Kennedy v. Supreme Forest Prods., Inc.

Citation: 295 F. Supp. 3d 113Docket: No. 3:14–cv–01851 (JAM)

Court: District Court, D. Connecticut; December 14, 2017; Federal District Court

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Michael Kennedy filed a lawsuit against Supreme Forest Products, Inc., claiming violations of the federal Surface Transportation Assistance Act (49 U.S.C. § 31105) after being terminated for refusing to drive trucks loaded beyond the federal weight limit. Following a five-day trial, the jury ruled in favor of Kennedy, awarding him $11,900 in compensatory damages and $425,000 in punitive damages. Supreme Forest Products subsequently requested either judgment as a matter of law or a new trial, while Kennedy sought attorney's fees and costs.

The court denied the defendant's motions but reduced the punitive damages to the statutory cap of $250,000. The background reveals that Kennedy worked as a truck driver for the company for approximately 12 years, during which he consistently adhered to federal safety regulations. The STAA prohibits employer retaliation against employees who refuse to drive vehicles that violate safety regulations. Kennedy claimed he was dismissed on April 3, 2014, after refusing to transport loads exceeding the 80,000-pound limit established by federal law (23 C.F.R. § 658.17(b)). Evidence presented at trial indicated that the company, under new general manager Martin Paganini, had begun loading trucks with excessive amounts of mulch, often reaching up to 70 yards, which would violate weight limits.

Kennedy and another former employee testified that such loads would exceed the legal weight threshold. Additionally, Kennedy recorded Paganini acknowledging the company's practice of hauling overweight loads and expressing a willingness to support drivers if they faced legal repercussions. This evidence contributed to the jury's verdict in Kennedy's favor.

An employee characterized the company’s practice of hauling loads over 80,000 pounds as "gross negligence." Paganini, a company representative, defended the practice by stating that the company had historically hauled heavy loads to remain profitable, acknowledging past financial losses from lighter loads. He claimed to have analyzed the company's profit margins related to weight and asserted that heavy hauling was necessary for the company's solvency. 

Documentary evidence supported the plaintiff's claims, including weight tickets from the company's scale indicating overweight loads from December 2013 to April 2014. The company's own website indicated that a 70-yard load of mulch could exceed federal weight limits, estimating weights of 800 to 1,000 pounds per yard. Given these estimates, a 70-yard load could push a truck's weight to 91,000 pounds, well over the legal limit.

On April 3, 2014, the plaintiff testified he was asked to drive two overweight loads of mulch, which he refused, leading to his termination. He provided a load manifest for that day and expressed concerns about the weights becoming excessive. A covert audio recording captured his conversation with Paganini, where he reiterated his refusal due to the truck being overweight. Paganini dismissed his concerns and indicated that human resources would follow up, but the plaintiff did not hear back for several days. When he contacted HR on April 7, he was informed he would receive a termination notice. 

This sequence of events allowed a jury to reasonably conclude that the plaintiff was fired for refusing to haul overweight loads. Under Rule 50, a motion for judgment as a matter of law requires that no reasonable jury could find in favor of the prevailing party based on the evidence presented, placing a heavy burden on the party seeking such judgment.

Evidence must be viewed favorably towards the party opposing a motion, allowing for reasonable inferences that a jury could draw in their favor (Harris v. O'Hare). In deciding a Rule 50 motion, a court disregards evidence favoring the moving party that a jury is not obligated to accept (ING Glob. v. United Parcel Serv.). Under Rule 59(a), a court can grant a new trial for any reason previously recognized in federal court, with a lower evidentiary standard than for Rule 50 motions, permitting the judge to assess evidence and witness credibility without favoring the verdict winner (Raedle v. Credit Agricole Indosuez). However, the Second Circuit emphasizes deference to jury credibility assessments, advocating against disturbing jury verdicts unless a seriously erroneous result or miscarriage of justice occurs, or if significant errors were made in evidence handling (Stampf v. Long Island R.R. Co.). 

The plaintiff's claim is based on the Surface Transportation Assistance Act (STAA), which protects employees from discharge for refusing to operate vehicles in violation of federal safety regulations, including the maximum gross vehicle weight limit of 80,000 pounds on interstate highways (23 C.F.R. 658.17). Congress intended the STAA to address rising fatalities and injuries in the trucking industry, ensuring employees can report safety violations without fear of retaliation (Yellow Freight Sys. Inc. v. Reich; Brock v. Roadway Exp. Inc.). The defendant contends that the jury lacked sufficient evidence to determine that the plaintiff would have driven overweight loads on interstate highways, a position the court does not support.

Plaintiff did not specify the route he would have taken had he accepted the overweight loads, but evidence indicated that both loads originated from the defendant's lot in Southington, Connecticut, with destinations in Bridgeport (approximately 40 miles away) and Hartford (about 20 miles away). The jury, familiar with these locations, could reasonably conclude that the plaintiff would have used interstate highways for transportation. Southington is directly connected to Hartford via Interstate 84, while there are indirect interstate routes available to Bridgeport. The jury could infer that a commercial driver would prefer interstate highways for faster travel and better road conditions for large trucks. The defendant's failure to suggest alternative local routes after the plaintiff's complaints about the loads further supported this conclusion. The jury's reliance on circumstantial evidence and their common knowledge was appropriate, leading to a reasonable inference that the plaintiff would have used interstate highways. The court denied the defendant's motion for a new trial, affirming the jury's finding and concluding it was not substantially erroneous or a miscarriage of justice.

Defendant seeks judgment as a matter of law or a new trial regarding punitive damages. The STAA allows punitive damages up to $250,000, as stated in 49 U.S.C. § 31105(b)(3)(C). Punitive damages are justifiable when a defendant's actions, after compensatory damages, are deemed sufficiently reprehensible to warrant further sanctions for punishment or deterrence. In this case, the jury found sufficient evidence of the defendant's negligence, including recorded statements from the general manager prioritizing profit over safety and testimonies regarding illegal overloading practices. The defendant's decision to terminate the plaintiff for refusing to drive overweight loads further supported the jury's conclusion of malice and recklessness.

The jury awarded punitive damages totaling $455,000, which exceeds the statutory cap, prompting the court to reduce the amount to $250,000. The defendant contends that even this reduced amount is unconstitutionally excessive, but the court disagrees. It notes that punitive damages serve to punish defendants and deter wrongful conduct. The assessment of punitive damages considers three factors: the reprehensibility of the defendant's conduct, the ratio of punitive to compensatory damages, and any applicable state penalties for the misconduct.

The first guidepost, reprehensibility, indicates that a jury could reasonably find the defendant acted willfully by terminating the plaintiff for refusing to adhere to a profit-driven policy that violated federal transportation safety laws. This factor strongly supports a significant punitive damages award, as emphasized in Payne v. Jones, where the degree of misconduct's reprehensibility is crucial in determining punitive damages. 

The second guidepost, disparity, highlights a 21-to-1 ratio between the reduced punitive damages of $250,000 and the plaintiff's compensatory damages of $11,900, which is substantially lower than the ratios deemed excessive in prior cases (e.g., 500-to-1 in Gore and 145-to-1 in State Farm). It is noted that the small compensatory damages are coincidental due to the plaintiff's quick re-employment. The Second Circuit suggests that in cases with minor injuries but severe misconduct, higher ratios may be appropriate. The compensatory damages could have been significantly higher had the plaintiff experienced longer job search delays, potentially altering the punitive/compensatory ratio favorably towards the plaintiff.

Regarding the third guidepost, comparisons to civil and criminal penalties indicate that a $250,000 punitive damages award is within the acceptable range for retaliatory termination cases, as seen in various precedents. Additionally, this amount aligns with the punitive damages authorized by the Surface Transportation Assistance Act (STAA). The court notes its reluctance to impose further constitutional limits on awards that fall within congressional guidelines, stating that only awards that shock the conscience or would cause financial ruin to the defendant may warrant reduction below the statutory cap.

Defendant references Vera v. Alstom Power, Inc. to argue that punitive damage awards of $200,000 or more typically arise from severe misconduct, such as discriminatory or retaliatory termination. While the plaintiff did not endure significant financial losses from their unlawful discharge, the defendant is implicated in numerous violations of federal weight regulations over an extended period, coupled with negligence regarding employee safety complaints. The defendant's cited cases are deemed largely dissimilar to this situation, which involves a corporate entity engaged in a pattern of willful federal safety violations. The Court concludes that a punitive damages award of $250,000 is constitutionally permissible.

Regarding attorney's fees and costs, the plaintiff requests $11,932.74 in litigation costs and $176,987.50 in attorney's fees, supported by the Surface Transportation Assistance Act (STAA), which allows for reasonable attorney fees for individuals harmed by violations of employee-protection provisions. Although the STAA explicitly permits fee awards during administrative reviews by the Secretary of Labor, the defendant does not contest the Court's authority to grant such awards. The defendant's argument that fee awards are discretionary lacks justification for denying them in this case. The Court finds the fee award reasonable based on the plaintiff's success, the defendant's financial capacity to pay, the deterrent effect of the fee, and the societal importance of enforcing anti-retaliation measures. The defendant's reported revenue supports the conclusion of financial stability, affirming the appropriateness of the fee award.

To award attorney's fees, a court must establish a presumptively reasonable fee based on a reasonable hourly rate and the number of hours reasonably expended. Key considerations include the plaintiff's degree of success, the time and labor required, the novelty and difficulty of the case, the requisite skill, the customary fee, and the attorney's experience and reputation, among others. The defendant contests the plaintiff's fee request, asserting that the hourly rates are excessively high. The plaintiff seeks $450 for Attorney Cicchiello, $375 for Attorney Reilly, and $325 for Attorney Paradisi. The burden is on the plaintiff to provide satisfactory evidence justifying these rates, beyond their affidavits. The plaintiff has cited several cases indicating reasonable rates in the District of Connecticut, but the court finds the requested rates unreasonably high based on recent surveys and case law. Therefore, the court reduces the hourly rates by 20%, setting them at $360 for Attorney Cicchiello, $300 for Attorney Reilly, and $260 for Attorney Paradisi.

Defendant contends that plaintiff should not receive attorney's fees for litigation against Supreme Industries, Inc., a former co-defendant dismissed during trial. However, under Hensley v. Eckerhart, a plaintiff who achieves excellent results is entitled to recover fees for all hours reasonably spent, even for unsuccessful claims if they share a common core of facts, as established in Green. Since plaintiff's claims against both the defendant and Supreme Industries involved a common core, the hours spent pursuing Supreme Industries were deemed reasonable and compensable.

Regarding attorney's fees for work on behalf of Ferrell Welch, a former plaintiff dismissed at summary judgment, the court agrees that fees should not be awarded for efforts solely related to Welch's unsuccessful claim. Plaintiff has not sought reimbursement for time specifically related to Welch, and thus the fee award will not be reduced for shared efforts on behalf of both plaintiffs.

Defendant objects to fees for time spent on a separate lawsuit, Supreme Forest Prods. Inc. v. Michael Kennedy and Ferrell Welch, which plaintiff listed as a 'counterclaim.' The court concurs that this is a distinct matter and denies reimbursement for those items.

Defendant also argues against awarding fees for defending against a sanctions motion, asserting it arose due to plaintiff's discovery misconduct. The court agrees, indicating that misconduct should not lead to fee rewards. 

Concerns raised by the defendant regarding the detail in plaintiff's billing records and potential block billing practices were dismissed; the court found the entries sufficiently specific and accurate. Finally, while acknowledging that several items listed by the defendant were excessive, the court agrees that two tasks—filing a waiver of service and drafting motions for extension of time—could have been performed by a paralegal and thus are not reimbursable at an attorney's rate. The court also affirmed that costs related to deposition or trial travel are not recoverable under local rules.

Plaintiff's motion for reimbursement for hiring a private process server is denied due to insufficient documentation, totaling $125, but may be reconsidered if proper documentation is submitted within 7 days. The remainder of the plaintiff's motion for attorney's fees is granted, resulting in a calculation based on hours billed by three attorneys. Attorney Reilly billed 408 hours, adjusted to 367.25 hours after deductions, resulting in $110,175. Attorney Cicchiello billed 48.25 hours, reduced to 44 hours, totaling $15,840. Attorney Paradisi billed 7 hours, totaling $1,820. The total attorney fees amount to $127,835. Additionally, costs of $11,932.74 are awarded, reduced by $536.02 in travel expenses and $125 for the private process server, resulting in $11,271.72. The total award to the plaintiff is $139,106.72. 

Defendant's motions for judgment as a matter of law and for a new trial are granted in part and denied in part, with punitive damages reduced to $250,000. The Clerk of Court is instructed to amend the judgment to reflect the reduced punitive damages and the awarded attorney's fees and costs. The statute prohibits discharging an employee for refusing to operate a vehicle in violation of safety regulations, and the Court's jury instructions correctly required the plaintiff to prove he was terminated for such refusal regarding overweight vehicle operation on interstate highways. The jury found sufficient evidence to support the plaintiff's claims regarding the interstate highway requirement.