By Daniel Wiessner

(Reuters) – Tesla Inc (NASDAQ:) Inc plans to reduce a $137 Million jury award awarded to a Black worker for racial discrimination. But legal experts warned that it may be hard to reduce the verdict given the claims of widespread harassment by the automaker.

A court filing shows that a San Francisco federal jury ordered Tesla Monday to pay $130,000,000 in punitive damage to Owen Diaz. Diaz is a contract worker, who worked at Tesla’s Fremont factory as an elevator operator.

According to the jury, Tesla had failed to protect factory workers from race-based harassment. They also used racial insults and graffiti to obstruct their work. Diaz was also ordered to receive $6.9million in compensatory damages.

While punitive damages can be used to penalize and deter future illegal conduct, compensatory damages will pay victims for actual losses.

According to the U.S. Supreme Court, punitive damages shouldn’t exceed 10x compensatory damages. However, a ratio higher than 1:1 might seem excessive. Large awards made by passionate juries can be reduced at the request of trial judges and appeals courts.

Tesla will most likely challenge Monday’s verdict. Legal experts involved in the case stated that the punitive damage amount is almost 19 times greater than the compensatory damages. Tesla may also assert that the jury verdict was invalidated and seek to resolve the dispute with Diaz, experts stated.

According to Catherine Sharkey (a New York University School of Law professor), the Supreme Court Guidelines can be thrown out of date if misconduct is widespread and has an impact on workers.

The jury found Tesla to have created an hostile workplace environment that was racially motivated. This means that other employees were able to claim that Tesla tolerated racism and graffiti, which could be a reason for the huge award.

“The thought is that having an employer make a payment for the widespread harm they caused could encourage them to prevent future harm,” she stated.

Valerie Workman, Tesla Vice President, stated that the facts did not justify the award and that Tesla had taken immediate action for each time Diaz made racial remarks.

Tesla didn’t respond to requests for comment regarding a possible appeal.

Diaz lawyer Lawrence Organ stated that this case is unusual due to evidence of Fremont’s widespread usage of the N word and Tesla’s inability to address it.

Organ stated, “We believe that the jury was correct in determining Tesla’s financial situation as the richest corporation in the world.”

Many legal experts stated that Diaz’s award was the highest in discrimination cases involving one plaintiff.

In 2014, a federal jury awarded $186million to an AutoZone (NYSE 🙂 Stores Inc former manager in a case involving pregnancy bias. This verdict was widely covered in the media and was the largest of its type. AutoZone asked for a fresh trial and settled with the plaintiff in an undisclosed settlement.

Diaz was awarded a nine-figure sum. This is a rare award and sends employers a clear message that discrimination can lead to financial problems. David Lopez, Rutgers Law School professor, New Jersey, served as general counsel to the U.S. Equal Employment Opportunity Commission under the Obama administration.

In several lawsuits other than Diaz’s, Tesla was accused of allowing Fremont-based harassment to continue at its Fremont facility. This includes a class action in California state courts. According to the company, it denies these allegations and has implemented policies that will better deal with complaints regarding racially charged incidents.

Lopez stated that the jurors in Tesla’s case probably took into consideration the widespread conduct of Diaz, the company’s high value and public profile. This could be a factor if Diaz seeks to reduce the jury verdict.

Tesla has a market capitalization of almost $800billion, which makes it the most valuable automobile manufacturer in the world.

The jury asked, “What would Tesla do to make this a stinging experience for Tesla? And how can they ensure that it’s not just another expense of doing business?” Lopez said.