Employers Who Prevail in FEHA Cases Cannot Recover Costs Unless the Employee’s Claims Are Frivolous, Unreasonable, or Groundless

In Williams v. Chino Valley Independent Fires District, (No. S213100, en banc, filed 5/4/15) (Williams), the Supreme Court of California held a prevailing defendant in an action under the California Fair Employment and Housing Act (“FEHA”) may not recover court costs from an unsuccessful plaintiff unless the court finds the plaintiff’s action was frivolous, unreasonable, or groundless.

In Williams, plaintiff employee filed an employment discrimination lawsuit against his former employer, Chino Valley Independent Fire District. On summary judgment, the trial court ruled for the defendant and awarded it court costs under the mandate of California Code of Civil Procedure section 1032. The Court of Appeal affirmed.

On appeal to the California Supreme Court, plaintiff argued the award of court costs in an FEHA action was instead governed by Government Code section 12965 which grants the court discretion to award the prevailing party costs. Plaintiff further contended this discretion must be exercised according to the rule announced by the Supreme Court of the United States in Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412 (Christiansburg).

In Christiansburg, the court held a plaintiff under Title VII of the 1964 Civil Rights Act (Title VII) “should not be assessed his opponent’s attorney’s fees unless a court finds that his claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so.” In Williams, plaintiff contended the limit on the court’s discretion to award attorney’s fees to a prevailing defendant under Title VII extended to an award of court costs to a prevailing defendant in a FEHA action.

The Willams court agreed with plaintiff and reversed. The Court held (1) Government Code section 12965(b) governs cost awards in FEHA cases because it is an express exception to Code of Civil Procedure section 1032(b), and (2) the court’s discretion under Government Code section 12965(b) is bounded by the rule of Christiansburg i.e., an unsuccessful FEHA plaintiff should not be ordered to pay the defendant’s fees or costs “unless the court finds the action was objectively without foundation when brought or plaintiff continued to litigate after it clearly became so.”

Code of Civil Procedure section 1032(b) provides a prevailing party is entitled, as a matter of right, to recover costs expended in litigation “except as otherwise expressly provided by statute.” However, the Williams court concluded that by making a cost award discretionary rather than mandatory, Government Code section 12965(b) expressly excepts FEHA actions from Code of Civil Procedure section 1032(b)’s mandate. In reaching this conclusion, the Williams court looked to federal court interpretations of the Americans With Disabilities Act (ADA) which have held cost awards are governed by Christiansburg when made in actions under the ADA. The Williams court found the statutory structure of both the ADA and FEHA expressly extends the court’s discretion to the award of both attorney’s fees and costs. The court distinguished decisions to the contrary under Title VII, reasoning the language of Government Code section 12965(b) follows the language of the ADA more closely.

In concluding the Christiansburg rule applies to awards of cost in addition to awards of attorney’s fees, the Williams court looked to the legislative history and public policy underlying the FEHA, which was to authorize discretionary awards of attorney’s fees and costs in order “to encourage persons injured by discrimination to seek judicial relief.” The court found that the same concerns regarding the potential imposition of attorney’s fees which may deter parties with meritorious claims also applied to court costs. The court noted the most common claim for FEHA litigation is wrongful termination and many plaintiffs have likely experienced some period of unemployment. Thus, while court costs are often significantly less than attorney’s fees, costs in some FEHA cases may still be a considerable barrier to many plaintiffs. For these reasons, the Williams court concluded “the Christiansburg standard applies to discretionary awards of both attorney’s fees and costs to prevailing FEHA parties under Government Code section 12695(b).”

Not surprisingly, the Williams decision is a blow to employers hoping to recoup costs expended in the defense of unsuccessful FEHA claims by employees.

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May 7, 2015