Williams v. Chino Valley Independent Fire District: Employer's Perspective

• Citation: Vol. 29 No. 4
• Publication year: 2015
• Author: By Judith S. Islas

Williams v. Chino Valley Independent Fire District: Employer's Perspective

By Judith S. Islas

Judith Islas is of-counsel at Liebert Cassidy Whitmore and is based in the San Diego office. Judith practices labor and employment law, representing employers in all types of employment litigation at the trial and appellate levels.

The holding in Williams v. Chino Valley Independent Fire District,¹ which changed the rule on recovery of costs in employment discrimination cases, will impact key dynamics in litigating these cases. Departing from multiple published state appellate cases,² Ninth Circuit,³ and other federal cases,⁴ this newly-created rule severely restricts the ability of prevailing employers to recover ordinary litigation costs in cases brought under the California Fair Employment and Housing Act (FEHA). Paradoxically, the laws enacted to protect against unequal treatment now mandate unequal treatment. Prevailing employees are automatically awarded costs; prevailing employers are not. To recover costs, prevailing employers must meet a heightened standard: they must prove the case was groundless, which will require another costly effort that employers may have little appetite for on the heels of incurring significant costs to defend the case. This means, even after being cleared of any wrongdoing, the employer will not be able to recover costs, unless it mounts an expensive battle and convinces a trial judge the case was groundless. This is a sharp turn in the law, which, since the mid-1800s, has equally allowed both prevailing plaintiffs and defendants to recover costs. This case not only impacts employment discrimination cases, but opens the classic Pandora's box, by incentivizing non-prevailing parties to challenge costs awards under a myriad of statutory schemes.

This means, even after being cleared of any wrongdoing, the employer will not be able to recover costs, unless it mounts an expensive battle and convinces a trial judge the case was groundless.

The Court's Newly-Created Rule Is a Sharp Departure From Longstanding Common and Statutory Law Entitling Prevailing Parties in Any Litigation to Recover Ordinary Litigation Costs

The court's reasoning in this case rested on statutory interpretation, heavily infused with public policy. First, the court addressed the general costs provision in Code of Civil Procedure section 1032, which entitles any prevailing party to recover costs as a matter of right unless there is an express exception to that right, and the costs and fees provision in FEHA, which grants to the court discretion to award attorneys' fees and costs. Despite prior California Supreme Court precedent to the contrary,⁵ the court held Government Code section 12965 is an express exception to section 1032, because it grants the court discretion to decide whether or not to award attorneys' fees and costs, instead of mandating that costs be awarded. Resolution of this first legal determination gave rise to the second—how courts must exercise their discretion when awarding costs to a prevailing defendant, a question that seems at odds with the very concept of discretion. The court held that although prevailing plaintiffs in FEHA cases are entitled to costs as matter of right—ironically, the exact standard set forth in section 1032 that the court said does not apply—prevailing defendants are only entitled to costs if the case was objectively groundless.

The court reasoned that because Government...