Jason Early v. Keystone Restaurant Group, LLC

*
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NOT FOR PUBLICATION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,
v.
KEYSTONE RESTAURANT GROUP,
LLC,
Defendant-Appellant,
and
SONIC INDUSTRIES, LLC; et al.,
Defendants.
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).
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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
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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.
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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.
6