Alfonso W. January, an individual v. DR PEPPER SNAPPLE GROUP, INC., a business entity, form unknown, erroneously sued as…

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALFONSO W. JANUARY, an individual,
Plaintiff-Appellee,
and
ROBERT M. WARD, an individual;
ROBERT E. JONES, an individual; JOSE
M. VALADEZ, an individual; LEONARD
TALTON, an individual; GARY SUHAY,
an individual,
Plaintiffs,
v.
DR PEPPER SNAPPLE GROUP, INC., a
business entity, form unknown,
erroneously sued as Dr. Pepper Snapple
Group; THE AMERICAN BOTTLING
COMPANY, a business entity, form
unknown, erroneously sued as American
Bottling Company,
Defendants-Appellants,
and
CADBURY SCHWEPPES BOTTLING
No. 12-56171
D.C. No. 2:09-cv-03279-DMG-
CW
MEMORANDUM*
FILED
DEC 03 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.

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GROUP; CADBURY SCHWEPPES
HOLDINGS INC.; 7-UP/RC BOTTLING
COMPANY OF SOUTHERN
CALIFORNIA,
Defendants.
ALFONSO W. JANUARY, an individual,
Plaintiff-Appellee,
and
ROBERT M. WARD, an individual;
ROBERT E. JONES, an individual; JOSE
M. VALADEZ, an individual; LEONARD
TALTON, an individual; GARY SUHAY,
an individual,
Plaintiffs,
v.
DR PEPPER SNAPPLE GROUP, INC., a
business entity, form unknown,
erroneously sued as Dr. Pepper Snapple
Group; THE AMERICAN BOTTLING
COMPANY, a business entity, form
unknown, erroneously sued as American
Bottling Company,
Defendants-Appellants,
and
No. 12-56608
D.C. No. 2:09-cv-03279-DMG-
CW
2

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CADBURY SCHWEPPES BOTTLING
GROUP; CADBURY SCHWEPPES
HOLDINGS INC.; 7-UP/RC BOTTLING
COMPANY OF SOUTHERN
CALIFORNIA,
Defendants.
On Appeal from the United States District Court
for the Central District of California
Dolly M. Gee, District Judge, Presiding
Argued and Submitted November 20, 2014
Pasadena, California
Before: TASHIMA, W. FLETCHER, and BYBEE, Circuit Judges.
Defendants-Appellants Dr Pepper Snapple Group, Inc. (Dr Pepper) and The
American Bottling Co. (ABC) appeal following a jury verdict awarding Plaintiff-
Appellee Alfonso January $1,140,000 in compensatory damages and $1,335,400 in
punitive damages for age discrimination under California’s Fair Employment and
Housing Act (FEHA), Cal. Gov’t Code § 12900 et seq. We have jurisdiction under
28 U.S.C. § 1291, and we reverse.
1. Defendants first claim prejudicial error based on the district court’s
interpretation of the parties’ stipulation that “Plaintiffs are or were employed by
Defendants.” We review the district court’s interpretation of a stipulation de novo,
United States v. Lawton, 193 F.3d 1087, 1094 (9th Cir. 1999), superseded by
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statute on other grounds, and we review the district court’s refusal to modify a
pretrial order to relieve a party of a stipulation for abuse of discretion, Byrd v.
Guess, 137 F.3d 1126, 1131 (9th Cir. 1998), superseded by statute on other
grounds.
The district court correctly interpreted the stipulation as establishing that Dr
Pepper, not just ABC, was Plaintiffs’ employer. The stipulation unambiguously
refers to “Defendants” in the plural, and the pretrial conference order clearly
provides that “Defendants” are ABC and Dr Pepper. The district court did not
abuse its discretion in refusing to modify the pretrial conference order to relieve
Defendants of the stipulation. Defendants did not formally move for modification
of the pretrial conference order, and even if they had, they have not shown that
enforcement of the stipulation resulted in manifest injustice.
Although the district court correctly interpreted the stipulation as
establishing that Dr Pepper was Plaintiffs’ employer, the district court erred in
interpreting the stipulation as establishing Dr Pepper’s joint liability with ABC for
compensatory and punitive damages. The stipulation does not expressly provide
that Defendants are joint employers. But even if it did, joint employment merely
establishes that two entities may be considered employers under FEHA. See
Bradley v. Cal. Dep’t of Corr. & Rehab., 71 Cal. Rptr. 3d 222, 230–32 (Ct. App.
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2008), cited with approval in Patterson v. Domino’s Pizza, LLC, 333 P.3d 723, 740
(Cal. 2014). California courts have indicated that joint employers are not
necessarily jointly liable for discrimination in violation of FEHA. See Mathieu v.
Norrell Corp., 10 Cal. Rptr. 3d 52, 59–60 (Ct. App. 2004) (holding that the
plaintiff’s general employer was not liable under FEHA for harassment and
discrimination by an agent of the plaintiff’s special employer). And nothing in the
relevant statutes suggests otherwise. See Cal. Gov’t Code § 12940(a) (providing
that “[i]t is an unlawful employment practice . . . [f]or an employer” to
discriminate against a person because of a protected ground (emphasis added));
Cal. Civ. Code § 3294(b) (providing that punitive damages can only be imposed on
a corporate employer if “an officer, director, or managing agent of the corporation”
committed, authorized, or ratified wrongful conduct (emphasis added)).
We therefore reverse and remand for a new trial.1 On retrial, the stipulation
shall not be interpreted to relieve January of the burden of proving each
Defendant’s liability for compensatory and punitive damages.
2. Defendants next claim prejudicial error based on the district court’s
exclusion of evidence and argument regarding the existence and amount of ABC’s
1 We must remand for a complete new trial because the compensatory
damages verdict did not identify which defendant was liable for what portion of the
damages.
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workers’ compensation settlements with January and his co-plaintiffs. Because the
district court excluded this evidence under Federal Rule of Evidence 403 without
explicitly weighing the settlements’ probative value as to issues of intent and
punitive damages, we review the exclusion de novo. United States v. Leo Sure
Chief, 438 F.3d 920, 925 (9th Cir. 2006).
Evidence that ABC paid hundreds of thousands of dollars to settle Plaintiffs’
workers’ compensation claims would have been highly probative. The jury could
have believed that such evidence discredited Plaintiffs’ “profits over people”
theory of the case. The jury also could have found such evidence to be relevant to
its determination whether Dr Pepper acted with malice and oppression or in its
determination of the amount of punitive damages to impose. By contrast, the
potential for prejudice—that the jury might deduct the workers’ compensation
settlements from the damages award—could have been mitigated by instructing the
jury not to consider the settlements when determining the amount of damages. The
dangers of unfair prejudice and confusion therefore do not substantially outweigh
the evidence’s probative value. See Fed. R. Evid. 403.
This error was not harmless. Although Defendants were allowed to tell the
jury that Plaintiffs’ claims were “accepted” and to introduce evidence of ABC’s
historical workers’ compensation payments, such evidence was not comparable in
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strength to the excluded evidence. See Obrey v. Johnson, 400 F.3d 691, 701–02
(9th Cir. 2005).
We therefore reverse and remand for a new trial on this ground as well. On
retrial, Defendants shall be permitted to introduce evidence of the existence and
amount of their settlements of Plaintiffs’ workers’ compensation claims.2
3. Defendants claim several additional errors. Because the resolution of
these claims may affect any retrial, we will address them. We conclude that
Defendants’ arguments are without merit.
First, Defendants argue that the district court erred in allowing January to
testify about his depression and mental distress. Defendants are incorrect. As the
district court correctly explained, an expert medical opinion would have been
required to establish that discrimination caused clinical depression for purposes of
economic damages, but was not required to establish that January experienced
mental distress and depression for purposes of noneconomic damages. January
was entitled to prove the latter type of damages by testifying about his own
perceptions. See Fed. R. Evid. 701.
2 We leave it to the sound discretion of the district court to decide if a
cautionary instruction is necessary on the limited purposes for which such evidence
is introduced, as well as the wording of such an instruction.
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Second, Defendants argue that January failed to produce sufficient evidence
at trial that discrimination was a substantial factor in causing his injuries. To the
contrary, there is sufficient evidence in the record from which a jury could
conclude that Defendants’ agents engaged in discrimination and thereby caused
January to injure his shoulder and to experience mental distress, anxiety, and
depression. See Fisher v. City of San Jose, 558 F.3d 1069, 1074 (9th Cir. 2009).
Third, Defendants argue that the district court erred in allowing Plaintiffs’
damages expert to opine that January suffered damages in the form of lost overtime
payments. We review for abuse of discretion a district court’s decision to allow
expert testimony under Federal Rule of Evidence 702. Estate of Barabin v.
AstenJohnson, Inc., 740 F.3d 457, 460 (9th Cir. 2014) (en banc). The district court
did not abuse its discretion. The damages expert’s methodology—extrapolating
from January’s past W-2s and wage statements to estimate his lost overtime
pay—was sufficiently reliable. See id. at 463. Defendants’ arguments to the
contrary go the weight of the testimony, not its admissibility.
Lastly, Defendants argue for the first time on appeal that the second and
third categories of compensatory damages in the verdict form permitted double
recovery of mental-distress damages. Because Defendants failed to raise this issue
below, the argument is waived. See Bolker v. Comm’r of Internal Revenue, 760
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F.2d 1039, 1042 (9th Cir. 1985). In any event, the third category of compensatory
damages recovered by January did not include mental-distress damages; rather, it
included only damages for “past and future physical impairment, including
shoulder, stress & strain.”3
4. Because we reverse and remand for a new trial, we also vacate
January’s attorneys’ fees award, pending the outcome of the new trial.
REVERSED and REMANDED.
3 Because Plaintiffs were not required to prove Dr Pepper’s separate liability
at the first trial, but will have the opportunity to do so on retrial, we decline to
decide at this point whether Plaintiffs presented sufficient evidence at the first trial
that a managing agent of Dr Pepper ratified age discrimination.
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