Why it matters

To recoup costs in a Fair Employment and Housing Act (FEHA) suit, a prevailing employer must prove that a discrimination suit was “objectively groundless,” the California Supreme Court has ruled. “In FEHA cases, even ordinary litigation costs can be substantial, and the possibility of their assessment could significantly chill the vindication of employees’ civil rights,” the unanimous court wrote, citing statutory language and legislative history for support. The dispute over costs began with a discrimination suit filed by Captain Winn Williams against the Chino Valley Independent Fire District. When the fire department prevailed, it sought to recover its costs. A trial court agreed, ordering Williams to pay about $5,400. An appellate panel affirmed. But the state’s highest court said that most FEHA plaintiffs “probably experienced some period of unemployment,” and the possibility for a costs award to an employer “would tend to discourage even potentially meritorious suits by plaintiffs with limited financial resources.” The decision sets a difficult obstacle for employers to overcome to recover an award of costs, even when victorious in a FEHA suit.

Detailed discussion

Captain Winn Williams sued his former employer, the Chino Valley Independent Fire District, alleging disability discrimination in violation of the California Fair Employment and Housing Act (FEHA). A trial court granted summary judgment for the employer and the District requested costs as the prevailing party.

The court ordered Williams to pay $5,368.88 and the plaintiff appealed. He argued that in the absence of a finding that his action was frivolous, unreasonable, or groundless, the District should not have been awarded its costs. An appellate panel affirmed the order.

But emphasizing the statutory purpose behind FEHA, the state’s highest court reversed.

The question presented to the court involved the intersection of the state’s Civil Code with FEHA, the court explained. Code of Civil Procedure section 1032(b) guarantees prevailing parties in civil litigation awards of the costs expected in the litigation.

At the same time, Government Code section 12965(b) provides that “In civil actions brought under [FEHA], the court, in its discretion, may award to the prevailing party, including the department, reasonable attorney’s fees and costs, including expert witness fees.”

Williams argued that Government Code section 12965(b) operated as an express exception to Civil Code section 1032(b) and that the court’s discretion included an asymmetric understanding that a plaintiff’s action must be groundless before a cost award could be made to a prevailing defendant, pursuant to Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978), where the U.S. Supreme Court held that a prevailing defendant can receive an award of attorneys’ fees only if the plaintiff’s action was objectively groundless in certain federal civil rights actions.

Christianburg involved a Title VII claim, and the Justices wrote that the discretionary provision found in that statute was evidence of Congress’s desire to create a different standard for awards of fees to prevailing defendants than to prevailing plaintiffs. To award fees to a defendant simply because the plaintiff was ultimately unsuccessful would “substantially add to the risks” and “undercut the efforts of Congress” to promote the enforcement of Title VII, the high court said.

As Christianburg involved attorneys’ fees, several courts have held that the decision does not apply to court costs, including the Second, Fifth, Seventh, Eighth, and Ninth U.S. Circuit Courts of Appeals. However, the California Supreme Court noted that the Ninth Circuit has applied Christianburg to costs in actions under the Rehabilitation Act as well as the Americans with Disabilities Act (ADA), “a provision of which gives trial courts discretion to award the prevailing party” reasonable attorneys’ fees—and costs, unlike Title VII.

The court first determined that the FEHA statute expressly directed the use of a different standard than the general costs statute, concluding that “Government Code section 12965(b) is an express exception to Code of Civil Procedure 1032(b) and the former, rather than the latter, therefore governs costs awards in FEHA cases.” Disavowing prior case law that appeared to direct otherwise, the court acknowledged that “[w]e spoke too broadly.”

An asymmetrical rule restricting awards to prevailing defendants was “consistent with the federal court interpretations of similar language in the ADA,” the court added, analogizing FEHA to the ADA and distinguishing it from Title VII, which does not have a provision making the award of costs discretionary with the trial courts.

Turning to the issue of how such discretion should be exercised when a defendant has prevailed, the California Supreme Court adopted the standard set forth in Christianburg. While Government Code section 12965(b) does not distinguish on its face between awards to FEHA plaintiffs and defendants, the legislative history and underlying policy distinctions reflected in that history “persuade us the Legislature intended that trial courts [should] use the asymmetrical standard of Christianburg as to both fees and costs,” the court wrote.

“We find inescapable the inference that the Legislature, in giving the trial courts discretion to award fees and costs to prevailing parties in employment discrimination suits, intended that discretion to be bounded by the Christianburg rule, or something very close to it,” the court said.

The court rejected the employer’s argument that the legislative intent as reflected in the Code of Civil Procedure would also be frustrated by not allowing a prevailing defendant the recovery of costs. “Though we have no estimate of the average FEHA costs award or of the average FEHA plaintiff’s financial resources, we note that the most common basis for FEHA litigation is wrongful termination of employment,” the California Supreme Court wrote. “Even if FEHA plaintiffs have found new jobs by the time they pursue litigation, many have probably experienced some period of unemployment. The Legislature could well have believed the potential for a costs award in the tens of thousands of dollars would tend to discourage even potentially meritorious suits by plaintiffs with limited financial resources.”

In FEHA cases, even ordinary litigation costs can be substantial, the court said, “and the possibility of their assessment could significantly chill the vindication of employees’ civil rights. Statutory language and legislative history thus point in the same direction.”

Therefore, “we conclude the Christianburg standard applies to discretionary awards of both attorney fees and costs to prevailing FEHA parties under Government Code section 12965(b),” the court wrote. “To reiterate, under that standard a prevailing plaintiff should ordinarily receive his or her costs and attorney fees unless special circumstances would render such an award unjust. A prevailing defendant, however, should not be awarded fees and costs unless the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so.”

To read the opinion in Williams v. Chino Valley Independent Fire District, click here.