Quick Summary
Mary Kotowski, who alleged sexual harassment and wrongful termination against Norcon, Inc., a subcontractor in the Exxon Valdez oil spill cleanup. The court reviewed claims of sexual discrimination, emotional distress, and the admissibility of evidence, ultimately affirming Norcon’s liability while reducing punitive damages.
Facts of the Case
Mary Kotowski worked for Norcon during the Exxon Valdez oil spill cleanup. Initially assigned to a shower barge, her supervisor Mike Posehn transferred her to another barge with no available work. Kotowski accused Posehn of inviting her to his room, providing alcohol, and propositioning her.
She reported these incidents to an Exxon executive and agreed to record conversations at a party hosted by Posehn where alcohol was present against company policy. The following day, under pressure, she signed a statement admitting insubordination but was assured it would not impact her job. Despite this assurance, both she and Posehn were terminated shortly after; Kotowski for alcohol consumption.
During trial proceedings, Kotowski presented a memo by Bruce Ford from Purcell Security summarizing statements from Jim Stampley and Sgt. Mark Flesching that implicated Posehn in offering employment favors for sexual activity. Norcon objected to this as hearsay.
Procedural History
- Kotowski filed a lawsuit against Norcon alleging sexual harassment and related claims.
- The superior court found some claims pre-empted by the Labor Management Relations Act (LMRA) and subject to grievance arbitration procedures.
- The jury found in favor of Kotowski on claims of sexual harassment and emotional distress, awarding compensatory damages.
- The jury also awarded substantial punitive damages against Norcon.
- Norcon appealed, challenging the hearsay evidence admission and the punitive damages award.
- The Supreme Court of Alaska reviewed the case focusing on evidence admissibility and punitive damages excessiveness.
I.R.A.C. Format
Issue
- Whether Bruce Ford’s memo fell within the business records exception under Alaska Rule of Evidence 803(6).
- Whether the punitive damages awarded were justified or excessive.
Rule of Law
The business records exception under Alaska R. Evid. 803(6) allows records made as part of regularly conducted business activity unless circumstances suggest untrustworthiness.
Punitive damages are permissible if conduct is ‘outrageous,’ involving maliciousness or reckless indifference.
Reasoning and Analysis
The court evaluated whether Ford’s memo qualified as a business record under Alaska Rule of Evidence 803(6). Despite Norcon’s objection over ‘double hearsay,’ the court considered if Ford’s activities were part of Purcell Security’s routine operations. It ruled that since Ford routinely collected such information as part of his investigative duties with Purcell Security, the memo was admissible.
Regarding punitive damages, the court examined whether Norcon’s behavior met ‘outrageousness’ criteria due to Posehn’s actions and Norcon’s insufficient response to allegations. While it agreed punitive damages were warranted due to reckless disregard for Kotowski’s rights, it found the initial award excessive compared to compensatory damages and reduced it through remittitur to $500,000.
Conclusion
The Supreme Court of Alaska upheld Norcon’s liability for sexual harassment and emotional distress but reduced the punitive damages to $500,000 due to excessiveness concerns. It also adjusted compensatory damages by $20,000 because of Kotowski’s settlement with Exxon.
Concurring Opinions
Justice Eastaugh concurred with the decision while emphasizing factors affecting punitive damage awards should aim at deterring misconduct while being proportionate to encourage corporate behavioral adjustments without being overly burdensome.
Key Takeaways
- The business records exception under Alaska R. Evid. 803(6) allows admissibility of records made as part of regular business activity unless deemed untrustworthy.
- Punitive damages require conduct deemed ‘outrageous,’ involving maliciousness or reckless indifference.
- The Supreme Court of Alaska can reduce punitive damages if found excessive compared to compensatory damages.
- Sexual harassment claims can include emotional distress and lost earnings as compensatory damages.
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References
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