Civil Rights, Section 998: 2/8 DCA Holds, For Pre-2019 Cases, That Plaintiffs In Nonfrivolous FEHA Suits Are Not Entitled To Costs Shifting Under CCP § 998

Panel Agrees With Reasoning In Arave Opinion So Holding.

            Effective January 1, 2019, the Legislature has determined that plaintiffs in FEHA cases found to be nonfrivolous in nature do not face fee, costs, or expert witness fee exposure under the FEHA shifting statute or even under CCP § 998 after rejection of a 998 offer which is not beaten at trial. With respect to pre-2019 cases, there is a split of opinion on the topic among the intermediary appellate courts, with Holman v. Altara Pharma US, Inc., 186 Cal.App.4^th 462 (2010) holding section 998 does allow for costs-shifting in nonfrivolous FEHA cases and with Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 19 Cal.App.5^th 525 (2018) holding it does not allow for costs-shifting in this situation.

            The 2/8 DCA, in Huerta v. Kava Holdings, Inc., Case Nos. B277164/B281303 (2d Dist., Div. 8 Nov. 14, 2018) (partially published; costs discussion published), has now weighed in. It has found Arave persuasive, reversing a $50,000 defense award of costs/expert witnesses against plaintiff in a nonfrivolous FEHA case. It also found that the result was consonant with the Legislature’s upcoming amendment which takes effect in 2019.

           Judge Kim Dunning, an Orange County Superior Court judge sitting by assignment, authored the 3-0 opinion.