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Levinson v. Prentice-Hall Inc.

argued: January 26, 1989.


On Appeal from the United States District Court for the District of New Jersey, D.C. Civil No. 85-3440

Gibbons, Chief Judge, and Seitz and Greenberg, Circuit Judge.

Author: Greenberg


GREENBERG, Circuit Judge.

Defendant Prentice-Hall, Inc. appeals following the denial of its post-trial motions after a jury trial in which a verdict was returned in favor of plaintiff Gerald Levinson in this action under the New Jersey Law Against Discrimination, N.J. Stat. Ann. § 10:5-1 et seq. (West 1976), and the public policy of the State of New Jersey. The district court had diversity jurisdiction under 28 U.S.C. § 1332. We have jurisdiction under 28 U.S.C. § 1291.

The facts of the case may be summarized as follows. Levinson, an attorney, was employed by Prentice-Hall in 1968 as an editor in its federal tax department while he was still in law school. In 1969 he was diagnosed as having multiple sclerosis. In April 1973 Levinson resigned from Prentice-Hall to go into private practice but he found this work too difficult because of his condition. He thus reapplied for a position at Prentice-Hall and was rehired in June 1973 as an editor in Prentice-Hall's pension department. For some years his relationship with his employer was essentially unremarkable with regard to the issues in this case in that he was given regular salary increases and does not claim to have been the victim of discrimination in his work assignments. Further, it appears that he was a competent editor. It does seem, however, that on some occasions he was subject to ridicule because of his handicap. In 1979 Levinson received a promotion to Supervisory Editor I, the lowest supervisory position at Prentice-Hall.

In 1979 a vacancy developed in the position of Supervisory Editor II in the pension department, a position also referred to as department head. At that time Jack Klaus, a Supervisory Editor I in another department, was designated Supervisory Editor II or department head in the pension department. There is evidence that during the time that Klaus was department head, Levinson performed functions ordinarily the responsibility of the department head and there is evidence that Levinson's performance was outstanding during this time. In 1984 Elizabeth Buchbinder, who had been a staff editor, was promoted to Supervisory Editor I, the same title held by Levinson, and in 1985 she became the department head. Thus, Levinson was by-passed for the promotion even though he had more seniority than Buchbinder in he position immediately below department head.

Buchbinder, however, left Prentice-Hall in 1985, creating a third vacancy in the department head position. In 1986 Ellen Lyons was designated department head so that Levinson was again passed over for promotion. He is, however, still employed by Prentice-Hall.

On July 9, 1985 Levinson brought this action, alleging claims under the New Jersey Law Against Discrimination and New Jersey public policy because of Prentice-Hall's failure to promote him and because of he ridicule to which he had been subjected. He also asserted a common law contract claim predicated on Prentice-Hall's alleged failure to follow the procedures in its employment manuals in failing to promote him. Levinson sought compensatory and punitive damages and included a claim for emotional distress. Although the complaint was filed before the last vacancy in the department head position was filled, this action has included claims by reason of Levinson's having been passed over for that position to which Prentice-Hall has raised no procedural objections, at least on this appeal.

At the end of Levinson's case, Prentice-Hall moved to dismiss the complaint, arguing that the "weight of the evidence" showed that Prentice-Hall did not intend to discriminate against Levinson on the basis of his multiple sclerosis. In addition, Prentice-Hall moved to dismiss the claim for emotional distress because it had not been shown that it had acted in an extreme, outrageous, intentional and reckless manner. It moved to dismiss the contract claim on the basis that the manuals on which Levinson relied were merely "general expressions of policy" and gave him no entitlement to promotion. Finally it moved to dismiss the claim for punitive damages as "aggravated malice" had not been shown. The motions were all denied. The judge indicated, however, that the jury would deliberate in stages. First, it would determine if there was a cause of action and, if so, the compensatory damages. If Levinson was successful at that stage, the jury would then consider the issue of punitive damages.

At the end of the presentation of all the evidence, the judge in conference entertained motions and discussed the proposed charge with the attorneys. Prentice-Hall urged that a recovery for front pay should not be allowed as its computation would be "speculative." The parties then discussed punitive damages. Levinson indicated that he wanted a charge permitting him to recover for Prentice-Hall's alleged violation of New Jersey public policy in discriminating against him. While this basis for recovery would duplicate his claim under the Law Against Discrimination, he sought it to protect his position in the event that the then recently decided case of Jackson v. Consolidated Rail Corp., 223 N.J. Super. 467, 538 A.2d 1310 (App. Div. 1988), in which the Appellate Division of the Superior Court of New Jersey indicated that punitive damages could be recovered in an action under the Law Against Discrimination, was reversed by the Supreme Court of New Jersey.*fn1 The court ultimately did give the charge. At the end of the conference Prentice-Hall indicated that it wanted the record to reflect that it made "motions to dismiss each and every count -- strike each and every count in the complaint." The judge then said that he would deny the notions "except that I will again take arguments on whatever arguments you have following the jury going out. We can sit around and argue that after. Whatever the jury does, I may then do something with it."

On the following day, the parties summed up and he court charged and submitted the case to the jury on a written verdict form. The jury found that discrimination was a substantial or determinative factor in Prentice-Hall's decision not to promote Levinson and that its manuals created an implied contract with its employees which was violated when Levinson was not promoted. It also found that the discrimination was against the public policy of New Jersey. The jury awarded Levinson $39,561 for wages and benefits already lost, $117,623 for wages and benefits to be lost in the future, and $100,000 for pain and suffering attributable to the discrimination. Thus, the compensatory damages amounted to $257,184.

The trial was then recessed for several days, giving the parties an opportunity to file additional memoranda. Prentice-Hall filed a letter memorandum asserting that "no evidence of aggravated malice exists in the present matter to justify the imposition of punitive damages" and "accordingly the issue of punitive damages should not be submitted to the jury." The memorandum also addressed the content of the proposed charge stating that:

in connection with the charge to the jury on the punitive damages issue, the court should make it clear to the jury that any sympathy for one party and dislike of another should not enter their consideration. The jury should also be instructed that any award on punitive damages must bear a reasonable relationship to the compensatory ...

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