Discrimination award $27K, attorneys’ fee award nearly $700K

by Walter Olson on December 9, 2013

A Ninth Circuit panel has ratified that result in a gender discrimination case under California law, ruling that federal district judge Claudia Wilken was within her discretion to approve the award even though, as defendant United Parcel Service argued, “plaintiff Kim Muniz recovered comparatively little in damages and had not prevailed on most of her claims.” [Julia Love, The Recorder; Muniz v. UPS]

{ 17 comments }

1 Mike 12.09.13 at 10:06 am

This attorney fee award encourages attorneys to pursue non-meritorious claims.

2 Allan 12.09.13 at 2:09 pm

This is a conundrum. Presumably, UPS would not have agreed to pay the claimant $27,000. That is not a small sum of money to an individual. Let’s assume that there was discrimination and there were $27,000 in damages. How would the claimant get the money except to sue? And how could she prosecute her case without an attorney?

I would posit that the least amount of money UPS should pay is the amount calculated by the amount of HOURS the attorneys spent Multiplied by a reasonably hourly RATE increased by a FACTOR representing the contingency fee.

This assumes, of course, that we like fee shifting. And, apparently, we do, as Title VII provides for it.

While I tend to agree that the amount awarded is excessive, I cannot see an alternative way to make the claimant whole.

Once again, Walter (like most conservatives) identify a real problem, shows his dislike for the progressive approach, and offer no alternative solution.

3 Richard Nieporent 12.09.13 at 3:21 pm

Once again, Walter (like most conservatives) identify a real problem, shows his dislike for the progressive approach, and offer no alternative solution.

If you are so interested in making the defendant whole Allan, then why stop at a measly $700K? Just think of the legal representation she could have if the court awarded a $700M fee!

4 Allan 12.09.13 at 3:46 pm

but a $700M fee would not make the claimant whole. When consumers are ordered to pay outrageous fees for default on a mortgage are you also concerned?

It sounds like this case should have settled, but UPS would not do so. If UPS held numerous depositions and filed numerous motions increasing the time the claimant’s counsel had to spend prosecuting the case, would your position be different?

5 Boblipton 12.09.13 at 5:41 pm

Well, there is a solution, Allan, but lawyers won’t like it: limit lawyers’ fees to one third of their clients’ awards when taken on a contingency basis.

Don’t like the solution? Well, that’s too bad. You can’t snipe at Walter for mentioning there’s a problem without coming up with a solution and then snipe at me for coming up with a solution you don’t like. Sometimes, you have to say “We have a problem” and have people look around for a good solution. That, however, doesn’t seem to be good enough for you, so we’ll adopt the first solution that comes up.

Sometimes the solution is to look at the outcome and say “this is stupidly wrong” and instead of applying a mechanical solution that results in that solution. Of course, that would require thought and judgment. No one wants that.

Bob

6 Richard Nieporent 12.09.13 at 7:48 pm

but a $700M fee would not make the claimant whole.

You are being disingenuous Allan. You though a $700K fee was necessary because it would get the plaintive a lawyer.

Let’s assume that there was discrimination and there were $27,000 in damages. How would the claimant get the money except to sue? And how could she prosecute her case without an attorney.

Thus by your logic she would get much better representation and therefore more money if the law firm was able to get a $700M fee as opposed to a $700K fee.

7 DEM 12.10.13 at 8:16 am

If UPS held numerous depositions and filed numerous motions increasing the time the claimant’s counsel had to spend prosecuting the case, would your position be different?

_____________

You mean if UPS actually defended itself within the bounds of the law — a system designed to promote the sort of inefficiency to which you allude — that would or should justify a higher fee award? Sounds like a corporate defendant is damned either way under your view. Put up a half-hearted defense, lose and pay damages. Put up a spirited defense, prevail on most of the claims and whittle the case to a nominal damage amount, and pay the plaintiffs’ attorney a king’s ransom.

8 Allan 12.10.13 at 10:43 am

The contingency fee arrangement has problems, also. An attorney can do minimal work and get a great reward.

I don’t know what the proper answer is. But, if UPS ends up paying its lawyers to defend a losing case, Plaintiff’s counsel should get at least as much for prosecuting a winnning case.

The best system possible would be for a lawyerless process whereby aggrieved claimants could be compensated according to their losses. Find that and I think we have a solution.

9 DEM 12.10.13 at 11:32 am

“The best system possible would be for a lawyerless process whereby aggrieved claimants could be compensated according to their losses. Find that and I think we have a solution.”

According to their losses, and not according to the fault of the defendant? It seems you are suggesting that, though it’s not clear. If so, I don’t see it as a realistic solution, especially given the ever-widening scope of “losses” the law sees fit to compensate.

I might be able to agree to a more strict liability system if the scope of possible claims was very narrow and the tort system was radically revised to make its administrative costs a small fraction of what they now are. Of course, the biggest opponents of such a system would be the plaintiffs’ lawyers.

10 Allan 12.10.13 at 12:35 pm

Of course fault is important. That is why I wrote “aggrieved.” Perhaps I should have written that claimants who are unlawfully discriminated against should be made whole. But I wanted to be succinct.

Don’t fool yourself. Defense attorneys also benefit from the system. UPS got screwed. They discriminated and caused $27,000 in damages, but ended up paying $27,000 to the claimant, $700k to her attorneys, and an unknown amount (surely in the six figure range) to their own attorneys.

11 Richard Vaznaugh 12.10.13 at 5:56 pm

The Judge in this case did what she had to: as a result of proving discrimination Ms. Muniz’s attorneys are entitled to be paid for all reasonable hours worked at market rates, basically what a paid-by-the-hour attorney could have reasonably charged UPS for the same work.

The amounts are not diminished based on the size of the recovery, because overcoming the formidable and well-funded opposition of UPS and STILL proving that company broke discrimination laws has a value in and of itself. What’s more, no taxpayer dollars were spent on behalf of Ms. Muniz, she and her attorney enforced the laws entirely on their own and at risk.

Most likely, UPS is spending even more money now, preparing for another appeal. Shouldn’t Ms. Muniz’s attorneys be compensated for the work and delay they are put to?

12 DEM 12.11.13 at 11:23 am

“Ms. Muniz’s attorneys are entitled to be paid for all reasonable hours worked at market rates, basically what a paid-by-the-hour attorney could have reasonably charged UPS for the same work. ”

Well, the market rates of Ms. Muniz’s attorneys were apparently zero, since, in this case at least, she was probably paying them nothing. That’s what market rate means — what willing buyers are willing to pay. UPS’ attorneys, by contrast, competed for UPS’ legal work in an incredibly competitive market. The notion that Ms. Muniz’s attorneys should be paid commensurate with UPS’ attorneys is specious. A better, though far from perfect, measure would be a market contingent fee, so about 1/3 of the recovery. That is a far better approximation of the price Ms. Muniz would be willing to pay and what her attorneys would have charged.

13 Boblipton 12.11.13 at 11:37 am

Briefly: no.

Given that the damage awarded is currently one-thirtieth the amount spent to achieve it, this counts as using an A-bomb to deal with a fly.

Of course, one cannot put a price on justice…. oh, wait, we can. Always, of course, assuming that 27K is justice. And the 700K is the price. This time.

Bob

14 Ron Miller 12.11.13 at 11:19 pm

I like the points Allan makes.

I’m a plaintiffs’ lawyer. I have no problem with big contingency fees because I think there is a method to the madness. But this is spending 700k in legal fees on a 27k case. I have some real concerns with that as a citizen.

15 anonymous 12.12.13 at 7:59 pm

Well, the market rates of Ms. Muniz’s attorneys were apparently zero, since, in this case at least, she was probably paying them nothing. That’s what market rate means — what willing buyers are willing to pay.

Willing and/or able to pay. Therefore, only the wealthy are entitled to justice in conservativeopia.

ie, UPS could afford to spend hundreds of thousands on dollars for legal representation. Ms. Muniz could not.

16 DEM 12.13.13 at 2:54 pm

” Therefore, only the wealthy are entitled to justice in conservativeopia.”

You got us, we’ve created a system where poor people have no access to civil justice. No really, they never file lawsuits! All the plaintiffs are already rich.

17 Joe 01.08.14 at 12:02 am

UPS is a proven abuser of the system, they discriminate, and retaliate against anyone that might ruin their ” Corporate Image of Purity ” they should be so lucky to get off for 700k. UPS legal needs to take a hard look themselves, they are fighting a war started by stockholders(1%), and not all wars can be won on the battlefield. Case presents is big I suspect Muniz has opened the door for yet more cases perhaps her intent, and now the bleeding will commence…?

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