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Hathaway v. Idaho-Pacific Corporation

United States District Court, D. Idaho

October 3, 2019



          David C. Nye Chief U.S. District Court Judge


         Pending before the Court is Plaintiff Ross Hathaway's Motion to Amend to Seek Punitive Damages Pursuant to Idaho Code § 6-1604 (“Motion”).[1] Dkt. 145. Defendant Idaho Pacific Corporation (“IPC”) opposed the Motion.

         Oral argument on this Motion was heard September 25, 2019. At the conclusion of oral argument, the Court granted the motion; however, the Court also explained its desire to issue a formal ruling memorializing its decision. Accordingly, as was stated on the record, and for the reasons discussed below, the Court GRANTS Hathaway's Motion.


         On February 19, 2013, Hathaway claims to have slipped on potato granules, causing him to fall and injure his left thumb, hand, and shoulder. Hathaway reported the accident to Dwain Gotch, IPC's Plant Safety Manager. Gotch prepared a handwritten report detailing the accident, which Hathaway reviewed and signed (“Handwritten Report”).

         About a month later, on March 21, 2013, Hathaway went to Community Care, IPC's workers' compensation provider, after he experienced pain in his shoulders. This pain caused his arm to seize up while he was at work. On March 22, 2013, Dr. Larry Curtis informed Hathaway he had a shoulder strain from the February 19, 2013, fall. Lorina Steele, IPC's human resources administrator, received this information on the same day but believed Hathaway's pain and arm-seizure were caused by hyperglycemia. Because of this belief, she responded by telling Community Care that this injury was not workers' compensation related.

         On March 28, 2013, Dr. Curtis sent a letter to Steele stating he “fe[lt] strongly that [Hathaway's injury] is work comp related.” Dkt 145-8. The next day, Steele prepared a workers' compensation report (“First Report”) and sent it to Liberty Mutual, IPC's insurer, along with the medical documentation she had received from Community Care. In the First Report, Steele did not include any information regarding Hathaway's shoulder injury. In an email to Liberty Mutual, Steele stated she didn't know how to complete a report for Hathaway because she believed the March 21, 2013, arm seizure was not related to his prior work injury.

         Around mid-April of 2013, a co-worker informed Hathaway that IPC omitted his shoulder injury from their records. When Hathaway inquired about the omission, Gotch provided him a copy of an unsigned, typed report in place of the Handwritten Report. This typed report included only his thumb injury and did not reference his shoulder. Gotch told Hathaway to see Mike Willmore, another supervisor, about any concerns he had regarding the shoulder injury or Handwritten Report. On April 17, Hathaway met with Willmore to discuss his concerns. On April 18, IPC fired Hathaway, claiming he told another employee he would intentionally hurt himself at work. Hathaway was not given an opportunity to respond to those allegations.


         Hathaway seeks to amend his Complaint to add a claim for punitive damages on his state cause of action. Typically, in federal court, a motion to amend is governed by Rule 15 of the Federal Rules of Civil Procedure, which provides a “court should freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2). Here, however, the federal standard must be balanced with the limiting provisions of Idaho statutory and case law. Strong v. Unumprovident Corp., 393 F.Supp.2d 1012 at 1025 (D. Idaho 2005) (“[A] claim for punitive damages is substantive in nature and accordingly is controlled by relevant Idaho case law.”).

         Punitive damages are disfavored under Idaho law and should be awarded in only the most “unusual and compelling circumstances.” Cusack v. Bendpak, Inc., No. 4:17-CV-00003-DCN, 2018 WL 1768030, at *4 (D. Idaho Apr. 12, 2018) (quoting Seiniger Law Office, P.A. v. N. Pac. Ins. Co., 178 P.3d 606, 614 (Idaho 2008)). Under Idaho Code section 6-1604, a “claimant must prove, by clear and convincing evidence, oppressive, fraudulent, malicious or outrageous conduct by the party against whom the claim for punitive damages is asserted.” Idaho Code § 6-1604(1) (2010). A claim for punitive damages cannot be made in the original complaint but must be brought in a pretrial motion. Id. at §6-1604(2). After conducting a hearing, a court may grant leave to add a claim for punitive damages “if, after weighing the evidence presented, the court concludes that the moving party has established . . . a reasonable likelihood of proving facts at trial sufficient to support an award of punitive damages.” Id. Thus, a court need not determine that the movant has established clear and convincing evidence, but instead focuses on if there is a reasonable likelihood of doing so at trial. Id.

         This can be summed up as a two-part inquiry. First, a defendant's conduct must rise to the level of oppressive, fraudulent, malicious, or outrageous conduct. Id. at § 6-1604(1). This requires an “intersection of two factors: a bad act and a bad state of mind.” Myers v. Workmen's Auto Ins. Co., 95 P.3d 977, 985 (Idaho 2004) (internal quotations omitted). Put differently, a defendant must “act[] in a manner that was an extreme deviation from reasonable standards of conduct, and that the act was performed by the defendant with an understanding of or disregard for its likely consequences.” Id. If a defendant's actions do not meet this high threshold, there can be no award of punitive damages.

         Second, a plaintiff must establish a reasonable likelihood of proving that a defendant acted in such an outrageous manner. Idaho Code §6-1604(2). This requires a plaintiff do more than simply allege extreme conduct. It necessitates evidence, direct or circumstantial, that a defendant acted in a punitive manner. After a court examines all the evidence, if it finds there is a reasonable likelihood that a plaintiff can prove ...

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