On October 16, 2013, the California Supreme Court granted review in Williams v. Chino Valley Independent Fire District (2013) 218 Cal. App. 4th 73. The California Supreme Court's decision in this case will impact all specials districts, other public agencies, as well as, private employers. The Court will decide whether there is a double standard in employment discrimination cases that automatically allows prevailing plaintiffs to recover litigation costs, but only allows prevailing employers to recover litigation costs where the discrimination case is frivolous, unreasonable or groundless.
The plaintiff in this case was a former Fire Captain with the Chino Valley Fire District. Williams disability retired in 2002, sought reinstatement in 2008, and filed a lawsuit in 2008 that included claims for disability discrimination under the California Fair Employment and Housing Act ("FEHA"). The District prevailed when the Court of Appeal granted the District's petition for peremptory writ of mandate and ordered the trial court to enter an order granting the District's motion for summary judgment. Judgment was then entered in favor of the District.
The District sought costs as the prevailing party. Williams challenged this, arguing the United States Supreme Court standard set forth in Christiansburg Garment Co v. Equal Employment Opportunity Commission (1978) 434 U.S. 412 ("Christiansburg") that attorney's fees to a prevailing defendant in a discrimination lawsuit can only be awarded where the lawsuit is frivolous, unreasonable, or groundless, also applies to an award of costs. The trial court rejected this argument, awarded costs to the District, and Williams appealed. The Court of Appeal also rejected Williams' arguments and in an eighteen page published opinion held Christiansburgdoes not apply to a prevailing FEHA Defendant costs award. Williams filed a petition for review on the grounds this is an issue of statewide public importance and there is a split of appellate authority that needs resolution of this constantly recurring issue. The petition was granted. Williams and the Chino Valley Independent Fire District have both submitted their briefing to the California Supreme Court. Oral argument and the Court's decision in this case, will likely occur in 2015.
The financial consequences and basic fairness at stake in this case are enormous. In 2012, 19,839 charges were filed with the California Department of Fair Employment and Housing ("DFEH"). Special districts are consistently faced with defending lawsuits filed after the DFEH issues right-to-sue notices on these charges. The attorneys' fees and costs paid to defend these claims are significant. In Williams the District had already incurred $12,488.07 in costs by the summary judgment stage, an amount that would have more than doubled, to at least $30,000, had the case gone to trial.
Special districts have a direct financial interest in this case because it significantly impacts public funds. IfWilliams prevails, no special district or any other public or private employer will ever again be able to collect costs from the plaintiff upon prevailing in a FEHA lawsuit and after devoting considerable funds and organizational effort to do so, unless the special district spends more litigation dollars and is able to prove the very high standard, that the lawsuit is frivolous, unreasonable, or groundless.
The financial impact to special districts on a collective basis will be huge. There are about 2,300 special districts in California, with an average of about 48 employees each, for a total of 110,400 special district employees statewide. If only one employee in each special district files a FEHA lawsuit over the next five years and the average costs per lawsuit are $30,000, in just five years that would be $69,000,000. In addition to this collective impact, the impact to one special district can be tremendous. Special districts often have a flurry of discrimination lawsuits at one time or a single employee who files successive suits, placing a very large burden on that individual special district or other public entity.
If Williams prevails before the California Supreme Court, when special districts and other public agencies are sued, the burden of paying these costs would be forever shifted from non-prevailing plaintiffs to the public coffers. Special districts individually and collectively have a clear and real fiscal interest to stand up to and oppose this potentially harsh and inequitable fiscal result. CSDA's decision to file an amicus brief supporting the Chino Valley Independent Fire District in this case, which ultimately supports all its member districts, is to be saluted.