This section contains the nature of the case and procedural background.

D operates a grocery store. P began work for D as a deli cook in June 1993. P was diagnosed with diabetes. By August 1996, P's diabetic condition had deteriorated to the point that her left leg had to be amputated below the knee. At that time, Fletcher ceased working for D and rehabilitated her leg. P returned to work in the same position at D but developed a diabetic ulcer in her right foot. P's foot ulcer required treatment and dressing at a hospital three times per week. P spilled hot gravy on her right foot with the diabetic ulcer. A co-worker assisted P in removing her sock and placed burn cream on the exposed portion of her foot. P completed and signed an Arkansas Workers' Compensation form. That form contained an authorization that permitted the release of Fletcher's medical information. P learned that her right foot had developed a staph infection. Fletcher immediately informed two coworkers and eventually conveyed the information to the local store manager. D's corporate manager, Marlene Sawyer, testified that she decided to terminate P's employment because Arkansas health regulations forbid persons infected with a communicable disease (such as staph) from working in the food preparation industry. P applied for state unemployment benefits, claiming she did not have a staph infection at the time D terminated her employment. Sawyer learned of the claim that P had not been infected with staph. Sawyer contacted P's doctor to ascertain whether Fletcher in fact had a staph infection. A Nurse Flemon, told Sawyer she needed a medical authorization form. Sawyer gave the Nurse P's signed medical information waiver from when P began working at D. Sawyer agreed to fax to the doctor's office a copy of P's authorization. Sawyer faxed a copy of P's workers' compensation form that contained a medical authorization. P's doctor wrote to Sawyer informing her that P was indeed infected with the staph virus. The doctor reiterated that P should not remove her bandages. P sued D for invasion of privacy. At the close of P's case-in-chief, D moved for judgment as a matter of law, which the district court denied. The jury found D liable on the state-law invasion of privacy claim and awarded $5,000 in compensatory damages and $50,000 in punitive damages. The court granted D's motion for judgment as a matter of law as to the punitive damages component, but denied the motion as to the underlying claim of invasion of privacy. Both parties appealed.

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