A California judge has ruled that lawyers for FedEx Ground were “deceptive” during the trial of a racial discrimination case, but still slashed the jury's award to two delivery drivers of Lebanese descent from a record $60 million to $12 million.

Edgar Rizkallah and Kamil Issa won the largest single civil-rights judgment under California's employment discrimination law in June. According to trial testimony, a manager at a FedEx Ground facility in Oakland routinely taunted them by calling them "camel jockeys," "terrorists," "sand niggers" and other ethnic slurs.

Ruling on the defense's new trial motion, Alameda County Superior Court Judge Stephen Dombrink discussed the “cutting-edge issue” of whether FedEx Ground should be barred from contesting the compensatory portion of the verdict because of its closing argument in the punitive damages phase of the trial.

The company's lawyers told the jury that FedEx had accepted the award of $5 million in compensatory damages to each plaintiff. Dombrink said that claim was “deceptive,” noting FedEx Ground's “simultaneous high-powered efforts to have the damages drastically reduced by the court.”

“The final argument said, in effect, that the plaintiffs were going to get $5 million each, don't give them more,” he said.

Nevertheless, Dombrink decided that the “deceptive lawyering may have done FedEx Ground more harm than good” and reduced the compensatory damages to $750,000 to each plaintiff. The jury, he said in his Sept. 5 order, was “affected by passion and prejudice.”

As for punitives, the judge said the plaintiffs were entitled to $5.25 million each -– a relatively high multiple of seven times the amount of the reduced compensatory damages. The jury awarded $25 million in punitives to each plaintiff, or five times the compensatory award (see table below).

The defense team included attorneys from two high-powered law firms -- O'Melveny & Myers in San Francisco and Seyfarth Shaw in Sacramento.

“I do not consider the language used in the final argument on punitive damages to [be] accidental,” Dombrink said in his final comment. “With the amount of money at stake here, a committee of legal minds no doubt came up with this strategy."

Elsewhere in California, the 4th District Court of Appeal was also in verdict-slashing mode this week, throwing out almost all of the $4 million in punitives awarded against two highway patrol officers for persecuting a San Diego County man.

The jury's award would ruin the officers financially, the court said in cutting it down to only $55,000. Grassilli v. Barr. The California Highway Patrol, however, said after the trial that it would pay the punitives -– which makes the poverty argument puzzling, to say the least.

By Matthew Heller
9/15/06