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Maddalena v. Valve Corp.

United States District Court, W.D. Washington, Seattle

February 2, 2018




         THIS MATTER comes before the Court on Plaintiff's Motion to Recover Attorney Fees, docket no. 147 (“Plaintiff's Motion”), and Defendant Valve Corporation's Motion for Award of Attorney's Fees, docket no. 151 (“Defendant's Motion”). Having reviewed all papers filed in support of, and in opposition to, the motions, the Court enters the following order.


         Plaintiff brought suit alleging eight claims: (1) wrongful termination in violation of public policy; (2) discrimination; (3) failure to accommodate; (4) hostile work environment; (5) retaliation; (6) unpaid wages under California Labor Code § 203; (7) violation of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200, et seq.; and (8) misclassification under California Labor Code § 226.8. See generally Complaint, docket no. 1-1.

         On July 27, 2017, Defendant moved for partial summary judgment on all of Plaintiff's claims, except for causes of action six and seven. See Defendant's Motion for Partial Summary Judgment, docket no. 60, at 2. On September 20, 2017, the Court granted Defendant summary judgment on Plaintiff's failure to accommodate, hostile work environment, retaliation, and misclassification claims. Docket no. 89. The Court denied Defendant's request for summary judgment on Plaintiff's wrongful termination and discrimination claims. Id.

         On September 25, 2017, Defendant tendered a check to Plaintiff “in the amount of $51, 243.14, the exact amount Plaintiff claimed was owed to her in unpaid overtime wages and associated interest . . . .” Declaration of Liam Lavery, docket no. 154 (“Lavery Decl.”), at ¶ 4. “[Defendant] explained to Plaintiff that while it did not intend to admit that she was an employee entitled to overtime wages, it intended to moot her Labor Code and Unfair Competition Law claims by providing her with all of the relief to which she would be entitled if she prevailed on those claims. To complete her recovery, [Defendant] also agreed to pay Plaintiff's reasonable attorneys' fees solely in connection with her unpaid wages claim in an amount to be determined by the Court.” Id. at ¶ 6. Plaintiff accepted and deposited the check, but maintained that her unpaid wages and UCL claims were not moot. Id. at ¶¶ 8-9.

         Trial commenced on November 1, 2017, and Defendant ultimately prevailed on Plaintiff's remaining claims for wrongful termination, discrimination, unpaid wages, and UCL claims. See Jury Verdict, docket no. 145.

         Against this backdrop, Plaintiff asserts that she is entitled to reasonable attorney's fees incurred in prosecuting her unpaid wages claim, but does not identify any legal basis for the recovery of those fees. Defendant, in turn, seeks fees under FEHA and the parties' “Independent Contractor Agreement” at issue in this lawsuit. Declaration of Laurence A. Shapero in Support of Valve's Motion for Attorney's Fees, docket no. 152 (“Shapero Decl.”), Exhibit E (the “Agreement”). Defendant specifically asserts that “Plaintiff's wrongful termination, discrimination, failure to accommodate, and retaliation [claims] all arise under or are underpinned by FEHA [collectively, the ‘FEHA Claims']. Plaintiff's remaining claims-unpaid wages § 203, violation of UCL, and misclassification under § 226.8-all arise out of the parties' Agreement [collectively, the ‘Non-FEHA Claims'].” Defendant's Motion at 3.


         1. Legal Standards

         Federal courts sitting in diversity apply state law in determining a party's right to recover fees. Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000).

         a. Fees Under FEHA

         “A district court has discretion to award attorney fees to a prevailing defendant in a FEHA action ‘upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation [i.e., groundless].'” Zaman v. Kelly Servs., No. 15-cv-04601-HRL, 2017 WL 2335601, at * 3 (N.D. Cal. May 30, 2017) (alteration in original) (quoting Christianburg Garment Co. v. Equal Emp't Opportunity Comm'n, 434 U.S. 412, 42-22 (1978)). In determining whether a FEHA action is frivolous for purposes of a fee award, the Court considers whether (1) the plaintiff established her prima facie case; (2) defendant offered to settle; and (3) the court dismissed the case before it was tried on the merits. Portnoy v. Veolia Transp. Servs., Inc., No. 2:10-cv-02730-GEB-CKD, 2013 WL 4828122, at *1 (E.D. Cal. Sept. 9, 2013) (citing Lial v. Cnty. of Stanislaus, No. CV F 09-1039 LJO JLT, 2011 WL 92012, at *3 (C.D. Cal. Jan. 11, 2011)). If the Court concludes that the FEHA claims were frivolous, it must then determine when plaintiff should have known that they had become so. Zaman, 2017 WL 2335601, at *3.

         b. Fees Under the Agreement

         The Agreement allows the prevailing party in “any claim or cause of action . . . arising out of or relating to this Agreement . . . to recover . . . all “reasonable attorney's fees incurred . . . .” Agreement at ¶ 14. The Agreement further requires Plaintiff to “bear any and all expenses, including legal and other professional fees, . . . that [Defendant] and/or [Plaintiff] may incur in ...

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