Judge: Armen Tamzarian, Case: 20STCV33037, Date: 2023-02-21 Tentative Ruling

Please notify Department 52 via email at smcdept52@lacourt.org and indicate that the parties are submitting on the tentative ruling. Please provide the attorney's name and represented party. Please notify the opposing side via email if submitting on the Court's tentative ruling.

Case Number: 20STCV33037    Hearing Date: February 21, 2023    Dept: 52

Plaintiff Olivia McCabe’s Motion to Strike and Tax Costs Claimed by Defendant ADP, Inc.

Plaintiff Olivia McCabe moves to strike or tax defendant ADP, Inc.’s memorandum of costs.  Generally, a prevailing defendant “is entitled as a matter of right to recover costs in any action.”  (CCP § 1032(b).)  But in actions brought under the Fair Employment and Housing Act (FEHA), “a prevailing defendant shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so.”  (Gov. Code, § 12965(c)(6).)  This “exception to the mandatory award of litigation costs under section 1032, subdivision (b), implements a clear legislative goal of encouraging potentially meritorious FEHA suits.”  (Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1062 (Roman).)

Plaintiff’s action against ADP was not frivolous, unreasonable, or groundless.  Under FEHA, a court may only award costs to the prevailing defendant when “the plaintiff brought or continued litigating the action without an objective basis for believing it had potential merit.”  (Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 99–100.)  “In making this determination, the court ‘should exercise caution to avoid “hindsight bias.” ’ ”  (Pollock v. Tri-Modal Distribution Services, Inc. (2021) 11 Cal.5th 918, 951.) 

Though the court ultimately sustained ADP, Inc.’s demurrer without leave to amend, plaintiff’s action was not frivolous or groundless.  Plaintiff had an objective basis for believing the action had potential merit.  The court’s ruling on ADP’s demurrer to the third amended complaint turned on whether plaintiff alleged sufficient facts to make ADP liable for aiding and abetting the employer’s violations.  (Gov. Code, § 12940(i); see Smith v. BP Lubricants USA Inc. (2021) 64 Cal.App.5th 138, 146.)  Plaintiff made sensible arguments that ADP could be liable under that theory.  The question had no easy answer.  Reasonable minds could disagree. 

Plaintiff also had evidence suggesting an ADP employee was unusually involved in her employer’s decision making.  In her deposition, defendant Vandana Madkan testified ADP employee Krista Zimmerman “is our HR, you know, advisor and liaison for the office with ADP.”  (Moorhead Decl., Ex. 3, Madkan Depo., 110:5-8.)  When plaintiff requested a medical leave of absence and submitted a doctor’s note, Madkan “immediately turned [the note] over to Krista Zimmerman.”  (Id., 125:4-7.)  Before terminating plaintiff, Madkan “turned to the expertise of Krista at ADP as to what to do.”  (Id., 108:23-24.)  She testified Zimmerman ultimately told her “[Y]es, you can go ahead and fire Olivia McCabe.”  (Id., 107:7-9.)  Madkan further testified she understood Zimmerman’s advice as telling her “to fire Olivia for the absences instead of the performance issues because it’s cleaner.”  (Id., 241:13-18.)  This evidence supports an objective basis for believing the action against ADP had potential merit.

ADP argues that, because plaintiff also brought other causes of action, FEHA’s heightened standard does not apply to all costs.  “Although section 1032, subdivision (b), also serves an important purpose, relieving a party whose position was vindicated in court of the basic costs of litigation, when those costs have not been increased by the inclusion of additional theories of liability to the primary FEHA claim asserted, the express public policy of Government Code section 12965, subdivision (b), controls.”  (Roman, supra, 237 Cal.App.4th at p. 1062.)  This rule “should apply to any other cause of action that is intertwined and inseparable with the FEHA claims.”  (Id. at p. 1062, fn. 20.)  “Unless the FEHA claim was frivolous, only those costs properly allocated to non-FEHA claims may be recovered by the prevailing defendant.”  (Id. at p. 1062.)

ADP’s chief defense—which resulted in the judgment in its favor—applied equally to FEHA claims and Labor Code claims.  The defense was that ADP did not employ plaintiff and was not liable under any other theory in this action arising from plaintiff’s employment.  That defense cannot be separated or apportioned between the FEHA claims and the non-FEHA claims.  The different elements of each cause of action had little importance.  The key issue was whether ADP could be liable at all, not whether plaintiff alleged sufficient facts for the substance of those violations.  The same theories that could have made ADP liable for the Labor Code violations and other causes of action could have also made ADP liable under FEHA.

Assuming plaintiff’s other causes of action against ADP can be separated from the FEHA claims, none of ADP’s costs can be allocated solely to non-FEHA claims.  ADP’s costs were not increased because plaintiff included those additional theories of liability against it.

ADP claims two categories of costs.  First, it claims $1,129.23 in filing and motion fees.  None of those filings or fees can be separated from the FEHA claims.  The plurality of this category is ADP’s first appearance fee—which would be required even if plaintiff alleged only FEHA claims.  ADP incurred fees for various non-substantive documents such as a stipulation to continue the trial and a notice of remote appearance.  ADP also claims fees for filing papers in support of its demurrers (plus the proposed judgment), which were no greater because of plaintiff’s non-FEHA claims.  Finally, ADP incurred fees for filing papers regarding discovery disputes: oppositions to plaintiff’s motions to quash subpoenas and papers for ADP’s informal discovery conference on a dispute with co-defendant Madkan Dermatology PC.  These discovery disputes involved at least some issues arising from the FEHA claims, such as plaintiff’s damages or the extent of ADP’s involvement with Madkan Dermatology.  Plaintiff’s non-FEHA claims did not cause ADP to file these papers and did not increase ADP’s costs.

Second, ADP claims $6,351.25 in deposition costs for the depositions of plaintiff Olivia McCabe and defendant Vandana Madkan.  As ADP argues in its opposition to this motion, Madkan’s “testimony allegedly served the basis for bringing ADP into this action under aiding and abetting/joint employer theories.  There is no legitimate dispute that these depositions are reasonably necessary for ADP to defend itself in this action.”  (Opp., p. 7.)  McCabe and Madkan may be the two most important witnesses in this case.  Deposing them would be necessary regardless of whether plaintiff alleged non-FEHA claims.  Plaintiff’s other causes of action against ADP did not increase ADP’s deposition costs. 

Disposition

Plaintiff Olivia McCabe’s motion to strike and tax costs claimed by defendant ADP, Inc. is granted.  The court hereby strikes the entire memorandum of costs filed by defendant ADP, Inc. on December 1, 2022.