Caldwell v. Paramount Unified School Dist.

Facts

Both state and federal law forbid employers from discriminating on the basis of age or race. (Caldwell v. Paramount Unified School Dist. (1995) 41 Cal.App.4th 189, 195; Gov. Code, § 12940, subd. (a); 42 U.S.C. § 2000e et seq.; 29 U.S.C. § 621 et seq.) Because the state and federal antidiscrimination laws “‘differ in some particulars,’” but share “‘identical’” objectives, “‘California courts have relied upon federal law to interpret analogous provisions of the state statute.’” (Caldwell, supra, 41 Cal.App.4th at p. 195, quoting Mixon v. Fair Employment & Housing Com. (1987) 192 Cal.App.3d 1306, 1316–1317.) That borrowing supplies the disputed legal framework in this case: the “‘shifting burdens of proof’” of McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792, governing disparate-treatment claims proved by circumstantial evidence. (Caldwell, supra, 41 Cal.App.4th at p. 193.)

Richard Caldwell had been superintendent of the Paramount Unified School District for thirteen years when, on August 13, 1991, the board of education voted three to two not to renew his contract, which was due to expire on June 30, 1992. (Caldwell, supra, 41 Cal.App.4th at p. 194.) Caldwell presented evidence that age was a factor in the no-renewal votes of board members Vivian Hansen and Janet Miller, and that race was a factor in Joseph Montoya’s vote. (Ibid.) All three testified that neither age nor race played any part in their decisions, and each detailed the nondiscriminatory reasons that led to his or her vote. (Ibid.)

Hansen’s public statements became the centerpiece of Caldwell’s case. She acknowledged that she had been accurately quoted in a newspaper as saying, among other things, that Caldwell “‘is 66 years of age’” and was seeking a four-year extension, that the district “‘needs leadership that is younger, with fresh ideas,’” and — in a separate account — that “‘Caldwell is 66 years old and he wanted an extension to 70. Not that age is important, but this is someone at the end of his career, not at the beginning.’” (Caldwell, supra, 41 Cal.App.4th at pp. 206–207.) The District countered with board testimony that the votes rested on job-related dissatisfaction — for example, that Caldwell “‘had lost touch with what was going on in the District,’” “‘had very low expectations for students,’” and repeatedly failed to provide prioritized budget-cut lists — and that this dissatisfaction predated the contract vote. (Id. at p. 207.)

Procedural history

Caldwell sued the District for breach of contract, race and age discrimination in violation of FEHA, and wrongful termination in violation of public policy. (Caldwell, supra, 41 Cal.App.4th at pp. 193–194.) He also sued three board members individually; those defendants were dismissed under Government Code section 820.2, a dismissal the California Supreme Court upheld in Caldwell v. Montoya (1995) 10 Cal.4th 972. (Caldwell, supra, 41 Cal.App.4th at p. 193, fn. 1.) The trial court granted a nonsuit on the public-policy wrongful-termination claim. (Id. at p. 194, fn. 2.)

The case went to the jury on the discrimination and contract claims. The trial court instructed the jury on the three-stage McDonnell Douglas burden of proof, including — as part of the plaintiff’s prima facie case — a requirement that Caldwell prove he “‘was qualified for the position … and was satisfactorily performing in that position.’” (Caldwell, supra, 41 Cal.App.4th at p. 198.) On a special verdict, the jury answered “no” to both “‘Did defendant discriminate against plaintiff because of his race [/ age] with regard to the employment contract?’” questions, and was instructed to skip the prima-facie and burden-shifting questions once it found no discrimination. (Id. at pp. 194, 206.) The jury also found Caldwell had breached his employment contract. (Id. at p. 194.)

Caldwell moved for a new trial and for judgment notwithstanding the verdict. The trial court granted the new-trial motion and denied JNOV. (Caldwell, supra, 41 Cal.App.4th at p. 194.) Its sole ground for the new trial was that it had erroneously instructed that the plaintiff’s prima facie case required proof of satisfactory performance, reasoning that McDonnell Douglas “‘provides only that Plaintiff has the burden of showing that he was qualified for the position, not that he was qualified and satisfactorily performing in that position.’” (Id. at p. 199.) The District appealed the new-trial order; Caldwell cross-appealed the denial of JNOV. (Id. at p. 194.) The Court of Appeal affirmed the JNOV denial, vacated the new-trial order, and directed entry of judgment for the District. (Ibid.)

Issue

Two questions framed the appeal. First, on the District’s appeal: did the trial court abuse its discretion in granting a new trial on the ground that its McDonnell Douglas instruction was erroneous — which in turn required deciding (a) whether requiring proof of “satisfactory performance” as part of the prima facie case misstated the law, and (b) whether instructing the jury on the three-stage shifting burdens at all was proper. (Caldwell, supra, 41 Cal.App.4th at pp. 195, 199.) Second, on Caldwell’s appeal: did the trial court err in denying JNOV, given Hansen’s age-referencing statements and Caldwell’s challenge to the breach-of-contract finding? (Id. at p. 206.) The opinion’s doctrinal heart is the allocation question: are the prima-facie and rebuttal stages of McDonnell Douglas questions of law for the court, or questions of fact for the jury? (Id. at p. 201.)

Holding

Reasoning

The McDonnell Douglas framework, restated. The court began with the familiar three stages. The plaintiff “must carry the initial burden of establishing a prima facie case” — a burden the court repeatedly described as “minimal,” requiring “‘very little’” evidence. (Caldwell, supra, 41 Cal.App.4th at pp. 196–197.) “‘The burden then must shift to the employer to articulate some legitimate, nondiscriminatory reason for the employee’s rejection,’” and if the employer does so, “the burden then shifts back to the plaintiff to show that the employer’s stated reason for the adverse employment decision was in fact pretext.” (Id. at p. 197.) Critically, the court emphasized the asymmetry between production and persuasion: “‘the burden of persuasion never shifts to the employer; it remains at all times with the employee,’” and the employer “‘bears only a burden of going forward with additional evidence of legitimate nondiscriminatory reasons.’” (Id. at p. 201, quoting Clark v. Claremont University Center (1992) 6 Cal.App.4th 639, 663–664.)

Satisfactory performance can be part of a still-employed plaintiff’s prima facie case. The court rejected the trial court’s premise that McDonnell Douglas forbids a “satisfactory performance” element. McDonnell Douglas itself “‘provide[d] no authority for this conclusion’”; there, the plaintiff was a rejected applicant, “not employed by the defendant,” so satisfactory job performance could not figure in his prima facie case. (Caldwell, supra, 41 Cal.App.4th at p. 199.) And the Supreme Court had warned that “‘[t]he facts necessarily will vary in [discrimination] cases, and the specification … of the prima facie proof required … is not necessarily applicable in every respect to differing factual situations.’” (Id. at pp. 199–200.) Surveying the discriminatory-discharge formulations — including Mixon’s, which lists “‘his job performance was satisfactory’” as an element — the court held the instruction correctly stated the law. (Id. at p. 200.) Engaging Caldwell’s lead authority, Davenport v. Riverview Gardens School Dist. (8th Cir. 1994) 30 F.3d 940, the court explained that whether the element is phrased as “qualification” or “satisfactory performance,” the governing point is that “‘where a plaintiff claims not that he was a model employee but only that other employees with equivalent foibles did not suffer his fate, an employer cannot prevail simply by citing deficiencies in the plaintiff’s employment record.’” (Id. at p. 200, fn. 6.)

The pivotal move: the prima-facie and rebuttal stages are questions of law. Notwithstanding that the instruction was accurate, the court held the trial court erred in giving it — because the shifting-burden stages are for the judge, not the jury. (Caldwell, supra, 41 Cal.App.4th at p. 201.) Once the employer produces evidence of a nondiscriminatory reason that, if believed, would support a defense verdict, “‘the McDonnell/Burdine presumption “drops from the case” and the factfinder must decide upon all of the evidence before it whether defendant intentionally discriminated against plaintiff.’” (Id. at pp. 201–202, quoting Mixon, supra, 192 Cal.App.3d at p. 1319.) Drawing on St. Mary’s Honor Center v. Hicks (1993) 509 U.S. 502, the court explained that once the employer carries its production burden, “‘the McDonnell Douglas framework — with its presumptions and burdens — is no longer relevant,’” leaving only “‘the ultimate question’” of intentional discrimination. (Caldwell, supra, 41 Cal.App.4th at p. 202.) The shifting burdens are thus “an analytical tool for use by the trial judge in applying the law, not a concept to be understood and applied by the jury in the factfinding process.” (Ibid.)

Where the burdens are tested: pretrial and trial vehicles — and the summary-judgment passage. Because the prima-facie and rebuttal questions are legal, the court reasoned, they “are amenable to pretrial proceedings” — “by demurrer, by motion for summary judgment, or by some similar procedure.” (Caldwell, supra, 41 Cal.App.4th at pp. 202–203.) Here the court made the statements most relevant to summary-judgment practice — and here, too, the modern reader must take care (see Significance). The court described the employer’s typical motion: the employer argues “that the plaintiff has not satisfied one of the four elements of the prima facie case … or that there is no disputed issue of material fact regarding the motivation behind the adverse employment decision.” (Id. at p. 202.) It then framed the moving employer’s showing: “If the employer presents admissible evidence either that one or more of plaintiff’s prima facie elements is lacking, or that the adverse employment action was based on legitimate, nondiscriminatory factors, the employer will be entitled to summary judgment unless the plaintiff produces admissible evidence which raises a triable issue of fact material to the defendant’s showing.” (Id. at p. 203.) Quoting Code of Civil Procedure section 437c, subdivision (o)(2) as it then read, the court declared that “the burdens of proof for purposes of a defendant’s motion for summary judgment are precisely the same as those mandated by McDonnell Douglas.” (Id. at p. 203.) The court even noted, and disagreed with, the Sixth District’s contrary dictum in Martin v. Lockheed Missiles & Space Co. (1994) 29 Cal.App.4th 1718, 1730, that the shifting burdens “‘have no direct application to a defendant’s motion for summary judgment.’” (Id. at p. 203, fn. 8.) The opinion likewise mapped the trial-stage vehicles: a defense nonsuit motion after the plaintiff’s case-in-chief tests the prima facie showing, and a plaintiff’s directed-verdict motion after the defense case-in-chief tests the legal sufficiency of the employer’s stated reasons. (Id. at pp. 203–204.) The court distilled the consequence: “if the plaintiff cannot make out a prima facie case, the employer wins as a matter of law. If the employer cannot articulate a nondiscriminatory reason for the adverse employment decision, the plaintiff wins as a matter of law.” (Id. at p. 204.)

Practical counsel: invoke the burdens before the case reaches the jury. The court offered explicit “advice to those practicing employment law”: a litigant who hopes to win “solely on the basis of the other party’s failure to satisfy one of the elements of McDonnell Douglas’s intermediate burdens … must seek a determination from the trial court … that you are entitled to judgment as a matter of law.” (Caldwell, supra, 41 Cal.App.4th at pp. 204–205.) If the litigant does not, and the case goes to the jury, “the intermediate burdens … will fall away, and the fact finder will have only to decide the ultimate issue of whether the employer’s discriminatory intent was a motivating factor in the adverse employment decision.” (Id. at p. 205.)

Why the unnecessary instruction was nonetheless harmless. Turning to the new-trial standard, the court recited that a new trial is proper for an erroneous instruction only when it “‘materially affected the substantial rights of the aggrieved party’” (Code Civ. Proc., § 657), and that a new-trial order will not be disturbed “‘unless the questioned instruction was absolutely accurate and under no reasonable interpretation could possibly have misled or confused the jury.’” (Caldwell, supra, 41 Cal.App.4th at p. 205.) That standard cut against Caldwell: the instruction was accurate, and the jury was correctly and separately instructed that discrimination is established if age or race was a motivating factor. (Id. at pp. 205–206.) Because the jurors answered “no” to the motivating-factor questions, they “‘never entertained the question of whether plaintiff had made his prima facie showing’” — they were told to skip those questions on finding no discrimination — so the extraneous burden-shifting instruction “‘could not have misled or confused’” them. (Id. at p. 206.) The court also rejected, in a footnote, the District’s “invited error” theory, noting that invited-error and estoppel rules “‘have no application’” when an appellate court reviews a new-trial order. (Id. at p. 205, fn. 9.)

JNOV: substantial evidence supports the verdict. On Caldwell’s cross-appeal, the court applied the deferential substantial-evidence standard: “‘the power of the appellate court begins and ends with a determination as to whether there is any substantial evidence … which will support the conclusion reached by the jury,’” resolving all conflicts in favor of the verdict. (Caldwell, supra, 41 Cal.App.4th at p. 207.) Hansen’s age-referencing statements, the court acknowledged, “‘clearly … would have supported a verdict in plaintiff’s favor, had the jury rendered such a verdict’” — but the question on JNOV was whether the evidence supported the verdict actually returned. (Ibid.) It did: each board member gave “‘legitimate, job-related reasons’” for the no-renewal votes, corroborated by evidence of dissatisfaction predating the vote, and the jury was entitled to believe them. (Id. at pp. 207–208.) Substantial evidence — including testimony that Caldwell “completely delegated all of his supervisory duties” — also supported the breach-of-contract finding. (Id. at p. 208.)

Significance

Caldwell is a leading early California statement that the McDonnell Douglas shifting burdens are a judge’s analytical device, not a jury question. Its core teaching — that the prima-facie and rebuttal stages are questions of law, that the presumption “drops from the case” once the employer carries its production burden, and that the jury decides only the ultimate question of discriminatory intent — was absorbed into California jury-instruction practice and is reflected today in CACI No. 2570 and its companion FEHA instructions, which do not ask the jury to march through the burden-shifting stages but instead pose the substantial-motivating-reason question directly. For trial lawyers, the durable lesson is procedural: the intermediate burdens must be invoked by motion (summary judgment, nonsuit, directed verdict) before the case reaches the jury, or they fall away.

One part of the opinion, however, must be read with real care, because the law moved underneath it. Caldwell’s assertion that “the burdens of proof for purposes of a defendant’s motion for summary judgment are precisely the same as those mandated by McDonnell Douglas” (Caldwell, supra, 41 Cal.App.4th at p. 203) describes the pre-2001 version of Code of Civil Procedure section 437c. The 2001 amendments to section 437c and the Supreme Court’s decision in Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826 recalibrated the moving party’s summary-judgment burden — clarifying that a defendant who is not the trier of fact’s burden-carrier may shift the burden by showing the plaintiff cannot establish an element or by presenting evidence negating one, and articulating the now-governing burden-of-production / burden-of-persuasion structure. In the FEHA setting, Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317 supplied the operative summary-judgment framework, holding that an employer moving for summary judgment may meet its initial burden by presenting evidence of a legitimate, nondiscriminatory reason and that the plaintiff must then produce evidence of pretext or discriminatory animus. The practical upshot is that practitioners should rely on Aguilar and Guz, not Caldwell, for the mechanics of an employer’s moving burden on summary judgment. Caldwell’s holdings on jury instruction and JNOV — the matters actually decided — remain undisturbed; it is the case’s passing equation of the summary-judgment burden with the McDonnell Douglas trial burdens that later authority superseded.

Key quotes

“[W]hether or not a plaintiff has met his or her prima facie burden, and whether or not the defendant has rebutted the plaintiff’s prima facie showing, are questions of law for the trial court, not questions of fact for the jury.” (Caldwell, supra, 41 Cal.App.4th at p. 201.)

“[I]f and when the case is submitted to the jury, the construct of the shifting burdens ‘drops from the case,’ and the jury is left to decide which evidence it finds more convincing, that of the employer’s discriminatory intent, or that of the employer’s race- or age-neutral reasons for the employment decision.” (Id. at p. 204.)

“If the employer presents admissible evidence either that one or more of plaintiff’s prima facie elements is lacking, or that the adverse employment action was based on legitimate, nondiscriminatory factors, the employer will be entitled to summary judgment unless the plaintiff produces admissible evidence which raises a triable issue of fact material to the defendant’s showing.” (Id. at p. 203.)

Read the full opinion (Justia) →

Practice pointer

Open questions

The opinion leaves several matters to later development. Most significantly, the Caldwell court expressly disagreed with the Sixth District’s dictum in Martin v. Lockheed Missiles & Space Co. (1994) 29 Cal.App.4th 1718, 1730, that the shifting burdens “‘have no direct application to a defendant’s motion for summary judgment,’” asserting instead that the McDonnell Douglas requirements “‘may be fully satisfied within the context of such a motion.’” (Caldwell, supra, 41 Cal.App.4th at p. 203, fn. 8.) That intra-appellate tension over how the burdens operate on summary judgment was not authoritatively resolved until the Supreme Court’s post-2001 decisions in Aguilar and Guz — so Caldwell’s confident equation of the summary-judgment and trial burdens is best treated as a question the Supreme Court has since answered on different terms. The opinion also does not address the standard for proving discrimination by direct evidence — Hansen’s statements were arguably direct evidence of age bias, but the court resolved the JNOV claim on substantial-evidence grounds without deciding what a direct-evidence case would require of either party. (Id. at pp. 206–207.) Finally, although the opinion repeatedly speaks of an “adverse employment decision” (the contract non-renewal), it neither defines the contours of an actionable adverse employment action under FEHA nor addresses constructive discharge; those questions — later developed in cases such as Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028 — lie outside this opinion.