## Facts

- Debbie L. Smith worked as an account service representative in a Casper, Wyoming office operated by affiliated Norwest entities (defendants), supervised by Curtis Mangus (defendant).
- Smith worked in a small, open office space shared with Mangus and several male coworkers, without partitions or privacy.
- Over about 23 months (February 1993 to January 1995), Smith alleged Mangus repeatedly made crude sexual comments and remarks about her dating “Mexicans,” often within earshot of others.
- Examples of statements attributed to Mangus included telling Smith to “get a little this weekend” so she would “come back in a better mood,” saying she “would be the worst piece of ass that [he] ever had,” and stating she would find a decent man if she stopped dating Mexicans.
- Smith testified that she left her job because she was unhappy and uncomfortable in the work environment.
- Two coworkers testified that Mangus’s remarks were inappropriate and offensive and that they affected Smith’s work product and the office environment.
- Smith sued for hostile work environment sexual harassment under Title VII.
- An advisory jury found for Smith and awarded $270,000 in compensatory damages for emotional distress and $89,000 for lost future fringe benefits.
- The district court reduced the compensatory award to $200,000 under Title VII’s statutory cap and set aside the future fringe-benefits award.
- The district court denied defendants’ motion for judgment as a matter of law (JMOL) and alternative motions for a new trial and remittitur.
- The district court awarded Smith $93,507.31 in attorney’s fees and costs and denied Smith’s request for sanctions based on conduct at a pretrial settlement conference.
- Defendants appealed the merits, damages, and fees/costs; Smith cross-appealed the denial of sanctions.

## Issues

1. Whether the evidence was sufficient to support a Title VII hostile-work-environment finding, including both an objectively hostile environment and Smith’s subjective experience of hostility.
2. Whether the district court erred in denying defendants’ JMOL, new-trial, and remittitur motions.
3. Whether the district court properly applied the Title VII compensatory-damages cap and properly set aside the advisory jury’s award for future fringe benefits.
4. Whether the district court abused its discretion in awarding attorney’s fees and costs to Smith as the prevailing party.
5. Whether the district court abused its discretion in denying Smith’s motion for sanctions tied to defendants’ conduct at a settlement conference.

## Decision

- The Tenth Circuit affirmed the judgment for Smith on her Title VII hostile-work-environment claim.
- The court held that the record permitted a finding that Mangus’s repeated sexual and ethnicity-based remarks in a small open office were sufficiently severe or pervasive to alter the conditions of employment.
- The court concluded the evidence also supported that Smith personally experienced the environment as hostile, based on her testimony and corroborating coworker testimony about effects on her work and the office.
- The court affirmed the district court’s denial of JMOL, a new trial, and additional remittitur.
- The court affirmed the reduction of compensatory damages to $200,000 under the statutory cap and affirmed setting aside the advisory jury’s award of future fringe benefits.
- The court affirmed the award of $93,507.31 in attorney’s fees and costs.
- The court affirmed the denial of Smith’s motion for sanctions.

## Legal Principles

- A Title VII hostile work environment exists when discriminatory intimidation, ridicule, or insult is sufficiently severe or pervasive to alter the conditions of employment and create an abusive working environment.
- The hostile-environment inquiry has two parts:
  - an objective component (whether a reasonable person would find the environment hostile or abusive), assessed from the totality of the circumstances; and
  - a subjective component (whether the plaintiff actually perceived the environment as hostile or abusive).
- In assessing severity or pervasiveness, courts consider factors such as frequency, severity, whether the conduct is humiliating or threatening (as opposed to mere offensive utterances), and whether it interferes with work performance.
- On appeal, sufficiency challenges to hostile-environment findings and the denial of JMOL/new-trial relief are reviewed under standards that ask whether the evidence permitted the result reached by the trial court.
- Compensatory damages for Title VII claims are subject to statutory caps under 42 U.S.C. § 1981a, and a court may modify an award to conform to the cap.
- Attorney’s fees and costs to a prevailing Title VII plaintiff under 42 U.S.C. § 2000e-5(k) are reviewed for abuse of discretion.
- Decisions on sanctions for litigation or settlement-conference conduct are reviewed for abuse of discretion.

## Conclusion

Smith v. Northwest Financial Acceptance, Inc. affirmed a Title VII hostile-work-environment judgment where a supervisor’s repeated crude sexual and ethnicity-based remarks in a small open office supported findings of both objective hostility and the plaintiff’s subjective distress; the Tenth Circuit also upheld limiting emotional-distress damages to the $200,000 statutory cap, leaving aside an advisory award of future fringe benefits, approving attorney’s fees and costs, and rejecting a request for sanctions.


Smith v. Northwest Financial Acceptance, Inc., 129 F.3d 1408 (1997)