SMUD appeals employment discrimination lawsuit that awarded $6.2M to four Black workers
The Sacramento Municipal Utility District is asking California’s 3rd District Court of Appeal to grant it a new trial in an employment discrimination case filed by four Black current and former employees.
In November, a jury awarded the plaintiffs — Amy Ayers, Dwayne Pugh, Rodney James and Deborah Bates-Pettaway — roughly $6.2 million in damages.
In motions after that trial, SMUD asked the trial judge, Sacramento Superior Court’s Renuka R. George, to grant a new trial.
The utility made a number of assertions to support its request. Among them:
▪ There wasn’t sufficient evidence to support the jury’s verdict.
▪ George had erred in denying the company’s pre-trial request to sever the cases and try them separately.
▪ A comment by the judge and some testimony were prejudicial. Ayers, Pugh and James had received excessive awards.
▪ And, jurors were given “fatally defective” forms to use to determine what damages Pugh and James should receive.
SMUD declined to comment on its appeal but said it stands by its past statements related to this case. The utility told The Bee that its team had investigated the employees’ allegations and determined they were unfounded.
Issue of severing the cases
Over dozens of pages in a final ruling issued in January, George explained why she denied SMUD’s requests for a new trial but agreed to cut jury awards to three of the four plaintiffs. George also slashed the fees and expenses that plaintiffs’ attorneys Mike Justice and Mark Brenner were able to bill the utility.
George said that SMUD would have grounds for a new trial if the plaintiffs did not accept the damage awards as she amended them. In her decision, the judge noted that case law has established that plaintiffs cannot receive a substantial non-economic award if they do not demonstrate “physical ailments (sleeplessness, weight gain, stress-related illnesses, doctor/therapist visits) or severe emotional distress as a result of retaliation.”
The plaintiffs’ total jury award dropped to about $4.5 million from $6.2 million after George determined that, even though Ayers, Pugh and James had suffered emotional distress, the evidence of their suffering was not so severe that it justified the entirety of the awards the jury had given them.
In its motion for a new trial, SMUD argued that George had abused her judicial discretion by not severing the plaintiffs’ four cases and that there was not enough evidence in each individual case to support a jury verdict. But George pointed out that there was significant overlap in the witnesses and defendants in three of the four cases.
By trying them jointly, she said, SMUD saved the expense of having to call in many of the same witnesses for four separate trials. George said she also provided clear instructions to the jury that the plaintiffs’ attorneys must provide separate evidence for each plaintiff’s case and meet the burden of proof for each of their clients.
Justice said he actually filed this lawsuit in 2022, but at no time before the trial began in October 2024 did SMUD seek to sever the cases: “We litigated this case for 2.75 years and we get to the eve of trial, and they make this motion that, ‘Oh, this case should be divided up into four cases.’”
SMUD alleges unfair emails
SMUD asserted that two email exchanges allowed in as exhibits had unfairly prejudiced jurors, but George said both pieces of evidence addressed key aspects of the plaintiffs’ case: Whether SMUD managers were violating company policy by coaching white candidates for job positions and whether SMUD HR responds effectively to allegations of managerial misconduct.
The utility also alleged that it suffered undue prejudice because George commented that she found a witness’ testimony about the SMUD Civil Service Rules and promotional process to be confusing. George said the utility had not cited any record or offered any evidence to support its allegation.
SMUD, which filed its notice of appeal on Feb. 21, will now take its arguments for a new trial and reduced awards to an appellate court. On Mar. 3, Justice and Brenner sent the 3rd Court of Appeal their notice to cross appeal George’s rulings on their clients’ lowered damage awards and the reductions in their fees.
