Bains LLC v. Arco Products Co.
United States Court of Appeals for the Ninth Circuit
405 F.3d 764 (2005)
Bains LLC (plaintiff), a fuel-hauling company owned by three India-born brothers, contracted to haul fuel for Arco Products (defendant); an Arco employee subjected Bains's drivers to racial epithets, delayed paperwork, falsely accused them of safety violations, and made them clean up other drivers' spills, and Arco terminated the contract after the brothers complained. Bains sued for both breach of contract and racial discrimination under 42 U.S.C. § 1981; the jury awarded $50,000 in compensatory damages for the breach, only $1 in nominal damages on the discrimination claim, and $5 million in punitive damages. Arco appealed, arguing the nominal award proved the discrimination caused no economic harm, that a corporation can't suffer non-economic harm, and that the punitive award was constitutionally excessive.
Whether punitive damages are available on a claim asserting racial discrimination coupled with breach of contract, where the jury awarded only nominal compensatory damages on the discrimination claim itself.