April 21, 2012

Unpublished opinion allows plaintiff to seek punitive damages fordefendant's denial of wrongdoing (Dougherty v. Sears)

Under California law, punitive damages are not automatically available in every wrongful termination case.  That's exactly what the California Court of Appeal said three years ago in Scott v. Phoenix Schools("[W]e conclude that wrongful termination, without more, will not sustain a finding of malice or oppression").

But this unpublished opinion seems to take a contrary approach.  The Court of Appeal (First District, Division Two) reverses a trial court's order granting a nonsuit on a punitive damages claim in a wrongful discrimination case.  In doing so, the court acknowledges the rule set forth in Scott, but finds that this case presents something more than just wrongful termination, because in this case the defendant denied that it acted with an improper motive:

When the termination of employment is based on a violation of the Fair Employment and Housing Act and the employer denies the decision was based on any discriminatory motive, that action is sufficiently contemptible to support imposition of punitive damages.
Wait a minute.  What?  Wrongful termination alone isn't enough to support punitive damages, but if the defendant denies that the termination was wrongful, the denial supports punitive damages?  That not only seems contrary to Scott, but inconsistent with the caselaw holding that a defendant cannot be punished simply for defending itself against the plaintiff's claims.  (See, e.g., Holgrafer v. Unocal, p. 30, fn. 17.)