Muniz v. UPS

Disparity between a party’s damages awards and the prevailing party’s attorney fees is not a per se special circumstance triggering downward adjustment, and absent unique circumstances requiring adjustment, the figure should be awarded unaltered.

California resident, Kim Muniz, brought a successful suit for gender based employment discrimination against her employer United Parcel Service, Inc. (“UPS”) after being demoted from Division Manager to Supervisor. The jury found UPS in violation of California’s Fair Employment and Housing Act (“FEHA”), awarding $697,971.80 in attorney fees and only $27,280 in damages. UPS appealed, arguing that the district court abused its discretion by awarding such disparate amounts. The Ninth Circuit held that the district court did not abuse its discretion because California law does not require the district court to reduce disparities in awards. Aware of its discretion to reduce fees further than it did, the district court clearly and concisely addressed each issue UPS had with their award. Utilizing a “lodestar approach” for calculating attorney fees for the prevailing party, the court determined each attorney’s reasonable hourly rate and then multiplied by reasonable hours spent. Absent unique circumstances requiring adjustment to the lodestar amount, the figure should be awarded unaltered to the prevailing party attorneys. Disparity does not trigger downward adjustment. However, the panel did find that the fee award to a paralegal was based upon inadmissible hearsay. The panel remanded to the district court to reconsider the award of fees to the paralegal and to determine an award for Muniz. AFFIRMED in part, VACATED in part, and REMANDED.