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Dailey v. North Coast Life Insurance Co.

filed: July 25, 1996.


Appeal from Superior Court, Spokane (92-2-03483-7) County; Honorable James Murphy, Judge. Judgment Date: 9-8-94.

Dolliver, J., Durham, C.j., Smith, Guy, Madsen, J.j. Talmadge, J. (concurring by separate opinion), Johnson, Alexander, Sanders, J.j., concurring.

Author: Dolliver

En Banc

DOLLIVER, J. -- Since its earliest decisions, this court has consistently disapproved punitive damages as contrary to public policy. See Spokane Truck & Dray Co. v. Hoefer, 2 Wash. 45, 50-56, 25 P. 1072 (1891). Punitive damages not only impose on the defendant a penalty generally reserved for criminal sanctions, but also award the plaintiff with a windfall beyond full compensation. See Kadoranian v. Bellingham Police Dep't, 119 Wash. 2d 178, 188, 829 P.2d 1061 (1992). Particularly in the case of workplace discrimination, the Legislature has assured a plaintiff may "become whole" through a full panoply of compensatory damages. See Barr v. Interbay Citizens Bank, 96 Wash. 2d 692, 699-700, 635 P.2d 441, amended by 649 P.2d 827 (1981). Nevertheless, Plaintiffs in the present case have asked the court to endorse the trial court's tortuous path through three statutes to find a sufficient expression of legislative intent for punitive damages in employment discrimination claims. We instead hold punitive damages are unavailable under the Law Against Discrimination (LAD), RCW 49.60.

On March 16, 1990, Defendant North Coast Life Insurance Co. terminated Plaintiff Julie Dailey's employment. Dailey and co-Plaintiff Gregory Dailey filed a wrongful termination claim that included an allegation of sex discrimination in violation of the LAD and specifically sought punitive damages. Both parties moved for partial summary judgment on the availability of punitive damages under the LAD.

The trial court granted Plaintiffs' motion, concluding RCW 49.60.030(2) both permitted punitive damages in an employment discrimination action and operated retrospectively. Defendants appealed. At the request of the Court of Appeals, the Supreme Court accepted certification of the case. We now reverse.

Governing resolution of this case is the court's long-standing rule prohibiting punitive damages without express legislative authorization. See, e.g., Barr, 96 Wash. 2d at 699-700; Spokane Truck, 2 Wash. at 50-56. The trial court determined the LAD, RCW 49.60.30(2), expressly authorized punitive damages by incorporating that federal remedy by reference to the United States Civil Rights Act of 1991, 42 U.S.C. 1981a(a)(1). See Mackay v. Acorn Custom Cabinetry, Inc., 127 Wash. 2d 302, 316, 898 P.2d 284 (1995) (Madsen, J., dissenting) (noting RCW 49.60.030(2) does not authorize punitive damages under state law). While we do not fault the trial court's analytic framework, we find the statutory authority too ambiguous and attenuated to suffice as express.

Since 1973, the Legislature has authorized private equitable and compensatory relief under the LAD:

to enjoin further violations, to recover the actual damages sustained by him, or both, together with the cost of suit including a reasonable attorney's fees or any other remedy authorized by this chapter or the United States Civil Rights Act of 1964 . . . .

Former RCW 49.60.030(2). In 1993, the Legislature acknowledged the Civil Rights Act of 1991 by amending RCW 49.60.030(2) to "any other remedy authorized by this chapter or the United States Civil Rights Act of 1964 as amended." (Italics ours.) RCW 49.60.030(2).

The Civil Rights Act of 1964 provided private remedies for employment discrimination in Title VII, historically authorizing only equitable relief. By the Civil Rights Act of 1991, Congress amended the 1964 Act to allow greater trial costs, including expert fees. 42 U.S.C. 2000e-5(k); see Xieng v. Peoples Nat'l Bank, 120 Wash. 2d 512, 528, 844 P.2d 389 (1993). The 1991 Act also amended 42 U.S.C. 1981a, known as the Revised Statutes, to permit compensatory and punitive damages in an action for intentional employment discrimination:

provided that the complaining party cannot recover under section 1981 of [the Revised Statutes (42 U.S.C. 1981)], the complaining party may recover compensatory and punitive damages as allowed in subsection (b) of this section, in addition to any relief authorized by section 706(g) of the Civil Rights Act of 1964, from the respondent.

42 U.S.C. 1981a(a)(1).

Ambiguities cloud the relation between 42 U.S.C. 1981a(a)(1) and RCW 49.60.030(2) to preclude characterization of their link as an express authorization for punitive damages. First, the structure of the language in RCW 49.60.030(2) arguably evinces an intent to incorporate only federal remedies qualifying as "costs." While the trial court read the provision as: "to recover the actual damages . . . together with . . . any other remedy . . .," we might reasonably read the term "including" as restrictive: "the cost of suit including . . . any other remedy . . . ." Under the latter interpretation, punitive damages simply would fall outside the scope of the incorporation provision. We need not choose between these alternative meanings, however, to decide the resultant ambiguity cannot overcome Washington's policy against punitive damages.

We find equally disturbing the relation between the provision of punitive damages in the Civil Rights Act of 1991 and the Civil Rights Act of 1964. RCW 49.60.030(2) explicitly incorporates only the 1964 Act as amended, but whether the 1991 Act actually constitutes an amendment to the 1964 Act is unclear. The Civil Rights Act of 1991 did not directly amend Title VII to permit punitive damages, but rather amended the Revised Statutes, 42 U.S.C. § 1981a. Indeed, the amendment explicitly describes compensatory and punitive damages "in addition to" remedies available under the 1964 Act. 42 U.S.C. § 1981a(a)(1). An implied incorporation of the 1991 Act does not meet our standard for express authorization.

The trial court found controlling this court's prior analysis of the interplay between RCW 49.60.030(2) and the 1991 Act in Xieng, 120 Wash. 2d 512, 844 P.2d 389. Analyzing the scope of the incorporation of federal remedies by reference, Xieng held express legislative authorization for expert witness fees under the LAD lies in the explicit expert witness fee provision of the Civil Rights Act of 1991. Xieng, 120 Wash. 2d at 528; RCW 49.60.030(2); 42 U.S.C. § ...

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