Opinion ID: 792064
Heading Depth: 2
Heading Rank: 3

Heading: The award of attorney fees was an abuse of discretion.

Text: 76 The district court made an error of law, and therefore abused its discretion, in awarding attorney fees to UPS under California Government Code § 12965. Aside from that error in identifying a source of law, however, the district court acted within its discretion, and it is free to reconsider the question on remand. 77 We begin by summarizing the relevant facts. The Bryan action was filed in May 2001. To ascertain that Plaintiffs had exhausted their administrative remedies before filing a complaint, Plaintiffs' counsel relied on a list of Class Members from the EEOC action. The district court assumed that it was reasonable for Plaintiffs' counsel to have relied on that list initially. But during depositions in November 2003, Bryan testified that he had not filed a complaint with either the EEOC or the California Department of Fair Employment and Housing. Similarly, in his deposition Torres testified that he had not filed a complaint with the state agency and could not remember whether he had filed with the EEOC. One day after the depositions ended, Plaintiffs' counsel filed a motion for summary adjudication that included the Bryan and Torres claims. 78 Plaintiffs' counsel made various overtures toward dismissing the Bryan and Torres claims during December and January, but ultimately did not do so until February 10, 2004. Between November 2003 and February 2004, when Plaintiffs' counsel ultimately filed the voluntary dismissal of the Bryan and Torres claims, Defendant subpoenaed the EEOC for files relating to Bryan and Torres, filed their opposition to Plaintiffs' motion for summary adjudication, filed their own motion for summary judgment, and corresponded with Plaintiffs' counsel regarding the text of the voluntary dismissals. 79 Following the voluntary dismissals, UPS filed a motion for attorney fees under California Government Code § 12965. The district court awarded Defendant attorney fees of $25,000, to be paid by Plaintiffs' counsel, for work done on the Bryan and Torres claims between the date of the depositions and the date of the voluntary dismissal. (The amount represented one-third of UPS's cost to prepare the response to Plaintiffs' motion and its own summary judgment motion.) 80 The district court was within its discretion to determine that some kind of sanction was appropriate, because Plaintiffs continued to litigate their claims after Plaintiffs' counsel knew that Bryan had not exhausted his remedies and had reason to suspect that Torres had not. See Bond, 50 Cal.App.4th at 921, 57 Cal.Rptr.2d at 919(noting that a prevailing defendant may be awarded fees if the plaintiff's action was unreasonable, frivolous, meritless, or vexatious). But the district court misunderstood Hon v. Marshall, 53 Cal.App.4th 470, 62 Cal.Rptr.2d 11 (1997). In Hon, the defendant in a FEHA action was granted summary judgment because the plaintiff failed to exhaust her administrative remedies: 81 This case ... raises a narrow question which is apparently one of first impression in this state, whether a defendant who is granted summary judgment because of such a jurisdictional defect qualifies as a prevailing party entitled to an attorney fee award under section 12965. 82 Id. at 475, 62 Cal.Rptr.2d at 13 (emphasis added). We do not read Hon, as the district court did, merely to express[] a general preference toward not awarding attorney's fees when dismissal is based on non-exhaustion of administrative remedies. Instead, the court in Hon interpreted the statutory term prevailing party and held that, when summary judgment is entered without a decision on the merits because the plaintiff failed to exhaust, the defendant simply is not a prevailing party that is eligible for fees under § 12965. Id. at 478-79, 62 Cal.Rptr.2d at 15-16; see also Cal.Civ.Proc.Code § 128.6(a) (Every trial court may order a party, the party's attorney, or both to pay any reasonable expenses, including attorney's fees, incurred by another party as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay.). 83 Although Hon precludes an award of attorney fees under § 12965, and the fee award must be reversed, it is clear from the record that the district court would have awarded the same sanctions under a different provision, if one is available. We do not foreclose that possibility on remand. See Hon, 53 Cal.App.4th at 478-79, 62 Cal.Rptr.2d at 15-16(remanding to allow trial court to conduct further proceedings on the issue of sanctions, should the court deem it appropriate).