Jason Early v. Keystone Restaurant Group, LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 20, 2020
• Docket: 18-17148
• Status: Unpublished

Opinion

* FILED NOT FOR PUBLICATION MAY 20 2020 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

JASON EARLY, as Guardian Ad Litem No. 18-17148 for S.E., D.C. No. Plaintiff, 2:16-cv-00740-JAM-DB

and MEMORANDUM* SARAH EARLY,

Plaintiff-Appellant,

v.

KEYSTONE RESTAURANT GROUP, LLC,

Defendant-Appellee,

and

SONIC INDUSTRIES, LLC; et al.,

Defendants.

JASON EARLY, as Guardian Ad Litem No. 19-15463 for S.E.,

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3 Plaintiff, D.C. No. 2:16-cv-00740-JAM-DB and

SARAH EARLY,

Plaintiff-Appellee,

Defendant-Appellant,

Appeal from the United States District Court for the Eastern District of California John A. Mendez, District Judge, Presiding

Submitted March 23, 2020** San Francisco, California

Before: GOULD, CHRISTEN, and BRESS, Circuit Judges.

Plaintiff Jason Early, on behalf of his daughter, Sarah Early, appeals a

number of trial-related rulings. Early and Defendants Keystone Restaurant Group,

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). 2 LLC and Sonic Industries, LLC, cross-appeal the district court’s fee and cost

awards. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm in part

and reverse in part. Because the parties are familiar with the facts and procedural

history of this case, we recite them only as necessary to resolve the issues on

appeal.

1. Early appeals several of the district court’s evidentiary rulings that

excluded: (1) “Me Too” testimony from another employee allegedly harassed by

Sirenio Gonzalez; (2) certain testimony on hearsay grounds; and (3) evidence of

Gonzalez’s prior write-ups. The district court did not abuse its discretion by

excluding the “Me Too” testimony because it had previously concluded that Early

proved a hostile work environment as a matter of law and Keystone did not dispute

that Gonzalez had harassed Sarah Early. The district court did not abuse its

discretion by excluding the hearsay testimony, which was either offered to prove

the truth of the matter asserted or cumulative of other admissible testimony. The

district court did not abuse its discretion by excluding Gonzalez’s previous write-

ups because Gonzalez, a supervisor, and Sarah Early, an entry-level employee,

were not similarly situated. See Vasquez v. Cty. of L.A., 349 F.3d 634, 641 (9th

Cir. 2003).

3 2. The district court did not err by dismissing Early’s request for

punitive damages pursuant to Federal Rule of Civil Procedure 50(a). Because the

jury found for Keystone on all of Early’s federal claims, Early suffered no

prejudice from any potential error in not allowing the jury to consider the prayer

for punitive damages premised on 42 U.S.C. § 1981a. California law requires

“clear and convincing evidence that the defendant has been guilty of oppression,

fraud, or malice” for a plaintiff to be entitled to seek punitive damages. Cal. Civ.

Code § 3294(a). Early asserts that there was clear and convincing evidence that

Keystone acted with malice or oppression, but fails to identify which evidence

would have been sufficient for the jury to award punitive damages on the state-law

claims. There was no evidence that Keystone had any prior knowledge of

Gonzalez’s misconduct, and Keystone investigated, suspended, and terminated

Gonzalez after learning of the harassment.

3. The district court erred by dismissing Early’s claim for wrongful

termination in violation of public policy premised on a retaliation theory. At the

close of plaintiff’s case, Keystone moved for judgment as a matter of law pursuant

to Federal Rule of Civil Procedure 50(a) on two of Early’s three theories of

wrongful termination. The district court erred by dismissing the third theory as

duplicative without providing Early a meaningful opportunity to respond. See

4 Summers v. Delta Air Lines, Inc., 508 F.3d 923, 927–28 (9th Cir. 2007). Deeming

a claim redundant or unnecessary is not a proper ground for dismissal, so long as

the evidence introduced at trial supports the claim. See id. 926 (explaining Rule

50(a) allows dismissal of claims “when there is not ‘legally sufficient evidentiary

basis’ to support a particular outcome.”).1 Early’s claim for wrongful termination

in violation of public policy had a legally sufficient evidentiary basis, it was not

redundant, and dismissal was not harmless.

Early presented three retaliation-based claims: Title VII retaliation, Fair

Employment and Housing Act (FEHA) retaliation, and wrongful termination in

violation of public policy premised on retaliation. The jury instructions for each

claim required proof of retaliation as an element, but each presented a different

basis supporting that theory of retaliation. The district court erred by dismissing

Early’s claim for wrongful termination in violation of public policy premised on

retaliation because the jury could have found that Keystone terminated Sarah Early

in retaliation for her complaints of sexual harassment, despite having found that

she was not terminated in retaliation for both her participation in Keystone’s

investigation and her allegations of sexual assault, as required by her FEHA claim.

1 The district court did not invoke Rule 12(f), which applies only to motions to strike pleadings. See Fed. R. Civ. P. 12(f). This case was well beyond the pleading stage, and Rule 50 provided the proper standard. 5 Thus, the FEHA claim and wrongful termination claim were not duplicative and

the jury should have been allowed to consider Early’s third theory.2

The dissent suggests that the issue regarding dismissal of the claim for

wrongful termination in violation of public policy was waived in the district court,

but the district court transcript shows otherwise. When Early’s counsel identified

the availability of attorneys’ fees as the difference between the FEHA retaliation

claim and the claim for wrongful termination in violation of public policy, she was

responding to a specific question asked by the district court: “Explain to me the

difference in terms of damages.” (emphasis added). As for the contention that

counsel conceded it would be inconsistent for the jury to find that Sarah Early was

retaliated against and not find that she was wrongfully terminated because the two

claims were “tied together,” counsel’s statement was entirely correct. It would

have been inconsistent for the jury to find that Keystone retaliated against Sarah

Early for purposes of the FEHA claim, but not find for her on the wrongful

termination claim. But because each claim was supported by a different theory of

2 The dissent relies on M.M. v. Lafayette Sch. Dist., 681 F.3d 1082 (9th Cir. 2012), for the proposition that courts have broad discretion to control their own dockets, but that case does not support the district court’s ruling. It merely affirmed dismissal of a redundant claim where a plaintiff filed two separate cases involving the same parties, in the same court, with overlapping claims. Id. at 1091. Notably, one of the complaints in Lafayette was allowed to proceed on the merits. 6 retaliation, this statement did not preclude a finding for Early on the wrongful

termination claim even if she did not succeed on the FEHA claim.

4. The district court did not err by instructing the jury not to use the

court’s prior finding that Early proved a hostile work environment to assess Early’s

state and federal sex discrimination claims. The jury instruction, when considered

in the context of the full jury charge, see Jenkins v. Whittaker Corp., 785 F.2d 720,

730 (9th Cir. 1986), did not prevent the jury from finding in Early’s favor on the

sex discrimination claims premised on sexual harassment as a form of sex

discrimination. Early did not advance that theory of discrimination, but instead

proceeded on a disparate treatment discrimination theory only.

5. The district court erred by awarding attorneys’ fees and costs to Sonic.

Courts may award fees to a prevailing Title VII or FEHA defendant only “upon a

finding that the plaintiff’s action was frivolous, unreasonable, or without

foundation,” and may not “engage in post hoc reasoning by concluding that,

because a plaintiff did not ultimately prevail, his action must have been

unreasonable or without foundation.” Christiansburg Garment Co. v. EEOC, 434

U.S. 412, 421–22 (1978); see also Bond v. Pulsar Video Prods., 57 Cal. Rptr. 2d

917, 918–19 (Ct. App. 1996). The district court did not make any such findings or

explain the basis for its award to Sonic, nor does the record reveal a reasonable

7 basis for concluding that Early’s claims against Sonic were frivolous, groundless,

unreasonable, or vexatious. See Patton v. Cty. of Kings, 857 F.2d 1379, 1381 (9th

Cir. 1988). Thus, we vacate and remand the order granting Sonic fees and costs.

See EEOC v. Bruno’s Rest., 13 F.3d 285, 288 (9th Cir. 1993).

6. Because we conclude that the district court erred by dismissing

Early’s claim for wrongful termination in violation of public policy, we do not

consider the district court’s other cost and fee awards. See Ass’n of Mexican-

American Educators v. California, 231 F.3d 572, 590 (9th Cir. 2000) (en banc)

(declining to issue an advisory opinion on an issue the panel did not consider). We

vacate those awards and remand for further proceedings consistent with this

disposition.

AFFIRMED IN PART, REVERSED IN PART AND REMANDED, with

the parties to bear their own costs on appeal.

8 FILED Early v. Keystone Rest. Grp., LLC, No. 18-17148, 19-15463 MAY 20 2020 MOLLY C. DWYER, CLERK BRESS, Circuit Judge, concurring in part and dissenting in part: U.S. COURT OF APPEALS

I agree with the majority that the district court did not err in its evidentiary

rulings or refusal to give a requested jury instruction, that punitive damages were

properly disallowed, and that there is not a sufficient record on which to uphold the

district court’s award of attorneys’ fees to Sonic. I respectfully part ways with the

majority, however, in its determination that the district court erred in dismissing as

duplicative Early’s claim for wrongful termination in violation of public policy. In

my view, that is not a sound basis on which to vacate the judgment, which resulted

from a four-day trial and two and a half years of proceedings in the district court.

I

Prior to sending the case to the jury, the district court dismissed Early’s claim

for wrongful termination in violation of public policy on the ground that it was

duplicative of her retaliation claim under California’s Fair Employment and Housing

Act (FEHA), and therefore “clearly likely to confuse the jury.” While the majority

suggests a district court can never dismiss a claim as redundant, “[i]t is well

established that a district court has broad discretion to control its own docket, and

that includes the power to dismiss duplicative claims.” M.M. v. Lafayette Sch. Dist.,

681 F.3d 1082, 1091 (9th Cir. 2012) (holding that district court did not abuse its

discretion in dismissing a duplicative claim also filed in another action before the same court); see also Fed. R. Civ. P. 12(f). The real issue, as the majority later

indicates, is whether the two claims here were, in fact, duplicative of each other.

The majority holds they were not duplicative on the theory that “[t]he jury

instructions for each claim . . . presented a different basis supporting [each] theory

of retaliation.” This is not an argument Early advanced in this court; her briefing

devoted limited attention to this entire assignment of error. Indeed, while the

majority’s decision turns on language in the proposed jury instructions for the

wrongful termination in violation of public policy claim, those proposed jury

instructions were not even included in the appellate excerpts of record.

The district court’s dismissal of Early’s claim for wrongful termination in

violation of public policy is also understandable considering that Early’s counsel

conceded in the district court that this claim was duplicative of the FEHA retaliation

claim. The only difference that Early’s counsel identified between the claims was

that the latter allowed recovery of attorneys’ fees. And whereas the majority

concludes that Early could have prevailed on her claim for wrongful termination in

violation of public policy even if she did not prevail on her FEHA retaliation claim,

Early’s counsel conceded the opposite: “THE COURT: She can’t recover -- under

your theory, she can’t recover under wrongful termination unless you prove

retaliation. [COUNSEL FOR EARLY]: Correct.” In fact, Early’s counsel

effectively admitted that if the jury resolved the two claims differently, it would

2 amount to an inconsistent verdict:

THE COURT: So you have to prove your retaliation claim. In other words, it would be an inconsistent verdict for the jury -- if I let this go forward -- inconsistent for the jury to find that she was retaliated against and not find that it was a wrongful termination in violation of public policy; in other words, you are tying the two claims together.

[COUNSEL FOR EARLY]: They are tied together. They actually are.

THE COURT: I’m glad I got you to admit that . . . .

I also do not think the majority is correct that the district court committed a

procedural error by not “providing Early a meaningful opportunity to respond” on

this issue. The district court held a hearing at which Early was given ample

opportunity to argue. At no time did she request more briefing or argument.

Finally, the slight difference that the majority perceives in the jury instructions

for the two claims at issue is not material under the circumstances of this case.

Early’s participation in the investigation and her complaints about sexual harassment

coincided in one interview. I thus do not believe the record supports the majority’s

conclusion that “each claim was supported by a different theory of retaliation.” The

majority’s suggestion that Early could have been terminated only due to her

complaints, but not her participation in the investigation, is therefore unpersuasive.

I thus respectfully dissent on this issue.

3 II The majority’s decision to reverse the judgment requires it to vacate the

district court’s award of fees and costs to Early. Keystone had cross-appealed on

that issue. Although the majority has no occasion to reach this cross-appeal, I would

need to reach it given my view that the judgment should be affirmed. Here, I believe

the district court erred, albeit understandably, in awarding Early those attorneys’ fees

incurred after she rejected Keystone’s second offer of judgment.

Early rejected Keystone’s second settlement offer ($75,000, exclusive of

attorneys’ fees) and won a less favorable judgment at trial ($50,000). Under Federal

Rule of Civil Procedure 68, which applies here, see MRO Commc’ns, Inc. v. Am.

Tel. & Tel. Co., 197 F.3d 1276, 1279 (9th Cir. 1999), “[i]f the judgment that the

offeree finally obtains is not more favorable than the unaccepted offer, the offeree

must pay the costs incurred after the offer was made.” Fed. R. Civ. P. 68(d). Under

this rule, “[a] plaintiff that rejects a Rule 68 offer in excess of the judgment

ultimately obtained at trial must bear its own and the defendant’s post-offer costs.”

Champion Produce, Inc. v. Ruby Robinson Co., 342 F.3d 1016, 1026 (9th Cir. 2003).

Early only prevailed under FEHA. If this state law treats attorneys’ fees as

part of costs, they are treated as “costs” subject to Rule 68. Marek v. Chesny, 473

U.S. 1, 9 (1985); Champion Produce, 342 F.3d at 1028. FEHA provides that a court

may award the prevailing party “reasonable attorney’s fees and costs.” Cal. Gov’t

4 Code § 12965(b). But California law also provides that if a statute “refers to the

award of ‘costs and attorney’s fees,’ attorney’s fees are an item and component of

the costs to be awarded.” Cal. Civ. Proc. Code § 1033.5(c)(5)(A).

The California Supreme Court has explained how these provisions work in

combination: “Code of Civil Procedure section 1033.5 defines which costs are

allowable and which are not” and “explains, rather than contradicts, Government

Code section 12965.” Davis v. KGO-T.V., Inc., 950 P.2d 567, 572 (Cal. 1998).1

Accordingly, attorneys’ fees under FEHA are a “component of the costs,” Cal. Civ.

Proc. Code § 1033.5(c)(5)(A), and subject to Rule 68. Champion Produce, 342 F.3d

at 1028; see also Steele v. Nibco, Inc., 2002 WL 1316191, at *8–12 (Cal. Ct. App.

2002) (applying this reasoning to California Code of Civil Procedure § 998, the state

analogue to Rule 68).

The district court held otherwise based on an unpublished decision in which

we said that FEHA attorneys’ fees are not subject to Rule 68 because FEHA “clearly

provides attorney’s fees separately from costs.” Hasan v. Contra Costa Cty.,

45 F. App’x 795, 796 (9th Cir. 2002). But this portion of Hasan was dicta and did

not address the issue in detail. See id. I also believe, for the reasons stated above,

1 Williams v. Chino Valley Independent Fire District, 347 P.3d 976 (Cal. 2015), did not alter this. Williams explicitly noted that it did not disturb Davis’s holding that “the definition of allowable costs in Code of Civil Procedure section 1033.5 governs the type of costs that may be awarded under Government Code section 12965(b).” Id. at 982 (emphasis in original).

5 that Hasan’s interpretation of California law is not correct.

Accordingly, I would have remanded this case to the district court for a

redetermination of Early’s fee award; she is only entitled to fees incurred prior to the

second offer of judgment. In all other respects, Keystone’s cross-appeal is without

merit, as is Early’s appeal of a cost award to Keystone.