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Saturday, November 21, 2009
Courts - "Kentucky Appeals court upholds $6.1 million strip-search verdict against McDonald's"
Updating this long list of earlier ILB entries, Andrew Wolfson reports in today's LCJ in a lengthy story:
The Kentucky Court of Appeals Friday upheld the $6.1 million jury award to strip-search victim Louise Ogborn, saying McDonald’s legal department was “fully aware” of hoax calls to its restaurants, yet its management made “a conscious decision not to train or warn employees or managers about the calls.”In a unanimous decision, the court also said that the $5 million awarded to Ogborn in punitive damages for McDonald’s “reprehensible” behavior was justified because the evidence showed the company repeatedly “placed a higher value on corporate reputation than on the safety of its own employees” over the 10 years it knew about the hoax calls.
A three-judge panel also upheld the judgment for former assistant manager Donna J. Summers, who claimed she was duped into executing the search because of the company’s failure to warn her about the hoaxes. But the court cut her $1 million punitive damage award to $400,000, saying the jury’s verdict was excessive. Summers was also awarded $100,000 in compensatory damages.
Kirsten Daniel, one of Ogborn’s lawyers, said Ogborn was thrilled to hear the news that the verdict, returned after a four-week trial in Bullitt Circuit Court in 2007, had been affirmed. * * *
Ann Oldfather, another lawyer for Ogborn, said: “We are thrilled that the court made the correct decision and hope that McDonald’s does not attempt to continue to hurt Louise with any further appeals.”
A spokeswoman for McDonald’s USA said Friday the company is “extremely disappointed” with the decision but hasn’t decided whether it will ask the Kentucky Supreme Court to hear the case.
“McDonald's is not disputing that what happened to Ms. Ogborn was wrong,” spokeswoman Danya Proud said in a prepared statement. “However, it has been our position throughout these proceedings that she was the victim of a malicious hoax perpetrated by individuals not representing McDonald’s.” * * *
The Court of Appeals noted that the store was one of 30 McDonald’s restaurants at which similar hoaxes were perpetrated, and that evidence presented by Ogborn’s lawyers showed that proper training and warnings would have prevented them.
The court rejected eight grounds offered by McDonald’s for reversing the judgment, which included $1,111,312 in compensatory damages for Ogborn, who claimed she suffered psychological and emotional trauma.
Addressing McDonald’s claim that Ogborn’s damages should have been limited to worker’s compensation, the court said its lawyers failed to submit proof the company had worker’s comp insurance.
Even if they had, however, the court said Senior Judge Tom McDonald had properly ruled that the hoax occurred outside of Ogborn’s course of employment because she had “clocked out” before it occurred.
Next, the court dispatched McDonald’s claim that it shouldn’t have been held responsible under the Kentucky Civil Rights Act because Nix and the caller were not its employees.
The court said that Summers, who was an employee, compelled Ogborn to disrobe in a small office, deprived her of her clothes, and allowed four McDonald’s employees to see in her a “state of undress,” all of which “qualify as sexual harassment.”
The court rejected McDonald’s denial that Ogborn was unlawfully imprisoned, saying the evidence showed she had no choice but to stay once her clothes were taken. The company had claimed she voluntarily consented to be searched so she could clear her name.
Finally the court dismissed the company’s argument that it couldn’t be held liable for the unforeseeable criminal acts of Nix, who was later convicted of sexual abuse and other crimes and sentenced to five years in prison.
Writing for the court, Judge Glenn Acree of Lexington, joined by Judges Jeff Taylor of Owensboro and Kelly Thompson of Bowling Green, said McDonald’s knew that some of the prior hoaxes at its restaurants had produced “criminal activity” and that Nix’s crimes were a “foreseeable danger naturally resulting” from the company’s failure to warn and train employees and owners about an “ongoing problem.”
Posted by Marcia Oddi on November 21, 2009 08:17 AM
Posted to Courts in general