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The Michigan Court of Appeals recently upheld a twenty-one million dollar jury verdict in a sexual harassment case against the DaimlerChrysler Corporation. The verdict, along with interest, resulted in a judgment of more than thirty-million dollars, an amount more than seventy times the largest sexual harassment award ever affirmed in a published decision of the Michigan Court of Appeals.

Plaintiff Linda Gilbert was hired by DaimlerChrysler in 1992 to work as a millwright, a skilled trade involving the installation, maintenance, and repair of machinery. Prior to her position with DaimlerChrysler, Gilbert suffered from a longstanding drug and alcohol dependency, as well as severe depression. The severity of her addictions fluctuated over the course of several years, resulting in several arrests for drunk driving, and the onset of major depressive disorders. Gilbert was treated by various social workers and therapists for these problems.

Gilbert was one of the only female tradespersons at the Michigan assembly plant, and is said to have encountered hostility from her male coworkers. Gilbert alleged, for instance, that lewd cartoons and limericks were posted in or on her locker, and that a nude photograph was left atop her toolbox. More seriously, she allegedly discovered urine on a chair inside her private changing area. In all, Gilbert reported six incidents of alleged harassment over the course of seven years. None of the incidents involved physical contact, or sexual propositions. 

Gilbert declined to identify all but one of the persons she believed were responsible for the most serious allegations of abuse, citing concerns over retaliation, and a lack of foundation. Gilbert also expressed satisfaction with the company’s remedial efforts, and agreed that no additional actions could be taken to address improper workplace conduct.

In 1994, Gilbert filed suit against DaimlerChrysler claiming violations of the Michigan Civil Rights Act. By 1995, Gilbert had relapsed into addiction, requiring hospitalization for an apparent suicide attempt, as well as detoxification and therapy. Another suicide attempt followed in 1997.

At trial, Gilbert argued that despite her documented history of addiction, her prognosis for recoveryhad significantly improved prior to joining DaimlerChrysler. Gilbert therefore argued that only the sexual harassment she encountered on the job forced her back into alcoholism. Gilbert attempted to support this theory by arguing that the company’s management had failed to adequately investigate her complaints. For instance, Gilbert elicited testimony showing that the company had not installed surveillance cameras in the plant, designated a floor supervisor for complaints, or analyzed the handwritten notes containing the offensive references. Gilbert also testified that she endured a continual and persistent pattern of sexual harassment throughout the course of her employment, far beyond the six occurrences she formally reported to the company.

Steven Hnat, a social worker, testified as an expert on Gilbert’s behalf. Hnat opined that despite the severity of Gilbert’s alcoholism, her likelihood of recovery was in the top ten percent of patients who sought professional treatment. However, Hnat concluded that Gilbert was instead “dying” from a combination of alcoholism and a major depressive disorder, both primarily caused by the harassment at work. In addition, although Hnat testified that he lacked training or education as a physician, he opined that Gilbert’s brain chemistry had been permanently altered because of her disorders, and that her impairments would likely lead to physical ailments including pancreatitis. The testimony of a second social worker largely restated these conclusions.

In response, DaimlerChrysler argued that Gilbert’s difficulties, if any, stemmed from her own interpersonal problems with the other millwrights. The defense also argued that the alleged harassment constituted no more than commonplace shoptalk, and was not intended to be offensive. DaimlerChrysler also noted Gilbert’s long history of illness and addiction to suggest that her relapses were attributable solely to her own disorders. Finally, the company argued that the few reported instances of harassment over a lengthy period of years could not evidence a hostile work environment. Rather, the company noted that it had investigated each of these complaints, and taken remedial steps where appropriate.

Following the close of proofs, the trial court instructed the jury on the law prior to closing arguments. The jury awarded Gilbert twenty million dollars for emotional damages, and one million dollars for future medical expenses. Currently, Gilbert remains employed by DaimlerChrysler.

DaimlerChrysler appealed, raising four general errors of law. First, DaimlerChrysler argued that the trial court erred in denying its motion for judgment notwithstanding the verdict. The company argued that Gilbert presented insufficient evidence to support the jury’s findings of a hostile work environment, actual or constructive notice of the alleged harassment, and failure to take remedial actions.

The Court of Appeals rejected DaimlerChrysler’s contention that Gilbert’s testimony concerning a pattern of harassment was improperly admitted. The Court of Appeals noted that the company had only first learned of these new problems during Gilbert’s deposition, and at trial. The Court of Appeals noted that Gilbert’s case was “unusual,” in that she continued to work for DaimlerChrysler after filing suit. Nonetheless, the Court of Appeals interpreted Michigan caselaw as examining the “totality of circumstances” surrounding the alleged harassment, thus entitling the trial court to look beyond the episodes formally reported to management. In so ruling, the Court of Appeals found that DaimlerChrysler had actual notice of both the incidents formally reported, and the occurrences described during Gilbert’s deposition.

The Court of Appeals also reasoned that because the Michigan Civil Rights Act addresses a hostile work “environment,” the employer need not necessarily have notice of every harassing incident to be charged with actual notice. Accordingly, the Court of Appeals found that the complaints Gilbert did submit were sufficient to notify the company that she considered her environment hostile because of her sex. In addition, the Court of Appeals again referenced Gilbert’s deposition allegations, and concluded that these charges were also sufficient to alert management of the ongoing harassment, because the defense attorneys were acting as agents for the corporation in gathering information about the lawsuit. Finally, the Court of Appeals held that the question of DaimlerChrysler’s remedial efforts was properly presented to the jury because of conflicting evidence.

Second, the Court of Appeals found no reversible error in the trial court’s decisions regarding the conduct of Gilbert’s attorney. During the closing statements, Gilbert’s counsel argued that the jury “must consider” the “disease that she is suffering from, and that will kill her,” in evaluating her emotional damages. Despite the absence of punitive damages under Michigan law, Gilbert’s attorney suggested that “complete justice” for the alleged misconduct would require $140,000,000 and invited the jury to “break it up any way you want.” Gilbert’s counsel also compared her situation to the Israeli settlers after World War II, and the American civil rights movement. Most seriously, Gilbert’s counsel alluded to the horrors of the Nazi holocaust, and referenced the German corporate ownership of the Defendant, before admonishing the jury to “ring the bell of justice” with a “loud, clear, and high” award that would get the attention of the executives in Stuttgart.

The Court of Appeals found that these comments were, in large part, supported by the record and “accurate characterizations” of Gilbert’s situation. Although the Court recognized the implicit parallel between Nazism and the German owned corporaMichigan--Continued from page 1 5 tion, the Court found that counsel “never drew any explicit connection,” and thus DaimlerChrysler’s corporate identity was not an issue. For these reasons, the Court of Appeals ascribed the jury’s verdict to the persuasiveness of Gilbert’s evidence, and not the suggestive arguments of her counsel. Accordingly, the Court found insufficient evidence to conclude that the arguments of Gilbert’s attorney materially affected DaimlerChrysler’s rights.

Third, the Court of Appeals considered the propriety of Gilbert’s expert witnesses. Prior to testifying, Gilbert’s expert Steven Hnat described his education to include a Masters degree in “psycho-biology” and a Masters in social work. Gilbert’s attorney later restated this background to include a “degree in Psychology.” Hnat listed among his credentials an award for his graduate thesis in psychology, and described his professional practice to center on psychiatric social work.

However, following a challenge by the Defendant, Hnat was forced to admit that he had not received an award for his graduate thesis, and that he did not hold a Masters degree in psycho-biology. Hnat also clarified that he was not trained as either a psychiatrist or a psychologist. The trial court denied DaimlerChrysler’s motion to exclude Hnat as an expert, concluding that the misrepresentations were not sufficiently serious, and that his testimony was largely limited to non-medical opinions.

The Court of Appeals found no error in permitting Hnat to testify as an expert, finding little possibility that the jury misunderstood the scope of his expertise. The Court of Appeals noted that Hnat did actually hold a Masters degree in social work, and a limited state license to provide psychological therapy. The Court construed the Defendant’s objection to argue that only medical doctors can render expert opinions, and thus inconsistent with the modern, broad, expert definition. Therefore, although noting that Hnat’s testimony appeared to have a “medical dimension,” his opinions were centered on his practice as a social worker, and free from express representations of medical expertise.

The Court of Appeals also affirmed the trial court’s decision to exclude a proposed medical expert to rebut Hnat’s testimony. DaimlerChrysler moved to call this witness after Hnat’s testimony, despite having endorsed Hnat as a witness before trial. DaimlerChrysler argued that it had no reason to anticipate the breadth of Hnat’s testimony, or the overt medical dimension to his opinion. The Court of Appeals noted the trial court’s ruling appeared to center on the belief that DaimlerChrysler had not adequately prepared for trial. Viewing the matter as a close question, the Court of Appeals ultimately deferred to the trial court’s discretion, finding it “impossible” to conclude the ruling was baseless.

Finally, the Court of Appeals affirmed the jury’s award of twentyone million dollars in damages. DaimlerChrysler argued that the jury’s verdict was grossly excessive in relation to jury awards in comparable sexual harassment cases. The Court of Appeals, however, characterized the results in similar cases as “not particularly germane,” to the core analysis of whether the evidence submitted to the jury supported the award. Applying this standard, the Court speculated that the jury could have credited Gilbert’s evidence “that she would die an untimely death because of the effects of the harassment that [DaimlerChrysler] knew existed and did nothing to stop.” The Court similarly reasoned that Gilbert introduced sufficient evidence of her future medical expenses, the high costs of treating her disorders, and the “completely joyless” life she faced “because the harassment had caused her to develop major depressive” disorders.

The Court of Appeals also noted that the jury “exercised its independence by awarding Gilbert only about fifteen percent of the $140,000,000 [her attorney] said was appropriate,” thereby evidencing an award based on evidence, rather that “passion, bias, or misunderstanding.” Accordingly, the Court of Appeals found no abuse of discretion by the trial court in declining to reduce the award.

The decisions of the trial and appeals court have received wide publicity, including coverage in the New York Times, the National Law Journal, and several foreign newspapers. DaimlerChrysler has filed a petition for review of the decision in the Michigan Supreme Court.

The unreported opinion of the Court of Appeals is available at Gilbert v. DaimlerChrysler, No. 227392, 2002 WL 1766672 (Mich. Ct. App. July 30, 2002), or http:// courtofappeals.mijud.net/documents/ OPINIONS/FINAL/COA/ 20020730_C227392(124)_227392.OPN.PDF

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