Muniz v. United Parcel Service, Inc.
2013 U.S. App. LEXIS 24189
| 9th Cir. | 2013Background
- Muniz (plaintiff) sued UPS in California state court under FEHA for gender discrimination arising from denial of stock bonus, placement on a Manager Performance Improvement Plan (MPIP), and a two-level demotion; case removed to federal court on diversity grounds.
- After summary judgment narrowed issues, jury found UPS discriminated in the demotion and awarded Muniz $27,280.
- Muniz sought attorney fees under Cal. Gov’t Code § 12965(b), requesting ~$1.95 million (lodestar plus 1.5 multiplier); district court awarded $697,971.80 after rate reductions, hour reductions, and a 10% cut for limited success/inflation.
- UPS appealed only the fees award, principally arguing the award was excessive given the small damages and that paralegal fees relied on inadmissible hearsay.
- Ninth Circuit affirmed the award except it vacated the paralegal-fee portion and remanded for reconsideration of Susan Jaffe’s paralegal hours (hearsay issue) and for fees on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were paralegal fees (Susan Jaffe) admissibly supported? | Muniz: Mr. Jaffe's declaration verifies Ms. Jaffe’s hours based on his personal knowledge. | UPS: Spreadsheet and Mr. Jaffe’s statement are hearsay and cannot support the award. | Majority: Mr. Jaffe’s declaration was hearsay as to Ms. Jaffe’s hours; remand required to determine admissibility or apply hearsay exception. |
| Did the district court abuse discretion by not reducing fees more for limited success? | Muniz: Hours were reasonably related to the successful gender claim; reductions already applied. | UPS: Large disparity between $27,280 damages and ~$697k fees requires larger reduction; unsuccessful claims required greater deduction. | Majority: No abuse—district court properly applied lodestar approach, deducted for unrelated claims where appropriate, and its limited-success reasoning was not clearly mistaken. |
| Was the requested fee inflation appropriately addressed? | Muniz: Requested lodestar and multiplier but trial court may exercise discretion; court already reduced rates, hours, denied multiplier, and cut 10%. | UPS: Request was unreasonably inflated; Chavez and Farrar support a deeper reduction or denial. | Majority: No abuse—district court permissibly reduced rates/hours and applied a 10% cut for inflation/limited success; Chavez/Farrar inapposite. |
| Did the district court adequately explain its lodestar percentage reduction? | Muniz: Court provided tables, discussed factors, and its 10% reduction was within discretion. | UPS: Court failed to "show its work"—across-the-board 10% cut lacks explanation relative to small recovery. | Majority: Explanation sufficient for meaningful review; decline to require further remand on this ground (dissent would remand for fuller explanation). |
Key Cases Cited
- Chavez v. City of Los Angeles, 47 Cal.4th 970 (Cal. 2010) (California lodestar framework and permissive adjustments to lodestar)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (limited-success rule for fee awards; segregate hours for unsuccessful claims)
- Farrar v. Hobby, 506 U.S. 103 (U.S. 1992) (nominal damages may justify reduced fees)
- Padgett v. Loventhal, 706 F.3d 1205 (9th Cir. 2013) (district courts must adequately explain fee calculations)
- Beaty v. BET Holdings, Inc., 222 F.3d 607 (9th Cir. 2000) (California law permits fees that may exceed damages when public-policy deterrence served)
- Strong v. Valdez Fine Foods, 724 F.3d 1042 (9th Cir. 2013) (addressing hearsay arguments in fee declarations)
- Mardirossian & Assocs., Inc. v. Ersoff, 153 Cal.App.4th 257 (Cal. Ct. App. 2007) (fee declarations should be based on personal knowledge)