California Supreme Court Raises the Bar for Recovery of Costs by Prevailing Defendants in FEHA Cases

[author: Jennifer Lutz – Pettit Kohn Ingrassia & Lutz]

In Williams v. Chino Valley Independent Fire District, the California Supreme Court held that a prevailing defendant in a California Fair Employment and Housing Act (“FEHA”) case can only recover costs of suit where the plaintiff’s action was objectively groundless.

Loring Williams (“Williams”) worked as a firefighter for Chino Valley Independent Fire District (“Chino Valley”). Williams sued Chino Valley, alleging disability discrimination in violation of the FEHA. The trial court granted summary judgment in Chino Valley’s favor and awarded it costs totaling $5,368.88. The court of appeal affirmed, holding that the prevailing party was entitled to court costs as a matter of right pursuant to Code of Civil Procedure section 1032(b) (“Section 1032(b)”). A defendant/employer, however, may only be awarded attorneys’ fees if the plaintiff’s suit was baseless and unfounded.

On appeal, the California Supreme Court held that a defendant prevailing in a FEHA action is entitled to recover its ordinary costs only in the discretion of the trial court. Section 1032(b) guarantees that prevailing defendants are “entitled as a matter of right” to recover the costs expended in litigation “[e] xcept as otherwise expressly provided by statute.” The California Supreme Court reasoned that Section 12965(b) of the Government Code expressly excepts parties in a FEHA action from this entitlement. FEHA explicitly states that costs are awarded in the discretion of the trial judge: “[i]n civil actions brought under this section, the court, in its discretion, may award to the prevailing party, reasonable attorneys’ fees and costs.” Thus, the trial court has discretion in deciding whether to award ordinary court costs to a prevailing defendant in a FEHA action.

In holding that a prevailing defendant should only recover its costs and attorneys’ fees if the plaintiff’s action was objectively groundless, the California Supreme Court opined that plaintiffs should not be forced to bear such a high risk in order to “vindicate their statutory right against workplace discrimination.” Because even ordinary litigation fees can be substantial, the possibility of their assessment could significantly chill the vindication of employees’ civil rights.

Pursuant to this ruling, a prevailing plaintiff will generally be able to recover his or her costs and attorneys’ fees while a prevailing defendant likely will not be awarded costs or attorneys’ fees unless the court determines that the plaintiff’s claims were frivolous.