WILLIAM ALSUP, District Judge.
In this race-discrimination employment action, the employer moves for attorney's fees and expenses following summary judgment in its favor. For the reasons stated herein, the motion is
Plaintiff Richard Veloz identifies himself as Mexican-American or Hispanic. He was fired by his employer, defendant Pacific Gas & Electric Company ("PG&E"), for excessive absenteeism. The termination was found to be "appropriate and for just cause" by the fact-finding committee composed of the union, defendant International Brotherhood of Electrical Workers ("IBEW") Local 1245, and PG&E.
Plaintiff's counsel are Attorneys Spencer Smith and Dow Patten from Smith Patten, located in San Francisco. In December 2012, Attorneys Smith and Patten filed a complaint alleging: race discrimination and retaliation in violation of Title VII; race discrimination in violation of Section 1981 of Title 42 of the United States Code; duty of fair representation; race discrimination under the California Fair Employment and Housing Act ("FEHA"), California Government Code 12900, et seq.; retaliation under FEHA; harassment under FEHA; and wrongful termination. The complaint did not reference any claim based on the Family Medical Leave Act ("FMLA") or the California Family Rights Act ("CFRA").
From December 2012 to March 2014, no motions to dismiss, dispositive motions, or FRCP 11 motions were filed. In April 2014, the union, PG&E, and Mr. Veloz each moved for summary judgment. A May 2014 order granted summary judgment for defendants, dismissing all claims (Dkt. Nos. 129, 130). This order follows full briefing and oral argument.
Defendant PG&E seeks fees and expenses pursuant to FRCP 54(d), under Section 1927, FRCP 11, Title VII, Section 1988, and FEHA in the amount $535,976; or alternatively, in the amount $439,844 for fees and expenses incurred after April 2013 (when plaintiff was first deposed). PG&E seeks to hold plaintiff Richard Veloz and his counsel, Attorneys Spencer Smith and Dow Patten, jointly and severally liable for fees and expenses (Br. 1, 21). This order will briefly canvass the relevant authorities.
The American Rule is that each party bears his own litigation expenses, including attorney's fees, regardless of whether he wins or loses. Fox v. Vice, — U.S. —, 131 S.Ct. 2205, 2213 (2011). Congress, however, has created certain fee-shifting statutes.
Title VII, Section 1988, and FEHA permit, but do not mandate, fee shifting. Title VII, 42 U.S.C. 2000e-5(k), states that: "[i]n any action or proceeding under this subchapter, the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee (including expert fees) as part of the costs" (emphasis added). Section 1988 of Title 42 of the United States code states that: "[i]n any action or proceeding to enforce a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title . . . the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the cost" (emphasis added). Section 12965(b) of the California Government Code states that: "[i]n civil actions brought under this section [Fair Employment and Housing Act], the court, in its discretion, may award to the prevailing party, including the department, reasonable attorney's fees and costs, including expert witness fees" (emphasis added).
In civil rights actions, the Supreme Court has stated that:
Fox, 131 S. Ct. at 2213 (internal citations and quotation marks omitted). Attorney's fees to prevailing defendants, however, are awarded "only where the action brought is found to be unreasonable, frivolous, meritless or vexatious." Christiansburg Garment Co. v. Equal Employment Opportunity Commission, 434 U.S. 412, 421 (1978). This is because, even when unsuccessful, civil rights suits:
Harris v. Maricopa County Superior Court, 631 F.3d 963, 971 (9th Cir. 2011).
PG&E also seeks fees under Section 1927 of Title 28 of the United States Code, which states:
Federal courts also have inherent powers to assess attorney's fees when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. Chambers v. NASCO, Inc., 501 U.S. 32, 45 (1991). "[I]f a court finds that fraud has been practiced upon it, or that the very temple of justice has been defiled, it may assess attorney's fees against the responsible party." Id. at 46 (internal quotation marks omitted). While "[r]ecklessness suffices for [Section] 1927 sanctions . . . sanctions imposed under the district court's inherent authority require a bad faith finding." Lahiri v. Universal Music & Video Distribution Corp., 606 F.3d 1216, 1219 (9th Cir. 2010).
In addition, under FRCP 11(c)(1):
In employment discrimination cases, a common gimmick by the defense is to ask the plaintiff at a deposition whether the plaintiff heard racial epithets or other direct admissions of racial bias and when the plaintiff answers no, to assert that the plaintiff "conceded away" the case. This is counterfeit logic. Just because the plaintiff himself heard and saw no racially derogatory language hardly proves conclusively that discrimination was absent — discrimination can be proven from other witnesses or documents, such as the employer's own emails and memoranda. Turning to the instant case, it is true that plaintiff stated he observed no epithets or other discriminatory acts, but contrary to PG&E, that alone hardly "conceded away" the case. It was not, as PG&E argues, so obvious following Mr. Veloz's first deposition in April 2013, that his claims were "frivolous."
The complaint alleged racial harassment, retaliation, race discrimination, and wrongful termination against PG&E. Even if plaintiff was destined to lose his harassment claim, his discrimination claim (and other claims) might have survived based on facts in discovery, which remained open for ten more months after the deposition. Fact discovery closed in February 2014. Although it is true that PG&E sent a letter requesting dismissal and citing FRCP 11 in April 2013, PG&E never filed a timely FRCP 11 motion with the Court, no doubt because Mr. Veloz's testimony in April 2013 did not foreclose the possibility that other evidence of race discrimination or wrongful termination could exist. Now, of course, we know Mr. Veloz's claims did not survive summary judgment but it would go too far to conclude that it was abundantly clear in April 2013 that Mr. Veloz had no case.
PG&E cites a litany of discovery complaints. PG&E argues that fees should be awarded because plaintiff's counsel filed unsuccessful discovery letters, made long speaking objections during plaintiff's deposition, missed a meet and confer, repeatedly sought overbroad discovery, propounded interrogatories numbers 26 through 28 in violation of FRCP 33(a), failed to appear at a scheduled deposition, larded the record with unauthenticated exhibits, and attempted to bring untimely new claims on the eve of trial. Nevertheless, it is now too late to seek fees for past discovery disputes. PG&E should have timely moved for sanctions when those disputes were fresh. To wait until after all claims have been dismissed on summary judgment is too late.
PG&E's most serious contention is that plaintiff lied under oath in his deposition. The essence of the story is that plaintiff engaged in excessive absenteeism and then invented false emergencies to explain away missing work. Although some of PG&E's accusations are overblown, Mr. Veloz's testimony regarding his uncle's funeral, his friend at the hospital, his son's cardiologist appointment, his flat tire, and his DFEH pre-complaint questionnaire do raise eyebrows. Here are the details.
In March 2011, Mr. Veloz took two days off for funeral leave. At his first deposition in April 2013, Mr. Veloz testified that he missed work to attend his uncle's funeral (Dkt. No. 66-1, Veloz Dep. 206-07) (emphasis added):
A year later, after Mr. Veloz was compelled to appear at a second deposition in March 2014, he testified differently (Dkt. No. 66-5, Veloz Dep. 375):
In a verified interrogatory response, Mr. Veloz admitted: "Plaintiff did not attend a funeral on or about March 25, 2011 through March 29, 2011" (Dkt. No. 66-5, Davidson Exh. C).
This is a serious discrepancy. Mr. Veloz has never explained why at first he testified that he went to Phoenix and later he testified that he never went.
In February 2011, a month before the "funeral leave," Supervisor Lee Kirk informed Mr. Veloz that a large storm was anticipated, necessitating an emergency, mandatory weekend assignment on February 26 and 27. When Mr. Kirk denied Mr. Veloz's request to be excused, Mr. Veloz wrote the following email to human resources, dated February 25, 2011 (Dkt. No. 66-2, Veloz Dep. Exh. 8) (emphasis added):
In February 2014, PG&E deposed two doctors. Dr. Claude Roge testified (Dkt. No. 139-6, Roge Dep. 21, 22):
PG&E submitted a six-page excerpt from Dr. Roge's deposition. Nowhere in that excerpt did Dr. Roge directly testify about the February 2011 weekend. Moreover, even though PG&E subpoenaed the hospital's records, PG&E never submitted any direct proof that there was no record of any cardiologist appointment made on the February 2011 weekend in question. And, although the lead question above advertised that questions would be asked about "those records," no such passage about records from February 2011 in the deposition was supplied in the record. All we have is a stray letter from Dr. Roge to Elijah Veloz, dated March 7, 2011, which stated (Dkt. No. 66-2, Veloz Dep. Exh. 10) (emphasis added):
To Whom It May Concern:
This letter, however, does not foreclose the possibility that Elijah Veloz could have needed an appointment earlier than the summer of 2011.
PG&E also deposed a second doctor, Dr. Linda Fory, who testified (Dkt. No. 139-6, Fory Dep. 17-18):
Here too, Dr. Fory never testified that there was no appointment in February 2011. The record does not foreclose the possibility that something came up and Mr. Veloz had an appointment for his son on that weekend in February with the clinic.
Nevertheless, counsel for PG&E baldly leaped to the conclusion that no appointment was made and stated the following (Dkt. No. 139, Davidson Decl. ¶ 16) (emphasis added):
In other words, other than counsel's representations, PG&E has provided no direct evidence in the record that there was no cardiologist appointment scheduled for the weekend of February 26 and 27, 2011. At oral argument, counsel were asked about the clinic's records. Plaintiff's counsel stated that the clinic did not keep records of the scheduling of appointments. Therefore, while the Veloz story is certainly dubious, the record does not show it was perjury.
Not only did plaintiff miss the weekend work assignment on February 26 and 27, but he also failed to show up on that Monday, February 28, 2011. On the Monday, Supervisor Lee Kirk called Mr. Veloz. "About an hour later, Plaintiff called me back claiming he was in the emergency room with a friend" (Dkt. No. 63, Kirk Decl. ¶ 5). On this motion, PG&E provided no evidence of the identity of the friend. Out of the blue at the deposition (as far as this record reveals), PG&E asked Mr. Veloz about someone named "Chris" (Dkt. No. 71-2, Veloz Dep. 80-83):
But this testimony never established that "Chris" was the "friend" Mr. Veloz supposedly took to the hospital that Monday in February 2011. There is a disconnect.
At his second deposition in March 2014, Mr. Veloz testified (Veloz Dep. 344-56) (emphasis added):
It is, of course, concerning that at first Mr. Veloz testified that he took "Chris Munoz" to the hospital on some unknown date and, a year later, he testified that he could not remember if he had seen Mr. Munoz since elementary school. Nevertheless, this discrepancy would only matter if "Chris" was the friend he supposedly took to the hospital on February 28, 2011, a point of fact left out of the motion record.
In March 2012, Mr. Veloz was absent again and called the PG&E hotline. The call records created by the PG&E reporter included the following statement (Dkt. No. 66-3, Veloz Dep. Exh. 19) (emphasis added):
When asked about the flat tire at the deposition in March 2014, Mr. Veloz testified (Veloz Dep. 410-12):
Deponent Veloz was wrong in refusing to answer the question, but PG&E brought no motion to compel an answer. As for possible perjury, Mr. Veloz never directly testified that he was absent in March 2012 because of a flat tire. In the record, the flat tire only came up in the call records. This does not show that Mr. Veloz lied under oath in a deposition.
PG&E states that it "has now determined that Plaintiff's declaration is false and that he never submitted the DFEH Questionnaire to the EEOC" (Br. 15). In April 2013, Mr. Veloz produced 256 pages of discovery documents, including a DFEH pre-complaint questionnaire bearing bates numbers PL000019 and PL000020 (Patten Decl. ¶ 122). Unlike the EEOC questionnaire, the DFEH pre-complaint questionnaire bears no "Received" stamp. On the eve of trial, when PG&E argued that there was no notice in the complaint of any claim under the Family and Medical Leave Act ("FMLA") or California Family Rights Act ("CFRA"), Mr. Veloz responded that (Dkt. No. 90-5):
In other words, in Mr. Veloz's view, because someone checked "Denial of Family Care" on an unauthenticated DFEH pre-complaint questionnaire, PG&E should have been put on notice that Mr. Veloz's claims were alleged under the FMLA and CFRA. Not so. The complaint never referenced the FMLA or CFRA and that is what carried the day on summary judgment.
The question here, however, is whether the DFEH pre-complaint questionnaire and/or Mr. Veloz's declaration has been shown to have been false. In May 2014, Mr. Veloz signed a declaration which stated (Dkt. No. 126, Veloz Decl. ¶¶ 5, 7):
He never directly authenticated the DFEH pre-complaint questionnaire. Indeed, the DFEH pre-complaint questionnaire has never been appended to a declaration from plaintiff (Dkt. Nos. 117, 126). Instead, plaintiff's counsel simply appended the questionnaire to their papers without properly authenticating it. Plaintiff's counsel, however, have represented in their briefs that "[o]n April 12, 2012, Plaintiff submitted a Questionnaire to the EEOC . . . . Later that month[,] Plaintiff submitted a pre-complaint questionnaire to California's Department of Fair Employment and Housing" (Dkt. No. 121 at 6).
While Mr. Veloz stated under oath that he delivered the DFEH questionnaire to the EEOC, PG&E's counsel stated the DFEH questionnaire did not appear in the DFEH and EEOC's document productions. In May 2014, according to a hearsay declaration from PG&E's counsel, the "DFEH confirmed that it does not have a record of Plaintiff having submitted a DFEH Questionnaire" (Dkt. No. 122-1, Chun Decl. ¶¶ 2-4). On May 13, two members of the EEOC (Martin Olson and Dana Johnson) told PG&E counsel that they "could not have given Plaintiff a copy of the DFEH Questionnaire because the EEOC does not have any DFEH forms in its office." Moreover, "if Plaintiff had submitted a DFEH Questionnaire, the EEOC would have retained this document as part of its file" (Dkt. No. 140, Chun Decl. ¶¶ 17-18).
For the reasons stated herein, PG&E's motion is
Finally, although no sanctions will be awarded against plaintiff's counsel, they must live up to the standards of practice in this district. Their sometimes obstructive conduct in this case and in past cases is a disappointment to the Court and if it continues, appropriate sanctions or referrals will result. Persistent zeal will not excuse persistent obstructions.