In Muniz v. United Parcel Service, Inc., ___ F.3d ___ (9th Cir. Dec. 5, 2013), the Ninth Circuit Court of Appeals affirmed in part and vacated in part the order of the U.S. District Court for the Northern District of California awarding attorneys’ fees to a prevailing plaintiff under California’s Fair Employment and Housing Act.

Plaintiff sued her employer for gender discrimination under the FEHA.  At trial, the jury returned a verdict in Plaintiff’s favor, awarding her $27,280 in damages.  The district court awarded then awarded Plaintiff’s attorneys $697,971.80 in fees.

The appellate court held that the district court did not abuse its discretion by awarding the attorneys’ fees. Although there was a clear disparity between the damages recovered and the fees awarded, California law does not require the district court to reduce fees on this basis.

It was also permissible for the district court to deduct only 10 percent from the total fees requested for plaintiff’s unsuccessful claims, since California law allows for such percentage adjustments, and neither party was able to segregate hours spent exclusively on the unsuccessful claims.

In a separate part of the decision, the court found that the declaration of Plaintiff’s attorney claiming that he observed his paralegal reconstruct her hours constituted inadmissible hearsay and should be reconsidered.