Diaz v. Tesla, Inc.

697 F.Supp.3d 906

Owen DIAZ, Plaintiff, v. TESLA, INC., et al., Defendants.

Case No. 3:17-cv-06748-WHO

United States District Court, N.D. California

Signed October 4, 2023

Dustin Linley Collier, Collier Teti LLP, San Francisco, CA, Drew Franklin Teti, Law Offices of Drew F. Teti, San Francisco, CA, Jonathan Rosenthal, Michael Rubin, Altshuler Berzon LLP, San Francisco, CA, Elizabeth Malay, Collier Law Firm, LLP, Corte Madera, CA, Lawrence Anthony Organ, Cimone Annmarie Nunley, Navruz Avloni, California Civil Rights Law Group, San Anselmo, CA, Jba Bernard Alexander, III, Alexander Morrison + Fehr LLP, Los Angeles, CA, Marqui Jennifer Hood, California Civil Rights Law Group, Beverly Hills, CA, Verne Joshua Socks, The Armstrong Law Firm, Sausalito, CA, for Plaintiff.

Alexander Benjamin Spiro, Quinn Emanuel Urquhart and Sullivan LLP, New York, NY, Daniel C. Posner, Quinn Emanuel Trial Lawyers, Los Angeles, CA, Kathleen Marie Sullivan, Mari F. Henderson, Quinn Emanuel Urquhart and Sullivan, LLP, Los Angeles, CA, Brett David Young, ArentFox Schiff LLP, Los Angeles, CA, Asher Griffin, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan, LLP, Austin, TX, L. Julius M. Turman, Constangy, Brooks, Smith & Prophete, LLP, San Francisco, CA, for Defendant Tesla, Inc.

ORDER ON POST TRIAL MOTIONS

Re: Dkt. Nos. 454, 478, 479, 487, 489, 490

WILLIAM H. ORRICK, United States District Judge.

For the second time, a jury has rendered a verdict regarding plaintiff Owen Diaz's experience enduring a racist and hostile work environment while employed at defendant Tesla, Inc.'s factory in Fremont, California. After a retrial on compensatory and punitive damages, the jury awarded $3.75 million to Diaz, who has filed a motion for a mistrial and new trial because of the misconduct of Tesla's counsel and because the compensatory and punitive damages awards were inadequate. The lawyer's misconduct did not so permeate the entire trial to have influenced and prejudiced the jury, and the damages award was not defective. I deny Diaz's motion. Additionally, Tesla moves to reduce the punitive damage award to a 9:1 ratio with the compensatory damages award. This was the second jury that imposed such a high ratio, and its verdict is appropriate in light of the endemic racism at the Tesla factory and Tesla's repeated failure to rectify it. Tesla's motion is also denied.

BACKGROUND

I. PROCEDURAL BACKGROUND

The procedural history of this case is extensive. The complaint was filed in 2017, and the first jury trial occurred in September and October 2021. The jury found that Tesla was liable for discriminating against plaintiff Owen Diaz in violation of 42 U.S.C. § 1981 and California state law and awarded Diaz $6.9 million in compensatory damages and $130 million in punitive damages. [Dkt. No. 301].

Tesla moved for remittitur or a new trial on damages. [Dkt. No. 317]. I remitted the damages award to $1.5 million compensatory and $13.5 million punitive, finding that those awards were the highest supported by the evidence and the United States Constitution. ("Order on Post-Trial Mots.") [Dkt. No. 328]. That Order gave Diaz a choice between accepting the remittitur or adopting a proposal of Tesla's to proceed with a new trial on damages only. Id. Diaz rejected the remittitur. [Dkt. No. 347]. After extensive motion practice in which Tesla argued against a damages-only retrial— which I denied based on judicial estoppel, as Tesla moved for a damages-only retrial in the first place—I held a second damages-only trial in March 2023.¹

I limited the second trial to the evidence and witnesses presented in the first trial. [Dkt. No. 376]. At the close of Diaz's case in chief, Tesla moved orally for and filed a written motion for judgment as a matter of law, Trial Transcript² ("Tr.") 5-1010:1-20; [Dkt. No. 454], which I took under submission, Tr. 5-1009:15-25, 1010:22-1011:8. Subsequently, Diaz moved for a mistrial, [Dkt. No. 453], which I also took under submission, Tr. 5-917:9-12.

After deliberating, the jury returned an award of $100,000 for past non-economic damages, $75,000 for future non-economic damages, and $3 million for punitive damages. [Dkt. No. 463]. I entered the judgment. [Dkt. No. 471].

Diaz filed a renewed motion for a mistrial and for a new trial. ("Mot. Mistr.") [Dkt. No. 478]. Tesla opposed. ("Oppo. Mistr.") [Dkt. No. 481]. Diaz replied. ("Repl. Mistr.") [Dkt. No. 483]. Diaz subsequently filed a notice requesting that I not rule on his motion until I considered additional evidence that his counsel discovered while litigating a separate case against Tesla in state court. [Dkt. No. 485]. I ordered Tesla to respond. [Dkt. No. 486]. Tesla did so and attached the additional evidence. [Dkt. No. 488]. Diaz then filed a motion for leave to file a surreply. [Dkt. No. 490].

Tesla did not renew its motion for judgment as a matter of law but instead filed a motion to alter or amend the judgment. ("Mot. Jdgmt.") [Dkt. No. 479]. Diaz opposed. ("Oppo. Jdgmt.") [Dkt. No. 480]. Tesla replied. ("Repl. Jdgmt.") [Dkt. No. 483].

I vacated the hearing on the motions under Civil Local Rule 7-1(b). [Dkt. No. 484].

II. EVIDENCE AT TRIAL³

Diaz began working at the Tesla factory in June 2015, Tr. 3-587:3, and ended his employment about March 2016, Tr. 3-607:5-7. He testified that he was excited to work somewhere that was developing technology to help move away from fossil fuels and make the world better for his kids. Tr. 3-587:5-14, 588:12-14. But during his time at Tesla, Diaz encountered racism and hostility, including regularly being called the N-word.

Robert Hurtado, a supervisor at Tesla, called Diaz the N-word over 30 times, including by saying "[N-word], hurry up," "[N-words] are lazy," and "I wish I can get all you [N-words] fired." Tr. 3:604:23-606:8. Ramon Martinez, another Tesla supervisor, called Diaz the N-word over thirty times, said "I hate you, [N-word]," and told him "to go back to Africa." Tr. 3-603:11-604:20. Diaz's supervisor, Tamotsu "Tom" Kawasaki, testified that Martinez often used the words "mayate" and "chongo," both racial slurs in Spanish. Tr. 2-281:9-12.

Wayne Jackson, a Black program manager at Tesla, confirmed that Martinez used the word "mayate." Tr. 2-381:17-382:7. Martinez denied all of this. Tr. 3-584:18-585:1.

Diaz testified that at one point, Martinez threatened to physically attack him at work and yelled at him, "You [N-words] aren't S-H-I-T." Tr. 3-610:2-612:7. Diaz complained to a supervisor, Ed Romero, and asked him to check the surveillance cameras, though Diaz's subsequent email complaint did not specifically mention racial insults. Tr. 3-612:8-614:23; see also Tr. 3-546:25-548:2 (Romero confirming this was recounted in an email). Tesla did not follow up, show Diaz the video, or interview witnesses after that event. Tr. 3-546:25-548:2, 612:8-614:23. Jackson testified that he interviewed Diaz and Martinez after the incident but did not interview the eyewitness, Rothaj Foster, because he was told by his boss to stop the investigation before it was complete. Tr. 2-387:10-390:18, 2-394:24-395:11. Jackson said he had "[v]ery little" control over how he investigated complaints. Tr. 2-396:8-397:12. Jackie Delgado Smith, a Human Resources representative, testified that Tesla HR was never told of the incident. Tr. 5-954:15-955:6. Subsequently, Diaz and Martinez were both given verbal warnings. Tr. 2-395:21-396:7. Martinez still works at Tesla. Tr. 3-571:11.

A male coworker, Judy Timbreza, called Diaz the N-word and "mayate" and also used Spanish to call Diaz a "porch monkey." Tr. 3-589:19-593:12. Diaz testified that one of the times Timbreza called him the N-word led to an "intense" "verbal" altercation, which was broken up by Kawasaki. Tr. 3-593:5-596:1. Kawasaki confirmed that witnesses told him that Timbreza "was throwing racial slurs." Tr. 2-268:11-13, 270:5-10, 291:8-12. Romero admitted that Kawasaki told him that Diaz complained about this incident and about racial slurs, and that Diaz had said this had happened before, Tr. 3-537:20-540:3, 542:15-543:7, though on cross he also said he did not recall Kawasaki mentioning the N-word, Tr. 3-559:14-17. Romero said that Kawasaki and another employee investigated the Timbreza incident. Tr. 3-544:3-5. Diaz told the jury that Kawasaki appropriately investigated the incident and that he did not have to work with Timbreza again. Tr. 3-593:5-596:1. Kawasaki testified that he never received any training on race harassment. Tr. 2-263:9-13.

Diaz also testified that he complained to Romero several times about being called the N-word. Tr. 3-613:5-14. Romero agreed that he learned Diaz had been complaining about racist conduct, see Tr. 3-542:22-24, 543:13-14, though Romero said Diaz did not complain directly to Romero at least until the Timbreza incident, Tr. 3:561:1-4. Romero testified that he did not personally investigate Diaz's complaints and was specifically told by Tesla to not personally investigate the Timbreza incident. Tr. 3-541:22-542:1, 544:21-545:2, 549:13-550:16. Diaz and Romero both testified that Tesla never fired anyone for using the N-word. Tr. 3-552:10-19, 615:13-15.

In addition to verbal harassment, Diaz encountered physical symbols of racism and hostility throughout his time at Tesla. On his second day at work, he saw racist graffiti in the bathroom, and continued to see the N-word and swastikas in bathrooms throughout the rest of his employment. Tr. 3-623:1-8. Another Black employee and later supervisor, Michael Wheeler, testified that he regularly saw racist graffiti, including the N-word and swastikas, and that Diaz reported the racist graffiti he saw to Wheeler. Tr. 2-346:17-347:17.

Diaz also encountered a large drawing consisting of a face with large lips and a bone in its hair with the word "Boo" underneath it, which he called a "jigaboo" or "picaninny."⁴ Tr. 3-618:11-621:10.

Image materials not available for display.

Ex. 33.

Diaz testified that the picaninny was...