will show that this case is about a corporation that made its profit by denying hourly workers the meal breaks and rest breaks that they are entitled to under California law. The evidence will show that the corporation made its profit, revenue and saved money by making sure that its hourly employees weren’t getting the rest breaks and meal breaks that they are entitled to by California law. When Ms. Steffens said that is illegal, she was fired. (3/18/13 Tr. at 96:6–14.) 10 11 12 13 14 And during his closing statement, Mr. Stormer said: 15 20 Now, if they had come before you and said, “I’m sorry, but she was going to be fired anyway. You know, I may have overreacted to her complaint,” well, maybe that would show a little bit of remorse and that they might not do it in the future. But instead, they came before you and said, “Never happened,” showing not one bit of remorse. Completely reprehensible. Then it also caused harm, that behavior, to other people. Those people who did not get their lawfully entitled breaks and—rest breaks and meal breaks. (3/22/13 Tr. at 8:17–25.) 21 Regus argues that these statements not only mis-framed the case but so inflamed the jury 22 that it awarded damages as if this case were a straightforward meal and rest break class 23 action. 16 17 18 19 24 “Generally, misconduct by trial counsel results in a new trial if the flavor of misconduct 25 sufficiently permeates an entire proceeding to provide conviction that the jury was influenced 26 by passion and prejudice in reaching its verdict.” Hemmings v. Tidyman’s Inc., 285 F.3d 27 1174, 1192 (9th Cir. 2002). 28 heightened version of it does, because Regus didn’t object to any of these statements during But that standard doesn’t apply here, or at least some - 45 - 08cv1494 1 trial, nor did it ever move for a mistrial because of them. Hemmings suggests that the Court 2 reviews only for plain or fundamental error—although it’s not exactly clear how this differs 3 from the general standard of review. Id. at 1192. In any event, even assuming it was error 4 to suggest this case is about Regus’s denial of meal and rest breaks—Steffens did have to 5 show she had a good faith belief these denials were real—the Court would find no prejudice 6 here. 7 For starters, the Ninth Circuit in Hemmings found no prejudice where the alleged 8 misconduct “was an isolated, short comment during a closing statement that covered 66 9 pages when transcribed.” Id. at 1194. The same can be said here. Regus has seized on 10 one statement in Steffens’s 10-page opening statement, two statements in about 30 pages 11 of closing arguments (3/21/13 Tr. at 176:3–23, 187:4–12), and one statement in Steffens’s 12 supplemental 5-page supplemental statement on punitive damages. Looking at those 13 statements under the totality of the circumstances, the Court doesn’t find them prejudicial. 14 See Cooper v. Firestone Tire and Rubber Co., 945 F.2d 1103, 1107 (9th Cir. 1991) (affirming 15 district court’s ruling that a new trial was not warranted where allegedly improper statements 16 were made only during the argument phase of trial, were isolated rather than persistent, and 17 weren’t objected to at the time). 18 Second, and speaking directly to the totality of the circumstances, the jury was 19 adequately and carefully instructed that this case is about Regus’s conduct with respect to 20 Steffens’s only. Indeed, after Mr. Stormer’s last statement in closing argument that Regus 21 now pounces on, he said, “You may not set the amount of any punitive damages in order to 22 punish the Defendant for harm to anyone other than the Plaintiff, but you can set the 23 damages to deter them from doing something to someone else.” (3/22/13 Tr. at 9:1–5.) 24 That was exactly the Court’s instruction. (Doc. No. 144 at 21–22.) The Court has no 25 concern that the remarks Regus now problematizes steered the jury’s attention away from 26 the core and only issue in this case, namely whether Regus terminated Steffens for 27 complaining that employees weren’t receiving meal and rest breaks. The motion for a new 28 trial based on counsel’s remarks is DENIED. - 46 - 08cv1494 1 B. 2 Regus next argues that Jones perjured himself at trial and that newly acquired 3 evidence would substantially dent his credibility before the jury. The essence of his alleged 4 perjury is that he testified in his deposition that he never spoke with anyone at Regus, apart 5 from Edmondson, about Steffens’s termination, and then testified at trial that he spoke with 6 Regus’s general counsel 10–15 times. When Jones was deposed and asked if he reported the nefarious nature of Steffens’s 7 8 Misconduct of Jones termination up the Regus flagpole, he said he did not. 10 Q: And you could have called human resources at any time to either get clarification on issues or if you did not like an issue you could go to human resources to get support, correct? 11 A: Correct. 12 Q: And you’ve done that in those kinds of situations while employed at Regus when something was not your liking you knew how to go to HR and get support and/or feedback on an issue, correct? 9 13 14 A Correct. 15 Q: You did not do that in this situation, correct? 16 A: I did not. (Doc. No. 153-2 at 11–12.) 17 18 He gave essentially the same answer when asked specifically if he contacted anyone in 19 human resources to report that he was being tasked with firing Steffens even though the 20 Emerald Plaza center was doing well. 23 Q: And even though you’ve had past occasions to call human resources to get support and feedback you never contacted anybody in HR and said look I got an issue here with the area vice president who’s asking me to get rid of an employee that is running a center that’s doing well? 24 Q: On that day or any point in time? 25 Q: At any point in time? 26 Q: Ever did that? 27 A: I never called HR in regards to that day in response to the area VP’s response. (Doc. No. 153-2 at 13.) 21 22 28 // - 47 - 08cv1494 1 Jones did testify during his deposition that he spoke with Edmondson over the telephone in 2 September 2007 after he’d received a DFEH complaint filed by Steffens, but he also testified 3 that he didn’t raise the illegality of her termination or discuss Steffens’s termination with 4 anyone else at Regus. 5 Q: Since that time have you had any discussions with Sharon Edmondson or Sande Golgart or anybody else at Regus as to what occurred in that October 2006 meeting, other than your deposition testimony.? 6 7 A: Since my deposition? 8 Q: Other than your deposition testimony - - 9 A: Okay. 10 Q: - - and other than this brief call with Sharon Edmondson, did you discuss that October 2006 meeting with anybody else at Regus? 11 12 A: No. 13 Q: No one followed up with you after that telephone call with Sharon Edmondson? 14 16 A: I had a phone conversation with Sharon letting her know that I had received paperwork from Denise Steffens but nothing else pertaining that meeting. 17 Q: To that meeting? 18 A: To that meeting. (Doc. No. 153-2 at 17–18.) 15 19 Jones also testified that he never put in writing to the effect that he disagreed with Steffens’s 20 termination or thought it may have been illegal. (Doc. No. 153-2 at 19.) 21 At trial, however, Jones mentioned multiple phone conversations he’d had with 22 Regus’s counsel Noah Pollack—whose last name he thought was Polk—after September 23 2007, and he further testified that he told Pollack he thought Steffens’s termination was 24 illegal: 25 26 27 28 Q: And do you know what date it was that you provided your declaration? A: Approximate June of 2008. Q: And that notice that you received from Ms. Steffens, when did you receive that? - 48 - 08cv1494 1 A: Looks like September of ‘07. 2 Q: Roughly nine months earlier? 3 A: Correct. 4 Q: And in that nine-month period, did you hear from any lawyers, including myself? 5 6 7 8 9 A: No, I did not. Q: Did you hear from any Regus lawyers? A: I did. Q: And from whom? 10 A: I don’t remember his first name, but Polk was, I believe, his last name. 11 Q: Mr. Polk contacted you when first? 12 A: Sometime after receiving this document. I don’t recall when. 13 14 Q: At that time, did you tell Mr. Polk that you believed Ms. Steffens had been terminated because she complained about Regus’ illegal conduct related to denying meal and rest breaks? 15 A: I did share those thoughts with him, yes. 16 Q: After you left Regus I believe in — Was it October of 2007 or November of 2007? 17 18 A: November. 19 Q: After you left Regus in November of 2007, did you hear from Mr. Polk again? 20 A: I did. 21 Q: On approximately how many occasions? 22 A: 10, 15 times. 23 Q: How many months or years did that continue? 24 A: I don’t recall how many — It wasn’t years that that continued. 25 Q: Did it continue including after the point that you provided your declaration? 26 27 28 A: Yes, it did. Q: Did you cooperate with him? A: I talked with him. Yes. (3/20/13 Tr. at 93:24–95:15.) - 49 - 08cv1494 1 Regus has now obtained a declaration from Pollack saying this simply isn’t true. Pollack 2 says, for example, “During my employment as the General Counsel of Regus, I do not recall 3 speaking with Regus Area Director Shannon Jones about General Manager Denise 4 Steffens’s employment at Regus or the termination of her employment. In fact, I have no 5 recollection of ever speaking with Shannon Jones.” (Doc. No. 153-3 at 2.) 6 Just to be clear, the only apparent contradiction here is between Jones’s deposition 7 testimony that he didn’t speak with anyone at Regus other than Edmondson about Steffens’s 8 termination and his trial testimony that he spoke with Pollack about it on a number of 9 occasions.12 It’s not clear at all to the Court how Jones’s deposition testimony that he never 10 complained about Steffens’s termination to HR at the time contradicts his trial testimony that 11 he spoke with Regus’s general counsel about it after Steffens had filed a legal grievance. 12 In order for the Court to order a new trial here, Regus has to show that it discovered 13 the evidence after trial, that it could not have discovered it sooner through the exercise of 14 reasonable diligence, and that the new evidence is so significant that it would likely have 15 changed the outcome of the case. Far Out Productions, Inc. v. Oskar, 247 F.3d 986, 998 16 (9th Cir. 2001). The Court finds that Regus can’t make the second and third of these 17 showings. 18 With respect to the second, there’s no explanation from Regus as to why it couldn’t 19 have reached out to Pollack immediately after Jones’s testimony, on the third day of a five- 20 day trial. Certainly, there is no explanation as to why it took until June 19—the day Pollack 21 signed his declaration, and nearly three months after the trial—to acquire Pollack’s 22 testimony. And second, Pollack was a former Regus employee who was obviously involved 23 in the handling of Steffens’s lawsuit in the early stages. It’s unclear why, over the course of 24 12 25 26 27 28 In a footnote in her opposition brief Steffens cites additional deposition testimony to suggest there was no inconsistency in Jones’s testimony considering the precise questions he was asked and answered, but the Court isn’t inclined to get into that level of detail and parse Jones’s testimony. Jones was asked during his deposition if he discussed the October 2006 meeting with anyone at Regus other than Edmondson and he said no. Then, at trial, he testified that he talked to Pollack about Steffens termination and said he believed it was in retaliation for her reports about meal and rest breaks—which almost certainly had to include some discussion of the October 2006 meeting. Indeed, Jones answered “Yes” when asked if he told Pollack that Steffens had been terminated for her statements in the October 2006 meeting. (3/20/13 Tr. at 6:7–12.) That’s arguably an inconsistency. - 50 - 08cv1494 1 this case before it went to trial, Regus never though to ask him if he had any conversations 2 with anyone pertaining to Steffens’s termination. Had it asked that question, Pollack could 3 have either been a witness himself or been on standby as an impeachment witness. So, the 4 Court first finds that Regus could have acquired the new evidence sooner through the 5 exercise of reasonable diligence. 6 The Court also finds that this newly-acquired evidence was not “of such magnitude 7 that it would likely have changed the outcome of the case.” Far Out Productions, 247 F.3d 8 at 998. The most obvious reason for this is that Regus was still able to impeach Jones, at 9 least partially, with his deposition testimony—and it could have further impeached him by 10 actually quoting that testimony. After Jones mentioned his conversations with Pollack, 11 counsel for Regus said “Sir, I took your deposition on two separate occasions. This is the 12 first time you’ve ever said that, correct?” (3/20/13 Tr. at 6:15–17.) Jones answered “I 13 believe it is.” (3/20/13 Tr. at 6:18.) Also, as important as Jones’s testimony may have been 14 to Steffens, it’s a stretch to say that merely calling his credibility into question would likely 15 have caused the jury to return a verdict for Regus. This is especially true considering that 16 trial testimony can always be parsed or finessed to make it appear that the precise question 17 asked wasn’t previously asked, or that a particular answer isn’t exactly in contradiction to 18 a previous answer. Indeed, Steffens has attempted just such a parsing here. (Doc. No. 156 19 at 40. n.22.) 20 Because the Court finds that Regus has failed to show that it couldn’t have acquired 21 the evidence at issue sooner, and that the evidence wouldn’t likely have changed the 22 outcome of the case, it DENIES Regus’s motion for a new trial. 23 C. 24 Regus has submitted the affidavit of a juror, Donald Holcomb, stating that another 25 juror brought biases into the deliberations that she expressly disavowed during voir dire. 26 Specifically, juror Smith was effectively asked by the Court during voir dire if anything in her 27 experience or her family members’ experience would impact her ability to be a neutral 28 factfinder in this case and she said no. (3/18/13 Tr. at 30:8–31:5.) Counsel for Regus also Misconduct of Juror Smith - 51 - 08cv1494 1 asked the jury generally “Is there anything, anything, the littlest thing, the biggest thing that 2 you haven’t shared with us that you think we should know in selecting a jury” and juror Smith 3 did not respond. (3/18/13 Tr. at 65:21–24.) Holcomb’s affidavit, though, says that before 4 deliberations Smith “shared with the jurors that her mother went through a very similar 5 situation as Ms. Steffens and was terminated as well.” (Doc. No. 153-4 at 2.) He also said 6 that Smith wasn’t even interested in deliberating, but simply in awarding Steffens as much 7 money as possible: “Ms. Smith then led the deliberations and immediately focused on how 8 much money we should give Ms. Steffens. Instead of focusing on the facts of Ms. Steffens’s 9 case, Ms. Smith kept repeating her mother’s story and insisted that we give Ms. Steffens as 10 11 12 13 14 15 16 much money as we could.” (Doc. No. 153-4 at 2.) Holcomb’s affidavit, however, is plainly excluded under Federal Rule of Evidence 606: During an inquiry into the validity of a verdict, a juror may not testify about any statement made or incident that occurred during the jury’s deliberations; the effect of anything on that juror’s or another juror’s vote; or any juror’s mental processes concerning the verdict or indictment. The court may not receive a juror’s affidavit or evidence of a juror’s statement on these matters. There are exceptions to this rule, but none covers Holcomb’s affidavit here. 17 A juror may testify about whether: 18 (A) extraneous prejudicial information was improperly brought to the jury’s attention; 19 20 (B) an outside influence was improperly brought to bear on any juror; or 21 (C) a mistake was made in entering the verdict on the verdict form. Fed. R. Ev. 606(b)(2) 22 23 The misfortune of Smith’s mother, which she allegedly brought into the jury room, was 24 neither extraneous prejudicial information brought to the jury’s attention or an outside 25 influence improperly brought to bear on the jury, despite Regus’s argument to the contrary. 26 See United States v. Budziak, 697 F.3d 1105, 1111 (9th Cir. 2012) (“The alleged juror 27 comments referred not to extraneous evidence, but to the jurors’ personal life 28 experiences . . . .); Price v. Kramer, 200 F.3d 1237, 1255 (9th Cir. 2000) (recognizing that - 52 - 08cv1494 1 jurors’ personal experiences did not constitute extraneous evidence). As the Tenth Circuit 2 has put it, “A juror’s personal experience, however, does not constitute ‘extraneous 3 prejudicial information.’” Marquez v. City of Albuquerque, 399 F.3d 1216, 1223 (10th Cir. 4 2005). 5 merits a new trial is a non-starter. The motion for a new trial is DENIED. 6 VII. The affidavit is therefore excluded and Regus’s argument that juror misconduct Conclusion 7 The jury’s verdict in this case obviously came as a surprise to Regus, and was 8 probably tough to swallow. But tough to swallow does not mean legally excessive, nor does 9 it mean the Court, or opposing counsel, or jurors, must have done something wrong. This 10 case was vigorously and ably tried by competent lawyers, and Regus simply lost. Now, 11 having carefully reviewed the record in the case, and having carefully considered all of 12 Regus’s arguments for a new trial—serious and flimsy arguments alike—the Court finds that 13 Regus needs to accept that loss. The jury’s verdict stands. Regus’s motion for a new trial 14 is DENIED in its entirety. 15 16 17 IT IS SO ORDERED. DATED: August 16, 2013 18 19 20 HONORABLE LARRY ALAN BURNS United States District Judge 21 22 23 24 25 26 27 28 - 53 - 08cv1494

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.