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Diane L. Sanders v. City of Newport

March 17, 2011

DIANE L. SANDERS, PLAINTIFF-APPELLANT,
v.
CITY OF NEWPORT, DEFENDANT-APPELLEE.
DIANE L. SANDERS, PLAINTIFF-APPELLEE,
v.
CITY OF NEWPORT, DEFENDANT-APPELLANT.
DIANE L. SANDERS,
PLAINTIFF-APPELLEE,
v.
CITY OF NEWPORT, OPINION DEFENDANT-APPELLANT.



Appeal from the United States District Court for the District of Oregon Thomas M. Coffin, Magistrate Judge, Presiding D.C. No. 6:07-CV-00776-TC

The opinion of the court was delivered by: Paez, Circuit Judge:

FOR PUBLICATION

D.C. No. 6:07-cv-00776-TC

D.C. No. 6:07-cv-00776-TC

Argued and Submitted March 1, 2010-Portland, Oregon

Before: Richard A. Paez, Richard C. Tallman and Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Paez

OPINION

Diane Sanders, a former employee of the City of Newport ("the City"), sued the City when it refused to reinstate her after she took an approved medical leave. In her complaint, Sanders alleged that the City violated the Family and Medical Leave Act of 1993 ("FMLA"), the Oregon Family Leave Act ("OFLA"), and other state and federal laws when it failed to reinstate her after she took FMLA/OFLA leave, and ultimately fired her.*fn1 At trial, the City argued that it could not provide a safe workplace for Sanders because she suffered from multiple chemical sensitivity. In a bifurcated trial, a jury decided Sanders's FMLA and other damages claims, while the court decided Sanders's claims for equitable relief under OFLA. The jury returned its verdict in favor of the City, finding that the City did not violate Sanders's FMLA rights. On the basis of the same evidence presented to the jury, the court concluded that the City violated Sanders's OFLA rights and awarded monetary relief. Both Sanders and the City timely appealed. In her appeal, Sanders argues that the court improperly instructed the jury on the elements of her FMLA interference claim. Sanders further argues that the instructional error was not harmless and therefore she is entitled to a new trial. In its appeal, the City argues that the court was bound by the jury's implicit factual findings that it made in rendering a verdict for the City on Sanders's FMLA claim. The City thus argues that it is entitled to judgment on Sanders's OFLA claim.

For the reasons explained below, we agree with Sanders that the trial court improperly instructed the jury on the elements of her FMLA interference claim and that the error was not harmless. We therefore reverse the judgment as to this claim and remand for a new trial. Because the jury was improperly instructed, we vacate the judgment on Sanders's OFLA claim and remand it for further consideration after the retrial of her FMLA claim.

I. Factual and Procedural Background

The City employed Diane Sanders as a utility billing clerk for approximately ten years. Sanders compiled water and utility bills, issued monthly bills, and provided customer service. After the City moved Sanders's office to a new location and started to use lower-grade billing paper, Sanders began suffering health problems. Sanders consulted with a specialist, Dr. Morgan, who diagnosed her as suffering from multiple chemical sensitivity. In Dr. Morgan's opinion, the condition was triggered by handling low-grade paper at work and poor air quality in Sanders's work area. The City, in response to Sand-ers's complaints, retained an expert to test the air quality in Sanders's work area. The expert determined that the air quality met governing health and safety standards. The Oregon Occupational Safety and Health Division of the Department of Consumer and Business Services rendered a similar report after testing air samples in the copy room.

On the basis of Dr. Morgan's advice, Sanders requested and received one month of FMLA leave, starting on January 19, 2006, to see if her health would improve if she were not exposed to the chemicals in her office. Sanders's leave was later extended because she had an unrelated medical condition. After the City sent a letter to Sanders, stating that she needed "to present a fitness-for-duty certificate from [her] physician prior to being restored to employment," Dr. Morgan faxed a letter to the City stating that Sanders had recovered from her other medical condition and that he believed she could return to work, so long as she avoided use of the problem-causing low-grade paper. The City had stopped using the low-grade paper while Sanders was on FMLA leave. Sanders also submitted a fitness-for-work certificate from the surgeon who treated her unrelated medical condition. On May 5, 2006, the City informed Sanders that she would not be permitted to return to work because the City could not guarantee that her workplace would be safe for her due to her chemical sensitivity. The City and Sanders continued to correspond throughout May and June, during which time Sanders consistently requested reinstatement and assured the City that she was ready to return to work.

On January 8, 2007, the City sent Sanders a letter advising her that her employment would be terminated that same day "due to the restrictions placed on [her] by [her] physician, Dr. Morgan, which the City is unable to accommodate." Sanders filed an administrative appeal of the decision to terminate her employment. In response to her appeal, the City informed her: "The decision to terminate your employment was made for the reason that the City could not provide a safe workplace for you, given your sensitivity to chemicals and the lack of knowledge as to the chemicals or concentrations that may cause a reaction."

Sanders filed her district court complaint in July 2007, alleging violations of the Americans with Disabilities Act ("ADA"), FMLA, OFLA, and other federal and state laws. Following discovery, the City moved for summary judgment on all claims. The district court granted the City's motion on Sanders's workers' compensation claim, but denied summary judgment on all other claims. At trial, the court impaneled a jury to hear Sanders's FMLA and other damages claims. Because the remedial relief that Sanders sought under OFLA and a state law retaliation claim was equitable in nature, these claims were severed and deferred by the court until the conclusion of the jury trial.

Although the parties discussed the nature of Sanders's FMLA claim with the court at a pretrial conference, it was not entirely clear at the outset of the trial whether Sanders was pursuing a retaliation or interference claim. As the trial progressed, the court, with clarification from counsel, determined that Sanders was pursuing an interference claim. With this clarification, the judge stated that he would modify the proposed jury instructions and verdict form to instruct the jury to consider whether "plaintiff prove[d] by a preponderance of the evidence that defendant failed to reinstate her . . . . [a]fter she took family medical leave[.]"

The next day, after discussion with counsel, the court determined that the FMLA instruction needed further revision. The City argued that the court's proposed instruction did not require Sanders to prove that the City's decision to terminate her was unlawful. In the City's view, an employer should only be liable if it acted wrongfully in terminating its employee, and the employee should bear the burden of proving as much. In response, the court proposed to modify the instruction and verdict form to instruct the jury to consider whether "plaintiff prove[d] by a preponderance of the evidence that the defendant, without reasonable cause, failed to reinstate her after she took leave[.]" (Emphasis added). Sanders objected, arguing that the proposed revision was a misstatement of the law. The following colloquy between the court and counsel ensued:

The Court: I suppose it boils down to the issue of whether [the City's] perception of [Sanders] as being unable to return to the workplace without getting sick, whether that's reasonable cause or not.

[Sanders]: I think that . . . where the employer says we can't . . . we're not bringing you back because of this doctor's note that restricts you in some way that we can't do, that's an affirmative defense that they can raise, certainly. They haven't at this point. They have to show that ...


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