On Tuesday, June 7, U.S. District Judge William Orrick in San Francisco stated that Owen Diaz had two weeks to accept a $15 million payout for racial abuse at the Tesla Fremont Factory. Diaz was a former elevator operator at Tesla’s assembly plant in California. He accused Tesla of racial discrimination.
In an order released on Tuesday, Orrick reaffirmed his decision to reduce the jury’s award from nearly $137 million to $15 million. He stated that Diaz had no controlling question of law to justify an immediate appeal of the reduced award. Orrick further explained that permitting an immediate appeal “would further delay [the] resolution of a case that is already five years old.”
Lawyers representing Diaz disagreed with Orrick’s statements. They said a question of law related to damages for emotional distress justified an immediate appeal.
Judge Orrick reduced the jury’s award to Diaz on April 13. He also rejected Tesla’s request for a new trial. Diaz’s $15 million payout includes $1.5 million for compensatory damages and $13.5 million for punitive damages. The jury initially awarded him $137 million in damages, comprised of $6.9 million for emotional distress and $130 million worth of punitive damages.
At the time, the Judge concluded that the award for compensatory damages was excessive but would not reduce it to $300,000 as Tesla requested. He also lowered the jury’s award for punitive damages. Orrick’s decision was based on a Supreme Court precedent that set constitutional limitations on punitive damages. Under the Supreme Court precedent, punitive damages are typically less than ten times compensatory damages. The Judge awarded Diaz $13.5 million in punitive damages, nine times the amount of compensatory damages.