Horne v. International Union of Painters and Allied Trades: Court Allows After-Acquired Evidence to Show That Plaintiff Was Not Qualified for Position in FEHA Action

Horne v. International Union of Painters and Allied Trades, District Council 16 (12/3/13) --- Cal.App.4th ---, deals with the after-acquired evidence doctrine in a FEHA discrimination case.

The plaintiff, Horne, sued the defendant, a labor union, for failing to hire him as a union organizer. During discovery, the union learned that Horne had a prior conviction for possession of narcotics for sale. The union moved for summary judgment, arguing that under federal law, the conviction rendered Horne ineligible for the position sought. The trial court granted the motion, Horne appealed, and the Court of Appeal affirmed.

The Court held that Horne failed to establish a prima facie case of racial discrimination because the undisputed evidence showed that his criminal conviction rendered him unqualified for the organizer position for which he was not hired. 29 U.S.C. § 504(a)(2). Slip op. at 4-5.

The after-acquired evidence doctrine did not preclude the trial court from considering this evidence even though the union did not know of the conviction at the time it decided not to hire Horne: 

The after-acquired evidence doctrine applies to bar consideration of Horne’s criminal record and the federal law rendering him ineligible for the organizer position if the issue is the council’s motive for not hiring him in February 2010... But the council’s motive in declining to hire Horne is not at issue unless he first establishes a prima facie case of racial discrimination, including evidence that he was qualified for the organizer position.

Slip op. at 5. Evidence that the applicant was disqualified as a matter of law at the time of the employment decision is relevant, whenever the employer acquired that information. Slip op. at 6. 

In the second part of the opinion, the Court held that the conviction at issue did in fact render Horne ineligible for the position sought. Slip op. at 7-8. 

The opinion is available here. 

Muniz v. UPS: Ninth Circuit Affirms $700,000 in Attorney Fees Following $27,000 FEHA Verdict

In Muniz v. United Parcel Service, Inc., ___ F.3d ___ (9th Cir. 12.5.13), the Ninth Circuit affirmed an award of $700,000 in attorney's fees where a jury awarded only $27,000 in damages for violation of California’s Fair Employment and Housing Act (FEHA). The Court held:

Plaintiff's counsel's declaration stating that he watched his paralegal reconstruct her working hours using the same information he used constituted inadmissible hearsay, and the portion of the fee award attributable to the paralegal's work should be reconsidered on remand. Slip op. at 13-15.

The district court court did not abuse its discretion in only deducting 10 percent from the lodestar amount for plaintiff’s unsuccessful claims, since California law allows for such percentage adjustments, and neither party was able to segregate hours spent exclusively on the unsuccessful claims. Slip op. at 15-18.

California law did not require the district court to reduce the disparity between damages and attorney fees. Slip op. at 18-19.

The district court did not abuse its discretion in declining to reduce the fee request further because the initial fee request of almost $2 million (calculated using a $1.2 million lodestar and 1.5 multiplier) was inflated. Slip op. at 19-22. 

The opinion is available here.

Mondragon v. Capital One Auto Finance: Ninth Circuit Clarifies CAFA "Local Controversy" Rule

Mondragon v. Capital One Auto Finance, ___ F.3d ___ (9th Cir. 11/27/13) concerns the "local controversy" exception to the general rules of federal jurisdiction set forth in the Class Action Fairness Act of 2005 (CAFA). 

The Court gives a good overview of CAFA and the local controversy exception: 

Through CAFA, Congress broadened federal diversity jurisdiction over class actions by, among other things, replacing the typical requirement of complete diversity with one of only minimal diversity, see id. § 1332(d)(2), and allowing aggregation of class members’ claims to satisfy a minimum amount in controversy of $5 million, see id. § 1332(d)(6). However, Congress also provided exceptions allowing certain class actions that would otherwise satisfy CAFA’s jurisdictional requirements to be remanded to state court. Among these is the exception commonly referred to as the local controversy exception, set forth in 28 U.S.C. § 1332(d)(4)(A). One of the requirements of the local controversy exception is that “greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed.” Id. § 1332(d)(4)(A)(i)(I). 

Slip op. at 3-4. 

The Court held that the plaintiff failed to show that a class of people who "purchased a vehicle in California for personal use to be registered in the State of California" would necessarily be California citizens, and the district court erred in relying on an inference that more than two-thirds of such class members would be California citizens. The Court remanded with instructions that the district court allow the plaintiff an opportunity to renew his motion to remand and to take jurisdictional discovery tailored to proving that more than two-thirds of the putative class are citizens of California. 

The opinion is available here.

Moncada v. West Coast Quartz: Court Rules On Misrepresentation Claims

A quick word on Moncada v. West Coast Quartz Corporation (10/28/13, pub. 11/22/13) --- Cal.App.4th ---, which involves allegations that an employer failed to pay a promised retention bonus. (A retention bonus is a bonus paid to compensate employees who agree to remain employed for some period of time, typically during a transition period, such as a sale or shut-down.)

In this case, the plaintiffs alleged that their employer offered them a retention bonus pending the sale of the business, then refused to pay. The plaintiffs sued for fraud, breach of contract, and other causes of action, trial court sustained the defendants' demurrer, the plaintiffs appealed, and the Court of Appeal reversed, holding:

Plaintiffs adequately fraud by alleging that the defendants "concealed the fact that they wanted plaintiffs to remain employed at West Coast to make the company more attractive to potential buyers, and only intended to give plaintiffs a nominal or no bonus for remaining employed." Slip op. at 5-8.

Plaintiffs adequately alleged breach of contract by alleging that "defendants told plaintiffs that if they stayed and continued to work for West Coast until the company sold, defendants would give plaintiffs bonuses that would be sufficient for plaintiffs to retire." Slip op. at 8-11.

Plaintiffs adequately alleged promissory estoppel by alleging that defendants "promised to pay them an amount sufficient to retire upon the sale of West Coast if they remained employed." Slip op. at 11-12.

Plaintiffs did not allege conduct sufficiently extreme or outrageous to support a cause of action for intentional infliction of emotional distress. Slip op. at 12-13.

Plaintiffs did not allege a cause of action for negligent misrepresentation because they alleged that the defendants knew their promises to be false at the time offered. Slip op. at 13-14.

Plaintiffs did not allege a cause of action for estoppel in pais, or equitable estoppel, which is defensive only and cannot be stated as an independent cause of action in California. Slip op. at 14-15.

The opinion is available here.