Justia Legal Ethics Opinion Summaries

Waters began working as a Petaluma firefighter and paramedic in 2008. She was the first and only woman to hold that position. She claims she was immediately subjected to harassment and discrimination based upon her sex. According to Waters, she was subjected to retaliation when she complained. The city maintains that Waters never complained. In February 2014, Waters went on leave; in May, the city received notice from the Equal Employment Opportunity Commission, that Waters had filed a charge alleging sexual harassment and retaliation. Days later, Waters voluntarily resigned. The city retained outside counsel, Oppenheimer, to investigate. Oppenheimer provided her report to the city only; every page contained an indication that it was confidential and attorney-client privileged. During discovery in Waters’ lawsuit, the court granted a motion to compel production of the report. The court of appeal reversed. The dominant purpose of Oppenheimer’s investigation was not fact-finding, but to provide legal services in anticipation of litigation. She was not required to give legal advice as to what course of action to pursue in order for the attorney-client privilege to apply. The privilege was not waived by the employer’s assertion of an avoidable consequences defense; the city does not seek to rely on the post-employment investigation as a defense, nor could it. View "City of Petaluma v. Superior Court" on Justia Law

CRST trucking company requires its drivers to graduate from its training program before becoming certified drivers. In 2005, new driver Starke filed an EEOC charge, alleging that she was sexually harassed by male trainers during her training (42 U.S.C. 2000e–5(b)).The Commission ultimately informed CRST that it had found reasonable cause to believe that CRST subjected Starke and “a class of employees and prospective employees to sexual harassment.” In 2007, having determined that conciliation had failed, the Commission filed suit. During discovery, the Commission identified over 250 allegedly aggrieved women. The district court dismissed, held that CRST was a prevailing party, and awarded the company over $4 million in fees. The Eighth Circuit reversed the dismissal of two claims and vacated the award. On remand, the Commission settled Starke’s claim and withdrew the other. The district court again awarded more than $4 million, finding that CRST had prevailed on more than 150 claims because of the Commission’s failure to satisfy pre-suit requirements. The Eighth Circuit reversed, stating that dismissal was not a ruling on the merits. A unanimous Supreme Court vacated. A favorable ruling on the merits is not a necessary predicate to find that a defendant is a prevailing party. A plaintiff seeks a material alteration in the legal relationship between the parties; a defendant seeks to prevent that alteration, and that objective is fulfilled whenever the plaintiff ’s challenge is rebuffed, irrespective of the precise reason for the decision. Title VII’s fee-shifting statute allows prevailing defendants to recover whenever the plaintiff ’s “claim was frivolous, unreasonable, or groundless.” Congress must have intended that a defendant could recover fees expended in such litigation when the case is resolved in the defendant’s favor, whether on the merits or not. View "CRST Van Expedited, Inc. v. Equal Employment Opportunity Comm'n" on Justia Law

Ling's employment as a Monterey restaurant manager was terminated. Her position was classified as exempt under Industrial Wage Order 5-2001(1)(B)(1), from overtime compensation and mandated meal periods. Ling sued, seeking unpaid overtime wages, waiting time penalties, and premium pay for failure to provide meal and rest periods; she alleged unfair competition and sought attorney‘s fees and costs. An arbitrator rejected Ling’s claim that she was wrongly classified and her contention that chronic staffing shortages required her to spend time performing nonexempt hourly work. Based on nine weeks when she attended training, Ling was compensated $1,038 for missed meal periods and $7,668 in waiting time penalties. The arbitrator deemed employer the prevailing party on all but that minor issue, awarded employer $29,046 in costs and $212,685 in attorney‘s fees based on the dominant contention of erroneous classification.The court corrected and remanded. The court of appeal agreed that the arbitrator exceeded his power by awarding statutory attorney‘s fees to an employer for work performed in defeating inextricably intertwined claims, contrary to public policy embedded in the Labor Code‘s one-way fee shifting provision. The court upheld the trial court‘s remedy and subsequent order confirming an award to plaintiff of costs but not attorney‘s fees based on intervening California Supreme Court authority. View "Ling v. P.F. Chang's China Bistro, Inc." on Justia Law

Case voluntarily enrolled in a three-year, employer-sponsored educational program, agreeing, in writing that if he quit his job within 30 months of completing the program, he would reimburse his employer, UPI, a prorated portion of program costs. Two months after completing the program, Case went to work for another employer. He refused to reimburse UPI, which sued for breach of contract and unjust enrichment. Case cross-complained, asserting the reimbursement agreement was unenforceable and UPI violated the Labor Code and other statutory provisions in seeking reimbursement. The trial court granted UPI summary judgment on both its complaint and Case’s cross-complaint, and subsequently granted UPI’s motion for attorney fees for defeating Case’s wage claims. The court applied the version of Labor Code section 218.5 in effect at the time of the summary judgment proceedings, rather than the version in effect at the time it awarded fees, which permits fees to a prevailing employer only when the employee’s wage claims have been brought in “bad faith.” The court of appeal affirmed summary judgment, but reversed the attorney fees award. Under California Supreme Court precedent, statutory provisions that alter the recovery of attorney fees are deemed procedural in nature and apply to pending litigation. View "USS-POSCO Indus. v. Case" on Justia Law

Petitioner was awarded benefits under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. 928(a), for injuries he sustained while working for PacificRim. On appeal, petitioner challenged the Board's decision affirming an ALJ's award of attorney's fees under the Act. The court concluded that the proxy market rate relied upon by the ALJ does not adequately reflect market rates for Portland, Oregon, the relevant community, because it is based entirely on data not tailored to Portland, even though reliable information about attorney billing rates in Portland was readily available. Therefore, the court held that the Board erred in affirming the attorney’s-fee award based on a proxy market rate not tailored to the “relevant community.” Accordingly, the court granted the petition for review, vacated the judgment, and remanded for further proceedings. View "Shirrod v. OWCP" on Justia Law

Blume Construction, Inc. appealed a district court judgment affirming a Job Service North Dakota decision, finding Blume did not file a valid appeal and the agency's determination assigning Blume a final penalty tax rate. Blume received a notice of determination from Job Service informing Blume that it would be assigned a penalty tax rate for unemployment insurance. The notice stated the agency conducted an audit and concluded there was a transfer of ownership and payroll between Blume and another company that was knowingly done to obtain a lower tax rate for unemployment insurance. The notice informed Blume it would be assigned the highest tax rate assignable for the next three years. The notice advised Blume the determination would become final unless a written appeal was made to Job Service within fifteen days. Job Service received an electronic appeal request for Blume signed by Craig Fidler. Fidler was identified as a licensed attorney from Colorado. Fidler was not licensed to practice law in North Dakota. In approximately May 2014, Fidler notified the referee he was unable to secure a sponsoring attorney licensed in North Dakota. During that same time period, the referee was informed a North Dakota attorney would be representing Blume. Blume argued the referee erred in finding Blume's attorney engaged in the unauthorized practice of law and the appealed request the attorney filed was void. Finding no reversible error, the Supreme Court affirmed. View "Blume Construction, Inc. v. North Dakota" on Justia Law

Plaintiff Bruce Kaye, the controlling principal of three entities that sold and managed timeshare interests in resort properties in Atlantic County, hired defendant Alan Rosefielde, an attorney admitted to practice law in New York but not in New Jersey, initially as outside counsel, and then as an employee. After defendant had worked closely with plaintiff for approximately four months, the parties entered an agreement providing that, as compensation for his services, defendant would earn an annual salary of $500,000. For approximately two years, defendant served as Chief Operating Officer for several of the timeshare entities, and effectively functioned as their general counsel. In that capacity, defendant committed serious misconduct by acting on his own behalf instead of for his employers benefit, and exposing his employers to potential liability. Based on this misconduct, and dissatisfaction with defendant’s performance, plaintiff terminated defendant’s employment. Kaye, in his individual capacity and as trustee of two trusts, Kaye’s son Jason Kaye, and the business entities that Kaye owned, sued Rosefielde and several other entities. Plaintiffs asserted claims based on Rosefielde’s breach of fiduciary duty, fraud, legal malpractice, unlicensed practice of law, and breach of the duty of loyalty. Following a lengthy bench trial, the trial court found that Rosefielde engaged in egregious conduct constituting a breach of his duty of loyalty, breach of his fiduciary duty, legal malpractice, and civil fraud. The trial court rescinded Rosefielde’s interest in several entities, awarded compensatory damages, punitive damages, and legal fees, and dismissed Rosefielde’s counterclaims. It declined, however, to order the equitable disgorgement of Rosefielde’s salary as a remedy for his breach of the duty of loyalty, on the ground that his breach did not result in damage or loss to the entities that employed him. The Appellate Division affirmed that determination, and the New Jersey Supreme Court granted certification on the issue of equitable disgorgement. “In imposing the remedy of disgorgement, depending on the circumstances, a trial court should apportion the employee’s compensation, rather than ordering a wholesale disgorgement that may be disproportionate to the misconduct at issue. . . . If an agent is paid a salary apportioned to periods of time, or compensation apportioned to the completion of specified items of work, he is entitled to receive the stipulated compensation for periods or items properly completed before his renunciation or discharge. This is true even if, because of unfaithfulness or insubordination, the agent forfeits his compensation for subsequent periods or items.” The judgment of the Appellate Division was reversed with respect to the remedy of equitable disgorgement, and the matter was remanded to the trial court to decide whether plaintiffs were entitled to disgorgement. If so, the trial court should apportion Rosefielde’s compensation, ordering disgorgement only for monthly pay periods in which he committed acts of disloyalty. View "Kaye v. Rosefielde" on Justia Law

Plaintiff filed suit against Mehusa, her former employer, for unpaid overtime, unpaid wages, and violation of California's Equal Pay Act, Labor Code 1197.5. After plaintiff prevailed on her Equal Pay Act claim and defendant prevailed on plaintiff's overtime and wage claims, the trial court awarded plaintiff her attorney fees and defendant its attorney fees and costs. The trial court offset the attorney fees awards for a net award to plaintiff of $3,709.19. Plaintiff appealed, arguing that the trial court erred in ruling that defendant was a prevailing party on plaintiff’s wage claim and awarding defendant attorney fees and costs under section 218.5. The court held in the published portion of this opinion that when there are two fee shifting statutes in separate causes of action, there can be a prevailing party for one cause of action and a different prevailing party for the other cause of action. Accordingly, the court affirmed the judgment. View "Sharif v. Mehusa, Inc." on Justia Law

Plaintiffs filed suit against defendants under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., and the New York labor Law (NYLL). After plaintiffs prevailed, the district court awarded plaintiffs' counsel $514,284.00 in attorneys’ fees and $68,294.50 in costs. Of that amount, it awarded $10,425 to reimburse plaintiffs' counsel for costs incurred retaining an expert accountant for plaintiffs' affirmative case against defendants. Defendants appealed, arguing that the district court’s award of fees and costs constituted an abuse of discretion. The court concluded that because section 216(b) does not explicitly authorize awards reimbursing plaintiffs for expert fees, the district court erred in granting such an award pursuant to this provision. Therefore, the court vacated the district court’s award of $10,425 in costs for expert fees and remanded to the district court to consider whether the NYLL authorizes the award of such fees and, if so, whether to award them pursuant to the NYLL. In a summary order issued simultaneously with this opinion, the court affirmed in part and reversed in part as to defendants' other challenges. View "Gortat v. Capala Bros." on Justia Law

Plaintiffs filed suit against defendants under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., and the New York labor Law (NYLL). After plaintiffs prevailed, the district court awarded plaintiffs' counsel $514,284.00 in attorneys’ fees and $68,294.50 in costs. Of that amount, it awarded $10,425 to reimburse plaintiffs' counsel for costs incurred retaining an expert accountant for plaintiffs' affirmative case against defendants. Defendants appealed, arguing that the district court’s award of fees and costs constituted an abuse of discretion. The court concluded that because section 216(b) does not explicitly authorize awards reimbursing plaintiffs for expert fees, the district court erred in granting such an award pursuant to this provision. Therefore, the court vacated the district court’s award of $10,425 in costs for expert fees and remanded to the district court to consider whether the NYLL authorizes the award of such fees and, if so, whether to award them pursuant to the NYLL. In a summary order issued simultaneously with this opinion, the court affirmed in part and reversed in part as to defendants' other challenges. View "Gortat v. Capala Bros." on Justia Law