Judge Maurice A. Leiter, Case Number: 21STCV15300, Date: 2023-05-10 Tentative Ruling

Moving Party: Defendants Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, Inc.

DEFENDANTS’ MOTION FOR NEW TRIAL IS CONDITIONALLY DENIED, IF plaintiff accepts WITHIN 21 DAYS A reduced PUNITIVE DAMAGES AMOUNT OF $10 MILLION TOTAL ($5 million as to each deFENDANT). if plaintiff DECLINES to accept the reduced PUNITIVE DAMAGE AWARD, the motion for new trial is granted in part, as to punitive damages only.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:30 am on the day of the hearing.

On April 22, 2021, Plaintiff Maria Gatchalian sued Defendants Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, Inc., et al., asserting causes of action for (1) age discrimination; (2) age harassment; (3) disability discrimination; (4) failure to accommodate; (5) failure to engage in the interactive process; (6) retaliation in violation of FEHA; (7) failure to prevent discrimination, harassment and retaliation; (8) wrongful termination in violation of public policy; (9) whistleblower retaliation; and (10) intentional infliction of emotional distress. Plaintiff alleges her employment was terminated because of her age and disability and for reporting misconduct.

On December 11, 2023, the jury found for Plaintiff on her cause of action for whistleblower retaliation (the only cause of action Plaintiff submitted to the jury.) The jury awarded Plaintiff past economic damages of $1,268,249, future economic damages of $1,231,716, past noneconomic damages of $1,500,000, and future noneconomic damages of $7,500,000, for a total of $11,499,965. The jury also found entitlement to punitive damages. After a Phase 2 trial concerning the amount of punitive damages the jury awarded $15,000,000 in punitive damages against each of Defendant Kaiser Foundation Hospitals and Defendant Kaiser Foundation Health Plan, Inc., for a total punitive damage award of $30,000,000.

Before the Court are Defendants’ Motion for Judgment Notwithstanding the Verdict (JNOV) and Motion for New Trial.

The Court did not consider the exhibits for which Plaintiff requested judicial notice. The Court DENIES Plaintiff’s requests for judicial notice.

The trial court has limited discretion to grant a motion for judgment notwithstanding the verdict; it may grant it only when there is no substantial evidence to support the verdict. (Teitel v. First Los Angeles Bank (1991) 231 Cal.App.3d 1593, 1603. Campbell v. Cal-Gard Surety Services, Inc. (1998) 62 Cal.App.4th 563, 570.) A judgment notwithstanding the verdict can be sustained only when as a matter of law no other reasonable conclusion is legally deducible from the evidence, and any other holding would be so lacking in evidentiary support that the reviewing court would be compelled to reverse it or the trial court would be compelled to set it aside as a matter of law. (Moore v. City and County of San Francisco (1970) 5 Cal.App.3d 728, 733-734.) The trial court renders judgment notwithstanding the verdict when a motion for directed verdict should have been granted if made (CCP § 629). (Hansen v. Sunnyside Products, Inc. (1997) 55 Cal.App.4th 1497, 1510 [Rev. Den. 9/17/97]; Walton v. Magno (1994) 25 Cal.App.4th 1237, 1239–1240.) The trial judge cannot reweigh the evidence or judge the credibility of witnesses; if the evidence is conflicting or if several reasonable inferences may be drawn, the motion for judgment notwithstanding the verdict should be denied. (Teitel, supra, 231 Cal.App.3d at 1603.)

Defendants ask the Court to vacate the entire award of punitive damages on the grounds that Plaintiff failed to prove “by clear and convincing evidence” that Defendants acted with the requisite “oppression, fraud, or malice” to support any award of punitive damages. (Code Civ. Proc., § 3294, subd. (a).) Defendants assert that Plaintiff’s disagreements with Defendants does not constitute evidence of oppression, fraud, or malice. Defendants argue that Plaintiff was terminated for legitimate reasons, establishing a non-retaliatory reason to terminate her employment; and Plaintiff violated Defendants’ longstanding policies regarding infection prevention and principles of responsibility by putting her bare feet on an isolette with a newborn inside.

Viewing the evidence in the light most favorable to Plaintiff, the Court finds that there is substantial evidence to support an award of punitive damages. Plaintiffs rely on Cloud v. Casey (1999) 76 Cal.App.4th 895 and Colucci v. T-Mobile USA, Inc. (2020) 48 Cal.App.5th 442, to argue that the jury had sufficient evidence to find a pretextual retaliatory or discriminatory termination, which provides a basis for punitive damages. In Cloud, the court affirmed a punitive damages verdict on the ground that evidence of discriminatory intent and pretext supported a finding of malice or oppression. (Cloud, supra, 76 Cal.App.4th at p. 911-912.) In that case an employer discriminated by denying a promotion based on gender and attempted to cover up this illegal action with a fabricated rationale. (Id.) In Colucci, the appellate court affirmed a punitive damages verdict where the evidence suggested the employer attempted to conceal its real motive for terminating the employee after he complained about his supervisor. (Colucci, supra, 48 Cal.App.5th at p. 456.) The court found that the jury could infer that the reason provided by the employer (a conflict of interest) was contrived, allowing for a reasonable conclusion that the retaliatory conduct was malicious or oppressive. (Id.)

There was sufficient evidence here for the jury to determine that Plaintiff’s termination was pretextual and disproportionate, and that Defendants acted with fraud, malice, or oppression. Plaintiff introduced evidence that Defendants had motive to retaliate given that Plaintiff complained about the unit’s being understaffed, Plaintiff was discouraged from filing formal UORs, there were repeated failures or refusals to investigate reports of patient-safety issues, and there was temporal proximity between Plaintiff’s disclosures and her termination. (See Opp. p. 11-13.)

· Helen Kersey testified, “when mistakes are made or bad judgment is used, the culture at Kaiser was to use it as a training opportunity to coach and say, don’t do it again.” (RT, 1676:21-25.)

· Valerie McPherson testified that she was unaware of any other employee’s ever being terminated for a single violation of the infection control policy or violating the dress code policy or. Exh. “D” (VMP Depo., 83:21-25 & 84:21-85:1).

· Muratza Sanwari testified that she could not recall any other termination of a hospital-based nurse at Kaiser besides Plaintiff. (RT, 2624:13-2625:14.)

· Several examples where violations of similar policies or other conduct jeopardizing patient safety resulted in no discipline or discipline shy of termination. (See Opp. p. 10.)

o Nurse’s failure to detect or notify doctor of patterns on fetal heart monitor.

o Nurse’s failure to convey critical lab values and properly chart in connection with a delivery.

Defendants offered evidence and arguments to counter Plaintiff’s showing, including that Plaintiff’s placing her feet on the isolette created a risk that the infant patient could have been harmed if the isolette tipped over. But Plaintiff provided evidence that the isolette is a large structure weighing approximately 150-200 pounds, built to withstand earthquakes without falling over. The jury, in evaluating the evidence and making credibility determinations, properly could discount Defendants’ claim and find that the termination was pretextual, and that Defendants acted with fraud, malice, or oppression.

“The principal statutory authority for new trial motions is CCP § 657. “The right to a new trial is purely statutory, and a motion for a new trial can be granted only on one of the grounds enumerated in the statute.” (Fomco, Inc. v. Joe Maggio, Inc. (1961) 55 Cal.2d 162, 166.) The grounds enumerated in CCP § 657 include:

1. Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.

2. Misconduct of the jury; and whenever any one or more of the jurors have been induced to assent to any general or special verdict, or to a finding on any question submitted to them by the court, by a resort to the determination of chance, such misconduct may be proved by the affidavit of any one of the jurors.

3. Accident or surprise, which ordinary prudence could not have guarded against.

4. Newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at the trial.

6. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law.

7. Error in law, occurring at the trial and excepted to by the party making the application.

Defendants first seek a new trial because they claim Plaintiff was terminated for legitimate, independent reasons. The Court rejects this argument. A court cannot grant a new trial “unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the … jury clearly should have reached a different verdict…” Code of Civ. Proc. §657. “The court cannot grant a new trial simply because it would have found differently than the jury.” Huy Fong Foods, Inc. v Underwood Ranches, LP (2021) 66 Cal.App.5th 1112, 1126. As discussed above, there was sufficient evidence here for the jury to determine that Plaintiff’s termination was pretextual and disproportionate. The Court cannot find that the jury clearly should have reached a different verdict.

Defendants next seek a new trial on the grounds that Plaintiff improperly presented prejudicial evidence. Defendants assert that the evidence presented at trial, particularly graphic details of a complicated delivery and alleged harm to nonparties, was highly prejudicial and improperly influenced the jury’s decision, swaying them through bias and emotion. Defendants state that this evidence had little to no probative value and served only to inflame the jury’s emotions, compromising the fairness of the trial.

The introduction of this evidence directly pertained to the circumstances surrounding the case. It concerned potential violations of statutes or regulations concerning medical practice and care standards, potentially constituting “adverse events” that require reporting to regulatory bodies. Plaintiff’s testimony about the delivery details, including a patient’s being denied a request for a cesarean section, also suggested possible violations of patients’ rights under health care laws. This evidence was relevant to Plaintiff’s claim that she was terminated in part in anticipation of her disclosing these issues. It also was necessary to establish a factual understanding of the environment and practices that surrounded the decision to terminate Plaintiff's employment. The Court weighed the factors in Evidence Code § 352 in evaluating this evidence. The Court did not abuse its decision in admitting it.

The Court also finds that any possible error in admitting this testimony was not prejudicial to the extent that it would necessitate a new trial. Given the breadth of the evidence supporting the claims of retaliation, the specific details of the delivery discussed by Plaintiff were a minor portion of the overall testimony presented at trial and were unlikely to have swayed the jury’s verdict.

Defendants contend next that the noneconomic damages awarded by the jury are excessive. The Court finds that the award of noneconomic damages is reasonable and supported by the evidence. “[T]here is no fixed or absolute standard by which to compute the monetary value of emotional distress.” Hope v. California Youth Authority (2005) 134 Cal.App.4th 577, 595. The jury was entitled to believe Plaintiff’s testimony about the impact of her termination on her emotional well-being, including her self-image, her financial concerns, and her concerns about being able to speak up for patient safety in a new job. The jury also heard the testimony of Plaintiff’s expert, Dr. Anthony Reading, about the impact of her termination on her emotional state. The Court finds no basis to negate or alter the jury’s evaluation of the evidence and its determination of noneconomic damages.

Defendants also argue that the punitive damages awarded were grossly excessive and unconstitutional, failing to adhere to the principles of due process because the ratio of punitive to compensatory damages exceeded constitutional limits and the amount awarded far surpasses any comparable civil penalties.

As discussed above, an award of punitive damages was appropriate. The punitive damages award totaling $30 million, however, is excessive. The Supreme Court has stated, in BMW of North America, Inc. v. Gore (1966) 517 U.S. 559, State Farm Mutual Automobile Insurance Co. v. Campbell (2003) 538 U.S. 408 and their progeny, that to survive constitutional scrutiny ratios significantly higher than 1:1 must be justified by exceptionally malicious conduct or relatively insignificant compensatory damages. The 2.6:1 ratio in the jury’s verdict is inconsistent with these guidelines as well as with the evidence in the case, even seen in the light most favorable to Plaintiff. Plaintiff’s termination caused no physical injuries to her. While the jury rejected Defendants’ claim that they protected patient safety by terminating her, Plaintiff conceded that she acted inappropriately by placing her feet on the isolette and that some discipline or corrective action would be fair. Plaintiff declined to pursue an appeal of her termination which may have led to a lesser discipline, and/or given her an opportunity to air her concerns. While Plaintiff’s concerns about patient safety were indeed serious, Defendants did not engage in repeated acts of retaliation against her. And the $30 million award is significantly larger than comparable civil penalties. The 2.6:1 ratio cannot be justified by either exceptionally malicious conduct or insignificant compensatory damages.

The Court finds that a total punitive damage award of $10 million, assessed as $5 million to each Defendant, aligns with constitutional guidelines and is appropriate under the evidence in this case.[1] This award would be proportionate to the actual harm and to Defendants’ conduct. This reduction also addresses due process concerns and ensures that punitive damages serve their intended purpose of punishment and deterrence. If Plaintiff accepts the reduced punitive damages amount within 21 days, the Court will deny Defendants’ motion for new trial; otherwise, the motion will be granted in part and a new trial ordered on punitive damages.

Defendants’ motion for new trial is CONDITIONALLY DENIED, if Plaintiff accepts within 21 days a reduced punitive damages award of $10 million. Otherwise, the motion for new trial will be GRANTED as to punitive damages only.

[1] The Court finds that punitive damage awards against each entity are not duplicative. There was evidence at trial that the separate entities acted through their respective managing agents in recommending termination of Plaintiff’s employment.