in § 1981a, could not include individual employees because employees do not have employees, and Congress could not have intended to cap compensatory damages on large employers, but allow unlimited damages against employees who were acting as their employer's agent.
This apparent contradiction between the definition of employer in § 2000e and the damages rules established in § 1981a is further complicated by the Ninth Circuit case of Padway v. Palches, 665 F.2d 965, 968 (9th Cir. 1982), which held that under the previous Civil Rights Act, "individual defendants cannot be held liable for back pay." Padway had sued members of a government agency. Referring only to §§ 2000e-2 and 2000e-5(g), the Court found that because those sections refer only to the "employer," not its officers or employees, individuals are not liable. The court did not discuss § 2000e(b) or how the definition of employer interacts with § 2000e-5(g). Sattar urges that Padway should be limited to its facts and, thus, to damages against public employees. Because, however, the Ninth Circuit did not discuss the implication of its holding, i.e., that individual employees cannot be considered "any agent" of the employer, it is difficult to understand how Padway supports a distinction between public employees acting as agents and private employees acting as agents.
Indeed, two District of Nevada courts have declined to limit Padway based on such a distinction. Seib v. Elko Motor Inn, Inc., 648 F. Supp. 272, 274 (D. Nev. 1986); Pree v. Stone & Webster Eng'g Corp., 607 F. Supp. 945, 950 (D. Nev. 1985). Each court applied Padway to private employers, and held that individuals could not be liable for back pay. This Court, like the courts that decided Seib and Pree, can find no reason to distinguish public and private employees acting as agents for their employer. This Court is bound by Padway, and nothing in the new Civil Rights Act of 1991 disturbs the Ninth Circuit's holding that individual employees, despite their inclusion in 42 U.S.C. § 2000e, cannot be liable for back pay under § 2000e-5(g). Therefore, the Court remits the back pay award against Forbes.
The permissibility of § 1981a damages against an individual employee who has been found to have been acting as the agent of the employer, however, is an open question in the Ninth Circuit. In ruling sua sponte to dismiss the Title VII claims against Myers and Munoz, and in overruling defendants' objection to Instruction No. 5, the Court cited two decisions from other circuits. The Sixth Circuit has allowed a cause of action against an employer based on the actions of a supervisor who initiated a disciplinary action that lead to a discriminatory dismissal, even though the supervisor did not play a role in the final decision to dismiss the plaintiff. Simpson v. Diversitech Gen., Inc., 945 F.2d 156 (6th Cir.), cert. dismissed, 112 S. Ct. 1072 (1991). While supporting the Court's agency instruction, Diversitech is silent on the issue of damages against individual defendants. The Fifth Circuit has found that public officials are "employers" under Title VII, and can be liable for back pay under 42 U.S.C. § 2000e, but only in their official, not individual, capacities. Harvey v. Blake, 913 F.2d 226, 228 (5th Cir. 1990) (supervisor can be liable in official capacity but not in individual capacity). Harvey, however, did not address the question of damages under § 1981a, and is directly contrary to Padway. Neither case, therefore, provides a possible resolution of the question before this Court.
The reference to § 2000e5-(g) in § 1981a(a)(1), "the complaining party may recover compensatory and punitive damages as allowed in subsection (b) of this section, in addition to any relief authorized by [ 42 U.S.C. § 2000e-5(g)], from the respondent," is some evidence that Congress intended to provide damages against the same categories of persons under § 1981a as under § 2000e-5(g). (Emphasis added.) According to that reasoning, because the Ninth Circuit has excluded recovery from individuals under § 2000e-5(g), recovery from individuals is also excluded under § 1981a.
If individual employees are not liable for any type of damages under Title VII, then what is the meaning of the language in 42 U.S.C. § 2000e, which includes agents of the employer in "employer"? It is, of course, a principle of statutory construction that a Court should not construe a statute so as to render parts of it meaningless. Hughes Air Corp. v. Public Utils. Comm'n, 644 F.2d 1334, 1338 (9th Cir. 1981). Defendants argue that this language is not meant to extend personal liability to individual employees, but to create respondeat superior liability in the employer. They cite Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 72, 91 L. Ed. 2d 49, 106 S. Ct. 2399 (1986) (the use of the term "agent" "evinces an intent to place some limits on the acts of employees for which employers under Title VII are to be held responsible").
Presumably, they mean to imply that because the definition of "employer" includes "agent," the employer is only liable for actions of its agents, and not of employees or third parties who were not acting as its agents. This implication leads to redundancy. Any corporate employer can act, and accrue liability, only through individuals, and it is to the law of agency and corporations that courts turn when they wish to discover if an employer is liable. Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir. 1985) ("The rule is well established that a corporation is an artificial entity that can act only through agents[.]"); City of Vernon v. Southern Cal. Edison Co., 955 F.2d 1361, 1369 (9th Cir. 1992) (corporation liable for actions of employees within scope of employment). If "any agent" is read solely as a limit on "employer," then "any agent" and "employer of more than fifteen persons" are redundant, rather than separate concepts, as implied by their separate listing in the definitions section. Meritor does not necessarily lead to defendants' interpretation. The opinion discusses the "any agent" language of Title VII only from the perspective of testing when an employer is liable for the actions of its employees, and rejected the Court of Appeals strict liability standard for standard agency principles. 477 U.S. at 72. The case is silent on whether any Title VII claim was made against the individual supervisor in question and, if so, whether damages could be awarded against him. Thus, it did not reach the issue of whether in including "any agent" within the definition of employer, the drafters of Title VII logically included "any agent" in the sections holding an "employer" liable for back pay, and now compensatory and punitive damages.
Thus, "any agent" does not refer solely to a limit on employer liability, and yet individuals are not liable for back pay under Padway, despite the any agent language. Other cases offer two alternative interpretations of the statute that provide meaning to all parts of Title VII, and are consistent with Padway.4
This Court finds that the use of the word "agent" has meaning in two contexts: (1) when injunctive relief is sought against an individual employee, and (2) when an agent of the employer is itself an entity, not an individual.
In Pree, while finding that Padway precluded a back pay award against an individual defendant, the court mentioned that injunctive relief would be available against him had he not left his job. 607 F. Supp. at 950 ("only injunctive relief would be available against the [individual] employee"). Interpreting the statute to find that individual agents of the employer may be the subject of injunctive relief, but not monetary relief, also gives meaning to the statute and is consistent with Padway. Because Sattar did not seek injunctive relief against any defendant, there is no reason for this Court to pursue this possibility any further.
In Los Angeles Department of Water & Power v. Manhart, 435 U.S. 702, 55 L. Ed. 2d 657, 98 S. Ct. 1370 (1978), the Supreme Court recognized the words "any agent" in 42 U.S.C. § 2000e(1) as encompassing an administrative board. See also id. 718 n.33 ("we do not suggest, of course, than an employer can avoid his responsibilities by delegating discriminatory programs to corporate shells"). See also Morgan v. Safeway Stores, Inc., 884 F.2d 1211, 1214 (9th Cir. 1989) ("an employer . . . cannot avoid title VII liability by delegating discriminatory programs to third parties," finding that a credit union was not an agent of a grocery store chain and, therefore, not an employer under title VII). The implication of these cases is that "any agent" may be an entity, distinct from the employer, and yet still liable under Title VII even though it is not directly the complainant's employer. Such an entity, as an agent, would be liable for back pay under § 2000e-5(g), and under the Civil Rights Act of 1991, for compensatory and punitive damages, subject to caps based on the size of the agent entity. Thus, each part of the statutory framework would have satisfied a noncontradictory meaning. Further, this analysis is consistent with the Ninth Circuit's determination in Padway that individuals are not the intended target of § 2000e. Because the Court finds this analysis of the disputed statutory sections and relevant Supreme Court and Ninth Circuit precedent persuasive, it finds that, as a matter of law, defendant Forbes could not be liable for damages under 42 U.S.C. §§ 2000e-5(g) and 1981a(a) for race discrimination, national origin discrimination, or racial harassment.
Because the Court finds that judgment should be entered for Forbes as a matter of law, there is no need to address defendant's motions to remit damages assessed against Forbes as duplicative, or to order a new trial.
IT IS HEREBY ORDERED that:
1. The motion for judgment as a matter of law is GRANTED in part, and judgment is granted to defendant Forbes on the first, second, and third and causes of action.
2. The motion to amend the judgment is GRANTED. The Judgment on Verdict, entered in the civil docket on January 19, 1993, is amended as follows: Questions 2, 7, 8, 10, 15, 16, 17, 18, 21, 22, 25, and 26 are stricken.
3. The motions for remittitur, for relief from operation of judgment, and for new trial are DENIED.
Dated: April 11, 1993.
William H. Orrick
United States District Judge