Pollock v. Tri-Modal Distribution Services, Inc.Pollock v. Tri-Modal Distribution Services, Inc.
Plaintiff Pamela Pollock is a customer service representative at defendant Tri-Modal Distribution Services, Inc. (Tri-Modal), a corporation that ships freight by truck. She alleges that Tri-Modal passed her over for several promotions in part because she refused to have sex with defendant Michael Kelso, Tri-Modal‘s executive vice-president. We granted review to address two questions. First, when does the statute of limitations begin to run in a failure to promote case brought under the harassment provision of the Fair Employment and Housing Act (FEHA) (
Second, does
Kelso initiated a dating relationship with Pollock in 2014. He wanted the relationship to become sexual, but Pollock refused and ended the relationship in 2016. In this action, Pollock alleges that Tri-Modal and Kelso denied her a series of promotions even though she was the most qualified candidate, and that her refusal to have sex with Kelso was a substantial factor motivating those adverse employment actions. On April 18, 2018, she filed an administrative complaint with the Department of Fair Employment and Housing (DFEH), alleging quid pro quo sexual harassment in violation of the FEHA.
Although Pollock‘s administrative complaint challenged the promotion of several individuals, this appeal concerns the promotion that went to Leticia Gonzalez. Gonzalez received and accepted an offer of promotion in March 2017, and the promotion took effect on May 1, 2017. There is no evidence as to whether or when Tri-Modal notified Pollock that she did not receive the promotion that went to Gonzalez. And there is no evidence that Pollock knew or had reason to know that Gonzalez was offered the promotion and accepted it in March 2017.
The March 2017 and May 2017 dates are relevant because when Pollock filed her administrative complaint,
The trial court concluded that the failure to promote occurred in March 2017, when Gonzalez was offered the promotion and accepted it. Because Pollock did not dispute that Gonzalez received and accepted the promotion offer in March 2017, the court found no triable issue of fact as to Kelso‘s statute of limitations defense and granted his motion for summary judgment.
The Court of Appeal agreed that Pollock‘s claim was time-barred. (Ducksworth v. Tri-Modal Distribution Services (2020) 47 Cal.App.5th 532, 545–547 (Ducksworth); the named plaintiff, Bonnie Ducksworth, is not a party to this appeal.) It explained that “[t]he statute of limitations for a failure to promote runs from when the employer tells employees they have been given (or denied) a promotion. That date is key, and not the date when the promoted worker actually starts the new work.” (Id. at p. 546.) Construing the term “occurred” in
After concluding that the trial court properly granted Kelso‘s summary judgment motion and the summary judgment motions of two other defendants, the Court of Appeal awarded
We granted review.
II.
We begin with the statute of limitations. A statute of limitations “does not begin to run until the cause of action accrues,” and a cause of action accrues at the moment when the party alleging injury is entitled to ” ’ “begin and prosecute an action thereon.” ’ ” (Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487 (Romano).) An employee who wishes to file suit under the FEHA “must exhaust the administrative remedy provided by the statute by filing a complaint with the” DFEH, “and must obtain from the [DFEH] a notice of right to sue.” (Romano, at p. 492.) “The timely filing of an administrative complaint” before the DFEH “is a prerequisite to the bringing of a civil action for damages.” (Ibid.)
At the time of the alleged misconduct here, the FEHA provided that no administrative complaint alleging a violation of its provisions could be filed with the DFEH “after the expiration of one year from the date upon which the alleged unlawful practice or refusal to cooperate occurred.” (
A.
At the outset, we note that Pollock‘s failure to promote claim was pleaded as a quid pro quo sexual harassment claim under
Our precedent explains that the primary difference between discrimination claims and harassment claims is that discrimination claims “address[] only explicit changes in the ‘terms, conditions, or privileges of employment’ [citation]; that is, changes involving some official action taken by the employer.” (Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 706 (Roby), italics added by Roby.) “In the case of an institutional or corporate employer, the institution or corporation itself must have taken some official action with respect to the employee,
“The FEHA‘s distinction between discrimination and harassment does not mean that harassment claims are relegated to a lower status.” (Roby, supra, 47 Cal.4th at p. 707.) To the contrary, “an aggrieved employee can obtain full compensation for any resulting injury,” whether the alleged unlawful employment practice at issue constitutes discrimination, harassment, or both. (Ibid.) An employee who is the victim of discrimination based on some official action, such as a failure to promote, can “also be the victim of harassment” based on the same or similar underlying conduct. (Ibid.)
Indeed, “[a]lthough discrimination and harassment are separate wrongs, they are sometimes closely interrelated, and even overlapping, particularly with regard to proof.” (Roby, supra, 47 Cal.4th at p. 707.) In a case where a supervisor threatens to deny an employee a promotion unless the employee provides the supervisor with sexual favors and the threat is realized after the employee refuses, the aggrieved employee can bring suit against both the employer and the supervisor. The cause of action against the employer may take the form of a
With this backdrop in mind, we note there are two ways to understand a quid pro quo harassment claim. We express no view on whether one or both views are correct; our case law has not addressed this issue, and it was not briefed by the parties here. One view is that a quid pro quo harassment claim targets essentially the same unlawful conduct as a hostile work environment claim: the communication of an offensive message in the workplace. Hostile work environment harassment occurs when a sufficiently severe or pervasive offensive message is communicated to the aggrieved employee in the workplace
Alternatively, quid pro quo harassment may be understood as the very act of conditioning an employment benefit on submission to unwanted sexual advances. The notion is that the act itself comprises a distinct wrong, separate and apart from communication of an offensive message in the workplace. On this view, a quid pro quo harassment claim alleging unlawful denial of a promotion directly challenges the denial as based on forbidden considerations; the promotion denial does not play a meaningfully different role from the one it would play in a discrimination lawsuit brought against an employer.
In this case, we are addressing a quid pro quo sexual harassment claim that Pollock raised against Kelso, her supervisor and the executive vice-president of Tri-Modal. Our task is to determine when the actionable harassment “occurred” within the meaning of
As a textual matter, it is reasonable to say that a failure to promote has “occurred” when the person seeking the promotion has been informed or is otherwise put on notice that he or she will not receive the promotion. But there are other plausible understandings of when a failure to promote has “occurred,” such as the moment when the employer decides not to promote the aggrieved employee or when the employer decides to promote someone else. The term “occurred,” by itself, is susceptible to more than one interpretation.
Our task in construing any statute is ” ‘to determine the Legislature‘s intent and give effect to the law‘s purpose.’ ” (Lopez v. Sony Electronics, Inc. (2018) 5 Cal.5th 627, 633–634.) When enacting the FEHA, “the Legislature spoke at length about its purposes.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 223.)
The Legislature further declared that in order to eliminate discrimination and harassment in the workplace, “it is necessary to provide effective remedies that will both prevent and deter unlawful employment practices and redress the
The Court of Appeal took the view, adopted by Kelso here, that “according to the plain meaning of the word ‘occurred,’ ” Pollock‘s injury occurred when Tri-Modal decided not to “promote the deserving Pollock because of sexual harassment.” (Ducksworth, supra, 47 Cal.App.5th at p. 546.) This reading of “occurred” is not unreasonable. But it includes no mention of notice to the employee. The Court of Appeal‘s holding would presumably allow an employer or supervisor to decide not to promote an employee but never inform the employee of that decision, and then later rely on the employer‘s or supervisor‘s own record of when the decision was made to assert that the limitations period for challenging the decision has expired. This is at odds with the principle that “section 12960 should not be interpreted to impose serious practical difficulties on an employee‘s ability to vindicate” the right to hold employment without experiencing discrimination or harassment “if it can be reasonably interpreted otherwise.” (Richards, supra, 26 Cal.4th at p. 821; see People v. Gonzales (2018) 6 Cal.5th 44, 50 [“The words of a statute must be construed in context, keeping in mind the statutory purpose.“].)
“In order to carry out the purpose of the FEHA to safeguard [this right], the limitations period set out in the FEHA should be interpreted so as to promote the resolution of potentially meritorious claims on the merits.” (Romano, supra, 14 Cal.4th at pp. 493–494.) We have difficulty seeing how it
Aspects of the Court of Appeal‘s opinion implicitly recognize the importance of notice. At one point, the court said that “[t]he statute of limitations for a failure to promote runs from when the employer tells employees they have been given (or denied) a promotion.” (Ducksworth, supra, 47 Cal.App.5th at p. 546, italics added.) In light of this statement, it is unclear why the court focused on “when Tri-Modal offered and Gonzalez accepted the promotion” (ibid.) instead of when Tri-Modal told Pollock she had been denied the promotion.
Toward the end of its opinion, the Court of Appeal posed a hypothetical in which “Kelso would tell Pollock [in March 2017], ‘Today I am giving this promotion to someone else, even though you deserve it, because you rejected my sexual advances.’ Such a candid admission would describe grossly illegal discrimination that ‘occurred’ in March 2017, when Kelso denied Pollock a benefit she deserved because Kelso wanted sex from her and she would not give it. So that date triggered the one-year clock. That Kelso allegedly was less than candid would not change anything fundamental about this analysis.” (Ducksworth, supra, 47 Cal.App.5th at p. 547.) Kelso need not have spelled out an illicit reason for giving the promotion to someone else for the clock to start running. (See Williams v. City of Belvedere (1999) 72 Cal.App.4th 84, 92–93 (City of Belvedere); post, at p. 17.) But a key fact in the hypothetical is that Kelso informed Pollock of his decision not to promote her. The Court of Appeal did not elucidate the full import of its hypothetical when it held that the moment of injury ” ‘occurred’ ” simply when Tri-Modal decided not to promote Pollock. (Ducksworth, at p. 546.) “To the extent [Kelso] may be understood to ask this court to adopt a rule that discourages lawsuits alleging wrongful [failure to promote] by setting the statute of limitations to run at a time that makes it inconvenient or impossible for the employee to bring a lawsuit, we decline to do so. We do not view the statute of limitations as properly performing such a function.” (Romano, supra, 14 Cal.4th at p. 500.)
C.
The parties do not cite, and we have not found, any published authorities on the meaning of “occurred” in
Pollock contends that under Romano, the limitations period for her harassment claim did not begin to run until Gonzalez‘s promotion took effect. But this conflates a promotion with a failure to promote. Consistent with Romano, a promotion may be said to occur when an employee begins working in the new position; until that point, no promotion has occurred, even if the employee has been selected for promotion. But an employer‘s refusal to promote an employee — the “unlawful employment practice” alleged here (
Suppose Employees A, B, and C apply for a promotion, and Employee A is the first applicant to be rejected. Once the employer tells Employee A that he or she will not be promoted, the employer‘s refusal to promote Employee A has occurred. (Cf. City of Belvedere, supra, 72 Cal.App.4th at p. 92 [distinguishing Romano and concluding that the statute of limitations began to run in a FEHA failure to hire case when the employer informed the plaintiff by letter that he would not be hired].) It does not matter whether or when the employer decides to promote Employee B or Employee C, or whether or when the promotion takes effect. Pollock‘s approach is unpersuasive because, in many cases, an employer may refuse to promote the aggrieved employee well before promoting another employee. Moreover, Pollock‘s rule provides no guidance in cases where the denial of a promotion to one employee is not accompanied by a decision to promote another. (See Reynolds v. School Dist. No. 1, Denver, Colo. (10th Cir. 1995) 69 F.3d 1523, 1535 [“the elimination of a position, if done for racially motivated reasons, can potentially form the basis of a discrimination claim” in a failure to promote
In determining how
In Delaware State College v. Ricks (1980) 449 U.S. 250 (Ricks), the high court addressed whether a college professor, Columbus Ricks, “timely complained under the civil rights laws that he had been denied academic tenure because of his national origin.” (Id. at p. 252.) On March 13, 1974, the college board of trustees formally voted to deny Ricks tenure. On June 26, 1974, the college, following its usual practice after denying tenure, offered Ricks a one-year ” ‘terminal’ ” contract expiring on June 30, 1975, which he accepted. (Id. at p. 253 [“When that contract expires, the employment relationship ends.“].) Meanwhile, Ricks filed a grievance with the college board of trustees to contest the tenure denial, and the board denied his grievance on September 12, 1974. On April 4, 1975, Ricks filed a complaint under Title VII with the Equal Employment Opportunity Commission (EEOC). As mentioned, Title VII requires a plaintiff to file a complaint with the EEOC within 180 days “after the alleged unlawful employment practice occurred.” (
Rejecting this argument, the high court held that the “alleged discrimination occurred — and the filing limitations period[] therefore commenced — at the time the tenure decision was made and communicated to Ricks.” (Ricks, supra, 449 U.S. at p. 258, italics added; see id. at p. 259 [“the only challenged employment practice” was the denial of tenure, and it “occur[red] before the termination date“].) The EEOC urged the
The district court in Ricks concluded that the limitations period “had commenced to run by June 26, 1974,” when the college offered Ricks a ” ‘terminal’ ” one-year contract. (Ricks, supra, 449 U.S. at p. 261.) The high court declined to decide “whether the District Court correctly focused on the June 26 date, rather than the date the Board communicated to Ricks its unfavorable tenure decision made at the March 13, 1974, meeting,” because Ricks‘s EEOC complaint was “not timely filed even counting from the June 26 date.” (Id. at p. 262, fn. 17.) The high court explained: “By June 26, the [faculty committee on promotions and tenure] had twice recommended that Ricks not receive tenure; the Faculty Senate had voted to support the tenure committee‘s recommendation; and the Board of Trustees formally had voted to deny Ricks tenure. In light of this unbroken array of negative decisions, the District Court was justified in concluding that the College had established its official position — and made that position apparent to Ricks — no later than June 26, 1974.” (Id. at p. 262, fn. omitted, italics added; see id. at p. 262, fn. 16 [“We recognize . . . that the limitations periods should not commence to run so soon that it becomes difficult for a layman to invoke the protection of the civil rights statutes. [Citations.] But . . . there can be no claim here that Ricks was not abundantly forewarned.“].)
In Lukovsky v. City and County of San Francisco (9th Cir. 2008) 535 F.3d 1044, the court observed that Ricks “focused on when the plaintiff became aware of the adverse employment decision” and applied this focus to determine when the limitations period began to run on an unlawful failure to hire claim. (Lukovsky, at p. 1050, citing Ricks, supra, 449 U.S. at pp. 258–259, 261–262.) The Ninth Circuit clarified that “the claim accrues upon awareness of the actual injury, i.e., the adverse employment action, and not when the plaintiff suspects a legal wrong.” (Lukovsky, at p. 1049; see id. at p. 1051 [plaintiffs’ claims accrued, and the limitations periods began to run, when they “knew they had been injured and by whom, [citation], even if at that point in time the plaintiffs did not know of the legal injury, i.e., that there was an allegedly discriminatory motive underlying the failure to hire“].) Other federal circuits are in accord. (See, e.g., Hanani v. State of N.J. Dept. of Environmental Protection (3d Cir. 2006) 205 Fed.Appx. 71, 76 [failure to promote]; Amini v. Oberlin College (6th Cir. 2001) 259 F.3d 493, 498–500 (Amini) [failure to hire]; Merrill v. Southern Methodist Univ. (5th Cir. 1986) 806 F.2d 600, 605 [tenure denial].)
Although many cases, like Ricks, involve clear notification by the employer to the employee of the adverse employment decision, others do not. In assessing when a limitations period begins to run, courts have spoken in terms of actual or constructive notice — i.e., ” ‘[o]nce the employee is aware or reasonably should be aware of the employer‘s decision, the limitations period commences.’ ” (Amini, supra, 259 F.3d at p. 498, quoting EEOC v. United Parcel Service, Inc. (6th Cir. 2001) 249 F.3d 557, 561–562; see Harris v. City of New York (2d Cir. 1999) 186 F.3d 243, 247 (Harris); Miller v. Beneficial Management Corp. (3d Cir. 1992) 977 F.2d 834, 843 (Miller).) Determining what an employee knew or should have known requires a careful examination of the circumstances in each case.
In Harris, a police officer, Gerard Harris, alleged (among other claims) that he had been denied promotion to sergeant. (Harris, supra, 186 F.3d at pp. 246–247.) Harris had taken a civil service exam that placed him on a four-year eligibility list for sergeant from April 7, 1989 to April 7, 1993. In August 1991, Harris suffered a back injury in the line of duty; he was placed on ” ‘restricted duty’ ” status and later applied for and received disability benefits. (Id. at p. 246.) On August 31, 1994, he filed an EEOC complaint alleging that the city unlawfully discriminated against him on the basis of disability in refusing to promote him to sergeant, and he filed suit in district court on October 4, 1996. (Id. at pp. 247–248; see id. at p. 247 [statute of limitations under the Americans with Disabilities Act,
In Miller, an attorney, Elizabeth Miller, alleged that her employer refused to promote her to vice-president in violation of Title VII, the Age Discrimination in Employment Act (ADEA), and other laws. (Miller, supra, 977 F.2d at p. 841; see id. at p. 842 [limitations periods for filing EEOC complaint under Tit. VII,
The district court held that the limitations periods for her failure to promote claim began to run in July 1984, reasoning that ” ‘Miller does not assert she was unaware that Walsh‘s position was Vice President when she accepted the position as Associate Counsel. Accordingly, Miller had actual knowledge of any alleged discrimination [in the company‘s failure to promote her to vice-president] at the time she accepted and assumed the position in July 1984.’ ” (Miller, supra, 977 F.2d at p. 842.) But the Third Circuit cited evidence that from September 1987 to June 1988, Miller‘s supervisor had told her that “she deserved to be a Vice President” and “she would soon be getting the title of Vice President,” and had “recommended Miller for promotion to Vice President.” (Id. at p. 843.) Miller argued it was not until
In this case, Pollock focuses on the effective date of Gonzalez‘s promotion, and Kelso focuses on when Gonzalez received and accepted the promotion offer. Both dates, depending on how Tri-Modal communicated the information, may be relevant evidence of when Pollock knew or should have known she did not get the promotion. But neither is sufficient by itself to trigger the limitations period.
Consistent with the case law construing analogous language in federal antidiscrimination statutes, we hold that a FEHA harassment claim based on a failure to promote accrues, and the limitations period under section 12960 begins to run, when the aggrieved employee knows or reasonably should know of the employer‘s decision not to promote him or her. It is not enough to identify when an employer made its decision not to promote the employee; what starts the clock is the employee‘s actual or constructive knowledge of the employer‘s decision.
D.
The approach we elucidate today “protect[s] defendants from the necessity of defending stale claims and require[s] plaintiffs to pursue their claims diligently.” (Romano, supra, 14 Cal.4th at p. 488; see ibid. [statutes of limitation “are ’ “designed to promote justice by preventing surprises through
This approach also protects the employee‘s interests. Because the clock starts running only when the employee knows or reasonably should know of the adverse promotion decision, any period of time during which the decision is not disclosed or otherwise known to the employee does not count against the limitations period. The rule urged by Kelso, which focuses on the employer‘s moment of decision without requiring notice to the employee, would reward secrecy by employers to the potential detriment of employees with legitimate claims. As noted, we must interpret section 12960 “so as to promote the resolution of potentially meritorious claims on the merits.” (Romano, supra, 14 Cal.4th at p. 494.)
Further, by leaving an employee guessing as to when an employer has made an adverse promotion decision, Kelso‘s rule may incentivize plaintiffs to file claims as early as possible to avoid being time-barred, even if the employer (unbeknownst to the employee) has not yet “established its official position.” (Ricks, supra, 449 U.S. at p. 262.) Requiring actual or constructive notice reduces the risk of plaintiffs filing unripe claims. (Cf. Romano, supra, 14 Cal.4th at pp. 494–495 [
Finally, our construction of the FEHA statute of limitations is not at odds with
We reject Kelso‘s argument for two reasons that track the two views of quid pro quo harassment described above. (Ante,
Under the second view of quid pro quo harassment, the failure to promote Pollock is relevant not because it communicates an offensive message, but instead because it demonstrates that Kelso in fact conditioned a job benefit on Pollock‘s submission to his sexual advances. Kelso asserts that, on this view, the 90-day delayed discovery provision is relevant to Pollock‘s claim because
But Kelso‘s argument misapprehends the import of
We express no view on whether City of Belvedere correctly held that equitable tolling is unavailable in light of the delayed discovery provision. (Cf. McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 107 [“We discern in [
The provision addresses a situation where “a person allegedly aggrieved by an unlawful practice first obtained knowledge of the facts of the alleged unlawful practice after the expiration of one year from the date of their occurrence.” (
In sum,
A further question that divides the parties is whether the burden of proving when the employee knew or should have known of the adverse promotion decision falls on the plaintiff or defendant. Pollock argues that because notice to the aggrieved employee is an element the statute of limitations defense, the burden falls on the defendant. Kelso contends that the burden falls on the aggrieved employee to prove lack of knowledge in response to the defendant‘s statute of limitations defense. We hold that Pollock has the better view.
The statute of limitations is an affirmative defense, and as with any affirmative defense, the burden is on the defendant to prove all facts essential to each element of the defense. (
Kelso argues that “[e]ven if it is true that the statute of limitations is an affirmative defense and defendants must prove that the plaintiff‘s claim is untimely, a plaintiff seeking to establish a triable issue of material fact regarding the affirmative defense has the burden of producing evidence to create a dispute.” In his view, once he “proved that Pollock‘s claimed harm accrued before the one-year limitation period, the burden shifted to Pollock to prove that she did not have knowledge, did not discover, and did not know of facts that would cause a reasonable person to suspect she has suffered harm that was caused by someone‘s wrongful conduct.”
But Kelso has not proven that Pollock‘s claimed harm accrued before the beginning of the one-year statute of limitations period. The Directions for Use for CACI No. 454 explain that ” ‘[c]laimed harm’ refers to all of the elements of the cause of action, which must have occurred before the cause of action accrues and the statute of limitations begins.” Kelso has
Kelso relies on Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, but that case does not help his argument. Aguilar involved a summary judgment motion contesting a core element of the plaintiff‘s underlying antitrust claim. (Id. at pp. 838–840.) We noted that “how the parties moving for, and opposing, summary judgment may each carry their burden of persuasion and/or production depends on” the issues addressed in the given summary judgment motion. (Id. at p. 851.) For example, we explained that how the parties meet their respective burdens can depend on ”which [party] would bear what burden of proof at trial.” (Ibid.) Because Aguilar does not discuss how the parties might meet their respective burdens with regard to a statute of limitations defense, it does not speak to the question here.
Kelso also relies on CACI Nos. 454 and 455 to argue that if Pollock did not know of the adverse promotion decision in March 2017, the burden was on her to invoke the common law delayed discovery rule. Courts have relied on that rule to toll or expand the statute of limitations in cases where starting the limitations period on the date of the plaintiff‘s injury would be ” ‘manifestly unjust’ ” because “[t]he injury or the act causing the injury, or both, have been difficult for the plaintiff to detect.” (April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 826, 831.) The rule has been applied in cases involving breach of a fiduciary relationship, professional malpractice, underground trespass, personal injury, invasion of the right to privacy, libel,
Here, however, discovery of the adverse promotion decision is part of the accrual rule. (See Cada v. Baxter Healthcare Corp. (7th Cir. 1990) 920 F.2d 446, 450 [elucidating the distinction “between the accrual of the plaintiff‘s claim and the tolling of the statute of limitations“].) The date of accrual “is not the date on which the wrong that injures the plaintiff occurs, but the date — often the same, but sometimes later — on which the plaintiff discovers that he has been injured. . . . The discovery rule is implicit in the holding of Ricks that the statute of limitations began to run ‘at the time the tenure decision was made and communicated to Ricks,’ 449 U.S. at 258, 101 S.Ct. at 504 (emphasis added).” (Ibid.) As case law indicates (ante, at pp. 12–20), a refusal to promote has not “occurred” for purposes of the statute of limitations until the aggrieved employee has had actual or constructive notice.
In sum, when a defendant asserts a statute of limitations defense against a FEHA failure to promote claim, the burden is on the defendant to prove when the plaintiff knew or should have known of the adverse promotion decision. The Court of Appeal in this case concluded that the statute of limitations began to run when Tri-Modal offered the promotion to Gonzalez and she accepted it. It did not discuss when Pollock knew or should have known that she was denied the promotion, nor did it discuss whether Kelso, in asserting his statute of limitations defense, established any facts concerning Pollock‘s actual or
III.
We now turn to costs on appeal.
Separately, the Legislature spoke directly to the subject of costs and fees in the FEHA itself.
The question is whether costs on appeal in a FEHA action are governed by section 12965(b) or by Rule 8.278(a). The former requires a finding that the plaintiff‘s claim was frivolous before costs may be awarded to a prevailing defendant; the latter does not. The Court of Appeal here made no such finding before awarding costs to defendants.
Kelso argues that Rule 8.278 speaks directly to costs on appeal, whereas section 12965(b) “is silent regarding its application to costs on appeal” and should be understood to govern costs only in the trial court. We rejected a similar argument in Morcos v. Board of Retirement (1990) 51 Cal.3d 924 (Morcos). The Court of Appeal in Morcos had held that because section 31536 authorizes ” ‘the superior court in its discretion’ ” to award reasonable attorney‘s fees to prevailing plaintiffs in cases involving retirement benefits and says “nothing about the Courts of Appeal or Supreme Court having a similar authority to award fees, the statute should not be construed to grant such authority to the appellate courts.” (Morcos, at p. 927, italics added by Morcos, quoting
Although the text of section 31536 “only made express reference to the superior court,” we unanimously concluded in
When the Legislature in 2018 amended section 12965(b) by adding the phrase “a prevailing defendant shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so” (Assem. Bill No. 9 (2019–2020 Reg. Sess.); Stats. 2019, ch. 709, § 2, subd. (b)), it made its intentions clear. The Assembly Judiciary Committee explained that California courts depart from the “so-called ‘American Rule’ where each party is responsible for its own fees and costs” in civil rights cases and that “the provision in this bill limiting the ability of a prevailing defendant to recover fees and costs unless the plaintiff‘s case is deemed frivolous or without merit appears to codify existing case law.” (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 1300 (2017–2018 Reg. Sess.) as amended May 25, 2018, p. 8.) The Senate Judiciary Committee said that “[u]nder existing law, FEHA provides for an award of attorneys’ fees to a prevailing plaintiff, but not to a defendant except under narrow circumstances,” in order to “reflect[] the public policy that society should incentivize enforcement of our civil rights laws.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1300 (2017–
Kelso contends that costs on appeal are likely lower on average than costs at the trial level. Even if so, such costs “can be substantial, and the possibility of their assessment could significantly chill the vindication of employees’ civil rights.” (Williams, supra, 61 Cal.4th at p. 114.) In Williams, we held that the award of ordinary trial court costs in FEHA litigation is governed by section 12965(b), not by the general fee-shifting provision of
Kelso says Williams is distinguishable because Rule 8.278, unlike
Finally, Kelso argues that construing section 12965(b) to apply to costs on appeal would “incentivize FEHA plaintiffs who do not prevail in the trial court to appeal nonetheless, even in appeals that arguably lack merit.” But an appeal that “arguably” lacks merit may well be recast as an appeal that “arguably” has merit, and we see no indication that the
In sum, we hold that section 12965(b) applies to costs on appeal. An appellate court may not award costs or fees on appeal to a prevailing FEHA defendant without first determining that the plaintiff‘s action was frivolous, unreasonable, or groundless when brought, or that the plaintiff continued to litigate after it clearly became so. In making this determination, the court “should exercise caution to avoid ‘hindsight bias.’ ” (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 986; see id. at p. 987 [noting that Christiansburg Garment Co. v. EEOC, supra, 434 U.S. 412, 421–422, “caution[ed] courts, in deciding whether to award attorney fees to a prevailing defendant in an antidiscrimination action, to ‘resist the understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation’ “]; Williams, supra, 61 Cal.4th at pp. 99–100 [“an unsuccessful FEHA plaintiff should not be ordered to pay the defendant‘s fees or costs unless the plaintiff brought or continued litigating the action without an objective basis for believing it had potential merit“].)
Upon such a finding, an appellate court has discretion to award the full amount of costs and fees, a reduced amount, or no amount at all. Because the Court of Appeal made no finding as to whether Pollock‘s claims were objectively groundless, we vacate its award of costs to defendants.
We reverse the Court of Appeal‘s judgment, vacate its award of costs on appeal, and remand the matter to that court so that it may remand the case to the superior court for further proceedings consistent with this opinion.
LIU, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CORRIGAN, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.
JENKINS, J.