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denying summary judgment on causation where plaintiff filed his workers' compensation claim in November of 2002 and the employer terminated him in December 2002
Summary of this case from Powell v. Tucson Med. Ctr.Opinion
No. CIV 03-335-TUC-CKJ.
March 22, 2006
ORDER
Pending before the Court are Defendants' Motion for Summary Judgment and Motion for Reconsideration. For the reasons stated below, the Motion for Reconsideration is granted and the Motion for Summary Judgment is denied in part and granted in part. I. STANDARD OF REVIEW
The Court notes that the parties did not request oral arguments on these motions, and a conference call with the parties was held on 2/14/06 whereby both parties agreed that they did not wish to have oral arguments. As such, the Court will rule on the pending motions without oral argument. Further, the Court finds that a response to the Motion for Reconsideration is not necessary because the issue has been previously fully briefed by the parties.
Summary judgment is appropriate where "there is no genuine issue as to any material fact." Fed.R.Civ.P. 56(c). A genuine issue exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party," and material facts are those "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim." Id. An issue of fact is "genuine" if "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Id. Thus, the "mere scintilla of evidence" in support of the nonmoving party's claim is insufficient to defeat summary judgment. Id. at 252. However, in evaluating a motion for summary judgment, "the evidence of the nonmoving party is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255 (emphasis added). Further, a court "[must] not weigh the evidence[, make credibility determinations,] or determine the truth of the matter" at the summary judgment stage, but may only determine whether there is a genuine issue for trial. Abdul-Jabbar v. General Motors Corp., 85 F.3d 407, 410 (9th Cir. 1996); Balint v. Carson City, Nevada, 180 F.3d 1047, 1054 (9th Cir. 1999); see also Self-Realization Fellowship Church v. Ananda Church of Self-Realization, 206 F.3d 1322, 1328 (9th Cir. 2000) (recognizing that on a motion for summary judgment, "a district court is entitled neither to assess the weight of the conflicting evidence nor to make credibility determinations")
II. BACKGROUND
Plaintiff, Ivan Tomkins, began working for Schmid Systems, Inc. (USA) ("Schmid") in January of 1992, and his duties included service and repair of machines manufactured by Schmid throughout the United States. In 2002, Tomkins began experiencing problems with hearing loss stemming from high noise levels he encountered at work in repairing and servicing machines manufactured and sold by Schmid; as such, in November of 2002, Tomkins filed a workers' compensation claim for hearing loss and notified Schmid of the filing of this workers' compensation claim. Tomkins also alleges that he reported Occupational Health and Safety Act ("OSHA") violations regarding baseline hearing tests to Rebecca Baxter, who was an assistant to Schmid's President.
On December 10, 2002, Hartford Insurance Company, Schmid's workers' compensation insurance carrier, officially denied Tomkins' workers' compensation claim. Thereafter, Tomkins filed a Request for Hearing with the Industrial Commission of Arizona.
By December of 2002, Schmid's President, Gottfried Floer, decided to terminate Tomkins. In a meeting with company directors on December 18, 2002, Floer obtained final approval for his decision to terminate Tomkins.
In March and May of 2003, hearings regarding Tomkins' workers' compensation claim were held before Administrative Law Judge Luann Haley of the Arizona Industrial Commission. On May 14, 2003, Judge Haley ruled in favor of Tomkins and thereby concluded that Tomkins' had a compensable hearing loss that was caused in part by his cumulative industrial noise exposure at Schmid. In addition, on May 14, 2003, Floer met with Tomkins, and informed him that he was being laid off from the company for economic reasons. Thereafter, Tomkins filed suit against the Defendants alleging: (1) he was retaliated against for reporting OSHA violations; and (2) he was retaliated against for pursuing his workers' compensation claim. III. DISCUSSION
Tomkins also brought a third claim for interference with contract; however, this claim was previously dismissed by the Court. See Doc. #25.
A. Defendant's Motion for Reconsideration: Retaliation for Reporting OSHA Violations
Tomkins' retaliation claim for reporting OSHA violations is made pursuant to A.R.S. § 23-1501(3)(c)(ii). In a previous Order (Doc. #26), the Court denied Defendants' Motion to Dismiss this claim and found that Plaintiff could state a claim under this section of the statute. However, upon further analysis and review of the relevant authorities, the Court issued a subsequent opinion in another case holding that there was no legally cognizable claim for retaliation for reporting OSHA violations pursuant to A.R.S. § 23-1501(3)(c)(ii). See Welch v. Professional Transit Management of Tucson, Inc., 2005 WL 2897354, *8-10 (D. Ariz. 2005). Citing Welch, Defendants' have asked the Court to reconsider the previous ruling in this case, and dismiss Plaintiff's OSHA retaliation claim based on the analysis in Welch. The Court agrees that the more appropriate analysis of the statute occurred in the subsequent Welch opinion, and therefore grants Defendants' Motion for Reconsideration. As Plaintiff does not have a legally cognizable claim pertaining to retaliation for reporting OSHA violations pursuant to A.R.S. § 23-1501(3)(c)(ii), this claim is dismissed.
The Court notes that after the Court initially denied Defendants' Motion to Dismiss the OSHA retaliation claim (Doc. #26), the case was temporarily placed into arbitration. Defendants subsequently filed another Motion to Dismiss the same claim before the arbitrator; as this was an improper attempt to make an end run around the Court's Order, Defendants were sanctioned. See Doc. #97, 4/27/05 Order at 9-10. In that Order imposing sanctions, the Court noted that Defendants could have properly filed a Motion for Reconsideration before this Court. Indeed, Defendants subsequently filed a Motion for Reconsideration with this Court and relief has been granted. As the previous sanction was imposed for the reasons stated above, the sanction is not affected by the Court's favorable ruling on Defendants' current Motion for Reconsideration.
B. Retaliation for Pursuing the Workers' Compensation Claim
Tomkins' retaliation claim for pursuing his workers' compensation action is made pursuant to A.R.S. § 23-1501(3)(c)(iii). This section states in relevant part that an employee has a claim for wrongful termination if the employer terminates the employment relationship in retaliation for the "exercise of rights under the workers' compensation statutes." Although there is no definitive Arizona case law discussing the standard for establishing retaliation pursuant to A.R.S. § 23-1501(3)(c)(iii), there is Arizona case law regarding the standard for establishing retaliation in the context of civil rights retaliation; as such, the Court will use that standard in evaluating Tomkins' claim. See Najar v. State of Arizona, 198 Ariz. 345, 348, 9 P.3d 1084, 1087 (Ct.App. 2000).
As there is limited Arizona case law regarding discrimination, Arizona courts look to federal law analyzing discrimination as persuasive authority. See Francini v. Phoenix Newspaper, Inc., 188 Ariz. 576, 582, 937 P.2d 1382, 1388 (Ct. App. 1996); St. Lukes Health System v. State, Dept. of Law, Civil Rights Div., 180 Ariz. 373, 377 (Ct.App. 1994); Najar v. State, 198 Ariz. 345, 347, 9 P.2d 1084, 1086 (Ct.App. 2000).
To establish a retaliation claim, Arizona courts have held that the plaintiff must first establish a prima facie case of retaliation by showing that: (1) he engaged in statutorily protected activity, (2) the employer imposed an adverse employment action, and (3) there was a causal connection between the two actions. See Najar, 198 Ariz. at 348, 9 P.3d at 1087; see also Stegall v. Citadell Broadcasting Co., 350 F.3d 1061, 1065-66 (9th Cir. 2004). If a prima facie case is established, "the burden shifts to the employer to articulate some legitimate nonretaliatory reason for the adverse action. If it does, the employee must show that the employer's proffered explanation was merely a pretext or that a discriminatory[/statutorily prohibited] reason more likely motivated its actions." Id.
First, there is no question that Tomkins' pursuit of his workers' compensation claim is statutorily protected activity. See A.R.S. § 23-1501(3)(c)(iii). Second, Defendants' termination of Tomkins clearly constitutes an adverse action.
Defendants argue, however, that Plaintiff can not show a causal connection between his termination and his pursuit of his workers' compensation claim; further, Defendants argue that they had a legitimate, non-retaliatory reason for terminating Tomkins. Thus, Defendants argue that Tomkins' claim must be dismissed. To support this position, Defendants' primarily argue that Tomkins was terminated for a legitimate business reason. Defendants argue that in both 2002 and 2003, Schmid was experiencing a horrible economic situation. In 2002, Schmid had a net loss of $80,000. In 2003, Schmid had a net loss of $400,000. Schmid argues that in late 2002, Schmid was considering measures and holding meetings to discuss the poor economic outlook for the company in 2003 and possible ways to cut costs. Besides Floer, Tomkins was the most expensive employee at Schmid. As such, on December 18, 2002, Defendants argue that Schmid executives decided to terminate Tomkins to cut costs in light of the poor economic condition of the company. Thereafter, Defendants argue that Floer finalized plans to fly out to Tucson on April 29, 2003 for the purpose of terminating Tomkins, and that Floer terminated Tomkins on May 14, 2003 for purely economic reasons.
The Court disagrees with Defendants' position; as Plaintiff has introduced admissible evidence creating genuine issues of material fact as to causation and the efficacy of Defendants' non-retaliatory justification, summary judgment must be denied. Plaintiff introduced evidence that Schmid's industry, circuit boards, is cyclical and that Schmid experienced numerous economic booms and busts throughout its existence in the industry which did not result in employment terminations; thus, Plaintiff argues that Defendants' economic justification for his termination is questionable. Further, as Plaintiff correctly argues, the timing of his termination creates an issue of fact as to causation and the pretextual nature of Defendants' justification. See Little v. Windermere Relocation, Inc., 301 F.3d 958, 970 (9th Cir. 2002) (proximity in time between plaintiff engaging in protected activity and the employer taking an adverse employment action "provides circumstantial evidence of retaliation that is sufficient to create a prima facie case of discrimination"); Raad v. Fairbanks North Star Borough School District, 323 F.3d 1185, 1197 (9th Cir. 2003) (same); Miller v. Fairchild Industries, Inc., 885 F.2d 498, 505 (9th Cir. 1989) (same). For example, Tomkins officially filed his workers' compensation claim in November of 2002, and by December of 2002, Schmid executives had already decided to terminate him. Furthermore, Schmid terminated Tomkins the same day that Judge Haley of the Arizona Industrial Commission issued an opinion finding that Tomkins suffered a compensable hearing loss related to his employment at Schmid.
Defendants argue that it did not actually receive notice of the decision in favor of Tomkins until several days later and that Tomkins did not receive the decision in the mail until the day after he was terminated. However, Plaintiff points out, and Defendants do not dispute, that the decision was available to the public on the day that he was terminated.
Tomkins also argues that Floer repeatedly warned Tomkins not to pursue his OSHA claim; as Tomkins stated in relevant part in his deposition: ". . . I met privately with Mr. Floer in . . . early March of 2003 . . . and he told me that he — he once again told me, because he had previously done this, but he told me he agreed that I had hearing loss and that he had hearing loss, but in our business this cannot be. That was his words, it can not be . . . Also, Mr. Floer, a few days after filing the Workers' Comp claim, Mr. Floer took a special flight — it was very rare that he would do something like this — to a company in Brea, California, where I was working, pulled me into the lobby and warned me not to pursue a hearing loss claim and that I was a crybaby about insurance, and that OSHA was none of my business because our company is too small . . ." See Plaintiffs' Ex. 1, Tomkins' Depo at 22. Tomkins also emphasizes that Floer admits that he was concerned about Tomkins' workers' compensation claim because it could increase insurance premiums for Schmid, that he wanted to protect Schmid against future workers' compensation claims for hearing loss, and that Floer voluntarily flew out to the workers' compensation hearing to actively oppose Tomkins' claim. Further, Floer also told another Schmid employee/contractor, Greg Michel, that he thought Tomkins' workers' compensation claim was "nonsense" and discouraged employees from making such claims. In addition, although Tomkins' didn't disclose his workers' compensation claim, Schmid employees were made aware of the claim, discussed that the hearing loss claim was bad for business, and believed that Tomkins' termination was related to his workers' compensation claim. Given the nature of Tomkins' retaliation claim which implicates issues involving motive and intent, and in light of the disputed material facts related to Tomkins' retaliation claim, summary judgment is denied. See generally, Mustafa v. Clark County School Dist., 157 F.3d 1169, 1180 (9th Cir. 1998) (the "crux of disparate treatment claims is the elusive factual question of intentional discrimination . . . Therefore, because of the inherently factual nature of the inquiry, the plaintiff need produce very little evidence of discriminatory motive to raise a genuine issue of fact.") (internal quotes and citations omitted); Lyons v. England, 307 F.3d 1092, 1113 (9th Cir. 2002) ("any indication of discriminatory motive . . . may suffice to raise a question that can only be resolved by a factfinder, and for that reason summary judgment for the defendant will ordinarily not be appropriate on any ground relating to the merits because the crux of a Title VII dispute is the elusive factual question of intentional discrimination.") (internal quotes and citations omitted).
C. Punitive Damages
Defendants argue that Tomkins has failed to meet the standard for establishing punitive damages. However, taking Plaintiff's evidence as true and drawing all reasonable inferences in his favor as required at summary judgment, there are material issues of fact precluding summary judgment as to Tomkins' claim for punitive damages.
As Arizona case law reflects:
Punitive damages are awarded primarily to punish the wrongdoer and deter others from similar conduct . . . The award of punitive damages is limited to situations where these objectives can be furthered . . . Punitive damages are therefore awarded only where the defendant's wrongful conduct is the result of an evil mind, something more than the mere commission of a tort . . . Accordingly, the primary inquiry is based on the wrongdoer's state of mind or attitude . . . An evil mind is found where the defendant intended to injure the plaintiff, or where the defendant, not intending to cause injury, consciously pursued a course of conduct knowing that it created a substantial risk of significant harm to others . . . [P]unitive damages [are available] only upon clear and convincing evidence of the defendant's evil mindOlson v. Walker, 162 Ariz. 174, 177, 781 P.2d 1015, 1018 (Ct. App. 1989) (internal quotes and citations omitted); see also Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326, 331, 723 P.2d 675, 680 (1986) ("The key [for punitive damages] is the wrongdoer's intent to injure the plaintiff or his deliberate indifference with the rights of others, consciously disregarding the unjustifiably substantial risk of significant harm. While the necessary `evil mind' may be inferred, it is still this `evil mind' in addition to outwardly aggravated, outrageous, malicious, or fraudulent conduct which is required for punitive damages.").
The Arizona Supreme Court has stated that "[t]his requirement [of something more than the mere commission of a tort] does not preclude the existence of torts whose prima facie case will necessarily satisfy the elements and evidentiary burden of a prima facie claim for punitive damages." Thompson v. Better-Bilt Aluminum Products Co., Inc., 171 Ariz. 550, 556 n. 12, 832 P.2d 203, 209 n. 12 (1992).
As the Arizona Supreme Court has already found, in "appropriate circumstances, punitive damages may be recovered in an action for wrongful discharge in violation of public policy, including discharge for filing a workers' compensation claim." Thompson v. Better-Bilt Aluminum Products Co., Inc., 171 Ariz. 550, 555-556, 832 P.2d 203, 208-209 (1992). In Thompson, the plaintiff claimed that he was discharged by his employer in retaliation for filing a workers' compensation claim. Thompson, 171 Ariz. at 555-559, 832 P.2d at 208-212. At trial, the plaintiffs introduced evidence supporting this claim, and also submitted evidence suggesting that the employer may have had an informal, underhanded policy of discharging employees who filed workers' compensation claims. Id. The trial court, however, entered a directed verdict as to the plaintiffs' claim for punitive damages. Id. On appeal, the Arizona Supreme Court reversed the trial court, and emphasized that in "resolving all issues of credibility in favor of the plaintiffs, and allowing the plaintiffs all inferences that may legitimately be drawn from the evidence . . . the jury could have found that [the defendant employer] was pursuing a course of conduct to serve its own interests despite knowledge that its acts were wrongful and in conscious disregard for the legal right of its employees. This would provide a sufficient basis to send the punitive damages issues to the jury." Thompson, 171 Ariz. at 559, 832 P.2d at 212. Similarly, taking Tomkins' facts as true and drawing all reasonable inferences in his favor, a jury could find the same way and award punitive damages in this case.
In reaching its decision, the Arizona Supreme Court also cited with favor numerous cases from other jurisdictions finding that punitive damages were proper in cases involving an employer's retaliatory termination of an employee for exercising the right to pursue a workers' compensation claim stemming from an on the job injury. See Thompson, 171 Ariz. at 556 556 n. 11, 832 P.2d at 209 209 n. 11. Among the cases cited was Hansen v. Harrah's, 100 Nev. 60, 675 P.2d 394 (1984); in Hansen, the Nevada Supreme Court described the importance these issues in cases involving retaliation for filing a workers' compensation claim: "The [Workers' Compensation] Act creates a duty in the employer to compensate employees for work-related injuries (through insurance) and a right in the employee to receive such compensation. But in order for the goals of the Act to be realized and for public policy to be effectuated, the employee must be able to exercise his right in an unfettered fashion without being subject to reprisal. If employers are permitted to penalize employees for filing workmen's compensation claims, a most important public policy will be undermined. The fear of being discharged would have a deleterious effect on the exercise of a statutory right. Employees will not file claims for justly deserved compensation — opting, instead, to continue their employment without incident. The end result, of course, is that the employer is effectively relieved of his obligation . . . We know of no more effective way to nullify the basic purposes of Nevada's workmen's compensation system than to force employees to choose between a continuation of employment or the submission of an industrial claim. In the absence of an injury resulting in permanent total disability, most employees would be constrained to forego their entitlement to industrial compensation in favor of the economic necessity of retaining their jobs." Hansen, 100 Nev. at 63-63, 675 P.2d at 396-397 (internal quotes and citations omitted).
The Court notes that the cases cited by Defendants in support of dismissing the punitive damages claim do not implicate the same issues presented in workers' compensation retaliation cases, and are factually distinguishable from the serious allegations presented by Tomkins' in his opposition to summary judgment.
Here, taking Tomkins' facts as true and drawing all reasonable inferences in his favor, the jury could find as follows. Tomkins worked for Schmid for over a decade, and over time, suffered a permanent physical injury due to the conditions at work. The injury at issue, a permanent, premature loss of his full hearing ability, was caused by exposure to extremely loud, cumulative industrial noise stemming from Schmid machines. Throughout the workers' compensation claim process, Floer actively engaged in actions to undermine Tomkins' right to seek relief for his job related injury. He engaged in these actions to protect against future claims, and wanted to discourage other employees from filing similar future workers' compensation claims. Indeed, Floer met with Tomkins and warned him not to file his claim, received approval for his decision to fire him within approximately one month of Tomkins' filing of his workers' compensation claim, and fired Tomkins the same day that a favorable workers' compensation decision was issued. Employees were made aware of the circumstances surrounding Tomkins' workers' compensation claim, and believed that the termination stemmed from Tomkins' pursuing his workers' compensation claim for hearing loss. Under these circumstances, a reasonable jury could find that Defendants were "pursuing a course of conduct to serve its own interests despite knowledge that its acts were wrongful and in conscious disregard for the legal rights of its employees. This would provide a sufficient basis to send the punitive damages issues to the jury." Thompson, 171 Ariz. at 559, 832 P.2d at 212. As such, Defendants' Motion for Summary Judgment as to punitive damages is denied.
IV. CONCLUSION
Accordingly, IT IS HEREBY ORDERED as follows:
(1) Defendants' Motion for Reconsideration (Doc. #130) is granted;
(2) Defendants' Motion for Summary Judgment (Doc. #126) is denied in part and granted in part.
It is granted in part to the extent that the OSHA retaliation claim has been dismissed as explained in relation to Motion for Reconsideration.
(3) The parties shall file a Joint Proposed Pretrial Order and any Motions in Limine within 30 days of the filing date of this Order. See Doc. #41 (Scheduling Order at 4-5).
(4) Alternatively, if the parties so choose, they may engage in a settlement conference with a Magistrate Judge at no cost to the parties. If the parties choose this option, they should contact the Court which can set up the conference and stay the remaining deadlines.