Edward Y.s. Lee v. TRW, INC., a corporation

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
EDWARD Y.S. LEE,
Plaintiff - Appellee,
v.
TRW, INC., a corporation,
Defendant - Appellant.
No. 06-56703
D.C. No. CV-02-05172-FMC
EDWARD Y.S. LEE,
Plaintiff - Appellant,
v.
TRW, INC., a corporation,
Defendant - Appellee.
No. 06-56704
D.C. No. CV-02-05172-FMC
MEMORANDUM *
Appeal from the United States District Court
for the Central District of California
Florence-Marie Cooper, District Judge, Presiding
Argued and Submitted December 8, 2009
Pasadena, California
FILED
JAN 06 2010
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Before: PREGERSON, NOONAN and PAEZ, Circuit Judges.
Edward Lee (“Lee”) filed suit against TRW Inc. (“TRW”) for age
discrimination in violation of California’s Fair Employment and Housing Act
(“FEHA”). Following a trial in district court, the jury found TRW liable under the
FEHA, and the jury awarded compensatory and punitive damages to Lee. TRW
now appeals the district court’s denial of TRW’s post-verdict Rule 50(b) motion
for judgment as a matter of law. We affirm.
In 1999, Lee was laid off from TRW after more than twenty years of
employment with the company. At the time of his layoff, Lee was a test engineer
in the Electronic Products Organization (“EPO”), a department within TRW’s
Electronic Products Center (“EPC”). There were seven test engineers within EPO
who were considered for the layoff, and Lee was the oldest.
The head of the EPO, Paul Nakamura (“Nakamura”), oversaw the layoff
process. In executing the layoff, Nakamura worked with Rick Eriksen and Steve
Mass, two subordinate managers, and with John Molis (“Molis”), the acting section
head for test engineers in the EPO. Molis was assigned the task of designing a
“skills matrix” to evaluate the seven test engineers and recommend a layoff
candidate. Lee was ranked last in this matrix and was selected for layoff. Both

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Nakamura and Victor Weaver, the Human Resources Manager for the EPO, signed
off on the layoff.
This court reviews a district court’s denial of judgment as a matter of law de
novo. White v. Ford Motor Co., 312 F.3d 998, 1010 (9th Cir. 2002). When
reviewing a motion for judgment as a matter of law, the court considers the record
as a whole and “may not make credibility determinations or weigh the evidence.”
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). The court
will instead “view the evidence in the light most favorable to the nonmoving party
. . . and draw all reasonable inferences in that party’s favor.” Josephs v. Pac. Bell,
443 F.3d 1050, 1062 (9th Cir. 2006). The district court’s ruling will be reversed
only if “the evidence permits only one reasonable conclusion, and that conclusion
is contrary to the jury’s verdict.” Id. California state courts look to cases under
both federal and state law when applying California’s age discrimination statute.
See Guz v. Bechtel Nat’l Inc., 24 Cal. 4th 317, 354 (2000).
TRW raises two challenges to the jury verdict. First, TRW claims that there
was not substantial evidence to support a finding of liability for age discrimination.
In a workforce reduction case, such as this one, a plaintiff can present
“circumstantial, statistical, or direct evidence that the discharge occurred under

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circumstances giving rise to an inference of age discrimination.” Rose v. Wells
Fargo & Co., 902 F.2d 1417, 1421 (9th Cir. 1990).
Reviewing the record as a whole, there is substantial evidence to support the
jury’s finding of age discrimination. The testimony that Weaver considered Lee’s
age with regard to the layoff constituted direct evidence of age discrimination. In
addition, there was limited statistical evidence indicating that older employees
were disproportionately affected by both the employee downgrades and layoffs
that occurred in 1999. While this statistical evidence was based on a small sample
size, it presented a “numerical picture” that, combined with other evidence,
supported an inference of discrimination. See Noyes v. Kelly Servs., 488 F.3d
1163, 1173 (9th Cir. 2007).
The majority of Lee’s evidence of disparate treatment was circumstantial.
Lee introduced evidence to show that younger workers were preferred over Lee,
creating an inference of age discrimination. See Diaz v. Eagle Produce Ltd.
P’ship, 521 F.3d 1201, 1207-08 (9th Cir. 2008). Among the seven test engineers
considered for layoff, Lee was at least twenty years older than five of the six
others. The evidence showed that the younger test engineers were rated more
favorably than Lee in the skills matrix, despite weaker performance or untested
skills.

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Lee also provided evidence that TRW’s proffered reason for selecting
Lee—that he ranked lowest in skills as measured by a neutral skills matrix—was
pretextual. Lee offered evidence that in deciding to use the skills matrix to choose
a layoff candidate, Nakamura and Weaver ignored TRW’s own layoff policy.
TRW’s argument that a “mere failure to follow” internal policies cannot support a
discrimination claim is unavailing. See Guz, 24 Cal. 4th at 377 (Chin, J.,
concurring). Here, the evidence showed that the particular criteria in the layoff
policy that were ignored would have worked to the direct benefit of Lee. From this
evidence, the jury could have rationally concluded that the decision to use the skills
matrix only, and to disregard the layoff policy, was motivated by age.
Lee also offered evidence that when executing the layoff documents, Molis
left out or misstated several details that were favorable to Lee. While a selection
process that is subjective, unwise, or incomplete may not be probative of
discriminatory animus, Lee’s evidence showed that the errors made as to Lee were
not made as to any of the six other layoff candidates, who were all younger than
Lee. This more favorable treatment of the younger engineers supports a
conclusion that the proffered reason for the selection of Lee was pretextual.
As a whole, the record provides substantial evidence to support both an
inference of age discrimination and a finding that TRW’s proffered reason for the

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layoff was a pretext. Accordingly, the district court did not err in denying TRW’s
motion for judgment as a matter of law on the issue of liability.
TRW’s second challenge to the jury verdict is that there is not substantial
evidence to support the award of punitive damages. Under California law, in order
for a corporate employer to be liable for punitive damages, “an officer, director, or
managing agent” must authorize or ratify the act of “oppression, fraud, or malice.”
Cal. Civ. Code § 3294(b). Whether an employee is a “managing agent” depends
on the extent to which the employee exercises “substantial discretionary authority
over decisions that ultimately determine corporate policy.” White v. Ultramar,
Inc., 21 Cal. 4th 563, 576-77 (1999). To establish that a person is a managing
agent, a plaintiff must show “that the employee exercised substantial discretionary
authority over significant aspects of a corporation’s business.” White, 21 Cal. 4th
at 577; see also Major v. W. Home Ins. Co., 169 Cal. App. 4th 1197, 1221 (Ct.
App. 2009).
There is substantial evidence in the record to support a finding that
Nakamura was a managing agent. Nakamura oversaw the entire EPO department.
He exercised substantial discretion in upgrading and downgrading employee job
levels, and in deciding whether and how to conduct layoffs. These types of
decisions affect significant aspects of TRW’s business, and demonstrate that

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Nakamura was a managing agent. Because there is substantial evidence that
Nakamura was a managing agent, the district court did not err in denying the
motion for judgment as a matter of law on the issue of punitive damages.
TRW’s remaining claims, with regard to the economic damages award and
the prejudgment interest, were not raised before the district court. As a result,
those arguments have been waived on appeal. See Martinez v. Shinn, 992 F.2d
997, 1001 (9th Cir. 1993). AFFIRMED.
Lee’s appeal in docket number 06-56704 is DISMISSED for failure to file a
timely brief. 9 TH CIR. R. 42-1.

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