Defendant cannot recover costs under FEHA, absent finding the action was “objectively groundless”

Williams v. Chino Valley Independent Fire District, No. S213100 (Cal. May 14, 2015)

If the defendant prevails in a case brought under the Fair Employment and Housing Act (FEHA), can it recover courts costs as a matter of right, as provided in Code of Civil Procedure § 1032, “or only in the discretion of the trial court pursuant to Gov. Code § 12965, a provision of FEHA itself?” And if the court has such discretion, then what is the legal standard for determining a cost award to a prevailing defendant?

The California Supreme Court resolves these questions in a case brought by a firefighter who sued his fire district under the FEHA, alleging disability discrimination. The trial court granted summary judgment in favor of the defendant and then awarded it over $5,000 in costs. In so doing, the court outright rejected the plaintiff’s argument that the court should apply to the cost claim the same “asymmetrical” legal standard in Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978) – namely, under which a defendant (unlike a plaintiff), even though the prevailing party would not receive attorney fees, unless the plaintiff’s action was objectively groundless. In awarding costs to the defendant in this case, the trial court made no findings that the plaintiff’s action was frivolous, unreasonable or groundless. The Court of Appeal affirmed, concluding that the Christianburg standard applied only to attorney fees, not costs.

In a unanimous decision, the California Supreme Court reversed, holding that the award of costs was wrong, in the absence of any finding the underlying action was “objectively groundless.” The Supreme Court’s adoption of an asymmetrical Christianburg standard for awarding fees and costs under the FEHA turns on a key analogy to similar awards under the Americans with Disabilities Act, which “makes fees and costs parallel” and gives trial courts discretion to award both, relying on the Christianburg standard, even though that case only involved attorney fees. Bottom line: In an FEHA case, the award of costs are controlled by Gov. Code § 12965, not Civil Procedure Code § 1032; and the awards must conform to the asymmetrical Christianburg standard.

Just in time: Ninth Circuit construes filing deadlines in favor of plaintiffs in two different cases

In two recent decisions, the Ninth Circuit has interpreted statutes of limitations for the benefit of plaintiffs who, the defendants in each case had argued, filed their claims too late. In Escobedo v. Applebees, No. 12-16244, 2015 DJDAR 6064 (9th Cir. June 4, 2015), a former employee filed a pro per Title VII complaint charging her employer with sexual harassment. She submitted her complaint, along with an application to proceed in forma pauperis (IFP) to the district court clerk well within 90 days of receiving her “right to sue” letter from the EEOC, as required by the statute. The district court, however, did not consider her application until after the 90 day limitations period had expired; the court then denied the application because the plaintiff’s spouse allegedly had sufficient resources to pay the $350 filing fee. The court ordered plaintiff to pay the filing fee within 30 days, which she did. Nevertheless, the court then dismissed the complaint because plaintiff failed to “file” her complaint within the 90 day period.

On appeal, the Ninth Circuit reverses the dismissal, holding that the “filing” date of a complaint is the date it is delivered to the clerk, with or without an IFP application. If an IFP application is subsequently denied, the court must give the plaintiff a reasonable time to pay the fee, and if she does so, the complaint will be deemed filed as of the original submission date. Here, for good measure the court also reverses the denial of the IFP application. holding that the district court erred in assuming plaintiff’s spouse had assets which were “actually available” to help pay the filing fee.

In Le Gras v. AETNA Life Insurance Co., No. 12-56541, 2015 DJDAR 5798 (9th Cir. May 28, 2015), the Ninth Circuit also reversed a lower court decision dismissing a plaintiff’s complaint as time-barred. Here the plaintiff had received an administrative denial of his application for long-term disability benefits under a private insurance contract. The contract required applicants to exhaust administrative remedies by filing an internal appeal of the initial denial within 180 days of receipt (and also apparently provided that the appeal would be deemed “filed” as of the date it was placed in the mail to the insurer).

In this case the 180 day period expired on a Saturday. The plaintiff mailed his appeal the following Monday. The insurer declined to review the appeal, and later argued successfully in the district court that plaintiff’s subsequent court complaint was barred because the administrative appeal was filed two days late.

A divided Ninth Circuit reverses the judgment, holding as a matter of federal common law, governing the vast array of ERISA-related claims (such as this one), that if an administrative deadline falls on a weekend or holiday, it automatically is extended to the following business day. Thus plaintiff’s appeal in this case was timely, and the case is remanded for the insurer to consider the merits of the administrative appeal.

Judge Smith, in dissent, complains that that contractual deadlines were unambiguous; that plaintiff “could have mailed [his] appeal on any one of the 180 days” which followed his receipt of the denial letter; and (perhaps this was the really irritating factor for the dissent), plaintiff “never offered any reason to explain why he failed” to mail his appeal within the 180 day period.