California Supreme Court Upholds Published Attorney Fee Award Against Employee in Meritless Race Discrimination Case

The California Supreme Court recently declined to review the Court of Appeal’s published decision in Villanueva v. City of Colton (2008) 160 Cal.App.4th 1188, which affirmed summary judgment and a $40,000 attorney fee award against the employee in a race discrimination case against BB&K’s client, the City of Colton.  That decision is now citable as precedent, and can be used as a tool by employers state-wide, both to dissuade the filing of weak employment claims, and to enhance the prospect of attorney fee recovery after the successful defense of such claims.

Plaintiff Daniel Villanueva was a senior wastewater plant operator at the City of Colton.  He was suspended without pay for several days for mishandling an alarm incident.  A few months later, his position was eliminated as part of a reduction in force, and he was bumped to a lesser paying position.  He sued, claiming race discrimination and retaliation.  The trial court granted summary judgment, finding that Colton’s actions were based on legitimate non-discriminatory reasons.  Plaintiff attempted to introduce evidence of alleged disparate treatment of Hispanic employees and racial remarks by various individuals at the City, but nearly all of his supposed evidence was excluded in response to Colton’s objections. 

Following summary judgment, Colton made a motion for attorney fees, based on Government Code section 12965(b), which authorizes an award of reasonable attorney fees to the prevailing party in a FEHA case.  Generally, fees are only awarded to prevailing plaintiffs.  However, under limited circumstances, fees can also be awarded to employers.  In essence, the employer must show that the case was objectively baseless.  The trial court made that finding, and awarded Colton nearly $40,000 in attorney fees.  Specifically, the court found that the action was in fact “unreasonable, frivolous and meritless.”

The Court of Appeal affirmed both the summary judgment and the attorney fee award, noting that Colton’s entitlement to attorney fees “cannot seriously be questioned” and finding that “the record reflects overwhelming evidence that the lawsuit was unfounded, unreasonable, and frivolous.”  The Court of Appeal acknowledged earlier case law to the effect that a trial court should consider the plaintiff’s ability to pay before deciding the amount of an attorney fee award, but affirmed the full amount of the attorney fee award – notwithstanding the trial court’s failure to undertake that analysis – based on Villanueva’s failure to produce any evidence of his inability to pay.  The only evidence before the court was a personnel action form showing that Plaintiff was earning approximately $25.00 per hour.  In essence, the Court of Appeal placed the evidentiary burden regarding ability to pay on the plaintiff.

What This Case Means For You:

1. Conventional wisdom holds that money spent on defending employment litigation is always a sunk cost.  This case, and similar cases like it, suggest otherwise (see also, Gonzales v. City of Colton, 2006 Cal. App. Unpub. LEXIS 3437 – affirming an attorney fee award under Code Civ. Proc. § 1038 in another discrimination / retaliation case).  While it is often tempting to settle employment lawsuits as quickly as possible, sometimes it makes sense to aggressively defend against weak claims, particularly where there is a possibility of recovering attorney fees from the plaintiff.
   
   
2. Consider filing a motion to recover attorney fees after prevailing on summary judgment.  Winning a case on summary judgment necessarily involves a determination that the plaintiff’s claim was weak.  Getting the judge to go a step further and find it baseless may not be that difficult.  At a minimum, the filing of the motion may be enough to convince the plaintiff to forego what might otherwise be an expensive appeal.
   
   
3. Always carefully document the reasons for an adverse employment action as far in advance as possible.  The stronger the employer’s evidence, the weaker the employee’s will appear by comparison, and the greater the likelihood of prevailing and recovering attorney fees.
   

For more information contact John Higginbotham or one of the attorneys in Best Best & Krieger’s Labor and Employment Practice Group.

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