A Reminder That Employees May Have to Pay for Bringing Unsuccessful Discrimination Claims

Posted on January 24, 2014

We all know that Rule 54 of the Federal Rules of Civil Procedure provides that a prevailing party is entitled to costs (not including attorneys’ fees) unless a federal statute, the rules themselves, or a court order provides otherwise. The district court has the discretion to deny the award of costs, but must articulate some good reason for such a denial. Often, in employment discrimination cases, employees claim they shouldn’t be required to pay attorneys’ fees on the grounds of financial inability.

In Arthur v. Pet Dairy and Land-O-Sun Dairies, LLC, No. 6:11-cv-00042 (W.D.Va. 2013), a judge in the Western District of Virginia rejects exactly this kind of argument from an unsuccessful plaintiff, finding that the plaintiff’s claims that he was unable to pay were too “tenuous” to justify denying the defendant’s request for costs.

Arthur filed a lawsuit against Land-O-Sun Dairies that he was discriminated against on the basis of his age when he was terminated from his job as a milk delivery driver. The court had granted summary judgment to the employer, finding that Arthur had not shown direct or circumstantial evidence that age discrimination had motivated his termination and that the employer had successfully shown that Arthur had failed to meet its legitimate performance expectations. The employer filed a bill of costs, seeking the recovery of costs incurred in defending against the lawsuit.

The court started out with the proposition that it “is incumbent upon the losing party to show circumstances sufficient to overcome the presumption that favors awarding costs to the prevailing party.” Arthur, p.2. The court acknowledged that financial inability to pay can be considered by a court in denying an award of costs, but found that in this case, the plaintiff just had not sufficiently demonstrated his inability to pay to justify denying costs. The court pointed out that the plaintiff had a paying job, was receiving Social Security payments and was not looking for additional work. Although, in his objections to the bill of costs filed by the defendant, the plaintiff had asserted that a significant portion of his resources were committed to caring for his wife who has terminal cancer, there was nothing in the record referring to his wife’s illness. Moreover, the plaintiff had not included any affidavit or citations to the record that supported his extreme inability to pay or hardship from his wife’s illness. Further, the court pointed out that even if costs end up being a high percentage of a losing party’s income, they may still be awarded. On this basis, the court awarded the employer its costs of defending against the claim.

Employers are forced to spend significant amounts of money defending against baseless discrimination claims brought by employees—although we are not able to recover the attorneys’ fees necessary to defend against these claims, it is important to be able to recover at least the costs. This case reaffirms the idea that employees should be required to do more than simply assert financial hardship; but rather, should have to present actual evidence of their inability to pay.

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