Ninth Circuit OKs Outsized Fees in Bias Case
SAN FRANCISCO — A divided Ninth Circuit panel has rejected the United Parcel Service's challenge to a nearly $700,000 attorney fee award in a gender discrimination case that resulted in a jury verdict of just $27,280.
U.S. District Chief Judge Claudia Wilken of the Northern District of California had awarded about 36 percent of the $1.95 million in attorney fees sought by lawyers at Kerr & Wagstaffe and The Jaffe Law Firm in San Francisco. But attorneys for UPS at Paul Hastings argued that the award should be cropped further because plaintiff Kim Muniz recovered comparatively little in damages and had not prevailed on most of her claims.
Muniz sued UPS in 2009 alleging retaliation as well as age and gender discrimination after she was demoted from a management position.
A three-judge panel in the U.S. Court of Appeals for the Ninth Circuit ruled on Thursday that Wilken had acted within the considerable discretion that California law allowed her.
"There is a disparity between the damages recovered and the fees awarded," wrote Senior District Judge James Singleton of Alaska, sitting by designation. "We are not convinced that California law requires the trial court to reduce that disparity." Joining his opinion in Muniz v. UPS, 11-17282, was Circuit Judge Diarmuid O'Scannlain.
Circuit Judge Milan Smith Jr. dissented in part, finding that Wilken had not provided enough information to explain how she arrived at her calculations. But he sided with the majority that Wilken had improperly awarded fees for the work of a paralegal based on hearsay evidence. The panel remanded the case to Wilken to reconsider the paralegal's fees and award more to Muniz for the fees and costs she incurred defending the appeal.
UPS lawyer Katherine Huibonhoa, a San Francisco-based partner at Paul Hastings, did not respond to a request for comment.
Kerr & Wagstaffe partner Michael von Loewenfeldt, who represented Muniz in the appeal, said the panel's verdict is an important victory for low-wage workers. The law's flexible standard for attorney fees ensures that employees of limited means are able to secure legal representation in costly discrimination suits, he said.
"The suggestion that UPS made throughout the case—that attorney fees had to be tied to a jury verdict—would essentially strip low-wage workers of all protections," he said.
He added that Wilken had already given the fee award a "pretty severe haircut." Wilken reduced the hourly rates requested by plaintiffs lawyers as well as the total number of hours they could claim due to insufficient recordkeeping, according to the ruling. She then reduced that figure by another 10 percent because Muniz's claims for age discrimination and retaliation did not pan out.
UPS said that discount fell far short but did not attempt to calculate how many hours Muniz's lawyers had spent working on the failed claims.
After finding the fee request was inflated, Wilken had the authority to hack it severely or decline to award attorney fees altogether, the judges noted. But they found she could not be faulted for leaving considerable fees intact.
Wilken "concluded that a total denial of fees or limiting the award to a nominal amount would be too severe a sanction," Singleton wrote.