"Decision on Mixed-Motive Issue Sets 9th Circuit Apart"
by Richard S. Rosenberg and John J. Manier

The 9th Circuit recently ruled en banc that a plaintiff does not need "direct evidence" to prevail in a "mixed-motive" case under Title VII of the 1964 Civil Rights Act, 42 U.S.C. Section 2000e et seq. Costa v. Desert Palace, 2002 DJDAR 8738 (9th Cir. Aug. 2, 2002). This holding is contrary not only to an earlier decision in Costa by a three-judge panel, but also to the rulings of most other federal appellate courts on this issue.

The author of the en banc opinion, Judge Margaret McKeown, made the court's sympathies clear by describing the plaintiff, Catharina Costa, as a "trailblazer." Costa was the lone female forklift operator in a warehouse at Caesars Palace Hotel & Casino in Las Vegas. She alleged that she was subjected to sex bias in connection with discipline and the assignment of overtime work throughout her employment.

Costa's disciplinary record culminated with her physical altercation with a male co-employee, Herb Gerber. Costa accused Gerber of instigating the incident and offered corroborating evidence in support of her allegation. However, Caesars disbelieved Costa and terminated her due to the altercation and her lengthy disciplinary record. Gerber, who had no prior disciplinary record, was suspended for five days.

Costa sued Caesars in federal court under Title VII for sex discrimination and wrongful discharge. A jury awarded her $64,000 in back pay, $200,000 in compensatory damages and $100,000 in punitive damages. The district court reduced the compensatory award to $100,000, but otherwise upheld the jury's verdict.

The original 9th Circuit panel in Costa reversed in part and vacated in part on the grounds that Costa lacked direct evidence of sex bias. The panel held that the district court erred in giving a "mixed-motive" jury instruction and in denying Caesars' motion for judgment as a matter of law on Costa's wrongful termination claim.

However, the full 9th Circuit voted to rehear the case. By a 7-4 vote, the en banc court affirmed the judgment for Costa in all respects, except that it remanded the punitive damage claim for retrial under Kolstad v. Am. Dental Ass'n, 527 U.S. 526 (1999).

Both the en banc and panel decisions in Costa, as well as the other federal appellate court decisions addressing the mixed-motive issue, analyzed the interplay between the Supreme Court's decision in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), and the 1991 Civil Rights Act, which amended Title VII and partially overruled Price Waterhouse. In Price Waterhouse, all nine justices agreed that an employer is not liable for sex bias under Title VII if it would have made the same employment decision regardless of the plaintiff's sex.

The 1991 amendments legislatively overruled this holding. An employer now violates Title VII whenever sex (or any other unlawful factor) is "a motivating factor" in an employment decision, but damages and reinstatement are unavailable if the employer shows that it "would have taken the same action in the absence of the impermissible motivating factor." 42 U.S.C. Section 2000e-5(g)(2)(B).

Six justices in Price Waterhouse agreed that the burden of proof in a mixed-motive case shifts to the employer if the plaintiff proves sex was a motivating factor in the employer's decision. This remains the law under the 1991 amendments, except that such proof by the plaintiff now establishes a violation of Title VII, in and of itself.

Justice William Brennan's plurality opinion in Price Waterhouse, joined by three other justices, did not specify the quantum of evidence required to shift the burden of proof in mixed-motive cases. However, Justice Sandra Day O'Connor's concurring opinion stated that the burden shifts only if the plaintiff presents "direct evidence" of discrimination.

In his dissent, Justice Anthony Kennedy read the court's opinions in Price Waterhouse as a whole to establish a direct evidence requirement for mixed-motive cases. Kennedy stated, however, that he would have adhered to the traditional burden-shifting framework for "pretext" cases under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), and opined that the court's "creation of a new set of rules for 'mixed-motives' cases is not mandated by the statute itself."

The 1991 amendments to Title VII are silent on the direct evidence issue. As McKeown notes in Costa, the relevant legislative history also fails to address this issue.

Since the passage of the 1991 amendments, most other circuits have followed the O'Connor concurrence in Price Waterhouse which requires plaintiffs to produce direct evidence in mixed-motive cases. These decisions are cited in Judge Ronald Gould's dissent from the en banc decision in Costa. However, McKeown pointed out inconsistencies among the circuits and intra-circuit splits in mixed-motive cases.

The 9th Circuit majority decided "the best way out of this morass is a return to the language of the statute, which imposes no special requirement" of direct evidence in mixed-motive cases. The court instead ruled that a plaintiff "in any Title VII case" may prevail by proving, with direct or circumstantial evidence, "that a protected characteristic played 'a motivating factor.'"

Although McKeown's analysis has some logical force, it also has several flaws. For example, McKeown asserts that the 1991 amendments to Title VII, by making the "same decision" defense apply only to remedies and not liability, "wholly abrogate[]" the "premise" for O'Connor's direct evidence discussion in Price Waterhouse. However, McKeown fails to explain how O'Connor's analysis was "premise[d]" on the "same decision" defense negating liability, as opposed to remedies, and most other circuits have found that it was not.

McKeown's reliance on United States Postal Serv. Bd. v. Aikens, 460 U.S. 711 (1983), begs further questions. As McKeown notes, the Supreme Court in Aikens held that a plaintiff may prevail under Title VII either under the McDonnell Douglas framework "or other sufficient evidence - direct or circumstantial - of discriminatory intent."

But Aikens was not a mixed-motive case, and the Supreme Court did not explain what type of evidence would be "sufficient" to prevail in such cases. Indeed, the court's statement that the trier of fact "must decide which party's explanation of the employer's motivation it believes" presupposes a "pretext" analysis.

Notably, the 9th Circuit's discussion of the sufficiency of Costa's evidence is likewise reminiscent of "pretext" cases. In particular, the court stated that Caesars' explanation for not knowing whether to believe Costa or Gerber - an assessment which was crucial to Caesars' decision to discharge Costa - "was lacking in several respects, and the jury was certainly not required to believe it."

Such statements contradict the court's own description of Costa as a "classic instance of ... a 'mixed-motive' case." As the earlier panel decision noted, Costa herself proceeded solely on a mixed-motive theory. In light of these concessions, McKeown's partial reliance on a "pretext" analysis is baffling.

The 9th Circuit further held that the district court did not abuse its discretion in giving a mixed-motive jury instruction. While Costa had requested this instruction and Caesars objected, the 9th Circuit's decision may make it incumbent upon employers to request a mixed-motive instruction in future Title VII cases, in order to preserve the "same decision" defense.

The 9th Circuit rejected Caesars' "same decision" defense in Costa. The court found "a substantial basis" for the jury to disbelieve "that Caesars would have made the same decision 'but for' Costa's sex."

Gould's dissent in Costa chides the majority for failing to follow the O'Connor concurrence in Price Waterhouse. He concludes: "Taken with the idea that plaintiff, an unsatisfactory employee, is a 'trailblazer,' the majority departs from the path of precedent and blazes its own trail beyond the frontiers of settled law into regions of error."

Costa is just the latest in a series of recent employment law cases where the 9th Circuit has used the en banc review process to overturn pro-employer decisions and replace them with plaintiff-friendly precedents. See, e.g., Barnett v. US Air, 228 F.3d 1105 (9th Cir. 2000), vacated and remanded sub nom. US Airways v. Barnett, 122 S.Ct. 1516 (2002); Cramer v. Consolidated Freightways, 255 F.3d 683 (9th Cir. 2001), cert. denied, 122 S.Ct. 806 (2002); Rene v. MGM Grand Hotel Inc., 2002 DJDAR 11059 (9th Cir. Sept. 24, 2002).

Fortunately for California employers, Costa may have little or no impact on cases decided under our state's Fair Employment and Housing Act, Gov. Code Section 12940 et seq. The California Court of Appeal has held that the direct evidence requirement discussed in the O'Connor concurrence in Price Waterhouse applies to mixed-motive cases under state law. Morgan v. Regents of Univ. of Cal., 88 Cal.App.4th 52 (2000).

For mixed-motive cases under federal law, however, Costa may do more to add to the "morass" of confusion than to clear it up. Inevitably, the United States Supreme Court will be asked to clear up this murky area of job bias law once and for all.