Discrimination and retaliation

$90,000 Lesson Regarding Rejecting Offers

Aleksei Sviridov learned a harsh lesson after rejecting offers from the defendant in his lawsuit. Aleksei sued his former employer, the City of San Diego and the San Diego Police Department, for discrimination and other claims. Defendants made several CCP Section 998 offers, which Aleksei rejected. When Aleksei lost his claims on summary judgment, the defendants asked the court to award their costs. The trial and appellate courts award defendants over $90,000.00 in costs.

Normally, in a discrimination case, the employee is only responsible for the employer’s costs and fees if the claims are frivolous. The same rule applies to claims under the Public Safety Officers Procedural Bill of Rights Act. There was no finding that Aleksei’s claims were frivolous. So how come the court awarded defendants $90,000? Here’s the lesson regarding rejecting offers.

Lesson Regarding Rejecting Offers

CCP Section 998 is a cost-shifting statute. Used wisely, it can require the plaintiff to pay the defendant’s costs if the plaintiff fails to obtain a more favorable judgment. Section 998 encourages settlement by forcing parties to seriously consider reasonable offers.

A plaintiff who refuses a reasonable pretrial settlement offer and subsequently fails to obtain a “more favorable judgment” is penalized by a loss of prevailing party costs and an award of costs in the defendant’s favor.’ ” (Guerrero v. Rodan Termite Control, Inc. (2008) 163 Cal.App.4th 1435, 1440.)

Rejecting offers after a 998 offer can be quite costly. Just ask Aleksei.

When California’s discrimination laws adopted the “frivolous” standard for awarding the employer’s costs, many assumed employees would not have to worry about excessive fees or costs. Under Sviridov v. City of San Diego, section 998 offers trump the FEHA statute. This is definitely a situation where bad cases make bad law. Apparently Aleksei did not respond substantively to the City’s argument that FEHA does not trump section 998.

Rather, he asserted, with no analysis or citation to legal authority, “just as [Williams, supra, 61 Cal.4th 97], precludes a prevailing defendant from recovering costs under section 1032, subd[ivision] (b),” then “so does Williams preclude a … successful defendant from recovering as a prevailing party under … section 998.” We deem the failure to support this statement with reasoned argument a forfeiture.

In other words, Aleksei provided no authority or substantive analysis upon which the court could rule in Aleksei’s favor. This not only hurt Aleksei’s case, it also made it more difficult for future employees.

I expect we’ll see more 998 offers in discrimination cases, and plaintiffs will once again need to carefully consider whether they can do better than the offer before rejecting offers out of hand.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

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