FedEx Corporate Services recently appealed to the Fifth Circuit in a bid to undo a Houston jury’s staggering $365 million punitive damages award in a case where compensatory damages for a former employee alleging retaliation and discrimination totaled about $1.1 million, but its voice isn’t alone in seeking review.
The company has garnered the backing of five entities who weighed in May 3 with amicus briefs urging that the award be wiped out entirely or reduced to reflect a 1:1 ratio of compensatory to punitive damages. The entities who weighed in with amicus briefs supporting FedEx’s appeal are the International Association of Defense Counsel, the Federation of Defense and Corporate Counsel, Airlines for America, the U.S. Chamber of Commerce and Lawyers for Civil Justice.
A weeklong trial before U.S. District Judge Kenneth Hoyt ended with the $366 million award in favor of Jennifer Harris. Harris was fired by FedEx in 2020
, after the company alleged she repeatedly failed to meet the requirements of her managerial position. But Harris alleged in her May 2021 lawsuit, filed 16 months after she was fired, she was the victim of racial discrimination and retaliation, fired for “opposing racial discrimination in the workplace.”
In its October 2022 verdict, the jury rejected the claim of racial discrimination but did find that Harris’ firing was retaliatory. It awarded her $120,000 for past pain and suffering and about $1 million for future pain and suffering before tacking on the $365 million punitive award for FedEx’s “reprehensible conduct.”
In its brief on appeal, filed April 26, FedEx told the court Judge Hoyt failed to acknowledge binding Supreme Court precedent “forbidding such breathtaking and disproportionate punitive-damages awards.”
“That punitive-damages award is more than 300 times the jury’s compensatory award and represents 49 percent of FedEx Corporate Services’ net worth at that time,” FedEx told the court in seeking reversal.
The company also alleges the case never should have made it to trial because Harris’ claims are time barred pursuant to an employment agreement that required her to sue the company within six months of the “events giving rise to the action.”
The International Association of Defense Counsel, which has about 2,500 members comprised of in-house and outside defense counsel and insurance executives, told the court in its brief that it should adopt a 1:1 ratio of compensatory to punitive damages.
The IADC’s brief argued that the record “fails to establish the requisite clear and convincing evidence of actual malice or reckless indifference by FedEx to support any award of punitive damages, let alone an award of several hundred million dollars.”
“Due process cannot support a $365 million punitive damages award that is more than 300 times the compensatory damage award,” the amicus brief argues. “Rather, if any punitive award may be supported in these circumstances, which is unlikely, 1:1 is the constitutionally permissible ratio.”
The punitive damages award in this case “is divorced from the alleged harm” Harris suffered and “flies in the face” of the jury’s liability findings, argued the Federation of Defense and Corporate Counsel in its amicus brief.
The FDCC has about 1,500 members who are defense and corporate counsel working in private practice, in-house and as insurance claims representatives. It asked the court to vacate the punitive damages award in this case.
The U.S. Chamber of Commerce called the judgment in this case “facially unconstitutional” and argued it was entered following a trial that was “tainted by several questionable rulings against the defense — including an unqualified ‘HR expert’ testifying based only on her review of the complaint and inflammatory and improper closing argument by the plaintiff’s attorney.”
“… The district court entered a blatantly unconstitutional judgment reflecting the jaw-dropping jury verdict without even accepting full briefing on the defense’s extensive post-trial motions,” the Chamber argued.
Lawyers for Civil Justice, a coalition comprised of defense trial lawyer groups, law firms and corporations, filed an amicus brief focusing on what it characterized as the “widespread misunderstanding” of the requirements of Rule 702 of the Federal Rules of Evidence, which governs the use of expert witnesses.
The rule requires the trial judge to ensure expert testimony is “the product of reliable principles and methods,” is based on sufficient facts or data and applies to the facts of the case.
“Some courts, however, have refused to adhere to Rule 702’s letter and intent… many courts have punted to the jury this judicial gatekeeping function,” LCJ argued.
“The district court here, in deciding whether to exclude the plaintiff’s human resources expert, Coneisha Sherrod, made exactly the errors LCJ’s research shows are so common,” LCJ argued. “Rather than analyze whether the proposed testimony embodied a sufficient factual foundation and reliable principles and methods, the district court simply said the crucial gatekeeping function was a ‘jury call, not to be pre-judged by the court.’”
Airlines for America describes itself as a national trade association that advocates on behalf of the American airline industry. It said one goal of its amicus brief was to inform the court about the “risk of bias that large corporations face with respect to excessive punitive damage awards.”
“And the record in the district court indicates that FedEx Corporate Services Inc. was the victim of such an improper award of punitive damages,” A4A told the court, later arguing that the $365 million award in this case “threatens the entire commercial aviation industry.”
“Harris’ counsel invited the jury to act on a bias against large, national corporations and the jury complied by awarding punitive damages that are almost 315 times the amount of compensatory damages it awarded,” A4A said.
Harris is represented by Brian Paul Sanford and Elizabeth J. Sanford of Dallas.
FedEx is represented by Kyle D. Hawkins and Leah F. Bower of Lehotsky Keller and its own Barak J. Babcock and Christopher M. Ahearn.
Lawyers for Civil Justice is represented by Raffi Melkonian of Wright Close & Barger.
The Chamber of Commerce is represented by William R. Peterson and Catherine L. Eschbach of Morgan Lewis & Bockius and Tara S. Morrisey and Jonathan D. Urick of the U.S. Chamber Litigation Center.
Airlines for America is represented by Maurice Baskin and A. John Harper III of Littler Mendelson.
The Federation of Defense and Corporate Counsel is represented by D. Alexander Harrell and Alicia Hickok of Faegre Drinker Biddle & Reath and W. Neil Rambin of Neil Rambin Law.
The International Association of Defense Counsel is represented by Philip S. Goldberg and Christopher E. Appel of Shook Hardy & Bacon. The case number is 23-20035.