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Kenneth J. Thomas v. Istar Financial

December 17, 2010; as amended July 22, 2011

KENNETH J. THOMAS, PLAINTIFF-APPELLANT-CROSS-APPELLEE,
v.
ISTAR FINANCIAL, INC., A MARYLAND CORPORATION AND ED BARON, DEFENDANTS-APPELLEES-CROSS-APPELLANTS.



Per curiam.

Argued: February 24, 2009

Before: HALL and LIVINGSTON, Circuit Judges, and BIANCO, District Judge.*fn1

Kenneth J. Thomas appeals from an order of the United States District Court for the Southern District of New York (Marrero, J.) vacating his punitive damages award in the amount of $1.6 million and offering him a choice between accepting a lesser award of $190,000 or a new trial on punitive damages. For the purposes of bringing this and other issues forward on appeal, however, the parties jointly petitioned the district court to reduce Thomas's punitive damages award as a matter of law without offering Thomas the option of a new trial. We need not determine here whether the district court was authorized to grant such relief since we read the parties' joint submission as effectively stipulating to a new jury trial, the result of which was an award in the reduced amount of $190,000, rendering the district court's judgment final. Our jurisdiction thus established, we affirm the decision of the district court that Thomas's original punitive damages award was unconstitutionally excessive. Additionally, we hold that the district court lacked jurisdiction to correct its clerical mistake without first obtaining leave from this Court to do so, but we now grant that leave nunc pro tunc. Because the remaining issues raised in both parties' appeals are without merit, we AFFIRM the district court's judgment in its entirety.

AFFIRMED.

In August 2003, iStar Financial, Inc. ("iStar") fired Kenneth Thomas. A year and a half later, Thomas sued iStar and one of his supervisors there, Ed Baron, (collectively "defendants") for various violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and parallel provisions of the New York City Human Rights Law ("NYCHRL"), N.Y.C. Admin. Code § 8-101 et seq. After a trial in the United States District Court for the Southern District of New York (Marrero, J.), a jury found that Thomas's termination was in retaliation for complaints he had made about Baron, and it awarded compensatory and punitive damages. Both sides now appeal numerous issues related to pre-trial, trial, and post-trial proceedings.

Thomas appeals from an order of the district court vacating his punitive damages award in the amount of $1.6 million and offering him a choice between accepting a lesser award of $190,000 or a new trial on punitive damages. For the purposes of bringing this and other issues forward on appeal, the parties jointly petitioned the district court to reduce Thomas's punitive damages award as a matter of law without offering Thomas the option of a new trial. We need not determine whether the district court was authorized to grant such relief since we read the parties' joint submission as effectively stipulating to a new jury trial, the result of which was an award in the reduced amount of $190,000, rendering the district court's judgment final. Our jurisdiction thus established, we affirm the decision of the district court that Thomas's original punitive damages award was unconstitutionally excessive. Additionally, we hold that the district court lacked jurisdiction to correct its clerical mistake without first obtaining leave from this Court to do so, but we now grant that leave nunc pro tunc. Because the remaining issues raised in both parties' appeals are without merit, we AFFIRM the district court's judgment in its entirety.

I. Background

In his complaint, Thomas asserted that defendants fired him both because he is African- American and in retaliation for complaints he made about racist treatment at iStar. He also claimed that, while he was employed, defendants created a hostile work environment. The district court granted summary judgment against Thomas on the hostile work environment claim but allowed his discriminatory termination and retaliation claims to go to trial. Thomas v. iStar Fin., Inc. ("Thomas I"), 438 F. Supp. 2d 348, 368-69 (S.D.N.Y. 2006). A jury subsequently found that defendants were not motivated by racial animus when they fired Thomas, but that they did act in retaliation for previous complaints Thomas had lodged about Baron. It awarded him compensatory damages in the form of front-pay, back-pay, and non-economic pain and suffering. The jury also assessed punitive damages against iStar in the amount of $1.6 million dollars. Post-trial, the district court determined that the punitive damages award was unconstitutionally excessive. Thomas v. iStar Fin., Inc. ("Thomas II"), 508 F. Supp. 2d 252, 262-64 (S.D.N.Y. 2007). It ordered a conditional remittitur of those damages, id. at 264-65, and, after Thomas refused to remit his award voluntarily, scheduled a new trial on the issue. Before the new trial took place, however, the parties filed a joint submission requesting that the district court directly reduce Thomas's punitive damages award as a matter of law and without the option of a new trial. The district court agreed and accordingly ordered entry of final judgment against iStar in the amount of $190,000 in punitive damages. Thomas v. iStar Fin., Inc. ("Thomas III"), 520 F. Supp. 2d 483, 486 (S.D.N.Y. 2007).

The district court also decided to award Thomas prejudgment interest on his back-pay damages. Thomas II, 508 F. Supp. 2d at 264. Although Thomas argued that the New York statutory interest rate should be applied to calculate that award, the court determined the interest should be calculated using the applicable rate under federal law. Id. In a subsequent order related to Thomas's remittitur of punitive damages, however, the district court erroneously directed the Clerk of Court to calculate Thomas's prejudgment interest using the New York rate.

Order Granting Joint Submission for Reduction of Punitive Damages, Nov. 21, 2007, Dkt. No. 89. When the district court realized its mistake, it issued a corrected order directing the Clerk of Court to rescind the earlier judgment and to calculate the prejudgment interest using the federal rate, as set forth in Thomas II. Order Correcting Calculation of Prejudgment Interest, Dec. 7, 2007, Dkt. No. 96. By the time the district court took this action, however, Thomas had already filed a notice of appeal. Notice of Appeal, Nov. 28, 2007, Dkt. No. 92.

II. Discussion

Remittitur of Punitive Damages

On September 7, 2007, the district court conditionally granted defendants' motion for a new trial under Fed R. Civ. P. 59(a) on the issue of punitive damages because it determined that the jury's punitive damages award was unconstitutional.*fn2 Thomas II, 508 F. Supp. 2d at 264-65. It ordered that a new trial on punitive damages would be scheduled unless Thomas agreed within ten days to remit voluntarily his punitive damages award from $1.6 million to $190,000--the maximum amount that the court found to be consistent with the Fifth Amendment's Due Process requirement. Id. Before his ten-day election period had run, Thomas moved pursuant to Local Civil Rule 6.3 for reconsideration of the district court's conditional remittitur order. In the alternative, he sought certification of an interlocutory appeal on the issue. The district court denied the motion for reconsideration and refused to certify an appeal. Thomas v. iStar Fin., Inc., 520 F. Supp. 2d 478, 482-83 (S.D.N.Y. 2007).*fn3 Reaffirming the conditional remittitur, the district court scheduled a new trial on the issue of front-pay and punitive damages to begin April 7, 2008 unless Thomas agreed to remit those awards within the next seven calendar days. Id. at 483. Four days later, Thomas sent a letter to the district court stating that he declined to accept the remitted amount of damages and elected to proceed to a new trial. Order Advising Parties of New Trial Scheduled to Commence April 7, 2008, Oct. 9, 2007, Dkt. No. 85. In preparation for the new trial, the district court convened a status conference with the parties wherein it was apparently suggested and agreed that--if possible--the district court should directly reduce Thomas's punitive damages award to $190,000 as a matter of law without providing the option of a new trial. Telephone Status Conference, Oct. 25, 2007, Dkt. No. 86. The parties then filed a joint submission officially urging the district court to enter judgment in the reduced amount of $190,000 and offering putative legal authority for it to do so. Joint Brief, Nov. 16, 2007, Dkt. No. 87. The submission argued, in essence, that conditional remittitur was unnecessary with respect to Thomas's punitive damages award because the jury's award of punitive damages did not constitute a finding of fact for the purposes of the Seventh Amendment. Id. Thomas pledged that if the district court entered final judgment on the punitive damages award along the lines urged in the joint submission, he would accept the remitittur on front-pay so that the case could be closed. Id. The submission was signed by both parties. Id. The district court adopted de facto the joint submission's reasoning, entered final judgment for, inter alia, $190,000 in punitive damages, and closed the case. Thomas III, 520 F. Supp. 2d, at 485-86.*fn4 Thomas now appeals the district court's "decision after trial to vacate the jury's punitive damage award." (Plaintiff-Appellant-Cross-Appellee's Br. 39.)

We write first to address the procedural path and substantive decision by which the district court reduced the ...


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