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Muniz v. United Parcel Service, Inc.

United States Court of Appeals, Ninth Circuit

December 5, 2013

Kim MUNIZ, Plaintiff-Appellee,
UNITED PARCEL SERVICE, INC., Defendant-Appellant.

Submitted June 14, 2013.[*]

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Katherine C. Huibonhoa, Paul Hastings LLP, San Francisco, CA, filed the briefs for the defendant-appellant. With her on the briefs was Ryan C. Hess, Paul Hastings LLP, San Francisco, CA.

Michael von Loewenfeldt, Kerr & Wagstaffe LLP, San Francisco, CA, filed the brief for the plaintiff-appellee. With him on the brief were Daniel A. Zaheer, Kerr & Wagstaffe LLP, San Francisco, CA, and Stephen R. Jaffe, The Jaffe Law Firm, San Francisco, CA.

Appeal from the United States District Court for the Northern District of California, Claudia Wilken, Chief District Judge, Presiding. D.C. No. 4:09-cv-01987-CW.

Before: DIARMUID F. O'SCANNLAIN and MILAN D. SMITH, JR., Circuit Judges, and JAMES K. SINGLETON, Senior District Judge.[**]

Opinion by Judge Singleton; Partial Concurrence and Partial Dissent by Judge Milan D. Smith, Jr.


SINGLETON, Senior District Judge:

Kim Muniz sued her employer United Parcel Service, Inc., (" UPS" ) in California State Superior Court for employment-related discrimination in violation of California's Fair Employment and Housing Act (" FEHA" ), California Government Code § 12900. Muniz made no federal claim. UPS removed the case to federal court on the basis of diversity of citizenship. The case was tried to a jury which returned a verdict in Muniz's favor finding that UPS had discriminated against her on the basis of her gender and awarded her $27,280 in damages. Muniz, as a prevailing plaintiff under FEHA, sought an award of attorney fees. CAL. GOV'T CODE § 12965(b). Muniz requested $1,945,726.50 in fees. After extensive argument, the district court awarded Muniz $697,971.80.

UPS appeals. The sole issue on appeal is whether the district court abused its discretion in awarding Muniz $697,971.80 where the jury awarded her only $27,280.


The district court had subject matter jurisdiction over Muniz's gender discrimination claims based upon diversity of citizenship. 28 U.S.C. § 1332. This court has jurisdiction over the final judgment under 28 U.S.C. § 1291.


We review the district court's interpretation of state law in a diversity case de novo. Stanford Ranch, Inc. v. Md. Cas. Co., 89 F.3d 618, 624 (9th Cir.1996). If state substantive law governs a case, then an award of attorney fees is also governed by state law. Champion Produce, Inc. v. Ruby Robinson Co., 342 F.3d 1016, 1024 (9th Cir.2003). California state law determines the standards and factors to be considered in determining an award of attorney fees in this diversity action. See Winterrowd v. Am. Gen. Annuity Ins. Co., 556 F.3d 815, 827 (9th Cir.2009). We

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review attorney fees awarded under state law for abuse of discretion. 389 Orange St. Partners v. Arnold, 179 F.3d 656, 661 (9th Cir.1999). Decisions of the California Supreme Court, including reasoned dicta, are binding on us as to California law. Aceves v. Allstate Ins. Co., 68 F.3d 1160, 1164 (9th Cir.1995). Decisions of the six district appellate courts are persuasive but do not bind each other or us. See In re Student-Athlete Name & Likeness Licensing Litig., 724 F.3d 1268, 1278 (9th Cir.2013). We should nevertheless follow a published intermediate state court decision regarding California law unless we are convinced that the California Supreme Court would reject it. In re Watts, 298 F.3d 1077, 1082-83 (9th Cir.2002); Owen ex rel. Owen v. United States, 713 F.2d 1461, 1464-65 (9th Cir.1983).

" We review evidentiary rulings for abuse of discretion, though we review de novo the district court's interpretation of the Federal Rules of Evidence." United States v. Urena, 659 F.3d 903, 908 (9th Cir.2011), cert. denied, __ U.S. __, 132 S.Ct. 1608, 182 L.Ed.2d 214 (2012).

We may affirm on any basis supported by the record, whether or not relied upon by the district court. Hall v. N. Am. Van Lines, Inc., 476 F.3d 683, 686 (9th Cir.2007). Accordingly, the decision of the district court may be affirmed " even if the district court relied on the wrong grounds or wrong reasoning." Cigna Prop. & Cas. Ins. Co. v. Polaris Pictures Corp., 159 F.3d 412, 418 (9th Cir.1998).


In her complaint, Muniz identified a single adverse employment action— her two-level demotion from Division Manager to Supervisor— and alleged alternative " discriminatory motives" for UPS's action in separate claims for retaliation, gender discrimination and age discrimination. Muniz contended that the wrongful discrimination was traceable in part to UPS's negligence in hiring and training its employees.

It appears that Muniz only identified one adversary in UPS management— Ron Meyer— to whom she traced all of her problems. Meyer is the only one specifically accused by Muniz of retaliation and age and gender discrimination. She does not contend that Mary Gill, the District Manager who demoted her, or UPS's other managers were gender biased or had any reason to retaliate against her. She maintains that Gill and the other managers were influenced by Meyer into taking all of the actions upon which this case is brought.

From the record provided, it appears that UPS essentially argued that Muniz was an example of what has elsewhere been called the " Peter Principle" — that she had been promoted to her level of incompetence. See LAURENCE J. PETER & RAYMOND HULL, THE PETER PRINCIPLE: WHY THINGS ALWAYS GO WRONG 7 (William Morrow ed.1969). In line with this theory, UPS apparently argued that Meyer was simply the first to recognize Muniz's failings, and that his efforts were a reasonable attempt to persuade senior management to

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demote her to a position consistent with her limitations. The jury disagreed and awarded damages. UPS does not challenge the jury verdict on appeal.

On March 30, 2009, Muniz filed a complaint with the California Department of Fair Employment and Housing (" DFEH" ) alleging that she was demoted based on gender, age and retaliation for engaging in protected activity. The only adverse action Muniz mentioned in her state court complaint and in her administrative complaint was the two-step demotion. Her complaint about the Manager Performance ...

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