Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civl No. 86-2753.
Sloviter and Cowen, Circuit Judges, and Debevoise, District Judge*fn*
On this appeal by Karen Lee Woodson from the district court's order denying her motion for a new trial, we are obliged to predict whether the Pennsylvania Supreme Court would allow an award of punitive damages in a wrongful discharge action. If so, we must then determine whether, under Pennsylvania's standard for punitive damages, Woodson introduced sufficient evidence to permit the punitive damages issue to go to the jury.
Facts and Procedural History
Woodson was employed by AMF Leisureland Centers, Inc. as a barmaid in the VanWinkle Lounge in Bristol, Pennsylvania. The lounge is part of a combination bowling and liquor facility; patrons can drink while they bowl and can also drink in the lounge, which is adjacent to the bowling alley.
The evidence at trial, viewed in the light most favorable to Woodson who won the verdict on liability, was that on the evening of November 21, 1985, Billy Naylor entered the lounge from the bowling area and asked Woodson to s erve him beer. Naylor had frequented the lounge on previous occasions; on s everal occasions he had become intoxicated, abusive, and violent towards Woodson and others. Woodson believed Naylor was intoxicated on the evening of November 21, 1985, and refused to serve him any alcoholic beverage.
Naylor complained to the manager, Anthony LaPolla, who was Woodson's immediate supervisor. LaPolla ordered Woodson to serve Naylor, stating, "Just give him one more so he doesn't create a scene. "App. at 42. Woodson refused, stating, "Tony, he is drunk. No, he is drunk. It is against the law to serve somebody a beer that is drunk." App. at 82. LaPolla again demanded that Woodson serve Naylor, stating, "If you refuse to serve this guy grab your coat and leave; get out of here" and "You don't serve him, you're done." App. at 108, 82. Accordingly, Woodson left the establishment.
Woodson filed suit against AMF in federal court on the basis of diversity jurisdiction. She alleged wrongful discharge and sought compensatory damages for lost wages and pain and suffering, as well as punitive damages for what she alleged was defendant's outrageous conduct in firing her under these circumstances. The case was tried before a jury. At the close of all the evidence, AMF made a motion for a directed verdict on the punitive damages claim, which the court granted. The court then instructed the jury that, "as a matter of law . . . there are no punitive damages to be found in this case," App. at 294, and withdrew from its consideration evidence of AMF's financial net worth, which had been stipulated to by the parties.
The jury, by special interrogatories, found that Woodson had been fired by LaPolla and that she had reasonably believed that Naylor was intoxicated. It returned a verdict for Woodson in the amount of $1,000, representing the stipulated figure for Woodson's lost wages.
Woodson filed a motion for a new trial on the issue of punitive damages. In its opinion accompanying the order denying the motion, the district court ruled as a legal matter that awarding punitive damages in wrongful discharge cases "involved a not insignificant expansion in the parameters of the wrongful discharge tort. " App. at 326. The court viewed the award of punitive damages for wrongful discharge as ["adding] a new and unprecedented depth to this persistently circumscribed tort, " App. at 327, and declined to permit such expansion until the Pennsylvania courts had done so in the first instance.
In addition, the court determined in light of the evidence submitted that Woodson was not entitled to punitive damages. The court explained, "in the case of a wrongful discharge . . . the employee [must] prove more than just the wrongful nature of the termination to be entitled to a punitive damage award. ...