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Gares v. Willingboro Tp.

July 23, 1996






On Appeal From the United States District Court

For the District of New Jersey (D.C. Civil Action No. 91-cv-04334) Argued December 8, 1995


STAPLETON, Circuit Judge

(Opinion Filed July 23, 1996)

This case involves a sexual harassment claim by plaintiff Margaret Gares against her former employer Willingboro Township and the Township's former police chief Gary Owens. Following a trial in June of 1993, the jury returned a verdict in favor of Gares against the Township for $20,000 in compensatory damages and $30,000 in punitive damages pursuant to the New Jersey Law Against Discrimination ("LAD"), N.J. Stat. Ann. Section(s) 10:5-1 to -42, and against Owens for $4,000 in compensatory damages and $8,000 in punitive damages pursuant to 42 U.S.C. Section(s) 1983. Owens did not appeal the judgment. The Township is appealing only the jury's award of punitive damages, arguing that the district court erroneously denied the Township's motion for judgment as a matter of law because: (1) punitive damages are unavailable under the LAD against municipalities, (2) New Jersey law requires evidence of the defendant's ability to pay as a predicate for an award of punitive damages and the plaintiff failed to provide such evidence, and (3) there is insufficient evidence to support a punitive damage award. We will affirm.


In reviewing the denial of the defendants' motion for judgment as a matter of law, we must view the evidence in a light most favorable to the plaintiff. Rotondo v. Keene Corp., 956 F.2d 436, 438 (3d Cir. 1992).

Willingboro Township, a New Jersey municipal corporation, is governed by a popularly-elected Town Council, which in turn appoints a Township Manager to handle the day-to-day operations of the Township in the manner of a chief executive officer. The Township Manager is ultimately responsible for all personnel actions, including hirings, promotions, terminations and disciplinary sanctions. Additionally, under the Township's policy on sexual harassment, employees are to direct all sexual harassment claims to the Township Manager, who must then decide what investigative or remedial steps to take.

The next tier of Township officials includes the Chief of Police, who is the head of the Township's Police Department. The Chief of Police, in turn, directly supervises and manages two Captains, one of whom is the Captain of the Services Division. These two Captains supervise the various sergeants and lieutenants within their respective divisions. The Police Department is an integral unit of the Township government, so that all who work in the department are in fact Township employees.

Margaret Gares began working for the Township's Police Department in about 1974 as a school traffic guard in the Services Division. From at least 1983, upon her promotion to Lieutenant of School Traffic, Gares was under the direct supervision and management of defendant Gary Owens, who served as Captain of the Services Division until his promotion to Chief of Police in October 1990. Continually over that seven-year period, Owens subjected Gares to a sexually hostile work environment by engaging in conduct including: calling Gares sexually offensive names, such as "bimbo," "bimbette," "tramp," "mere woman," "trollop," "dumb blonde," and "Township slut," in the presence of her fellow employees; openly condoning degrading conduct against female employees by other male employees under Owens' direct supervision; permitting the open display of pornographic material in the office; encouraging the public telling of obscene jokes; and touching Gares in an unwelcome and degrading manner, including at one point taunting her by holding her badge up out of her reach and pinning her body against the wall of his office with his own body. Owens persisted in such conduct even after Gares expressly and publicly asked him to stop. Each of the seven other female employees under Owens' direct supervision in the Services Division had made complaints similar to Gares' to then Chief of Police Richard Van Sciver.

A few specific examples of Owens' conduct will provide ample illustration of the nature of his actions. At one point, while Owens was Captain of Gares' division, someone left an obscene photograph on Gares' desk of a nude, extremely large-breasted woman, with Gares' name written across the top of the photograph. When Gares arrived at her desk and discovered the photograph, Owens and several other male officers laughed, much to Gares' anger and embarrassment, and Owens compared Gares' breasts to those depicted in the photograph. A female co-worker testified that Owens had made rude remarks about Gares' breasts on a number of occasions, calling them "bazooka-size" or "elephant-size." In 1988, on the day after a Township-sponsored seminar on sexual harassment in the workplace (a mandatory seminar that Gares, but not Owens, attended), Gares was working at her desk, which was situated with other desks in a large, main office. A broken garage door into the building was making a lot of noise, and one of a group of several male officers (including Captain Owens) asked what the source of the noise was. Another male officer replied, "Oh, just ignore it, that's [Gares'] dildo." Angry and embarrassed by the officers' and Owens' laughter, Gares immediately stated, as she had been instructed to do in the previous day's seminar, that Owens and the officers were all "on notice" that she found that conduct offensive and wanted it to stop. She then asked Owens, as the officers' supervisor, formally to reprimand the officer who had made the offensive joke. Owens merely walked away, laughing, to his office, but Gares followed him and repeated her demand. Owens then sharply replied, "Just get out of my office, I don't have time for you." (Supp. App. at 8.)

Thus, by his own affirmative conduct, and by tolerating and encouraging similarly offensive conduct on the part of other male employees against Gares and her female co-workers, Captain Owens created and fostered a sexually hostile work environment in the Services Division.

The Police Department operated on a strict "chain-of-command" procedure for employees to register their work-related complaints. Under this system, an employee with a complaint of sexual harassment must first complain to her immediate supervisor. If she is not satisfied with her immediate supervisor's response, the employee must persuade that supervisor to permit an appeal to the next official in the Department's command hierarchy. Should the complaining employee's supervisor choose not to authorize an appeal, the matter would be at an end: a Police Department employee was not permitted to bypass her immediate supervisor to report complaints directly to the Chief of Police or to the Township Manager. Former Chief Van Sciver testified that, if the Chief of Police elects not to tell the Township Manager, the Township Manager would never learn of the complaint. Several witnesses testified that the Police Department had clear, standing orders, reaffirmed periodically, that employees were to obey the chain-of-command rules and were not to see the Township Manager without the permission of the Chief of Police.

The Police Department's chain-of-command policy conflicted squarely with the Township's sexual harassment policy which provides that all employees should direct complaints of sexual harassment to the Township Manager. Gares and several other long-term Police Department employees testified, however, that they were unaware of the Township's sexual harassment policy. Chief Van Sciver was aware of the Township policy and of the Township Manager's personal "open door" policy, but he nonetheless enforced his department's chain-of-command policy because he believed it encouraged employees to work out their problems among themselves.

Gares' immediate supervisor was Owens, the man who was sexually harassing her, and so the Department's chain-of-command procedure trapped her between the Scylla of enduring Owens' offensive conduct and the Charybdis of possible termination for violating the chain-of-command rules by reporting Owens' conduct directly to the Chief of Police or the Township Manager. Gares endured Owens' conduct towards her and his dismissive responses to her complaints for years.

On one occasion in 1987, however, when former Chief Van Sciver happened to observe Gares in tears after Owens had made a sexually offensive remark to her, Van Sciver asked Gares what was the matter. Gares complained of Owens' conduct and explained that Owens had denied her permission to appeal to the Township Manager. Van Sciver told Gares he would take care of the matter, but Owens persisted in his offensive conduct. About a year later, Van Sciver again happened to observe Gares in tears following another of Owens' remarks, and Gares explained that Owens' offensive conduct had not diminished. Van Sciver told Gares that both he and the Township Manager were aware of the situation. Van Sciver engaged Gares in a third such conversation in 1989, repeating his assurances, yet neither Van Sciver nor the Township Manager ever conducted any investigation or took any remedial action.

After Owens had been promoted to Chief of Police, and shortly after Gares filed her discrimination charges with state and federal agencies in the spring of 1991, Gares met with the Township Manager to discuss Gares' allegations against Owens. The Township Manager told Gares that she did not believe Owens would do such things, and asked if Gares thought Owens "had a thing" for her. (Supp. App. at 60.) Following this meeting, the Township Manager took no steps to investigate the allegations or to correct the situation.

In September 1991, Gares filed this civil rights action in the United States District Court for the District of New Jersey, alleging violations of Section(s) 1983 and the LAD. *fn1 In June 1993, the jury returned a verdict in favor of Gares against the Township for $20,000 in compensatory damages and $30,000 in punitive damages pursuant to the LAD, and against Owens for $4,000 in compensatory damages and $8,000 in punitive damages pursuant to Section(s) 1983. Following the entry of judgment, Gares timely moved for an award of attorney's fees pursuant to the LAD and Section(s) 1988, and the Township moved pursuant to Fed. R. Civ. P. 50(b) for judgment as a matter of law as to both the compensatory and punitive damages verdicts. After denying the motion for judgment as a matter of law and granting the award of attorney's fees, the district court entered final judgment. This timely appeal followed.


The district court had jurisdiction over the Section(s) 1983 claims pursuant to 28 U.S.C. Section(s) 1331 and 1343, and the court had supplemental jurisdiction over the state law discrimination claims pursuant to 28 U.S.C. Section(s) 1367. We have jurisdiction pursuant to 28 U.S.C. Section(s) 1291.



The Township argues first that punitive damages are generally unavailable against municipal corporations and that a court should not construe a statute to allow such damages absent clear legislative expression or intent. Gares counters that the LAD does, by its express terms, its legislative history and the relevant case law, clearly provide for punitive damages against all employers, including municipalities.

In adjudicating a case under state law, we are not free to impose our own view of what state law should be; rather, we are to apply state law as interpreted by the state's highest court in an effort to predict how that court would decide the precise legal issues before us. Kowalsky v. Long Beach Twp., 72 F.3d 385, 388 (3d Cir. 1995); McKenna v. Pacific Rail Serv., 32 F.3d 820, 825 (3d Cir. 1994). In the absence of guidance from the state's highest court, we are to consider decisions of the state's intermediate appellate courts for assistance in predicting how the state's highest court would rule. McKenna, 32 F.3d at 825; Rolick v. Collins Pine Co., 925 F.2d 661, 664 (3d Cir. 1991) (in predicting state law, we cannot disregard the decision of an intermediate appellate court unless we are convinced that the state's highest court would decide otherwise). Our review of the district court's determination of state law is de novo. Kowalsky, 72 F.3d at 388.

Although the New Jersey Supreme Court and a panel of the superior court have, as explained below, spoken to the issue at hand, their decisions are not controlling law: the supreme court decision was evenly split 3-3, and, in New Jersey, a panel of the Superior Court, Appellate Division, is not bound by a prior decision of another panel of that court. E.g., Manturi v. V.J.V., Inc., 431 A.2d 859, 862 (N.J. Super. Ct. App. Div. 1981) ("A decision of an inferior court is not binding on a court of coordinate jurisdiction."). These decisions nevertheless remain important guides for, in determining how the New Jersey courts would approach and solve our problem, we must consider "analogous decisions, considered dicta, . . . and any other reliable data tending ...

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