Opinion
CAUSE NO. 1:03-CV-205
October 10, 2003
REPORT AND RECOMMENDATION
I. INTRODUCTION
This is a case brought by the Plaintiff, Rebecca M. Niles (hereafter, "Niles"), and against her former employer, Rich's Cafe (hereafter, "Rich's") under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended by the Pregnancy Discrimination Act ("PDA"), 42 U.S.C. § 2000e(k). Following the entry of a default by the Clerk against Rich's, the District Court Judge, Theresa L. Springmann, entered an order pursuant to 28 U.S.C. § 636(b)(1)(B), (C), and N.D. Ind. L.R. 72.1(d)(1), referring this case to the undersigned Magistrate Judge "to conduct a Damages Hearing . . . and any other necessary hearings and to submit a Report and Recommendation for the disposition of this cause." (See September 26, 2003 Order.)
In fact, by the time the Order of Reference was entered, a damages hearing had already been scheduled for October 2, 2003, at 1:00 P.M., with notice issuing to Rich's.
On that date, a damages hearing was held with Niles appearing in person, together with her counsel, Thomas O'Malley ("O'Malley"). Rich's failed to appear. Evidence was submitted, and following the argument of counsel the Court took the matter under advisement.
Having considered the argument and evidence, the undersigned Magistrate Judge makes the following findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a) based on a preponderance of the evidence, and accordingly recommends that a default judgment be entered in favor of Niles and against Rich's.
II. FINDINGS OF FACT
Any finding of fact deemed to be a conclusion of law is hereby incorporated as such, and any conclusion of law deemed to be a finding of fact is hereby incorporated as such.
Niles was eighteen years old and five months pregnant when she started to work at Rich's on August 1, 2002. (Compl. ¶ 8.) Nevertheless, despite her youth, Niles was already an experienced waitress, having worked at three other restaurants since she was sixteen, the most recent being Hall's Restaurant in Fort Wayne, Indiana, where she earned approximately $400 per week. After her employment at Hall's ended in July 2002, Niles learned about an opening for a waitress at one of Rich's restaurants, and applied, noting on her job application that she was pregnant. ( Id. at Tf 9.) After meeting with the owner, Niles was hired to start on August 1, 2002. (Mat ¶ 8.)
Upon a default, the factual allegations of the complaint, except those relating to the amount of damages, United States v. Di Mucci, 879 F.2d 1488, 1497 (7th Cir. 1989), are taken as true and can no longer be contested. Black v. Lane, 22 F.3d 1395, 1399 (7th] Cir. 1994). Accordingly, the facts set out in this section are at least partially based on the factual allegations in the complaint.
Rich's has four restaurants in and around Fort Wayne.
Indeed, with already one small child and another on the way, Rich's looked like a good opportunity to Niles. After all, one of her co-workers at Hall's was now a waitress at Rich's and reported making a little more than she had previously earned at Hall's. Moreover, Hall's and Rich's are similar in size and character, so it is probable that Niles too would have made more at Rich's than she had at Hall's, and certainly no less than the $400 per week she had been earning.
In any event, Niles' first day on August 1, 2002, was largely uneventful, because she spent the entire eight hour shift shadowing another waitress. With encouragement from this trainer that she was "doing great," Niles felt her first day had been a success ( Id. at ¶ 9), and expected the next day would be the last one she would need for training.
However, when Niles arrived to work at 7:00 a.m. the next morning, the acting manager told her in the presence of other employees that she was being fired on instructions from Rich, the restaurant's owner, because he had not realized she was pregnant when he hired her. (Compl. ¶¶ 10, 17.) As it was related to Niles, and apparently as Rich related it to the acting manager, he did not want employees who would require long leaves of absence and therefore "did not need the inconvenience" of a pregnant employee.
Despite the caption on the case, Rich's is apparently an Indiana corporation. Based on the personal observation of Niles, it can reasonably be inferred that Rich's employed more than fifteen employees for each working day in each of twenty or more calendar weeks in the preceding calendar year. Thus, as set out in Niles' complaint, Rich's is an "employer" for purposes of the PDA, 42 U.S.C. § 2000e(b). ( See Compl. ¶¶ 3, 4.)
Niles testified convincingly about the embarrassment and humiliation she suffered surrounding the fact and manner of her termination. As observed on the witness stand, it is apparent from her demeanor that she still feels anguish from being fired in public, ostensibly for no other reason than that her protected status made her a potential "inconvenience" to Rich's. She also had to endure the humiliation of being fired under the curious gazes of her fellow employees. Moreover, because she was and remains the sole support for her children, Niles was "devastated" and felt "terrible" about losing a job she clearly could perform, and her resulting economic uncertainty led to "a lot of crying" and "loss of sleep."
Two months later, in October 2002, Niles, now approximately seven months pregnant, was hired to work at a Citgo truck plaza. However, this position, which required some occasional heavy lifting, was much more physically demanding than a waitress job. Niles was ultimately unable to perform her assigned tasks because of the strain they put on her pregnancy, and she quit working at the truck plaza after a few weeks, earning overall $1,577.
After leaving her truck plaza job, Niles was forced to go on public assistance for the first time in her life, an experience she credibly described as embarrassing and humiliating. Moreover, because these payments were much less than the $400 per week Niles likely would have earned at Rich's, she could not provide all the Christmas gifts and other holiday experiences she had hoped to supply for her children.
Niles ultimately gave birth to her second child on December 17, 2003. After a short recuperation at home, she attempted to reenter the workforce in March 2003, but could not find a job until she was able to land one at Bandido's Restaurant in April 2003, as a waitress.
Had Niles remained employed at Rich's, it is likely she would have worked full-time until the delivery of her child on December 17, 2002, and also would have been able to resume work at Rich's in March 2003. Thus, Rich's decision to terminate Niles caused her to miss eighteen weeks of work before delivery, and five weeks after, for a total of twenty-three weeks, resulting in a gross wage loss from her termination in the amount of $9200 (23 weeks x $4007 week = $9200). Therefore, after the $1577 in mitigation from the truck plaza job is subtracted, her net lost back pay amounts to $7623.
Niles remained in good health throughout her pregnancy, and unlike the much more difficult job at the truck plaza, she would have been able to meet the relatively light physical demands of a waitress up to the date of her delivery.
As for Niles's claim of emotional distress, it was obvious from her testimony that the public firing, the economic uncertainty that resulted, the having to settle for a job beyond her physical abilities, and being forced onto public assistance as the Christmas holiday approached, all contributed to an almost palpable sense of anxiety, as manifested in her crying, depression and sleeplessness. For having to go through these experiences, Niles seeks an appropriate, indeed modest, amount of damages. Upon inquiry, and as she noted in her Proposed Findings of Fact and Conclusions of Law, Niles maintains that $15,000 is an appropriate amount in compensation for the emotional injuries she suffered as a result of her unlawful termination. ( See Proposed Findings of Fact and Conclusions of Law ¶ 17.) This amount is clearly reasonable by almost any standard, but as discussed more fully infra, certainly reasonable when placed within the context of other emotional distress awards.
Finally, Niles secured the services of counsel to prosecute her claim. Accordingly, she requests an award of attorney's fees in the amount of $2722.38. However, attorney's fees are not available to her, as discussed more fully infra.
III. CONCLUSIONS OF LAW
Note 1, supra, is incorporated by this reference.
The Court has jurisdiction of the subject matter of this action pursuant to 28 U.S.C. § 1331 in that Niles asserts a claim arising under a federal statute, namely, Title YE of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended by the PDA, 42 U.S.C. § 2000e(k).
A. Liability
The Court first considers whether a default judgment should be entered against Rich's on Niles's charge of pregnancy discrimination. When a defendant defaults, the factual allegations of the complaint, except those relating to the amount of damages, Di Mucci, 879 F.2d at 1497, are taken as true and can no longer be contested. Black, 22 F.3d at 1399. Practically, this means that the defendant will usually be liable to the plaintiff for each cause of action alleged in the complaint. Di Mucci, 879 F.2d at 1497. Even after default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law. 10A Charles Alan Wright, Arthur R. Miller Mary Kay Kane, Federal Practice and Procedure: Civil 3d § 2688 (1998) (hereinafter Wright Miller); see Black, 22 F.3d at 1399 ("The entry of a default order does not, however, preclude a party from challenging the sufficiency of the complaint"). Thus, the Court must decide if the factual allegations of Niles's complaint entitle her to a default judgment.
Title VII makes it unlawful for an "employer" to "discharge any individual . . . because of such individual's . . . sex. . . ." 42 U.S.C. § 2000e-2(a)(1). In 1978, Congress amended Title VII's prohibition on sex discrimination with the PDA to include discrimination on the basis of pregnancy. See Kennedy v. Schoenberg, Fisher Newman, Ltd., 140 F.3d 716, 722 (7th Cir. 1998). More particularly, the amendment provides that "women affected by pregnancy, childbirth, or related medical condition shall be treated the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work." 42 U.S.C. § 2000e(k); see Kennedy, 140 F.3d at 722. "An unlawful employment practice is established whenever pregnancy is a motivating factor for an adverse employment decision." Kennedy, 140 F.3d at 722, citing 42 U.S.C. § 2000e-2(m); see also Maldonado v. U.S. Bank, 186 F.3d 759, 763 (7th Cir. 1999).
The term "employer" means "a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year." 42 U.S.C. § 2000e(b). While it is apparently undisputed that Rich's meets this definition, and thus it is an "employer" for the purposes of this case ( see Compl. ¶ 4), Niles also offered convincing testimony about the number of Rich's employees present just on her shift and the fact that the particular Rich's restaurant where she was working had been in continuous operation for considerably more than twenty weeks before she started there. Considering this testimony, it can reasonably be inferred that altogether Rich's four restaurants employ well over fifteen employees and did so each working day in the twenty weeks preceding Nile's employment there. ( See also Compl., Ex. A (showing Rich's to have between 15 and 100 employees).)
Evidence of discrimination maybe direct or circumstantial. Sheehan v. Donlen Corp., 173 F.3d 1039, 1044 (7th Cir. 1999). Direct evidence typically "relate[s] to the motivation of the decisionmaker responsible for the contested decision." Id., quoting Chiaramonte v. Fashion Bed Group, Inc., 129 F.3d 391, 396 (7th Cir. 1997). More to the point, direct evidence generally takes the form of "an admission by the decisionmaker that his actions were based on" the protected status. Balderston v. Fairbanks Morse Engine Div. of Coltec Indus., 328 F.3d 309, 321 (7th Cir. 2003). In the case at hand, Rich's explicit statement, voiced through a manager, that Niles was being fired because of her pregnancy, or more accurately, because her pregnancy would ultimately prove to be an inconvenience, constitutes direct evidence of discrimination, see Robin v. Espo Eng'g Corp., 200 F.3d 1081, 1088 (7th Cir. 2000) (holding that statement "I fired you because of your age" would be direct evidence of age discrimination); Sheehan, 173 F.3d at 1044-45 (holding that statement "[h]opefully this will give you some time to spend at home with your children," contemporaneous with termination, is direct evidence of pregnancy discrimination); and alone is sufficient to prove by a preponderance of the evidence a violation of Title VII as amended by the PDA. Cf. Wold v. Fellows Corp., 987 F. Supp. 662 (N.D.I11. 1997) (holding that employer's statement of its desire to employ "a young guy with fire coming out of his ass" when describing reasons for terminating plaintiff is sufficient evidence for a reasonable jury to find age discrimination).
Although the manager's comment is an out-of-court statement offered to prove the truth of the matter asserted (i.e., that Niles was being fired because she was pregnant), it is not inadmissible hearsay, because it constitutes an admission by a party-opponent. Fed.R.Evid. 801(d)(2)(D) (providing that a statement offered against a party and made "by the party's agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship" is not hearsay); see also Fed.R.Evid. 801(d)(2)(A). Of course, the statement is also admissible to show the effect it had on the plaintiffs state of mind, and thus is not hearsay at all because it is no longer being offered for the truth of the matter asserted. See, e.g., United States v. Hanson, 994 F.2d 403, 406 (7th Cir. 1993); Martinez v. McCaughtry, 951 F.2d 130, 133 (7th Cir. 1991).
Therefore, it is recommended that Niles receive a default judgment against Rich's for a violation of the PDA, and this Report will move on to address the question of damages.
B. Damages
A plaintiff who establishes a violation of Title VII may recover, inter alia, back pay, 42 U.S.C. § 2000e-5(g)(1), compensatory damages for "emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses. . . .", 42 U.S.C. § 1981a(a)(1), (b)(3), and reasonable attorney's fees, 42 U.S.C. § 2000e-5(k).
As discussed supra, Niles's net lost wages resulting from Rich's discrimination are in the amount of $7623 (23 missed weeks of work at $400 per week = $9200 — $1577 earned at Citgo = $7623). See 42 U.S.C. § 2000e-5(g)(1).
Niles also suffered emotional distress due to Rich's discrimination. She was embarrassed and humiliated by the manner in which she was terminated and by her subsequent need to rely on public assistance to support her family. She endured anxiety, depression, and sleeplessness, particularly because she feared her loss of employment would compromise her ability to provide for her children. As a result, she requests $15,000 in compensatory damages. On these facts, this is a modest request, particularly in light of other awards that have been sustained in this Circuit. SeeLampley v. Onyx Acceptance Corp., 340 F.3d 478, 484 (7th Cir. 2003) (upholding $75,000 award on similar facts); David v. Caterpillar, Inc., 324 F.3d 851, 864-65 (7th Cir. 2003) ($50,000); Tullis v. Townley Eng'g Mfg. Co., 243 F.3d 1058, 1067-68 (7th Cir. 2001) ($80,185.63); Ramsey v. Am. Air Filter Co., 112 F.2d 1303, 1313 (7th Cir. 1985) (upholding $35,000 award despite trial transcript's "paucity of references to any emotional harm that plaintiff suffered as a result of defendant's discrimination"). Therefore, it is recommended that compensatory damages be awarded in the amount of $15,000.
Of course, the maximum emotional distress damages allowable against an employer of Rich's size under Title VII are $50,000. See 42 U.S.C. § 1981a(b)(3).
Finally, at the Damages Hearing, Niles requested an award of $2722.38 in attorney's fees. However, Niles omitted one very important step that precludes such an award. Fed.R.Civ.P. 54(c) provides that "[a] judgment by default shall not be different in kind from or exceed in amount that prayed for in the demand for judgment." Neither Niles's Complaint nor her Motion for Default Judgment contain a demand for attorney's fees. ( See Compl.; Pl.'s Mot. for Default J.) Thus, an award of attorney's fees is "different in kind from" the relief originally demanded, and cannot be granted. To do otherwise would contravene the generally accepted rationale behind Rule 54(c): "[i]t would be fundamentally unfair to have the complaint lead defendant to believe that only a certain type . . . of relief was being sought and then, should defendant attempt to limit the scope and size of the potential judgment by . . . defaulting, allow the court to give a different type of relief. . . ." 10 Wright Miller § 2663.
Although the complaint's list of demands includes "[a]ll other relief just and proper under the circumstances" ( see Compl.), this vague language does not put the defendant on notice that attorney's fees may ultimately be sought.
Moreover, the clear weight of authority, albeit not from this Circuit, holds that attorney fees are "special damages" which must be specifically pled under Fed.R.Civ.P. 9(g). E.g., Nat'l Liberty Corp. v. Wal-Mart Stores, Inc., 120 F.3d 913, 916 (8th Cir. 1997); United Indus., Inc. v. Simon-Hartley, Ltd., 91 F.3d 762, 765 (5th Cir. 1996); Am. Cas. Co. v. City of Detroit, 851 F.2d 794, 802 (6th Cir. 1988); Ail. Purchasers, Inc. v. Aircraft Sales, Inc., 705 F.2d 712, 716 n. 4 (4th Cir. 1983); Botosan v Fitzhugh, 13 F. Supp.2d 1047, 1053 (S.D. Cal. 1998); 44 Liquormart, Inc., v Rhode Island, 940 F. Supp. 437, 439 (D.R.I., 1996). Of course, this makes sense because such damages are unforeseeable and may not come to the defendant's attention unless specially pled, particularly in a default setting such as here.
Thus, it is recommended that no award of attorney's fees be granted.
Unlike attorney's fees, Niles's complaint does specifically demand punitive damages. ( See Compl.) However, no mention was made of punitive damages at the hearing on October 2, 2003, or in her Proposed Findings of Fact and Conclusions of Law. Moreover, in order to be awarded punitive damages, a plaintiff must establish, inter alia, that the employer "acted with knowledge that its actions may have violated federal law." Lampley v. Onyx Acceptance Corp., 340 F.3d 478, 482 (7th Cir. 2003); Bruso v. United Airlines, 239 F.3d 848, 857-58 (7th Cir. 2001); see also Kolstadv. Am. Dental Ass'n, 527 U.S. 526, 535, 543, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999). No such evidence has been submitted, and therefore it is recommended that no punitive damages be awarded.
IV. CONCLUSION
For the foregoing reasons, the undersigned Magistrate Judge recommends that a default judgment be entered in favor of Plaintiff against Defendant. See Fed.R.Civ.P. 55(b)(2). The undersigned Magistrate Judge further recommends that the Plaintiff, Rebecca M. Niles, be awarded a total judgment of $22,623, consisting of $7623 in backpay and $15,000 in compensatory damages.The Clerk is directed to send a copy of this Report and Recommendation to the Defendant. NOTICE IS HEREBY GIVEN that within ten days after being served with a copy of this recommended disposition a party may serve and file specific, written objections to the proposed findings and/or recommendations. Fed.R.Civ.P. 72(b). FAILURE TO FILE OBJECTIONS WITHIN THE SPECIFIED TIME WAIVES THE RIGHT TO APPEAL THE DISTRICT COURT'S ORDER. See Thomas v. Arn, 474 U.S. 140 (1985); Lerro v. Quaker Oats Co., 84 F.3d 239 (7th Cir. 1996).
The Defendant is further notified that a corporation cannot appear pro se and must be represented by counsel. Mendenhall v. Goldsmith, 59 F.3d 685, 687 n. 1 (7th Cir. 1995); Scandia Down Corp. v. Euroquilt, Inc., 112 F.2d 1423, 1427 (7th Cir. 1985).