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Johnson v. Southwest Research Institute

United States District Court, W.D. Texas, San Antonio Division

May 23, 2019

MARY ELLEN JOHNSON Plaintiff,
v.
SOUTHWEST RESEARCH INSTITUTE, Defendant.

          MEMORANDUM OPINION

          Royce C. Lamberth United States District Judge.

         Following a week-long trial, the jury rendered a verdict in favor of plaintiff Mary Ellen Johnson against defendant Southwest Research Institute (SwRI). The jury found SwRI terminated Johnson because of her reports of sex discrimination, which is activity protected by Title VII of the Civil Rights Act of 1964, and discriminated against Johnson based on her sex by providing Johnson with unequal tuition reimbursement. The jury awarded Johnson $260, 000 in compensatory damages. The jury also determined Johnson was owed $335, 624 in back pay, but this amount was reduced by $185, 624 because of Johnson's failure to mitigate her damages, resulting in an award of $150, 000 in back pay. In addition to these awards, Johnson seeks prejudgment interest, post-judgment interest, two years of front pay in lieu of reinstatement, and to have the Court order SwRI to send a letter to the Defense Security Service Personnel Security Management Office for Industry (DSS PSMO-I) to inform DSS PSMO-I of the jury's verdict and request the incident report regarding Johnson be rescinded. SwRI disputes that Johnson should be awarded front pay and contends it would be improper for the Court to order SwRI to send a letter requesting DSS PSMO-I rescind the incident report regarding Johnson.

         I. Compensatory Damages

         The jury awarded Johnson $200, 000 for "[p]ast pain and suffering, inconvenience, mental anguish, and loss of enjoyment of life" and $60, 000 for "[f]uture pain and suffering, inconvenience, mental anguish, and loss of enjoyment of life." Verdict Form, ECF No. 142. This amounts to a $260, 000 compensatory damage award.

         Johnson will also be awarded prejudgment interest on the past compensatory damages. The Fifth Circuit has declared "[p]rejudgment interest should apply to all past injuries, including past emotional injuries . . . Refusing to award prejudgment interest ignores the time value of money and fails to make the plaintiff whole." Thomas v. Texas Dep't of Criminal Justice, 297 F.3d 361, 372 (5th Cir. 2002). In Thomas, the Fifth Circuit affirmed that prejudgment interest applies to both back pay and compensatory damage awards under Title VII, and asserted that "[b]ecause the jury found that the [plaintiff] suffered past emotional injuries, the district court was compelled to award prejudgment interest on those past injuries." Id.

         Here, the jury awarded Johnson $200, 000 in past compensatory damages for emotional injuries. Under Thomas, the Court will award prejudgment interest on the past compensatory damage award. Because there is no federal law setting the prejudgment interest rate here, the Court looks to state law for guidance on the applicable rate. See Perez v. Bruister, 823 F.3d 250, 274 (5th Cir. 2016) (turning to state law for guidance because the federal Employee Retirement Income Security Act does not set prejudgment interest rates). The Court therefore turns to Texas state law, as that is the applicable state law in this matter. The Texas Supreme Court has recognized two separate bases for the award of prejudgment interest: (1) an enabling statute; and (2) general principles of equity. Johnson & Higgins of Texas, Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 528 (Tex. 1998). Statutory prejudgment interest applies only to judgments in wrongful death, personal injury, property damage, and condemnation cases. Tex. Fin. Code Ann. §§ 304.102, 304.201 (West 2019); Kenneco, 962 S.W.2d at 530. Here, Johnson is entitled to recover on her Title VII claims. Thus, any award of prejudgment interest is governed by the common law, rather than by statute. Kenneco, 962 S.W.2d at 530. The Texas Supreme Court has held that prejudgment interest accrues at the rate for post-judgment interest and is computed as simple interest. Id. at 532.

         The Court looks to Texas state law on post-judgment interest rate as guidance for prejudgment interest rate. Under the Texas Finance Code, the post-judgment interest rate is "the prime rate as published by the Board of Governors of the Federal Reserve on the date of computation," unless that rate is less than five percent or greater than fifteen percent. Tex. Fin. Code Ann. § 304.003(c)(1) (West 2019). Currently, the prime rate is 5.50%. Selected Interest Rates (Daily), Board of Governors of the Federal Reserve System (May 21, 2019), https://www.federalreserve.gov/releases/hl5/. The Court will calculate prejudgment interest using this rate. The amount of prejudgment interest per day is $30.1369863. "District courts generally should calculate interest on back pay and past damages based on the date of the adverse employment action." Thomas, 297 F.3d at 372. Here, the date of the adverse action is August 15, 2012, which is the date Johnson was informed of her termination. ECF No. 109. Therefore, the calculation of prejudgment interest should date back to August 16, 2012.[1] The Court awards prejudgment interest from this date to the date of judgment, May 22, 2019, which equals 2470 days. Thus, the prejudgment interest amount totals $74, 438.36.

         Accordingly, Johnson's award is $260, 000 in compensatory damages and $74, 438.36 in prejudgment interest on her past compensatory damage award. This totals $334, 438.36 in compensatory damages. However, compensatory and punitive damages are capped at $300, 000 for unlawful intentional discrimination under Title VII when the respondent has more than 500 employees, which is the case for SwRI. 42 U.S.C. § 1981a(b)(3). The Court must take into account the prejudgment interest award when determining whether Johnson's award exceeds the statutory cap because prejudgment interest is a calculation intended to account for the loss of the value of money based on the passage of time. Prejudgment interest is not a separate damage award. Because the jury's compensatory damage award plus prejudgment interest on the past compensatory damages exceeds $300, 000, this statutory cap limits the compensatory damage award Johnson may receive. See Hudson v. Chertoff, 484 F.Supp.2d 1275, 1278-79 (S.D. Fla. 2007). Johnson will therefore only be awarded $300, 000 in compensatory damages.

         Also, Johnson will be awarded post-judgment interest on this award. Post-judgment interest is "calculated from the date of the entry of judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of judgment." 18 U.S.C. § 1961. The average rate of the 1-year constant maturity Treasury yield for the week preceding the date of this judgment Was 2.324%. Selected Interest Rates (Daily), Board of Governors of the Federal Reserve System (May 21, 2019), https://www.federalreserve.gov/releases/hl5/. Thus, Johnson will be awarded post-judgment interest on the compensatory damage award at a rate of 2.324% per annum from the date of this judgment, compounded annually, until paid.

         II. Back Pay

         The jury awarded Johnson $150, 000 in back pay. Back pay and interest on back pay are not considered compensatory damages under Title VII. See 42 U.S.C. § 1981a(b)(2) ("Compensatory damages awarded under this section shall not include backpay, interest on backpay, or any other type of relief authorized under section 706(g) of the Civil Rights Act of 1964."). These amounts are therefore not subject to the statutory caps. Johnson will be awarded $150, 000 in back pay.

         Johnson will also be awarded prejudgment interest on this back pay award. Although the decision to award prejudgment interest on back pay is discretionary, Gloria v. Valley Grain Productions, Inc., 72 F.3d 497, 500 (5th Cir. 1996), the Fifth Circuit has noted that "under Title VII interest is an item that 'should be included in back pay' to make a victim whole." Pegues v. Mississippi State Employment Serv., 899 F.2d 1449, 1453 (5th Cir. 1990) (citing Pettway v. Am. Cast Iron Pipe Co., 494 F.2d 211, 263 (5th Cir. 1974)). Refusal to award prejudgment interest ignores the time value of money. Thomas, 297 F.3d at 372. Again, because there is no federal law setting the prejudgment interest rate here, the Court looks to Texas state law for guidance on the applicable rate. See Perez, 823 F.3d at 274. For the reasons discussed supra in part I, the Court looks to Texas state law on post-judgment interest rate as guidance for the prejudgment interest rate and computes prejudgment interest as simple interest. Under the Texas Finance Code, the post-judgment interest rate is "the prime rate as published by the Board of Governors of the Federal Reserve on the date of computation," unless that rate is less than five percent or greater than fifteen percent. Tex. Fin. Code Ann. § 304.003(c)(1) (West 2019). Currently, the prime rate is 5.50%. Selected Interest Rates (Daily), Board of Governors of the Federal Reserve System (May 21, 2019), https://www.federalreserve.gov/releases/hl5/. The Court will calculate prejudgment interest using this rate. The amount of prejudgment interest per day is $22.60274. "District courts generally should calculate interest on back pay and past damages based on the date of the adverse employment action." Thomas, 297 F.3d at 372. Here, the date of the adverse action is August 15, 2012. ECF No. 109. Therefore, the calculation of prejudgment interest should date back to August 16, 2012.[2] The Court awards prejudgment interest from this date to the date of judgment, May 22, 2019, which equals 2470 days. Thus, the prejudgment interest amount totals $55, 828.77. Accordingly, Johnson will be awarded $150, 000 in back pay and $55, 828.77 in prejudgment interest on the back pay award. This totals $205, 828.77. She will be awarded post-judgment interest on this award at a rate of 2.324% per annum from the date of this judgment, compounded annually, until paid.

         III. Front Pay

         Reinstatement or front pay is ordinarily appropriate when requested. Bogan v. MTD Consumer Group, Inc.,919 F.3d 332, 336 (5th Cir. 2019). Although the preferred equitable relief is reinstatement, front pay is appropriate when reinstatement is not feasible. Reneau v. Wayne Griffin & Sons, Inc.,945 F.2d 869, 869 (5th Cir. 1991). Here, Johnson does not seek reinstatement and believes reinstatement is not feasible. SwRI also does not believe reinstatement is appropriate in this situation. Thus, both parties agree ...


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