Dyna-Med, Inc. v. Fair Employment & Housing Com.

Decision Date02 November 1987
Docket NumberINC,DYNA-ME
Citation241 Cal.Rptr. 67,43 Cal.3d 1379,743 P.2d 1323
CourtCalifornia Supreme Court
Parties, 743 P.2d 1323, 46 Fair Empl.Prac.Cas. (BNA) 1143, 44 Empl. Prac. Dec. P 37,503 , Plaintiff and Appellant, v. FAIR EMPLOYMENT AND HOUSING COMMISSION, Defendant and Respondent. L.A. 32145.

Michael Wischkaemper, Carlsbad, for plaintiff and appellant.

Marian M. Johnston, Deputy Atty. Gen., Sacramento, for defendant and respondent.

PANELLI, Justice.

In Commodore Home Systems, Inc. v. Superior Court (1982) 32 Cal.3d 211, 185 Cal.Rptr. 270, 649 P.2d 912 (hereafter Commodore Home ), we held that a court may award punitive damages in a civil suit for job discrimination pursuant to the California Fair Employment and Housing Act (FEHA or Act) (Gov.Code, § 12900 et seq.). 1 The issue in the present case is whether the FEHA authorizes the Fair Employment and Housing Commission (Commission or the commission) to impose punitive damages, a question left unresolved in Commodore Home. 2 (Id. at p. 220, 185 Cal.Rptr. 270, 649 P.2d 912.) As will appear, we conclude that the FEHA does not authorize the commission to award punitive damages.

I. BACKGROUND

The California Fair Employment Practice Act (FEPA) was enacted in 1959 (former Lab.Code, § 1410 et seq.; see Stats.1959, ch. 121, § 1, pp. 1999-2005) and recodified in 1980 as part of the FEHA (Stats.1980, ch. 992, § 4, p. 3140 et seq.). "The law establishes that freedom from job discrimination on specified grounds, ... is a civil right. (§ 12921.) It declares that such discrimination is against public policy (§ 12920) and an unlawful employment practice (§ 12940). [Fn. omitted.]" (Commodore Home, supra, 32 Cal.3d at p. 213, 185 Cal.Rptr. 270, 649 P.2d 912.) The statute creates two administrative bodies: the Department of Fair Employment and Housing (the department) (§ 12901), whose function is to investigate, conciliate, and seek redress of claimed discrimination (§ 12930), and the commission, which performs adjudicatory and rulemaking functions (§ 12935; see also § 12903). An aggrieved person may file a complaint with the department (§ 12960), which must promptly investigate (§ 12963). If the department deems a claim valid it seeks to resolve the matter--in confidence--by conference, conciliation, and persuasion. (§ 12963.7.) If that fails or seems inappropriate, the department may issue an accusation to be heard by the commission. (§§ 12965, subd. (a), 12969.) The department acts as prosecutor on the accusation and argues the complainant's case before the commission. (State Personnel Bd. v. Fair Employment & Housing Com. (1985) 39 Cal.3d 422, 428, 217 Cal.Rptr. 16, 703 P.2d 354; Commodore Home, supra, 32 Cal.3d at p. 213, 185 Cal.Rptr. 270, 649 P.2d 912.)

If an accusation is not issued within 150 days after the filing of the complaint or if the department earlier determines not to prosecute the case and the matter is not otherwise resolved, the department must give the complainant a "right to sue" letter. The complainant may then bring a civil suit in superior court. (§ 12965, subd. (b); see Commodore Home, supra, 32 Cal.3d at pp. 213-214, 185 Cal.Rptr. 270, 649 P.2d 912.)

In the instant case Linda Olander initially filed a complaint with the department alleging that Dyna-Med, Inc. (Dyna-Med) discriminated against her with regard to wages and promotional opportunities on the basis of sex in violation of the FEPA. The complaint was resolved by means of a written settlement agreement pursuant to which Dyna-Med agreed, inter alia, not to engage in retaliatory action against Olander for filing the complaint. 3 Approximately five hours after executing the agreement, Dyna-Med fired Olander. Olander filed a new complaint, alleging that she was fired in retaliation for her original complaint. Following a hearing, the commission issued its decision ordering Dyna-Med to pay Olander her lost wages, plus $7,500 in punitive damages. 4 The superior court denied Dyna-Med's petition for a writ of mandate. The Court of Appeal affirmed. We granted review.

The sole issue before us is whether the FEHA grants the commission authority to award punitive damages. Resolution of this issue depends on the meaning of section 12970, subdivision (a), which sets forth the scope of relief available from the commission. That section provides: "If the commission finds that a respondent has engaged in any unlawful practice under this part, it shall state its findings of fact and determination and shall issue ... an order requiring such respondent to cease and desist from such unlawful practice and to take such action, including, but not limited to, hiring, reinstatement or upgrading of employees, with or without back pay, and restoration to membership in any respondent labor organization, as, in the judgment of the commission, will effectuate the purposes of this part, and including a requirement for report of the manner of compliance."

Before addressing the parties' arguments we state briefly the basis for the Court of Appeal's determination that the commission is authorized to award punitive damages.

"It is undisputed," the Court of Appeal stated, "an administrative agency's power to award such damages must arise from express authorization. Here, the Legislature delegated broad authority to the Commission to fashion appropriate remedies for unlawful employment practices in section 12970, subdivision (a): [p] 'If the commission finds that a respondent has engaged in any unlawful practice under this part, it ... shall issue and cause to be served on the parties an order requiring such respondent ... to take such action, including, but not limited to, hiring, reinstatement or upgrading of employees, with or without back pay, and restoration to membership in any respondent labor organization, as, in the judgment of the commission, will effectuate the purposes of this part, and including a requirement for report of the manner of compliance.' ... [p] Attempting to harmonize this specific provision in context of the entire statutory framework, we find in section 12920 the underlying purpose of the act is to provide effective remedies to eliminate discriminatory employment practices. Consequently, considering the legislative mandate to liberally construe the act to further these purposes (§ 12993), we conclude it has statutorily authorized the Commission to impose punitive damages where necessary to effectively remedy and eliminate unlawful FEHA employment practices." (Emphasis in original.)

In the Court of Appeal's judgment, the facts of the instant case "prove ordinary restitutionary remedies are often ineffective in eliminating discriminatory practices." 5 The court thus determined that "in light of the limited remedial effect of [the] permissible compensatory remedies, the award of punitive damages may be the only method of fulfilling the purposes of the act, including encouraging plaintiffs to seek relief by increasing their potential recovery...."

II. DISCUSSION

Petitioner Dyna-Med and its amici 6 argue that although the Court of Appeal correctly recognized that the statutory language and legislative history of section 12970, subdivision (a) are determinative of the issue before us, the court misread the statute and misapplied common principles of statutory construction in concluding that the Legislature has authorized the commission to award punitive damages.

Respondent Commission and its amici 7 maintain that the FEHA is unambiguous in authorizing broad relief limited only by the judgment of the commission as to what will effectuate the purposes of the Act, and that the commission has properly determined that the award of exemplary damages in appropriate cases is necessary to deter deliberate discrimination.

A. Statutory Language

Pursuant to established principles, our first task in construing a statute is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, a court must look first to the words of the statute themselves, giving to the language its usual, ordinary import and according significance, if possible, to every word, phrase and sentence in pursuance of the legislative purpose. A construction making some words surplusage is to be avoided. The words of the statute must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent possible. (California Mfrs. Assn. v. Public Utilities Com. (1979) 24 Cal.3d 836, 844, 157 Cal.Rptr. 676, 598 P.2d 836; Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230, 110 Cal.Rptr. 144, 514 P.2d 1224, and cases cited; see also Brown v. Superior Court (1984) 37 Cal.3d 477, 484-485, 208 Cal.Rptr. 724, 691 P.2d 272.) Where uncertainty exists consideration should be given to the consequences that will flow from a particular interpretation. (Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110.) Both the legislative history of the statute and the wider historical circumstances of its enactment may be considered in ascertaining the legislative intent. (California Mfrs. Assn., supra, 24 Cal.3d at p. 844, 157 Cal.Rptr. 676, 598 P.2d 836; see also Steilberg v. Lackner (1977) 69 Cal.App.3d 780, 785, 138 Cal.Rptr. 378.) A statute should be construed whenever possible so as to preserve its constitutionality. (See Department of Corrections v. Workers' Comp. Appeals Bd. (1979) 23 Cal.3d 197, 207, 152 Cal.Rptr. 345, 589 P.2d 853; County of Los Angeles v. Riley (1936) 6 Cal.2d 625, 628-629, 59 P.2d 139; County of Los Angeles v. Legg (1936) 5 Cal.2d 349, 353, 55 P.2d 206.)

We consider, therefore, the statutory language in the context of the legislative purpose. The Legislature has declared that the purpose of the FEHA is to provide effective remedies which will eliminate discriminatory practices. (§ 12920.) Webster's Dictionary defines a "re...

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