## Facts

- Susan M. Davey worked as a test engineer for Martin Marietta Corporation (later Lockheed Martin Corporation) in a defense systems department from 1987 until her 1993 layoff.
- In 1991, after receiving a low layoff ranking from her supervisor, Davey filed an internal ethics complaint alleging sex discrimination.
- Davey alleged (1) sex discrimination in 1992 and (2) retaliation in 1993 when she was selected for layoff during a reduction in force.
- In 1997, Davey sought reemployment with Lockheed Martin and was not rehired; she alleged the refusal to rehire was retaliation for her earlier complaint activity.
- At trial, the jury found for Lockheed Martin on the 1992 discrimination and 1993 retaliation claims, but found for Davey on the 1997 retaliatory failure-to-rehire claim.
- The district court awarded Davey compensatory damages, punitive damages, back pay, front pay, prejudgment interest, and attorney’s fees.
- After the Supreme Court’s decision recognizing an employer’s “good-faith efforts to comply with Title VII” as a bar to punitive damages, Lockheed Martin sought to amend the final pretrial order shortly before trial to add that affirmative defense; the district court refused, citing unfairness and lack of discovery.

## Issues

1. Whether the district court abused its discretion under Fed. R. Civ. P. 16(e) by refusing to modify the final pretrial order to permit Lockheed Martin to assert a good-faith compliance affirmative defense to punitive damages.
2. Whether the jury instructions on the 1997 retaliation claim were reversible error for not using “motivating factor” wording.
3. Whether the district court clearly erred in sustaining a Batson challenge to one of Lockheed Martin’s peremptory strikes.
4. Whether the attorney-fee award required reconsideration given the relationship between the fee analysis and the punitive damages award.

## Decision

- The court vacated the punitive damages award on the 1997 retaliation claim and remanded for a new trial limited to punitive damages.
- The court held the district court abused its discretion under Rule 16(e) by denying amendment of the final pretrial order to add the good-faith compliance defense; any prejudice was curable through limited discovery and, if needed, a short continuance.
- The court affirmed the liability finding on the 1997 retaliatory failure-to-rehire claim and affirmed the compensatory and equitable monetary relief tied to that claim (including back pay, front pay, and prejudgment interest).
- The court affirmed the district court’s jury instructions when viewed as a whole, finding no prejudice warranting reversal.
- The court affirmed the Batson ruling, concluding the trial court’s credibility-based determination was not clear error.
- The court vacated the attorney’s fee award and remanded for reconsideration after the punitive-damages retrial.

## Legal Principles

- A final pretrial order may be modified under Fed. R. Civ. P. 16(e) only to prevent manifest injustice; courts weigh timeliness, prejudice and ability to cure, trial disruption, and bad faith or willfulness.
- In Title VII cases, an employer may avoid punitive damages by proving good-faith efforts to comply with Title VII; the defense operates as an affirmative defense to punitive damages.
- When an error affects only punitive damages, an appellate court may order a retrial limited to punitive damages while leaving liability and compensatory relief intact.
- Jury instructions are reviewed in their entirety; imperfect phrasing is not reversible absent prejudice.
- Batson rulings are reviewed for clear error and commonly turn on the trial court’s credibility findings.

## Conclusion

The Tenth Circuit upheld the jury’s finding that Lockheed Martin retaliated in 1997 by refusing to rehire Davey, but vacated punitive damages because the employer was wrongly barred from presenting a good-faith compliance defense; it ordered a new trial limited to punitive damages and required a renewed attorney-fee analysis after that retrial.


Davey v. Lockheed Martin Corp., 301 F.3d 1204 (10th Cir. 2002)