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HELGESON v. AMERICAN INTERN. GROUP

March 2, 1999

KATHYE L. HELGESON, PLAINTIFF
v.
AMERICAN INTERNATIONAL GROUP, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by:  Longobardi, Senior District Judge.[fn1] [fn1] The Honorable Joseph J. Longobardi, Senior United States District Judge for the District of Delaware, sitting by designation.

OPINION

I. Introduction

Plaintiff Kathye L. Helgeson was employed by American International Group ("AIG"), in their wholly owned subsidiary, American International Group Claims Services ("AIGCS"),*fn2 from October 1994 until November 1996. Plaintiff originally filed suit in San Diego County Superior Court, but defendants removed the case to this Court. The Complaint contained ten causes of action, including claims for: (1) sexual harassment, (2) retaliation, (3) pretextual constructive discharge, (4) breach of employer's harassment policies (5) breach of implied employment contract, (6) breach of implied contract of good faith and fair dealing, (7) negligence, (8) negligent supervision, (9) intentional infliction of emotional distress, and (10) negligent infliction of emotional distress. Before removal to federal court, the state court dismissed the third and tenth causes of action. This Court granted defendants' motion for summary judgment on the fourth, fifth, sixth, seventh, and eighth causes of action.*fn3 Immediately preceding trial, plaintiff voluntarily dismissed the first cause of action. Accordingly, the only issues that went to trial were the plaintiff's claims of retaliation and intentional infliction of emotional distress.

A jury trial was held from June 8-15, 1998, at which the jury found for the plaintiff on both claims. The jury made the following findings of fact in its verdict: (1) plaintiff reasonably and in good faith believed she was sexually harassed in violation of the FEHA*fn4 or the public policy of California; (2) plaintiff, or someone on her behalf, complained or otherwise protested to defendants that she believed she was sexually harassed; (3) defendants took some adverse employment action against plaintiff after she or someone on her behalf complained or protested; (4) the complaints were a motivating factor for defendants' adverse employment action; (5) plaintiff sustained injury, damages, loss or harm as a result of defendants' retaliation; (6) defendants engaged in outrageous conduct; (7) the individuals who engaged in outrageous conduct acted within the scope of their employment; (8) plaintiff suffered severe emotional distress caused by this outrageous conduct; and (9) plaintiff has proven by clear and convincing evidence that any of the individuals who engaged in this conduct are guilty of malice, oppression, fraud or despicable conduct. The jury then awarded plaintiff $350,000 in economic damages,*fn5 $650,000 in non-economic damages, and $1,250,000 punitive damages.

Currently pending before this Court are defendants' motions for: (1) Judgment as a Matter of Law Pursuant to Rule 50(b), and (2) New Trial or, Alternatively, Remittitur Pursuant to Rule 59. Also pending is plaintiffs Motion for Attorneys Fees and Costs.

II. Facts

Briefly summarized, the relevant facts, in a light most favorable to the plaintiff,*fn6 are as follows: From October 1994 through November 1996, AIG employed Kathye Helgeson as a fraud investigator in the claims division of AIGCS' San Diego office. AIGCS, a wholly-owned subsidiary of AIG, adjusts claims for insurance carriers owned by AIG. On April 3, 1996, plaintiff was engaged in a conversation with Ronnie Austin, a supervisor at AIGCS. In this conversation, plaintiff was acting defensively in response to Mr. Austin's earlier suggestion in a meeting that she needed to handle more claims. Mr. Austin suggested that the two continue the conversation outside, where plaintiff continued to act defensively. At this, point, Mr. Austin stated that she should relax, and that she was not being investigated. He then added' that "if we caught you in bed with a dead man or a live woman, then we might have to investigate you." Plaintiff reported this comment to David Sossaman, a co-worker who had been plaintiffs former direct supervisor. Mr. Sossaman subsequently notified Ken Coleman, Mr. Austin's supervisor.

Subsequent to plaintiff's report to Mr. Sossaman, and Mr. Sossaman's report to Mr. Coleman, several events occurred that plaintiff alleged were in retaliation for her reporting Mr. Austin's comment. These events include: (1) MG threatened to put plaintiff on a work program designed to help her meet critical success goals; (2) Mr. Coleman threatened to lay off plaintiff if she did not transfer to the Costa Mesa office, a threat that AIG rescinded three days later; and (3) defendants assigned several cases to Mr. Sossaman that should have been assigned to plaintiff, although the evidence showed that this practice was occurring before the April incident. Subsequently, at the end of June, plaintiff took a leave of absence from AIG. Plaintiff returned in September, and within two weeks received a verbal reprimand for improperly using her E-mail to spread rumors. Defendant also reprimanded plaintiff for improperly contacting a supervisor in the New York office even though she was expressly given permission to do so. Additionally, Mr. Coleman issued an inaccurate performance review of plaintiff's October performance. Finally, on November 22, 1996, plaintiff resigned from AIG.

III. Notion for Judgment as a Matter of Law

A. Standard

Defendants' first motion is for Judgment as a Matter of Law Pursuant to Rule 50(b) of the Federal Rules of Civil Procedure. "Judgment as a matter of law is proper if the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that conclusion is contrary to the jury's." Lambert v. Ackerly, 156 F.3d 1018, 1021-22 (9th Cir. 1998) (citing Forrett v. Richardson, 112 F.3d 416, 419 (9th Cir. 1997)); Bank of the West v. Valley Nat'l Bank of Ariz., 41 F.3d 471, 477 (9th Cir. 1994).

  The standard for deciding a Rule 50(b) motion "is
  appropriately strict." The court must determine
  whether the evidence, viewed in the light most
  favorable to the plaintiffs, was sufficient to have
  allowed a reasonable juror to arrive at a verdict for
  plaintiffs. The court must draw all reasonable
  inferences in plaintiff's favor, and all questions of
  credibility must likewise be decided in plaintiffs'
  favor. . . . [T]he court should grant the motion only
  when (1) there is such a complete absence of evidence
  supporting the verdict that the jury's findings could
  only have been the result of sheer surmise and
  conjecture, or (2) there is such an overwhelming
  amount of evidence in favor of the movant that
  reasonable and fairminded men could not arrive at a
  verdict against him.

Datskow v. Teledyne Continental Motors Aircraft Products, 826 F. Supp. 677, 682 (W.D.N.Y. 1993) (citing Stubbs v. Dudley, 849 F.2d 83, 85 (2d Cir. 1988); Konik v. Champlain Valley Physicians Hosp., 733 F.2d 1007, 1013 (2d Cir. 1984); Mattivi v. South African Marine Corp., 618 F.2d 163, 167-68 (2d Cir. 1980)).

B. Intentional Infliction of Emotional Distress Claim

Plaintiff's first cause of action was for intentional infliction of emotional distress. The jury found in plaintiff's favor. The tort of intentional infliction of emotional distress is comprised of three elements: (1) extreme and outrageous conduct by the defendants with the intention of causing, or reckless disregard of the probability of causing, emotional distress (2) the plaintiff suffered severe or extreme emotional distress; and (3) the plaintiff's injuries were actually and proximately caused by the defendants' outrageous conduct.*fn7 KOVR-TV, Inc. v. Superior Court, 31 Cal.App.4th 1023, 1028, 37 Cal.Rptr.2d 431 (Cal.Ct.App. 1995). Defendants argue that there is insufficient evidence to support the jury's finding of extreme and outrageous conduct.

To prove extreme and outrageous conduct, "plaintiff must show that defendant[s'] conduct was outrageous and beyond all bounds of decency." Berdan v. Ortho-McNeil Pharmaceutical, Inc., No. C-96-207-VRW, 1997 WL 811782, at *5 (N.D.Cal. Dec. 31, 1997) (citing Cervantez v. J.C. Penney Co., Inc., 24 Cal.3d 579, 156 Cal.Rptr. 198, 595 P.2d 975 (Cal. 1979)). The conduct "must be so extreme as to exceed all bounds of that usually tolerated in a civilized community. Generally, conduct will be found to be actionable where the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, `Outrageous!'" Cochran v. Cochran, 65 Cal.App.4th 488, 494, 76 Cal.Rptr.2d 540 (Cal.Ct.App. 1998) (citing and quoting KOVR-TV, 31 Cal.App.4th at 1028, 37 Cal.Rptr.2d 431; Rest.2d Torts, § 46, comment d). See also Cabanas v. Gloodt Associates, 942 F. Supp. 1295, 1311 (E.D.Cal. 1996). "In evaluating whether the defendant's conduct was outrageous, it is `not enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by "malice," or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort. Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.'" Cochran, 65 Cal.App.4th at 496, 76 Cal.Rptr.2d 540 (quoting Rest.2d Torts, § 46, comment d).

The actions upon which plaintiff bases her claim are the adverse employment actions that are also the basis for her retaliation claim. These actions are: AIG threatened to place plaintiff on a work program; AIG did not assign plaintiff a sufficient number of cases with which to meet her critical success goals; Mr. Coleman threatened to lay off plaintiff; an in-house AIG attorney, during an interview with Mr. Sossaman, asked whether Mr. Sossaman and plaintiff were having an affair; AIG issued two verbal reprimands that had no basis in fact; Mr. Coleman issued an inaccurate performance evaluation; Mr. Coleman promised plaintiff he would be there when she returned to work from her leave of absence, but was absent upon her return; and AIG took away assignments that were within plaintiff's territory. (See plaintiff's memorandum at 12-13).

All of the actions submitted by plaintiff are every-day management decisions. Performance reviews, counseling sessions, lay-off decisions, and work assignments are all decisions that businesses make every day. "Managing personnel is not outrageous conduct beyond the bounds of human decency, but rather conduct essential to the welfare and prosperity of society. . . . If personnel management decisions are improperly motivated, the remedy is a suit against the employer for discrimination." Janken v. GM Hughes Electronics, 46 Cal.App.4th 55, 80, 53 Cal.Rptr.2d 741 (Cal.Ct.App. 1996). Even if these decisions were improperly motivated, they fall far short of the necessary standard of outrageous conduct beyond all bounds of decency.

A sampling of cases demonstrates that the conduct in evidence in this case falls far short of the evidence needed to prove extreme and outrageous conduct. See, e.g., King v. AC & R Advertising, 65 F.3d 764 (9th Cir. 1995) (under California law, employer's alleged actions against employee did not constitute "extreme and outrageous conduct," and employer thus was not liable for intentional infliction of emotional distress; employer allegedly changed employee's status to at-will, restructured his compensation package, terminated him after he rejected proposal and subsequently rehired him, and made age-related comments); Schneider v. TRW, Inc., 938 F.2d 986, 992-93 (9th Cir. 1991) (no intentional infliction of emotional distress where plaintiffs evidence showed her supervisor screamed, yelled, and made threatening gestures while criticizing her job performance); Janken, 46 Cal.App.4th 55, 53 Cal.Rptr.2d 741 (no intentional infliction of emotional distress for firing in violation of FEHA based on age); Yurick v. Superior Court, 209 Cal.App.3d 1116, 1123-30, 257 Cal.Rptr. 665 (Cal.Ct.App. 1989) (comments that plaintiff was over forty and senile did not give rise to claim for intentional infliction of emotional distress); Trerice v. Blue Cross of California, 209 Cal.App.3d 878, 257 Cal.Rptr. 338 (Cal. Ct.App. 1989) (employer's conduct was not so outrageous as to state claim for intentional infliction of emotional distress, where employer presented plaintiff with termination package that she accepted, withdrew that package and told plaintiff that she was still employed, told plaintiff that position would be eliminated, provided plaintiff with termination package that was less advantageous than original one, and required plaintiff to work during last days of employment performing duties normally performed by persons of lower rank); Ankeny v. Lockheed Missiles and Space Co., 88 Cal.App.3d 531, 536-37, 151 Cal.Rptr. 828 (Cal.Ct.App. 1979) (no intentional infliction of emotional distress where plaintiff alleged his employer prevented him from becoming a union steward, transferred him from job to job, wrongly denied him promotions, assigned him inappropriate job tasks, and personally insulted him). But see Alcorn v. Anbro Engineering, Inc., 2 Cal.3d 493, 86 Cal.Rptr. 88, 468 P.2d 216 (Cal. 1970) (African-American employee alleged he was fired in a despicable manner when his supervisor did so while shouting various racial epithets was entitled to damages for intentional infliction of emotional distress); Rulon-Miller v. International Business Machines Corp., 162 Cal.App.3d 241, 255, 208 Cal.Rptr. 524 (Cal.Ct.App. 1984) (Evidence supported finding of intentional infliction of emotional distress where company fired plaintiff for dating another employee, even though company had policy of not interfering in private lives of employees. "The combination of statements and conduct would under any reasoned view tend to humiliate and degrade [the plaintiff]. To be denied a right granted to all other employees for conduct unrelated to work was to degrade her as a person."), disapproved on other grounds, Foley v. Interactive Data Corp., 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373 (Cal. 1988).

The defendants' actions, while possibly demonstrating poor business judgment, are not so extreme and outrageous to justify an award for intentional infliction of emotional distress.*fn8 The conduct does not rise to that described in Rulon-Miller and Alcorn. Moreover, defendants' conduct is less extreme than the conduct in King, Ankeny and Schneider where the court found no intentional infliction of emotional distress as a matter of law. Here, plaintiff was not insulted, degraded, yelled at, physically threatened, or publicly humiliated. She did not incur any racial slurs, and defendants made no employment decisions based on her personal life. Although defendants carried out their business decisions in a manner offensive to plaintiff, was not extreme and outrageous as a matter of law. While offensive, defendant' conduct was not so egregiously outside the realm of civilized conduct to give rise to a verdict in the plaintiff's favor. In short, there is a complete absence of evidence to support the jury's finding of outrageous conduct.

Accordingly, defendants' Motion for Judgment as a Matter of Law is granted for the claim of intentional infliction of emotional distress.

C. Retaliation Claim*fn9

Section 12940(f) of the California Government Code makes it unlawful "[f]or any employer . . . to discharge . . . or otherwise discriminate against any person because the person has opposed any practices forbidden under [the FEHA]." The elements of retaliation that plaintiff needed to prove to the jury are: (1) she reasonably believed that Mr. Austin had sexually harassed her in violation of FEHA or the public policy of California; (2) plaintiff or someone acting on her behalf complained about or otherwise protested to defendants that she in good faith believed that Mr. Austin had sexually harassed her by making an offensive comment; (3) defendants took some adverse employment action against her after she complained or protested about the comment; (4) her complaints or protests were a motivating factor for the adverse employment action; and (5) the adverse action caused her injury, damage, loss or ...


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