Court Strikes Down $563K Emotional Distress Damages Jury Verdict in SOX Case as “Infected With Passion and Prejudice”

In Sharkey v. J.P. Morgan Chase & Co., 2018 WL 1229831 (S.D.N.Y. March 5, 2018), the court, inter alia, struck down a jury verdict of $563,000 for emotional distress suffered by plaintiff as a result of her alleged retaliatory termination in violation of the Sarbanes-Oxley Act of 2002 (SOX).

From the Opinion:

If Sharkey is entitled to recover emotional distress damages at all, she at most would be entitled to a garden-variety award to reflect the emotional distress that typically accompanies a wrongful firing. The evidence of her emotional distress was limited to her own testimony, which was brief and largely conclusory.

After surveying other verdicts and taking into account the objective circumstances of her termination and Sharkey’s testimony, the Court concludes that a damages award in the range of $20,000 to $50,000 would be the maximum award sustainable on this record. …

The particular amount chosen for the emotional distress damages award indicates that the jury did not follow its instructions. An award of $563,000 cannot be sustained because it is far in excess of what a reasonable jury could have awarded. But, as significantly, the particular choice of amount – an amount equal to that it awarded back pay – indicates that the jury acted out of passion in favor of Sharkey, or prejudice against J.P. Morgan, and not on the basis of the trial evidence and the law provided in the jury charge.

Noting that the jury’s verdict was “vastly out of proportion to the maximum supportable damages award” and that “[t]he excessiveness of these awards reflects a jury motivated by passion or prejudice, or both” such that there “can be no confidence in the integrity of the jury’s verdict on liability.”

Therefore, the court required retrial on all issues – not just damages – and held that an offer of remittitur was inappropriate.