Tesla Seeks Retrial, Cut in ‘Staggering’ $137M Award in Racial Bias Workplace Case

By | November 17, 2021

Tesla has asked a federal court to reject what is calls a “staggering” $136.9 million jury award or order a new trial in a case involving an employee’s claim that the car maker did not do enough to protect him from racial conduct at its northern California factory in 2015 and 2016.

On Oct. 4, a jury awarded Oscar Diaz $6.9 million in compensatory damages and $130 million in punitive damages in finding that Tesla failed to take reasonable steps to protect Diaz from a hostile work environment.

Tesla disputes Diaz’s claims and denies that it failed to act on his harassment complaints. The company claims it investigated and took action against the workers about whom Diaz filed complaints. Tesla also argues that Diaz suffered no physical or economic harm, and did not need medical treatment or counseling as a result of racial slurs and other hostile acts.

Jury Orders Tesla to Pay $130M to Former Worker Over Racially Hostile Workplace

Yet in the Tesla complaint’s own language, based on the verdict, “the jury believed Tesla could and should have done more to root out alleged racism at the factory.”

Now, in a Nov. 16 filing in U.S. Court for the Northern District of California in San Francisco, Tesla is seeking a new trial and reconsideration of the damages award. “[T]he jury award here, a staggering $136.9 million, simply cannot stand,” the company told the court.

Tesla is asking the court to order a new trial on damages unless Diaz agrees to compensatory damages of $300,000 at most and a correction of the jury award of $130 million in punitive damages, which it calls “grossly excessive and blatantly unconstitutional.”

Tesla says the award is without precedent and “dwarfs awards in similar—and even in the most egregious—cases.” The company argues that even if liability stands (which it says should not), the court should grant a new trial or “steep” remittitur.

“This is not a case about physical harm, health, or safety,” argues Tesla, claiming that while “the jury felt strongly that Tesla should have done more, this is at most a case of omission or negligence, not malice or intent.”

In its recounting of other awards, Tesla says that courts in comparable cases have reduced punitive awards to a 1:1 ratio or at most a 2:1 ratio to compensatory damages, yielding punitive damages of $150,000 to $4 million. In contrast, the facts in this case support a 1:1 ratio at most, the company says.

Judge William H. Orrick is presiding in the case.

Topics Commercial Lines Business Insurance Tesla

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