Ninth Circuit Upholds Plaintiff Attorneys’ Fee Award Over 25 Times the Jury Award in Discrimination Case

December 11, 2013, by Meyers Nave

In a recent decision, the Ninth Circuit held that the district court did not abuse its discretion in awarding the prevailing plaintiff $697,971.80 in attorneys’ fees where the jury awarded her only $27,280 in damages.  The clear message from the decision is that even relatively modest legal transgressions under the Fair Employment and Housing Act (“FEHA”) can result in a significant damage award against an employer.

In district court, Kim Muniz raised FEHA claims of gender discrimination, age discrimination, and retaliation against her employer, UPS.  While Plaintiff’s age discrimination and retaliation claims were dismissed, the district court held a seven day trial on the gender discrimination claim.  The jury verdict held that Muniz’s gender was a substantial motivating factor in her demotion from division manager to supervisor, and awarded her $27,280 for UPS’s  violation.  Muniz’s attorney claimed over 1.9 million dollars in attorneys’ fees for handling the trial.  After vigorous argument from UPS, the district court reduced the attorney hours and rates, and further reduced the amount by ten percent to reflect the plaintiff’s limited success, finally settling on the $696,162.78 award.   

In Muniz v. UPS, the Ninth Circuit reviewed the district court’s decision and ultimately determined that California law did not require the district court to reduce the disparity between the attorneys’ fees awarded and the damages, concluding that the district court permissibly accounted for the plaintiff’s limited success with the ten percent reduction.  In its decision, the Ninth Circuit reaffirmed California jurisprudence that a California trial court does not “abuse its discretion by simply awarding fees in an amount higher, even very much higher, than the damage awarded, where successful litigation causes conduct which FEHA was enacted to deter to be exposed and corrected.”  The takeway from Muniz is that even relatively minor FEHA violations may result in major economic consequences for employers.         

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