Trujillo v. North County Transit Dist.

Facts

The California Fair Employment and Housing Act (FEHA) declares the State’s public policy of “protection and safeguarding of the right and opportunity of all persons to seek, obtain, and hold employment without discrimination or abridgment on account of race, color, national origin, ancestry,” and other enumerated characteristics, and of providing “effective remedies which will eliminate such discriminatory practices.” (Trujillo, supra, 63 Cal.App.4th at p. 286, paraphrasing Gov. Code, § 12920.) Government Code section 12940 then declares an array of practices unlawful. Subdivision (a) prohibits an employer from discharging or otherwise discriminating against a person “in compensation, terms, conditions or privileges of employment, because of the person’s race, color, national origin, ancestry, or other enumerated characteristics.” (Trujillo, supra, 63 Cal.App.4th at p. 286.) And the provision at the center of the case — then designated subdivision (i), and today renumbered subdivision (k) — makes it an unlawful employment practice “‘[f]or an employer … to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.’” (Ibid., quoting Gov. Code, § 12940, former subd. (i), italics added by the court.)

The plaintiffs — Miguel Trujillo, Pablo Flores, and Juan Rendon — were mechanics of Hispanic ancestry employed by the North County Transit District (NCTD). (Trujillo, supra, 63 Cal.App.4th at pp. 282–283.) They sued NCTD, its development board, and their direct supervisor, Gary Waer, “for employment discrimination, alleging a variety of name-calling, refusals to promote, and other discriminatory and retaliatory treatment.” (Id. at p. 283.) In particular, the plaintiffs “accused their direct supervisor, Waer, of harassing and discriminatory conduct.” (Ibid.) The matter went to trial “on a number of statutory and tort theories, including a cause of action for violation of FEHA due to racially discriminatory denials of promotions and raises, and a racially hostile work environment.” (Ibid.)

After a sixteen-day jury trial, the jury returned its findings on a special verdict form that had been “prepared by plaintiffs’ attorney (defendants’ form having been rejected).” (Trujillo, supra, 63 Cal.App.4th at p. 283.) The jury found that the defendants “had committed no discriminatory, racially harassing, or retaliatory conduct, nor had they inflicted severe emotional distress on plaintiffs, nor slandered plaintiff Rendon.” (Ibid.) Yet, on the same verdict form, “the jury found defendants had violated section 12940, subdivision (i), by failing to take all reasonable steps necessary to prevent discrimination and harassment from occurring.” (Ibid.) On that single finding, the jury “awarded noneconomic damages to each of the three plaintiffs ($ 6,000 each to Trujillo and Rendon, and $ 3,000 to Flores),” plus “punitive damages … against defendant Waer in the amount of $ 750 each for plaintiffs Trujillo and Rendon.” (Ibid.) Judgment was entered on the verdict. (Ibid.)

Procedural history

The defendants moved for judgment notwithstanding the verdict (JNOV) under Code of Civil Procedure section 629, “on the grounds of error of law and insufficient evidence.” (Trujillo, supra, 63 Cal.App.4th at p. 283.) They argued that “the finding of failure to take necessary steps to prevent discrimination and harassment was inconsistent with the factual findings that no discriminatory, racially harassing, or retaliatory conduct had taken place and there was no hostile work environment”; without those “foundational findings,” there was “no logical or legal basis for the jury’s finding of a violation of section 12940, subdivision (i), nor any basis for any award of damages.” (Ibid.) The plaintiffs countered that “there could be an independent violation of section 12940, subdivision (i), apart from any other violation of section 12940,” and that the verdict should be sustained because “the jury must have found at least a hostile work environment.” (Id. at pp. 283–284.)

The trial court, Judge Robert J. O’Neill presiding, granted the JNOV. (Trujillo, supra, 63 Cal.App.4th at p. 284.) The court reasoned: “‘There’s no logic that says an employee who has not been discriminated against can sue an employer for not preventing discrimination that didn’t happen, for not having a policy to prevent discrimination when no discrimination occurred ….’” (Ibid.) It found that “‘[t]he necessary foundational requirements of harassment or discrimination which are required to support a violation of Government Code section 12940[,] subdivision ([i]) and the noneconomic and punitive damages were absent from the jury’s verdict,’ as the jury had expressly found they did not occur.” (Ibid.) After the plaintiffs unsuccessfully moved for reconsideration, they appealed the judgment entered on the JNOV. (Ibid.) The appeal was taken from the judgment rather than the order, the challenge to the reconsideration denial being subsumed in that appeal. (Id. at p. 285 & fn. 2.) The Court of Appeal, Division One of the Fourth Appellate District, affirmed in an opinion by Justice Huffman, with Acting Presiding Justice Benke and Justice Haller concurring; there was no separate concurrence or dissent. (Id. at pp. 282, 289.)

Issue

The precise question, as the court framed it, was “whether the verdict for compensatory and punitive damages, based on a finding of violation of section 12940, subdivision (i) (failure to take all reasonable steps necessary to prevent discrimination and harassment from occurring), can stand despite the jury’s accompanying findings that these defendants did not discriminate, racially harass, or retaliate against the plaintiffs, nor cause them severe emotional distress.” (Trujillo, supra, 63 Cal.App.4th at p. 285.) Behind that lay a pure question of statutory interpretation that the court treated as one of first impression: whether a violation of section 12940, former subdivision (i) “is an independent statutory tort which requires no ‘necessary foundational predicate’ of underlying discrimination, harassment or retaliation … to allow for employer and/or supervisory employee liability.” (Id. at p. 283.) Because the appeal turned “solely with interpretation of a statute and application of statutory language to the undisputed facts,” the court reviewed the question de novo. (Id. at p. 284.)

Holding

Reasoning

The special-verdict posture forecloses the usual presumptions in favor of the verdict. The court began by distinguishing the ordinary JNOV standard — under which an appellate court asks “whether it appears from the record, viewed most favorably to the party securing the verdict, that any substantial evidence supports the verdict” — from the posture actually presented. (Trujillo, supra, 63 Cal.App.4th at p. 284.) Because the appeal turned on statutory interpretation applied to undisputed facts, review was de novo, and the plaintiffs had neither furnished a full trial record nor “challenged on appeal the factual findings adverse to them on the issues of a lack of actual discriminatory conduct or hostile work environment.” (Ibid.) Crucially, the verdict was special, not general. A special verdict “presents to the jury each ultimate fact in the case, so that ‘nothing shall remain to the Court but to draw from them conclusions of law.’” (Id. at p. 285, quoting Code Civ. Proc., § 624.) That feature carries a well-known hazard: “‘[t]he possibility of a defective or incomplete special verdict, or possibly no verdict at all, is much greater than with a general verdict.’” (Ibid.) Decisively, “[w]ith a special verdict, we do not imply findings on all issues in favor of the prevailing party, as with a general verdict.” (Ibid.) The plaintiffs thus could not rescue their failure-to-prevent finding by arguing that the jury “must have found at least a hostile work environment”; the special verdict’s express findings of no discrimination and no harassment had to be taken at face value, and “[t]he verdict’s correctness must be analyzed as a matter of law.” (Ibid.; see id. at pp. 283–284.) This move neutralized the plaintiffs’ core appellate theory before the court even reached the statute.

The statute’s plain language does not resolve whether the failure-to-prevent duty is freestanding. Turning to the text, the court applied the settled rule that it must “first turn to the words of the statute to determine the intent of the Legislature,” adding nothing to clear language “to accomplish a purpose that does not appear on the face of the statute or from its legislative history.” (Trujillo, supra, 63 Cal.App.4th at p. 285.) Section 12940, former subdivision (i) makes it unlawful “‘to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.’” (Id. at p. 286.) The court acknowledged that the provision “creates a tort that is made actionable by statute,” and that section 12965, subdivision (b) “creates a private right of action for damages” for a complainant whose complaint the Department of Fair Employment and Housing does not pursue. (Ibid.) But the existence of a statutory tort did not answer the dispositive question: “the plain language does not explain whether a violation of section 12940, subdivision (i) may give rise to a private right of action where there is no related factual finding of discrimination or harassment.” (Id. at p. 287.) Legislative history offered little, the court noted, because the only significant amendment had been to delete the bill’s specific illustrations of preventive “steps … employers could take,” leaving “only a general directive.” (Ibid.)

The court analyzed the claim through the elements of a private tort — and found the duty and causation links broken. Faced with an interpretive gap, the court “go[es] back to basics: the elements of a statutory and privately enforceable tort,” namely “defendants’ legal duty of care toward plaintiffs, breach of duty (a negligent act or omission), legal causation, and damages to the plaintiff.” (Trujillo, supra, 63 Cal.App.4th at pp. 286–287, 288.) Framed that way, the plaintiffs were asking the court “to rule that defendants owed them, specifically, a legal duty of care to take all reasonable steps necessary to prevent discrimination and harassment from occurring, and that a breach of such duty should give rise to a private right of action for damages.” (Id. at p. 288.) The court declined: “We do not believe the statutory language supports recovery on such a private right of action where there has been a specific factual finding that no such discrimination or harassment actually occurred at the plaintiffs’s workplace.” (Ibid.) Inadequate preventive procedures, absent any underlying wrong, were instead “an area where the DFEH would have jurisdiction to remedy inadequate procedures.” (Ibid.) The court also flagged a causation problem: it was hard to see “how there could be legal causation of any damages … from such a statutory violation, where the only jury finding was the failure to prevent actionable harassment or discrimination, which, however, did not occur.” (Id. at p. 289.)

The plaintiffs’ supporting authorities did not establish a stand-alone offense. The court worked through each authority the plaintiffs marshalled and explained why none supported a freestanding claim. Monge v. Superior Court (1986) 176 Cal.App.3d 503 had held only that the plaintiffs there had adequately alleged a failure-to-prevent violation; because it arose “on a pleadings challenge brought by writ of mandate,” it was “distinguishable here, where the jury has rendered a verdict.” (Trujillo, supra, 63 Cal.App.4th at pp. 287–288.) The citation to Bihun v. AT&T Information Systems, Inc. (1993) 13 Cal.App.4th 976 “merely cites to the statutory language and does not discuss any prerequisites for a finding of violation.” (Id. at p. 288.) The administrative decisions on which the plaintiffs “mainly rel[ied]” — DFEH v. Guill and DFEH v. Madera County — actually cut the other way, because each “dealt with situations where significant harassment of an employee had been found to occur,” with the failure to have preventive measures serving as “an additional basis for the decision adverse to the employer.” (Ibid.) Those agency rulings, the court emphasized, “focused on the failure to take preventative measures specifically with relation to the actual events that took place,” and so were “not … persuasive authority that a violation of section 12940, subdivision (i) requires no such background factual circumstances and findings.” (Ibid.)

The verdict was, in the end, internally inconsistent and unenforceable. Synthesizing these strands, the court endorsed the trial judge’s “commonsense approach,” which it found had “great intuitive appeal”: “‘[T]here’s no logic that says an employee who has not been discriminated against can sue an employer for not preventing discrimination that didn’t happen ….’” (Trujillo, supra, 63 Cal.App.4th at p. 289.) “Under all the circumstances and available authority,” the court was “satisfied that the jury’s special verdict is too inconsistent to be enforced.” (Ibid.) Because the verdict “correctly interpreted … [did] not includ[e] an essential foundational predicate of harassment or discrimination, as required by the statutory scheme,” the derivative damages “lack support in the record,” and the JNOV “was correctly granted.” (Ibid.)

One question the court pointedly left open: individual supervisor liability. The court flagged but did not resolve “[a] threshold issue … as to whether the statutory term ‘employer’ in section 12940, subdivision (i) applies to the individual defendant Waer, as an agent of the employer.” (Trujillo, supra, 63 Cal.App.4th at p. 287.) Because the only basis for the punitive award against Waer was the same failure-to-prevent finding made against “defendants” generally, the court “assume[d], without deciding,” that Waer fell within the statute, and disposed of his liability along with the entity defendants’ on the inconsistency ground. (Ibid.)

Significance

Trujillo is the cornerstone California authority for the derivative nature of the FEHA failure-to-prevent claim, and it supplies the legal premise embedded in CACI No. 2527. Its rule is compact and durable: an employer cannot be liable for failing to prevent harassment or discrimination unless harassment or discrimination actionably occurred and went unprevented. (Trujillo, supra, 63 Cal.App.4th at p. 289.) The decision has been followed and refined ever since; later courts read it to mean that a failure-to-prevent claim cannot survive once the underlying discrimination or harassment claim fails, a principle the Court of Appeal would later restate in cases such as Scotch v. Art Institute of California and Carter v. California Department of Veterans Affairs. The opinion also performs quieter doctrinal work. By insisting that the failure-to-prevent provision be analyzed through the conventional elements of a private statutory tort — duty, breach, causation, and damages — it situates the claim within negligence-style analysis and locates the “prevention” of un-occurred conduct in the DFEH’s administrative jurisdiction rather than in a private damages action. (Id. at pp. 286–289.) Equally important is the procedural lesson it carries about special verdicts: where a party drafts a special verdict form and obtains internally contradictory findings, the reviewing court will not imply the favorable findings that a general verdict would supply, and an inconsistency that negates an essential predicate is fatal. (Id. at p. 285.) The holding’s limits are real and worth marking. Trujillo does not hold that a failure-to-prevent claim requires the plaintiff to prevail at trial on the underlying claim; it holds that there must be actionable underlying conduct. Nor does it resolve whether an individual supervisor can be an “employer” for purposes of the provision — a point it expressly reserved. (Id. at p. 287.)

Key quotes

“We do not believe the statutory language supports recovery on such a private right of action where there has been a specific factual finding that no such discrimination or harassment actually occurred at the plaintiffs’s workplace.” (Trujillo, supra, 63 Cal.App.4th at p. 288.)

“Employers should not be held liable to employees for failure to take necessary steps to prevent such conduct, except where the actions took place and were not prevented.” (Id. at p. 289.)

“[W]e are satisfied that the jury’s special verdict is too inconsistent to be enforced. … The trial court correctly interpreted the verdict as not including an essential foundational predicate of harassment or discrimination, as required by the statutory scheme to support a finding of violation of Government Code section 12940, subdivision (i), and the noneconomic and punitive damages that were awarded by this jury lack support in the record.” (Id. at p. 289.)

Read the full opinion (Justia) →

Practice pointer

Open questions

The opinion leaves several questions unresolved. Most explicitly, the court “assume[d], without deciding,” that the statutory term “employer” in the failure-to-prevent provision reaches an individual supervisor sued as an agent of the employer, so whether a supervisor like Waer can be personally liable under the provision — and exposed to punitive damages — remains open after Trujillo. (Trujillo, supra, 63 Cal.App.4th at p. 287.) The court also flagged but did not fully develop “a significant question of how there could be legal causation of any damages … from such a statutory violation” divorced from an underlying wrong, leaving the precise causation theory for a future case in which an underlying violation is found. (Id. at p. 289.) And while the court held that the plaintiffs’ exoneration on the underlying conduct defeated the prevention finding, it did not delineate exactly how robust the underlying finding must be — for instance, whether a finding of harassment that is severe or pervasive yet not attributable to the employer, or a finding adverse on damages alone, would suffice as the necessary predicate. The opinion answers the binary question before it (no underlying wrong, no prevention liability) without mapping the gradations in between. (Id. at pp. 288–289.)