McGee

The primary issue presented in this appeal is whether a federally chartered credit union is subject to punitive damages. Appellants, Tucoemas Federal Credit Union (Credit Union) and Linda Reese, the Credit Union’s chief executive officer, contend the punitive damages awarded in favor of respondent, Kimberly McGee, on her employment discrimination claims must be reversed on the ground of sovereign immunity. According to appellants, the Credit Union, as a federal instrumentality, cannot be held liable for punitive damages absent an express waiver of its immunity from those claims. Appellants further argue that, in any event, the trial court should have reduced the punitive damage award when it reduced the compensatory damage award.

As discussed below, in the absence of certain narrow exceptions, federal “instrumentalities” that are subject to a “sue and be sued” clause are presumed to have fully waived immunity. These exceptions were not established by appellants. Accordingly, the trial court correctly concluded that appellants were not immune from the punitive damage award. Further, despite the reduction in compensatory damages, there remains a reasonable relationship…