Why it matters

Discrimination claims brought under New York City law are not subject to the same standard as Title VII when considering whether to award punitive damages, the U.S. Court of Appeals for the Second Circuit ruled, with a little help from the New York Court of Appeals. Physical therapy aide Veronika Chauca alleged that Park Management Systems fired her while she was on maternity leave. A federal judge denied her request to instruct the jury on punitive damages, and Chauca—who was awarded more than $60,000 in compensatory damages by jurors—appealed. The Second Circuit accepted the case but then sent it to New York’s highest court, asking for guidance on the standard for awarding punitive damages under the New York City Human Rights Law (NYCHRL). Last year, the court answered: Punitives are available in circumstances of “willful or wanton negligence” or “a conscious disregard of the rights of others.” With the case returned to the federal appellate panel, it held that the district court had erred in refusing to instruct the jury on punitive damages, as it had applied the more stringent standard of Title VII rather than the more liberal standard found in the NYCHRL.

Detailed discussion

Physical therapy aide Veronika Chauca sued her former employer for sex and pregnancy discrimination under Title VII, the Family and Medical Leave Act (FMLA), the New York State Human Rights Law and the New York City Human Rights Law (NYCHRL).

At trial, her attorney requested a jury instruction on punitive damages under the NYCHRL. The district judge applied the standard for punitive damages found in Title VII: whether the plaintiff submitted evidence that her employer had intentionally discriminated against her with malice or reckless indifference to her protected rights. Finding no evidence in support of this standard, the court denied the instruction.

The jury awarded Chauca in excess of $60,000, but she appealed, arguing that the court erred by importing the Title VII standard for punitive damages. Considering the issue, the U.S. Court of Appeals for the Second Circuit found itself stumped. The NYCHRL “provides no specific guidance” on an applicable standard for punitive damages, the federal appellate panel said, so it certified the question to the New York Court of Appeals for an answer.

Last year, the state’s highest court ruled that punitive damages are not automatically available with a showing of liability under the NYCHRL, but that plaintiffs do not need to meet the heightened standard set by Title VII.

Instead, the court held that plaintiffs are entitled to punitive damages “where the wrongdoer’s actions amount to willful or wanton negligence, or recklessness, or where there is ‘a conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.’”

This standard represents “the lowest threshold, and the least stringent form, for the state of mind required to impose punitive damages,” the court wrote. “By implementing a lower degree of culpability and eschewing the knowledge requirement, applying this standard adheres to the City Council’s liberal construction mandate while remaining consistent with the language of the statute.”

Back before the Second Circuit, the panel reconsidered what happened at the district court—the trial judge had denied Chauca’s request to provide a jury instruction concerning the availability of punitive damages under NYCHRL because it applied the standard for an award of punitives under Title VII, the court explained.

The New York Court of Appeals “expressly rejected the application of the federal standard for punitive damages,” the panel wrote. “We thus hold that the district court did not apply the proper standard in declining to submit the question of punitive damages to the jury. Accordingly, the judgment of the district court is vacated and the case is remanded for further proceedings consistent with this decision.”

To read the decision in Chauca v. Abraham, click here.