‘Liberal’ NYC Law May Allow Larger Jury Award in Bias Cases

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By Jon Steingart

New York state’s highest court will hear debate next week in a case that could affect how much a jury can award in damages under New York City law ( Chauca v. Abraham, N.Y., No. CTQ-2016-00003, oral argument 10/10/17 ).

Depending on which way the New York Court of Appeals comes down, the ruling may mean a New York city employer could be on the hook to pay a larger punitive damages award if it’s found liable for workplace violations under the city’s Human Rights Law. There is a statutory cap on damages for federal law claims under Title VII of the 1964 Civil Rights Act, but there is no limit under city law.

“We’re asking the court to find that you get damages as a matter of course under the city law, which is not always the case under Title VII,” Stephen Bergstein, a New Paltz, N.Y., lawyer whose client prevailed in the underlying pregnancy discrimination lawsuit, told Bloomberg BNA. “That creates a new dynamic to the city law because it’s another element of damages.”

The issue came up after a jury sided with Bergstein’s client, Veronika Chauca, who said that Park Health Center refused to reinstate her as a physical therapy aide after she took maternity leave. On appeal, she says the trial judge should have instructed the jury about different punitive damages it could award under city law and Title VII.

Park Health’s lawyer didn’t immediately respond to a request for comment.

‘Detour’ from Second Circuit to State Court

The U.S. Court of Appeals for the Second Circuit asked the New York Court of Appeals for its interpretation of the standard to apply for determining punitive damage awards under the New York City Human Rights Law. In 2001, the Second Circuit found the city law standard is the same as the standard used for Title VII.

In 2005, the New York City council amended the HRL so its provisions would be “construed liberally” by courts. The Local Civil Rights Restoration Act also said courts should interpret the HRL “regardless” of how similar federal and state discrimination laws are interpreted. The Restoration Act legislatively overruled the Second Circuit’s 2001 determination, Chauca says in a brief.

“When the Restoration Act was passed it was to reaffirm the purposes of the statute,” said Herbert Eisenberg, an attorney with Eisenberg & Schnell LLP in New York City who represents workers and contributes to Bloomberg BNA books on employment law. The council wrote the law with the sense that the HRL had been interpreted too narrowly, according to the legislative text. “I think the way that the legislative history of the statute is drawn and the liberal construction lends itself to the conclusion that a federal standard that’s more limiting doesn’t make sense,” Eisenberg told Bloomberg BNA.

But the HRL doesn’t address damages standards, according to Park Health. In the absence of language on this point, courts should continue applying the Title VII standard, Park Health says in its brief. Title VII allows punitive damages when someone acts with “malice” or “reckless indifference” toward a person’s protected rights.

“I don’t know where the New York Court of Appeals is going to look for guidance,” Lawrence Peikes, a partner in Wiggin and Dana LLP’s New York City and Stamford, Conn., offices who represents employers, told Bloomberg BNA. “There’s no commentary or legislative history that speaks to the intent,” he said. Peikes also contributes to Bloomberg BNA books on employment law.

“In the absence of a legislative directive otherwise state courts will typically apply the same basic standards that apply to federal law, the theory being the state law is modeled after the federal law,” Peikes said.

Federal courts typically certify, or ask, a state court a question of state or local law when it can’t come up with an answer based on its own review of the state court’s case law. Chauca’s case remains pending in the Second Circuit, which will take the state court’s ruling into consideration when it rules on the damages award. Chauca’s lawyer called the activity in the state court a “detour.”

A spokesman for the New York City Law Department, which filed an amicus brief urging the court not to tie the standard for damages under the HRL to the one for Title VII, referred Bloomberg BNA to the city’s brief.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bna.com

To contact the editor responsible for this story: Terence Hyland at thyland@bna.com

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