Andrea Jones v. Southpeak Interactive Corporation , 777 F.3d 658 ( 2015 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2399
ANDREA GAIL JONES,
Plaintiff - Appellee,
v.
SOUTHPEAK INTERACTIVE CORPORATION OF DELAWARE; TERRY M.
PHILLIPS; MELANIE J. MROZ,
Defendants – Appellants.
---------------------------
THOMAS E. PEREZ, Secretary of the United States Department
of Labor,
Amicus Supporting Appellee.
No. 14-1765
ANDREA GAIL JONES,
Plaintiff - Appellee,
v.
SOUTHPEAK INTERACTIVE CORPORATION OF DELAWARE; TERRY M.
PHILLIPS; MELANIE J. MROZ,
Defendants - Appellants.
Appeals from the United States District Court for the Eastern
District of Virginia, at Richmond. Robert E. Payne, Senior
District Judge. (3:12-cv-00443-REP-DJN)
Argued: December 10, 2014 Decided: January 26, 2015
Before TRAXLER, Chief Judge, and KEENAN and THACKER, Circuit
Judges.
Affirmed by published opinion. Judge Thacker wrote the opinion,
in which Chief Judge Traxler and Judge Keenan joined.
ARGUED: Kevin D. Holden, JACKSON LEWIS PC, Richmond, Virginia,
for Appellants. James B. Thorsen, MARCHANT, THORSEN, HONEY,
BALDWIN & MEYER, LLP, Richmond, Virginia, for Appellee. Mary J.
Rieser, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for
Amicus Curiae. ON BRIEF: M. Patricia Smith, Solicitor of Labor,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Jennifer
S. Brand, Associate Solicitor, William C. Lesser, Deputy
Associate Solicitor, Megan E. Guenther, Counsel for
Whistleblower Programs, Office of the Solicitor, UNITED STATES
DEPARTMENT OF LABOR, Washington, D.C., for Amicus Curiae.
2
THACKER, Circuit Judge:
The Sarbanes-Oxley Act of 2002 makes it illegal for
publicly traded companies to retaliate against employees who
report potentially unlawful conduct. See 18 U.S.C. § 1514A(a).
In this case, a video game publishing company, SouthPeak
Interactive Corp. (“SouthPeak”), 1 fired its chief financial
officer after she raised concerns about a misstatement on one of
the company’s filings with the Securities and Exchange
Commission (“SEC”). A jury found that the company and two of
its top officers violated the Sarbanes-Oxley Act, and the
district court awarded the chief financial officer more than
half a million dollars in back pay and emotional distress
damages.
The ensuing appeal raises a number of questions about
employees’ rights under the Sarbanes-Oxley Act. The case
requires us to consider such issues as when a whistleblower may
file suit, what she needs to do to exhaust her administrative
remedies, and what types of remedies are available under the
statute. We affirm the district court’s rulings on each of
these issues. In doing so, we hold that Sarbanes-Oxley Act
1
In May 2008, a publicly traded acquisition company named
Global Services Partners Acquisition Corp. (“GSPAC”) acquired
all of the outstanding membership interests of SouthPeak. GSPAC
adopted SouthPeak’s name as its own.
3
retaliatory discharge claims are subject to the four-year
statute of limitations under 28 U.S.C. § 1658(a), and not the
two-year limitations period set forth in § 1658(b)(1). We
further hold that the administrative complaint in this case
satisfies the exhaustion requirement, and that emotional
distress damages are available under the statute.
The case also requires us to address the handling of
apparent inconsistencies in a jury verdict and the steps a court
must take in calculating attorneys’ fees. On these issues, too,
we affirm the district court.
I.
SouthPeak is a Virginia-based company that designs,
develops, and distributes video games for PlayStation, Xbox,
Wii, and other gaming systems. In June 2007, the company hired
Andrea Gail Jones (“Appellee”) to work as an accountant. It
later promoted Appellee to chief financial officer.
A.
In February 2009, SouthPeak sought to place an order
with Nintendo for 50,400 units of a video game called My Baby
Girl. SouthPeak’s chief executive officer, Melanie Mroz
(“Mroz”), and its chairman, Terry Phillips (“Phillips”), hoped
to place the order “as soon as possible,” but the company lacked
4
the funds it would need to pay Nintendo in advance. J.A. 332. 2
To avoid delay, Phillips directed his assistant to send Nintendo
a wire transfer of $307,400 from Phillips’s personal account.
However, the company did not properly record this debt on its
balance sheet or in its quarterly financial report, which was
filed with the SEC on May 15, 2009.
When informed of the omission, Appellee became “very
concerned.” J.A. 1178. She asked Phillips for an explanation.
His response, she said, “did not seem, I guess, to make sense or
seem credible to me.” Id. at 1226. About a week later,
Appellee called the chairman of SouthPeak’s audit committee to
report her suspicion that the company was engaging in a fraud.
On August 3, 2009, SouthPeak’s outside counsel asked
Appellee to review and approve draft language for an amendment
to the company’s erroneous quarterly report. The proposed
amendment denied any intentional fraud or misstatement in the
earlier filing. Appellee refused to sign the amended report.
In an August 13, 2009 letter to the outside counsel, she
explained, “I do not know how a conclusion of no intentional
2
This case involves two sets of appeals, each with its own
case number and joint appendix. Though we consolidated the two
appeals (previously labeled 13-2399 and 14-1765) in September
2014, the joint appendices have not been merged. Here, we quote
only from the joint appendix associated with Case No. 13-2399.
All citations to the “J.A.” refer to this joint appendix.
5
wrongdoing or fraud can be reached.” J.A. 1274. That same day,
SouthPeak’s six-member board of directors held a special meeting
in which it voted to terminate Appellee’s employment. Mroz
notified Appellee of the board’s decision the next day.
B.
Appellee, through counsel, filed a complaint with the
Occupational Safety and Health Administration (“OSHA”) on
October 5, 2009. The complaint states, “On August 14, 2009, in
a clear violation of the [Securities Exchange] Act, SouthPeak
terminated Jones’ employment, apparently in retaliation for Ms.
Jones [sic] attempts to correct statements in periodic reports
filed, and proposed to be filed, by SouthPeak . . . .” J.A.
643. In the second numbered paragraph, the complaint further
provides:
The names and addresses of the company(s)
and person(s) who are alleged to have
violated the Act (who the complaint is being
filed against):
SouthPeak Interactive Corporation
2900 Polo Parkway.
Midlothian, VA 23113
804-378-5100
Terry Phillips, Chairman of the Board
Patrice Strachan, [VP] of Operations
Melanie Mroz, Chief Executive Officer
Id. at 645.
On October 16, 2009, OSHA sent SouthPeak a letter
notifying the company of Appellee’s complaint, along with a copy
6
of the complaint itself. The letter was addressed exclusively
to SouthPeak, without any reference to Mroz or Phillips.
More than 180 days passed without a final order from
OSHA; consequently, on July 23, 2010, Appellee sent OSHA a
letter explaining that she was electing to file a federal
lawsuit pursuant to the Sarbanes-Oxley Act and 29 C.F.R.
§ 1980.114(b). See 18 U.S.C. § 1514A(b)(1)(B) (authorizing
suits at law or equity in federal court if the Secretary of
Labor “has not issued a final decision within 180 days of the
filing of [an OSHA] complaint”). Appellee sent a copy of the
letter to a lawyer identified as “Counsel for SouthPeak
Interactive Corp.” She did not send a copy to Mroz or Phillips.
C.
Appellee waited nearly two years to file suit. Her
June 18, 2012 complaint named SouthPeak, Mroz, and Phillips
(collectively, “Appellants”) as defendants. The claims included
one count of retaliation pursuant to the Sarbanes-Oxley Act, 18
U.S.C. § 1514A, and one count of retaliation pursuant to the
Dodd-Frank Wall Street Reform and Consumer Protection Act
(“Dodd-Frank”), 15 U.S.C. § 78u-6(h)(1)(A). 3 The district court
granted Appellants’ motion to dismiss the Dodd-Frank claims on
3
The complaint also included a breach-of-contract claim,
but Appellee withdrew this claim prior to trial.
7
retroactivity grounds. The court, however, denied Appellants’
motion to dismiss the Sarbanes-Oxley Act claims, rejecting
Appellants’ arguments that the statute of limitations barred
those claims and that Appellee failed to exhaust her
administrative remedies.
A jury trial began on July 15, 2013. At the
conclusion of the trial, the jury was provided a verdict form
naming each of the three defendants. The form addressed each
defendant separately. If the jury found a defendant liable, it
could place a check mark next to a statement to that effect.
The form also provided blank spaces for any back pay or
compensatory damages the jury wished to assess against that
defendant.
The jury returned a verdict (the “First Verdict”)
finding each of the three defendants was liable. With regard to
SouthPeak, the jury assessed $593,000 in back pay and $357,000
in compensatory damages. However, the jury did not assess any
damages against Mroz or Phillips. In a sidebar conference with
counsel, the court expressed some confusion over whether the
jury might be “trying to account for no duplication of damages.
And I think I need to ask them if that’s what they’re doing or
if they think that there were no damages caused.” J.A. 1935.
Turning to the jury, the court advised:
8
Ladies and gentlemen, I notice that in
one place you articulate a sum to be
assessed as damages for compensatory and
backpay. In two other places, you find the
respective defendants liable but express no
damage figure at all. It is unclear to us
whether you are finding that that particular
defendant caused no damage or you are simply
trying to avoid awarding more than you
awarded, more damage than you found that Ms.
Jones had suffered. . . .
. . .
So I’m going to let you go back and
take your verdict form, and if you mean it,
with those instructions, you can return it,
or you can amend it, or you can do such
else, or send a question, or do whatever you
need to do.
Id. at 1936-37.
Before the jury could return to the jury room, the
court agreed to a second sidebar conference with counsel.
During this discussion, Appellants’ attorney told the court, “I
just want to make sure the jury doesn’t take it from your
instruction that they can go back and change it to have damage
against each of them. . . . I thought that maybe you were
suggesting that that’s what they were supposed to do.” J.A.
1937. To address this concern, the court clarified its previous
instruction, telling the jurors:
I am not by giving you this instruction
trying to do anything but clear up what
appears to be a problem. I am not telling
you what you have to do, nor suggesting that
you need to put a damage figure in either of
those places where you have a zero, but we
9
need to make sure we have a verdict that we
know what you are doing.
Id. at 1938.
Following a brief discussion in the jury room, the
jury passed the court a note stating: “From SouthPeak we want a
total of 593,000 back pay [and] 357,000 compensatory. We do not
find that Terry Phillips or Melanie Mroz are individually
responsible for any amount.” J.A. 2052 (alteration in original)
(internal quotation marks omitted). Conferring again with
counsel, the court said, “[I]t seems to me if that’s what they
want to do, they need to make another finding on their verdict
form. . . . [T]hey need to check the one that says you’re not
liable.” Id. at 1939. The attorneys for both sides said they
agreed.
When the jury returned, the foreperson confirmed that
Mroz and Phillips were not individually responsible. “Then what
you need to do,” the court said, “is eliminate the checkmarks
[indicating liability for Mroz and Phillips] and initial it
there, and then we will have the verdict.” J.A. 1941. The
court asked the foreperson, “Do you need to retire or can you do
it here?” Id. The foreperson said she did not need to retire,
“but evidently someone else does.” Id. With that, the court
permitted the jury to return once more to the jury room.
10
When, at last, the court session resumed, the jury
returned another verdict (the “Final Verdict”) in which it again
found all three defendants liable. This time, the assessment
against SouthPeak comprised $593,000 in back pay and no
compensatory damages. The assessments against Mroz and Phillips
were for $178,500 apiece in compensatory damages. In a sidebar
conference, Appellants’ attorney asked the court to “instruct
that they go back and reconsider because it is impossible to
come up with that verdict. . . . Clearly, there is something
wrong with the way they understand this case because it doesn’t
stand to reason, and the evidence wouldn’t support a verdict of
that nature.” J.A. 1947-48. The attorney then requested a
mistrial. The court denied the request. When the sidebar
conference ended, the clerk polled the jury; every member
affirmed the Final Verdict.
D.
Appellants moved for a new trial, remittitur, or an
amended judgment pursuant to Rules 59 and 60 of the Federal
Rules of Civil Procedure. They argued, among other things, that
the back pay award was not supported by the evidence, and that
the compensatory damages assessed against Mroz and Phillips were
excessive. Appellants also argued that the court should have
accepted the First Verdict. On October 29, 2013, the district
court denied most of Appellants’ requests. The court, however,
11
reclassified the assessment against SouthPeak, holding the
company responsible for $470,000 in back pay and $123,000 in
compensatory damages. The court also granted SouthPeak’s motion
for a new trial nisi remittitur with regard to the compensatory
damages awards against Mroz and Phillips, giving Appellee an
opportunity to accept a reduced award of $50,000 apiece from
those two defendants. Appellee accepted the reduced award.
On December 20, 2013, Appellee petitioned the court
for an order holding Appellants jointly and severally liable for
$406,851 in attorneys’ fees. Ultimately, the court awarded
$354,127.05 in attorneys’ fees. As requested, the court held
Appellants jointly and severally liable for the sum.
II.
A.
Statute of Limitations
We first consider Appellants’ contention that the
statute of limitations bars this action. This is a legal issue,
which we review de novo. See Sewell Coal Co. v. Dir., Office of
Workers’ Comp. Programs, 523 F.3d 257, 259 (4th Cir. 2008).
Appellee filed suit on June 18, 2012, a little less
than three years after her termination. The district court held
that the Sarbanes-Oxley Act claims were timely because the suit
commenced within the four-year time limit set forth in 28 U.S.C.
§ 1658(a). However, Appellants argue that § 1658(a) does not
12
apply to these claims. Rather, they say, Appellee’s action is
subject to the two-year limitations period set forth in
§ 1658(b) because the retaliatory discharge claims “involve[] a
claim of fraud . . . in contravention of a regulatory
requirement concerning the securities laws.” 28 U.S.C.
§ 1658(b).
Section 1658(a) supplies a “catchall,” or “fallback,”
statute of limitations for certain federal statutes that
“create[] a cause of action but [are] silent as to the
applicable limitations period.” H.R. Rep. No. 101-734, at 24
(1990); see Jones v. R. R. Donnelley & Sons Co., 541 U.S. 369,
371 (2004). The default provision states:
Except as otherwise provided by law, a civil
action arising under an Act of Congress
enacted after the date of the enactment of
this section may not be commenced later than
4 years after the cause of action accrues.
28 U.S.C. § 1658(a). This provision was on the books for more
than a decade before Congress amended Section 1658 as part of
the Sarbanes-Oxley Act. With this legislation, Congress
retained the default provision but added a new subsection, (b),
which provides:
Notwithstanding subsection (a), a private
right of action that involves a claim of
fraud, deceit, manipulation, or contrivance
in contravention of a regulatory requirement
concerning the securities laws, as defined
in section 3(a)(47) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),
13
may be brought not later than the earlier
of--
(1) 2 years after the discovery of the
facts constituting the violation; or
(2) 5 years after such violation.
Id. § 1658(b).
Courts have not hesitated to apply § 1658(b) to
securities fraud claims brought under section 10(b) of the
Securities Exchange Act, 15 U.S.C. § 78j(b). See In re Exxon
Mobil Corp. Sec. Litig., 500 F.3d 189, 196 (3d Cir. 2007)
(“Indeed, the implied cause of action recognized under § 10(b)
is widely known and referred to as ‘securities fraud.’ To
conclude that § 1658(b) does not apply to § 10(b) claims would
be absurd.” (citation omitted)). It is easy to see why this is
so. Congress confined § 1658(b)’s reach to causes of action
involving a claim of “fraud, deceit, manipulation, or
contrivance in contravention of” securities regulations. 28
U.S.C. § 1658(b). This language, as several courts have
previously noted, closely tracks the language of section 10(b)
of the Securities Exchange Act, “which creates liability for
‘any person’ who ‘employ[s] . . . any manipulative or deceptive
device or contrivance in contravention of’ SEC regulations.” In
re Global Crossing, Ltd. Sec. Litig., 313 F. Supp. 2d 189, 197
(S.D.N.Y. 2003) (alterations in original) (quoting 15 U.S.C.
§ 78j(b)); see In re Exxon Mobil, 500 F.3d at 196.
14
Typically, a section 10(b) securities fraud action
requires a plaintiff to “prove six elements: ‘(1) a material
misrepresentation or omission by the defendant; (2) scienter;
(3) a connection between the misrepresentation or omission and
the purchase or sale of a security; (4) reliance upon the
misrepresentation or omission; (5) economic loss; and (6) loss
causation.’” Yates v. Mun. Mortg. & Equity, LLC, 744 F.3d 874,
884 (4th Cir. 2014) (quoting Stoneridge Inv. Partners, LLC v.
Scientific-Atlanta, Inc., 552 U.S. 148, 157 (2008)). The second
element, scienter, separates securities fraud from other causes
of action under the Securities Exchange Act. It requires the
plaintiff to prove not only that the defendant made a material
misrepresentation, but that he did so with the “intent to
deceive, manipulate, or defraud.” Tellabs, Inc. v. Makor Issues
& Rights, Ltd., 551 U.S. 308, 319 (2007) (internal quotation
marks omitted).
The text of § 1658(b), with its references to “fraud,”
“deceit,” “manipulation,” and “contrivance,” strongly implies a
need for proof of fraudulent intent. 4 The Third Circuit has held
4
Section 1658(b)(1) speaks in terms of “discovery.” See 28
U.S.C. § 1658(b) (barring suits brought later than “2 years
after the discovery of the facts constituting the violation”).
In this context, the Supreme Court has said, the word
“discovery” is a term of art. See Merck & Co. v. Reynolds, 130
S. Ct. 1784, 1793 (2010). It alludes to the “‘discovery rule,’
a doctrine that delays accrual of a cause of action until the
(Continued)
15
accordingly, concluding that § 1658(b) applies only to section
10(b) securities fraud claims “and other claims requiring proof
of fraudulent intent.” In re Exxon Mobil, 500 F.3d at 197. In
In re Exxon Mobil Corp. Securities Litigation, the Third Circuit
determined that § 1658(b) did not apply to claims for false or
misleading proxy statements pursuant to section 14(a) of the
Securities Exchange Act because such claims do not require proof
of fraudulent intent. Id.
Here, in their opening brief, Appellants argue that
§ 1658(b) covers Appellee’s Sarbanes-Oxley Act claims because
those claims involve “allegations of fraud.” Appellants’ Br.
13. However, § 1658(b) does not speak in terms of
“allegations.” Per its text, § 1658(b) covers private rights of
action that “involve[] a claim of fraud.” 28 U.S.C. § 1658(b)
(emphasis supplied). Appellee has not advanced a claim of
plaintiff has ‘discovered’ it.” Id. In fraud cases, it is a
well-settled principle that the limitations period does not
begin until the plaintiff discovers the facts constituting the
fraud or, with due diligence, should have discovered such facts.
See id. at 1794. Critically, though, the Supreme Court has held
that discovery of an alleged misrepresentation is not alone
sufficient to start the two-year limitations period for a
securities fraud claim. In Merck & Co. v. Reynolds, the Court
held that the § 1658(b)(1) limitations period could not commence
without discovery of scienter, since “[a] plaintiff cannot
recover [for securities fraud] without proving that a defendant
made a material misstatement with an intent to deceive -- not
merely innocently or negligently.” Id. at 1796 (emphasis
omitted).
16
fraud. Her claim, rather, alleges retaliatory discharge under
the Sarbanes-Oxley Act. To succeed on this claim, she must show
that (1) she engaged in protected activity, (2) the employer
knew that she engaged in the protected activity, (3) she
suffered an unfavorable personnel action, and (4) the protected
activity was a contributing factor in the unfavorable action.
See Feldman v. Law Enforcement Assocs. Corp., 752 F.3d 339, 344
(4th Cir. 2014). The first of these elements does not require
proof that the employer’s conduct was, in fact, a legally
actionable fraud. The whistleblower need only show that she
“had both a subjective belief and an objectively reasonable
belief that the conduct” violated relevant law. Welch v. Chao,
536 F.3d 269, 275 (4th Cir. 2008) (internal quotation marks
omitted). Though courts have stated that the whistleblower’s
theory of fraud should “at least approximate the basic elements”
of fraud, Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir. 2009);
accord Van Asdale v. Int’l Game Tech., 577 F.3d 989, 1001 (9th
Cir. 2009), it is not necessary to show that a shareholder
would, in fact, have accrued a cause of action.
Appellee’s complaint was not specific in identifying
the securities law that she believed Appellants violated. Her
allegation does, however, approximate the basic elements of a
section 10(b) securities fraud claim. While a shareholder
bringing a section 10(b) claim would bear the burden of
17
establishing a strong inference of scienter, see 15 U.S.C.
§ 78u-4(b)(2)(A), Appellee is under no such obligation. Her
retaliation claim can succeed without “discovery of the facts
constituting” securities fraud. 28 U.S.C. § 1658(b)(1). It
stands to reason, then, that § 1658(b)(1), which hinges on the
discovery of such facts, does not apply. Section 1658(a)
controls, and because Appellee brought her suit within that
section’s four-year window, her claim is not barred.
B.
Exhaustion of Administrative Remedies
The next question before us is whether Appellee
properly exhausted her administrative remedies as to Mroz and
Phillips. This is a pure question of law, which we review de
novo. See E.L. ex rel. Lorsson v. Chapel Hill-Carrboro Bd. of
Educ., No. 13-2330, 2014 WL 6783052 (4th Cir. Dec. 3, 2014).
By statute, a Sarbanes-Oxley Act whistleblower cannot
go straight to court. Rather, she must first file an
administrative complaint with the Secretary of Labor. See 18
U.S.C. § 1514A(b)(1). This complaint must be filed “not later
than 90 days after the date on which such violation occurs.” 49
U.S.C. § 42121(b)(1). The whistleblower must then wait 180 days
for OSHA to investigate the allegation and issue a decision.
See 18 U.S.C. § 1514A(b)(1)(B). If, after 180 days, OSHA has
not issued a final decision “and there is no showing that such
18
delay is due to the bad faith of the claimant,” the
whistleblower may bring suit “for de novo review in the
appropriate district court of the United States.” Id.
Appellants recognize that Appellee’s administrative
complaint was timely, and that OSHA did not issue a final
decision within 180 days. They argue, though, that the OSHA
complaint did not clearly identify Mroz and Phillips as
respondents. They further assert that even if the fault lies
with OSHA for failing to pursue claims against Mroz and
Phillips, the burden was on Appellee to press OSHA to address
its oversight.
To be sure, an exhaustion requirement would be
meaningless if the complainant were free to litigate claims
bearing little or no connection to the preceding administrative
complaint. In the context of Title VII cases, we have long
recognized that “[t]he scope of the plaintiff’s right to file a
federal lawsuit is determined by” the contents of the charge
filed with the Equal Employment Opportunity Commission (“EEOC”).
Jones v. Calvert Grp., Ltd., 551 F.3d 297, 300 (4th Cir. 2009);
see Chacko v. Patuxent Inst., 429 F.3d 505, 506 (4th Cir. 2005)
(holding that a Title VII plaintiff “fails to exhaust his
administrative remedies where . . . his administrative charges
reference different time frames, actors, and discriminatory
conduct than the central factual allegations in his formal
19
suit”). However, we have also said that the administrative
charge “does not strictly limit” the ensuing lawsuit. Bryant v.
Bell Atl. Md., Inc., 288 F.3d 124, 132 (4th Cir. 2002) (internal
quotation marks omitted). Rather, the litigation may encompass
claims “reasonably related to the original complaint, and those
developed by reasonable investigation of the original
complaint.” Evans v. Techs. Applications & Serv. Co., 80 F.3d
954, 963 (4th Cir. 1996); see Sydnor v. Fairfax Cnty., Va., 681
F.3d 591, 595 (4th Cir. 2012) (“The touchstone for exhaustion is
whether plaintiff’s administrative and judicial claims are
reasonably related, not precisely the same . . . .” (citation
and internal quotation marks omitted)).
Our decision in Sydnor v. Fairfax County, Virginia,
681 F.3d 591 (4th Cir. 2012), is illustrative. There, a
disabled nurse indicated in a questionnaire accompanying her
EEOC charge that she had sought authorization to perform light-
duty work. Later, in a lawsuit alleging a violation of the
Americans with Disabilities Act, she sought a different
accommodation -- namely, authorization for full-duty work with
the assistance of a wheelchair. See 681 F.3d at 594. We found
this distinction to be insignificant, reasoning that the EEOC
questionnaire afforded the nurse’s employer “ample notice of the
allegations against it.” Id. at 595. We stated, “The
exhaustion requirement should not become a tripwire for hapless
20
plaintiffs. While it is important to stop clever parties from
circumventing statutory commands, we may not erect
insurmountable barriers to litigation out of overly technical
concerns.” Id. at 594.
Nothing in the record before us suggests that Appellee
was trying to circumvent the Sarbanes-Oxley Act exhaustion
requirement. See Woodford v. Ngo, 548 U.S. 81, 90 (2006)
(“[E]xhaustion requirements are designed to deal with parties
who do not want to exhaust . . . .”). Appellee’s OSHA complaint
is substantially similar to her complaint in this action. The
alleged harm, a retaliatory termination, is identical. In
addition, the OSHA complaint plainly identifies Mroz and
Phillips as “person(s) who are alleged to have violated the Act
(who the complaint is being filed against).” J.A. 645. Nothing
more precise is required. Indeed, the Department of Labor
regulations in effect at the time Appellee filed the complaint
expressly provided that “[n]o particular form of complaint is
required.” 29 C.F.R. § 1980.103(b) (2009). Appellee satisfied
her burden, and OSHA’s subsequent treatment of the complaint
cannot take away her opportunity to seek recourse. Cf. B.K.B.
v. Maui Police Dep’t, 276 F.3d 1091, 1099 (9th Cir. 2002) (“The
EEOC’s failure to address a claim asserted by the plaintiff in
her charge has no bearing on whether the plaintiff has exhausted
her administrative remedies with regard to that claim.”).
21
We recognize that a primary objective of exhaustion
requirements is to put parties on notice of the allegations
against them. In the context of Title VII actions, exhaustion
gives the employer an opportunity to investigate and resolve the
issue and “prevents the employer from later complaining of
prejudice, since it has known of the allegations from the very
beginning.” Chacko, 429 F.3d at 510. Here, though, there can
be no doubt that Mroz and Phillips were well aware of Appellee’s
allegations. Mroz was the company’s chief executive, and
Phillips its chairman. In its October 2009 letter notifying
SouthPeak of Appellee’s administrative complaint, OSHA listed
Phillips as the contact person for the company. Subsequently,
SouthPeak’s counsel discussed the complaint with both Mroz and
Phillips. Surely, it could not have gone unnoticed that the
complaint identified Mroz and Phillips as “person(s) who are
alleged to have violated the Act.” J.A. 645. It should not
have been all that surprising, then, when Appellee named the two
executives in the instant civil action.
C.
Nature of Available Remedies
Appellants next challenge the award of emotional
distress damages. The Final Verdict held Mroz and Phillips
accountable for $178,500 apiece in compensatory damages. The
district court, which later reduced that sum to $50,000 apiece,
22
inferred that these awards must represent Appellee’s damages for
emotional distress. Appellants argue that such damages are not
permissible under the whistleblower protection provisions of the
Sarbanes-Oxley Act. We reject this reading of 18 U.S.C.
§ 1514A(c), which expressly entitles a prevailing employee to
“all relief necessary to make [her] whole.” 18 U.S.C.
§ 1514A(c)(1). We also reject Appellants’ backup argument that
the emotional distress award in this case was excessive.
1.
Availability of Emotional Distress Damages
The first question is whether emotional distress
damages are available under 18 U.S.C. § 1514A(c). This, too, is
a question of law that we review de novo. See Rice v. Cmty.
Health Ass’n, 203 F.3d 283, 287 (4th Cir. 2000) (applying de
novo review to a district court’s determination that West
Virginia contract law permitted consequential damages).
The remedies provision at § 1514A(c) has two parts.
Subsection (c)(1) provides: “An employee prevailing in any
[enforcement] action under [18 U.S.C. § 1514A(b)(1)] shall be
entitled to all relief necessary to make the employee whole.”
18 U.S.C. § 1514A(c)(1). In subsection (c)(2), the provision
goes on to state that compensatory damages
shall include --
23
(A) reinstatement with the same seniority
status that the employee would have had, but
for the discrimination;
(B) the amount of back pay, with interest;
and
(C) compensation for any special damages
sustained as a result of the discrimination,
including litigation costs, expert witness
fees, and reasonable attorney fees.
Id. § 1514A(c)(2).
Appellants argue that the three forms of compensatory
damages itemized in subsection (c)(2) are the only forms of
relief available under the statute. There are two problems with
this argument. First, it all but ignores the language in
subsection (c)(1) that says a prevailing employee “shall be
entitled to all relief necessary to make the employee whole.”
18 U.S.C. § 1514A(c)(1). Second, Appellants’ interpretation of
the words “shall include” in subsection (c)(2) is at odds with
our precedent. In Project Vote/Voting for America, Inc. v.
Long, we said that “the term ‘shall include’ sets a floor, not a
ceiling.” 682 F.3d 331, 337 (4th Cir. 2012) (internal quotation
marks omitted) (interpreting section 8(i)(2) of the National
Voter Registration Act). “Courts have repeatedly indicated that
‘shall include’ is not equivalent to ‘limited to.’” Id.To date, two federal circuit courts have considered
the availability of emotional distress damages under § 1514A.
Both have concluded that such damages are available. See
24
Halliburton, Inc. v. Admin. Review Bd., 771 F.3d 254, 266 (5th
Cir. 2014); Lockheed Martin Corp. v. Admin. Review Bd., 717 F.3d
1121, 1138 (10th Cir. 2013). To support its position,
Appellants can only direct our attention to a smattering of
district court decisions, most of them unpublished. These
cases, by and large, liken § 1514A(c) to the remedies provision
in Title VII prior to its 1991 amendments. See, e.g., Walton v.
NOVA Info. Sys., 514 F. Supp. 2d 1031, 1035 (E.D. Tenn. 2007);
Murray v. TXU Corp., No. Civ.A.3:03-CV-0888-P, 2005 WL 1356444,
at *3 (N.D. Tex. June 7, 2005). At that time, Title VII
provided:
[T]he court may enjoin the respondent from
engaging in such unlawful employment
practice, and order such affirmative action
as may be appropriate, which may include,
but is not limited to, reinstatement or
hiring of employees, with or without back
pay . . ., or any other equitable relief as
the court deems appropriate.
42 U.S.C. § 2000e-5(g) (1988). In United States v. Burke, the
Supreme Court held that this provision did not support damages
for “pain and suffering, emotional distress, harm to reputation,
or other consequential damages.” 504 U.S. 229, 239 (1992). The
district court opinions cited by Appellants suggest that the
Sarbanes-Oxley Act remedies provision at 18 U.S.C. § 1514A(c)
operates the same way.
25
The Fifth Circuit’s decision in Halliburton, Inc. v.
Administrative Review Board, 771 F.3d 254 (5th Cir. 2014),
explains why the district courts’ reasoning misses the mark. By
its terms, the Sarbanes-Oxley Act provision entitles a
prevailing plaintiff to “all relief necessary to make the
employee whole.” 18 U.S.C. § 1514A(c)(1). Pre-amendment Title
VII was not so generous. See Halliburton, 771 F.3d at 265.
Beyond that, the Sarbanes-Oxley Act “plainly affords at least
some damages, that is, legal relief, in addition to equitable
remedies.” Id.; see 18 U.S.C. § 1514A(b)(1)(B) (authorizing
Sarbanes-Oxley Act whistleblowers to bring “an action at law or
equity”). Pre-amendment Title VII “afforded only equitable
relief.” Halliburton, 771 F.3d at 265.
In the Fifth Circuit’s view, and in ours, the remedies
provision in 18 U.S.C. § 1514A more strongly resembles the
remedies provision for retaliation claims under the False Claims
Act, 31 U.S.C. § 3730(h). In language that parallels the
provision now before us, the False Claims Act states that a
prevailing plaintiff “shall be entitled to all relief necessary
to make that [plaintiff] whole.” 31 U.S.C. § 3730(h)(1). It
further states that relief “shall include” reinstatement, back
pay, and “compensation for any special damages sustained as a
result of the discrimination, including litigation costs and
reasonable attorneys’ fees.” Id. § 3730(h)(2). Every federal
26
circuit court to have addressed the issue has concluded that the
False Claims Act “affords noneconomic compensatory damages.”
Halliburton, 771 F.3d at 265; see Brandon v. Anesthesia & Pain
Mgmt. Assocs., Ltd., 277 F.3d 936, 944 (7th Cir. 2002) (stating
that the allowance for special damages in 31 U.S.C. § 3730(h)
“permits recovery for emotional distress”); Hammond v. Northland
Counseling Ctr., Inc., 218 F.3d 886, 892-93 (8th Cir. 2000).
Though the case before us centers on a termination of
employment, we note that the Sarbanes-Oxley Act whistleblower
protection provisions proscribe a wide range of retaliatory
actions, including threats and harassment. See 18 U.S.C.
§ 1514A(a). There will be times when the primary harm will be
noneconomic. In these instances, the Department of Labor (the
“Department”) observes, “non-pecuniary compensatory relief, such
as emotional distress damages, may be the only remedy that would
make the complainant whole.” Amicus Br. 23. The Department
takes the position that the statute countenances emotional
distress awards, and indeed the Department’s Administrative
Review Board has a history of upholding non-pecuniary
compensatory damages in Sarbanes-Oxley Act whistleblower cases.
See Menendez v. Halliburton, Inc., Case Nos. 09-002, -003, 2013
WL 1282255, at *11 (Admin. Rev. Bd. March 15, 2013). In these
circumstances, where Congress has explicitly empowered the
Department to enforce § 1514A by formal adjudication, we afford
27
deference to the Department’s interpretation. See Welch, 536
F.3d at 276 n.2. We therefore join the Department, and the
Fifth and Tenth Circuits, in concluding that emotional distress
damages are available under § 1514A(c).
2.
Amount of Emotional Distress Damages
Appellants argue in the alternative that the emotional
distress award was excessive. Appellants, we note, have already
benefitted from a reduction in the emotional distress damages.
In its Final Verdict, the jury found Mroz and Phillips liable
for $178,500 apiece, all for emotional distress. The district
court later reduced these awards to $50,000 apiece.
The “power and duty of the trial judge to set aside”
an excessive verdict is “well-established.” Cline v. Wal-Mart
Stores, Inc., 144 F.3d 294, 304 (4th Cir. 1998) (internal
quotation marks omitted). Under Rule 59(a) of the Federal Rules
of Civil Procedure, a court may order a new trial nisi
remittitur if it “concludes that a jury award of compensatory
damages is excessive.” Sloane v. Equifax Info. Servs., LLC, 510
F.3d 495, 502 (4th Cir. 2007). On appeal, we reverse the grant
or denial of a motion for new trial “only upon a showing of
abuse of discretion. Pursuant to this standard, ‘[w]e must give
the benefit of every doubt to the judgment of the trial judge,’
while recognizing that ‘there must be an upper limit [to
28
allowable damages].’” Cline, 144 F.3d at 305 (alterations in
original) (citation omitted) (quoting Gasperini v. Ctr. for
Humanities, Inc., 518 U.S. 415, 435 (1996)).
We find no abuse of discretion here. To the contrary,
the district court’s opinion offers a meticulous and well-
reasoned explanation for the reduced award the court selected.
See Jones v. SouthPeak Interactive Corp. of Del., 982 F. Supp.
2d 664, 677-82 (E.D. Va. 2013). The court properly took note of
Appellee’s testimony about the toll her firing took on her
family and her psyche. Appellee, describing herself as the
“bread winner of the family,” testified that her termination
“caused concern . . . . We have four children [who at] that
time ranged from age eleven to age four. So there was a lot of
responsibility, and always has been on my shoulders to provide
for the family.” J.A. 1278. Appellee said she felt “awful”
because she had no choice but to seek unemployment benefits.
Id. at 1279. On job interviews, she said, the interviewer
“would always get to the question, why you were terminated[.]
And that was not a good conversation.” Id. at 1287. All told,
it took 23 months for Appellee to secure a new full-time job.
Appellee also testified that, even years after her
termination, she still cries sometimes when she thinks about her
experience at SouthPeak. As the district court noted,
Appellee’s husband corroborated her account, saying he has “been
29
woken up many times in the middle of the night with her crying.
Not understanding, like, people do the things they do, and lie
about her. And just not knowing why bad things happen.” Jones,
982 F. Supp. 2d at 680.
After concluding that the evidence supported an award
for emotional distress, the court compared the jury’s damages
assessment to awards in comparable cases, just as we have done
in our own review of awards for emotional distress. See, e.g.,
Hetzel v. Cnty. of Prince William, 89 F.3d 169, 172-73 (4th Cir.
1996) (comparing cases involving awards for emotional distress).
This was a sound approach. We see no reason to disturb the
court’s judgment.
D.
Perceived Inconsistencies in the Verdict
We turn now to the hubbub that followed the jurors’
emergence from the jury room. Appellants raise two arguments
about this stage of the proceedings. In the first place, they
argue that the court should have accepted the First Verdict.
Separately, Appellants argue that the court should not have
accepted the Final Verdict. We address each of these arguments
in turn.
30
1.
The First Verdict
First, we consider the district court’s decision to
reject the First Verdict as inconsistent. As this presents a
mixed question of law and fact, see Wilks v. Reyes, 5 F.3d 412,
415 (9th Cir. 1993), we inspect the court’s factual findings for
clear error and examine de novo the legal conclusions derived
from those facts, see Meson v. GATX Tech. Servs. Corp., 507 F.3d
803, 806 (4th Cir. 2007). Actions taken after the inconsistency
determination are reviewed for abuse of discretion. See Hauser
v. Kubalak, 929 F.2d 1305, 1308 (8th Cir. 1991) (per curiam).
Rule 49(b)(3) of the Federal Rules of Civil Procedure
outlines several options available to a district court when
answers to written questions are inconsistent with a general
verdict. 5 These options are: “(A) approve, for entry under Rule
5
Rule 49(b) covers general verdicts, which are those “by
which the jury finds in favor of one party or the other, as
opposed to resolving specific fact questions.” Black’s Law
Dictionary 1696 (9th ed. 2009). The rule does not apply to
special verdicts -- i.e., verdicts “in which the jury makes
findings only on factual issues submitted to them by the judge,
who then decides the legal effect of the verdict.” Id. at 1697.
Although the verdict form here has characteristics of both a
general verdict and a special verdict, in that it seeks a
conclusion on liability but separate damage assessments for each
defendant, it is best characterized as a general verdict. See
Mason v. Ford Motor Co., 307 F.3d 1271, 1275 (11th Cir. 2002)
(per curiam) (characterizing a similar verdict form as a general
verdict).
31
58, an appropriate judgment according to the answers,
notwithstanding the general verdict; (B) direct the jury to
further consider its answers and verdict; or (C) order a new
trial.” Fed. R. Civ. P. 49(b)(3). The purpose of this rule, we
have stated, “is to promote the efficiency of trials by allowing
the original deliberating body to reconcile inconsistencies
without the need for another presentation of the evidence to a
new body.” Austin v. Paramount Parks, Inc., 195 F.3d 715, 725
(4th Cir. 1999) (internal quotation marks omitted).
A district judge who “concludes that an inconsistent
verdict reflects jury confusion or uncertainty . . . has the
duty to clarify the law governing the case and resubmit the
verdict for a jury decision.” Hafner v. Brown, 983 F.2d 570,
575 (4th Cir. 1992). In Hafner v. Brown, the jury’s initial
responses on the verdict form indicated that two Baltimore
police officers were liable for conspiracy in a civil suit
pursuant to 42 U.S.C. § 1983. 983 F.2d at 574. The jury
awarded punitive damages against those officers, but,
perplexingly, it awarded no compensatory damages. See id. We
agreed that the jurors “clearly were confused,” and held,
accordingly, that the district court did not err in offering a
supplemental jury instruction and allowing the jury to reconvene
for further deliberation. Id. at 574-75.
32
Here, the jury found all three Appellants liable.
Although it would not necessarily be inconsistent to find
liability but assess no damages, see Zhang v. Am. Gem Seafoods,
Inc., 339 F.3d 1020, 1036 (9th Cir. 2003), it is difficult to
square what the jury did in the First Verdict. With this
verdict, the jury indicated that Appellee was entitled to back
pay and compensatory damages, but only from SouthPeak. This is
peculiar, given Mroz and Phillips’s involvement in the unlawful
termination. Faced with this discrepancy, the district court
did the sensible thing: it conferred with counsel, then
administered a supplemental jury instruction and sent the jury
back to redeliberate. See Hafner, 983 F.2d at 575. In the
process, the court identified the source of its confusion but
was careful to state that it did not wish to influence the
jury’s decision. We see no error.
2.
The Final Verdict
We next consider the Final Verdict. Appellants argue
that it was “irreconcilably inconsistent to find that
SouthPeak . . . caused back pay damages but no compensatory
damages and that Phillips and/or Mroz caused no back pay damages
but did cause compensatory damages -- since it is the same set
of facts alleged against each defendant that supposedly caused
the same harm.” Appellants’ Br. 38. The district court
33
rejected this argument when Appellants raised it in a Rule 59
motion for a new trial. We review the denial of Appellants’
motion for abuse of discretion. See Gregg v. Ham, 678 F.3d 333,
342 (4th Cir. 2012).
“A jury verdict may be set aside and the case remanded
for a new trial when it is not possible to reconcile the
findings. Likewise, a new trial is appropriate if the verdict
is against the clear weight of the evidence . . . .”
TransDulles Center, Inc. v. USX Corp., 976 F.2d 219, 227 (4th
Cir. 1992). Here, the Final Verdict did not conflict with the
jury instructions. See id. at 227-28 (rejecting a claim of
verdict inconsistency where the verdict accorded with jury
instructions). In charging the jury, the district court did not
state that the jury must hold the defendants liable for equal
sums. The court instructed the jury: “[I]f you return a verdict
in favor of Mrs. Jones against any defendant, you should put in
the amount of damages you think are recoverable.” J.A. 1930.
The jury did just that.
Appellants have not shown that the Final Verdict was
“against the weight of the evidence or based on evidence which
is false.” Gregg, 678 F.3d at 343 (internal quotation marks
omitted). While it is true that a single act -- a retaliatory
discharge -- caused Appellee’s injury, we believe a reasonable
jury could recognize the distinct role that each appellant
34
played in that act. After all, it was SouthPeak -- not Mroz or
Phillips -- that paid Appellee’s salary and that stopped paying
it upon her termination. Though Mroz and Phillips were involved
in the decision to fire Appellee, they could not make it alone;
that decision belonged to the entire board of directors. That
being the case, it would hardly have been unreasonable for the
jury to conclude that SouthPeak, rather than two of its
executives, should cover the back pay award. Similarly, it is
not unreasonable to conclude that Mroz and Phillips bear
responsibility for Appellee’s emotional distress. Both were
involved in the decision to terminate Appellee. Beyond that,
Phillips allegedly lied to Appellee about the errors in the
company’s SEC filings. And it was Mroz who delivered the news
of Appellee’s termination. Appellee testified that she has
tearfully recalled her experiences at SouthPeak, again and
again, in the years since her firing, and we do not doubt that
these scenes loom in her recollections.
In short, we do not share Appellants’ view that the
Final Verdict was “inherently inconsistent.” Appellants’ Br.
38. The district court was not obliged to reject it, and its
denial of Appellants’ Rule 59 motion was not an abuse of
discretion.
35
E.
Attorneys’ Fees
Lastly, there is the matter of attorneys’ fees.
Appellants make two arguments. First, they assert that the
district court failed to follow the three-step process outlined
in McAfee v. Boczar, 738 F.3d 81 (4th Cir. 2013). Second, they
challenge the court’s joint-and-several allocation of attorneys’
fees.
We review an award of attorneys’ fees for abuse of
discretion. See Robinson v. Equifax Info. Servs., LLC, 560 F.3d
235, 243 (4th Cir. 2009). In making this assessment, we
recognize that our review of the record, no matter how careful,
cannot substitute for the district court’s “close and intimate
knowledge of the efforts expended and the value of the services
rendered.” Id. (internal quotation marks omitted).
Accordingly, “we will only reverse such an award if the district
court is clearly wrong or has committed an error of law.”
McAfee, 738 F.3d at 88.
1.
Calculation of Attorneys’ Fees
Our opinion in McAfee states that the “proper
calculation of an attorney’s fee involves a three-step process.”
738 F.3d at 88. First, “the court must determine the lodestar
figure by multiplying the number of reasonable hours expended
36
times a reasonable rate.” Id. (internal quotation marks
omitted). Second, “the court must subtract fees for hours spent
on unsuccessful claims unrelated to successful ones. [Third],
the court should award some percentage of the remaining amount,
depending on the degree of success enjoyed by the plaintiff.”
Id. (citation omitted) (internal quotation marks omitted).
Appellants argue the court neglected to perform the third step.
They deem this omission a reversible error and urge us to vacate
the fee award.
To be sure, it can be challenging to put a number on
“success.” There is no “precise rule or formula” to aid the
court in determining just how successful a plaintiff may have
been. Hensley v. Eckerhart, 461 U.S. 424, 436 (1983). To wit,
the Supreme Court has said it would be inappropriate to simply
compare “the total number of issues in the case with those
actually prevailed upon.” Id. at 435 n.11 (internal quotation
marks omitted). Likewise, although we have advised courts to
compare the damages award to the amount sought, a court should
not reduce a fee award “simply because the plaintiff failed to
prevail on every contention raised in the lawsuit.” Id. at 435.
A court may consider whether a fee award seems reasonable in
light of the amount of damages awarded. However, “a substantial
disproportionality between a fee award and a verdict, standing
37
alone, may not justify a reduction in attorney’s fees.” McAfee,
738 F.3d at 94.
Here, the district court did not organize its opinion
as our instructions in McAfee indicate it should have. However,
it is simply untrue to claim that the court failed to consider
Appellee’s degree of success. The court’s opinion takes note of
Appellants’ claim that Appellee “was not successful in certain
aspects of the case.” Jones v. SouthPeak Interactive Corp. of
Del., No. 3:12cv443, 2014 WL 2993443, at *11 (E.D. Va. July 2,
2014). The court acknowledged that Appellants, “to some extent,
were successful in reducing the damage award.” Id. at *12.
However, it said, that reduction “is not an unsuccessful claim
as to which a fee request needs to be reduced in the same manner
as not succeeding on the claim at all.” Id. The same is true,
the court said, of Appellee’s unsuccessful efforts to block
discovery and to prevent the withdrawal of defense counsel. See
id.The court also addressed Appellants’ argument that
“the amount of hours attributed to post-judgment motions is
excessive and in light of the limited success [Appellee]
obtained at the post-judgment stage, it is not reasonable and it
should be reduced.” 2014 WL 2993443, at *14 (internal quotation
marks omitted). In response, the court repeated that Appellee
“had substantial and material success at trial . . . . [I]t is
38
not true that [Appellee] had limited success [in the post-
judgment stage]. [Appellee] retained a large portion of the
total judgment and she successfully opposed [Appellants’]
request for a new trial.” Id.Plainly, then, the court considered Appellee’s success
in the litigation and concluded that Appellee was substantially
and materially successful. The facts support this conclusion.
The jury found all three defendants liable for violations of the
Sarbanes-Oxley Act and awarded damages against each defendant.
Following remittitur, the total award came out to $737,000,
including $44,000 in pre-judgment interest. This is about one-
third of the roughly $2 million that Appellee sought. 6 Given
this result, we cannot say that declining to reduce the lodestar
figure was an abuse of discretion. See Hensley, 461 U.S. at 435(“Where a plaintiff has obtained excellent results, his attorney
should recover a fully compensatory fee.”).
2.
Allocation of Attorneys’ Fees
Appellants’ final argument is that the joint-and-
several allocation of attorneys’ fees was an abuse of
6
Appellee’s Rule 26 disclosures list $2,524,337 in damages
sought. This figure includes $500,000 in punitive damages;
however, Appellee did not request punitive damages in her
complaint.
39
discretion. We disagree, on the ground that the district court
enjoys considerable latitude in deciding how it will allocate
attorneys’ fees.
The proposition that district courts have discretion
over the proper allocation of a fee award among multiple
defendants is widely recognized. See, e.g., Torres-Rivera v.
O’Neill-Cancel, 524 F.3d 331, 337 (1st Cir. 2008); Herbst v.
Ryan, 90 F.3d 1300, 1304 (7th Cir. 1996); Council for Periodical
Distribs. Ass’ns v. Evans, 827 F.2d 1483, 1487-88 (11th Cir.
1987). Options available to a court may include: dividing the
award equally among the defendants; apportioning the award
according to the defendants’ relative culpability; awarding fees
“in the same proportions as [the] jury assessed actual damages”;
or holding a single defendant liable for fees related to a claim
for which that defendant was “solely or largely responsible.”
Council for Periodical Distribs., 827 F.2d at 1487-88. A court
is free to combine two or more of these methods, or it may
select another method entirely. See id. at 1488.
Two of our sister circuits -- the Seventh and District
of Columbia Circuits -- have identified several situations in
which it may be appropriate to hold all defendants jointly and
severally liable for attorneys’ fees. See Turner v. D.C. Bd. of
Elections & Ethics, 354 F.3d 890, 897-98 (D.C. Cir. 2004);
Herbst, 90 F.3d at 1305. For instance, they have said, “[i]t is
40
frequently appropriate to hold all defendants jointly and
severally liable for attorneys’ fees in cases in which two or
more defendants actively participated in a constitutional
violation.” Herbst, 90 F.3d at 1305; accord Turner, 354 F.3d at
897. A defendant’s ability to pay the award may be of some
relevance as well. In civil rights cases, “courts have upheld
the imposition of joint and several liability for a fee award
where there existed a question as to whether the fee would be
collectible from one of the defendants.” Herbst, 90 F.3d at1306 n.13; accord Turner, 354 F.3d at 897-98. The District of
Columbia Circuit has also said that “a plaintiff’s fully
compensatory fee for claims centered on a set of common issues
against two or more jointly responsible defendants should be
assessed jointly and severally.” Turner, 354 F.3d at 898(internal quotation marks omitted).
Here, Appellants call on us to redistribute the fee
award in proportion to each appellant’s share of the damages
awarded. We have never required a defendant’s share of a fee
award to equal his share of damages, nor have other circuits.
See, e.g., Corder v. Gates, 947 F.2d 374, 383 (9th Cir. 1991)
(“We have never mandated apportionment based on each defendant’s
relative liability under a jury’s verdict.”). Such a
requirement would take away the discretionary power that
district courts have traditionally enjoyed in this area.
41
Even if, in the first instance, we might not have
decided to hold Appellants jointly and severally liable for the
fee award, we cannot say that the district court’s decision was
an abuse of discretion. Mroz and Phillips were high-level
executives at SouthPeak. Both were involved in the decision to
fire Appellee. The claims against all three Appellants were the
same, and although the damages awards ended up differing, the
work that Appellee’s counsel put into developing, investigating,
and pursuing those claims cannot be so easily divided.
Accordingly, we affirm.
III.
For the foregoing reasons, the judgment of the
district court is
AFFIRMED.
42