Keiffer v. Bechtel Corp.

• Decision Date: 24 July 1998
• Docket Number: No. A078483,A078483
• Citation: 65 Cal.App.4th 893,76 Cal.Rptr.2d 827
• Court: California Court of Appeals Court of Appeals
• Parties: , 77 Fair Empl.Prac.Cas. (BNA) 916, 98 Cal. Daily Op. Serv. 5789, 98 Daily Journal D.A.R. 8017, 98 Daily Journal D.A.R. 8895 Thaddeus KEIFFER, Plaintiff and Respondent, v. BECHTEL CORPORATION, Defendant and Appellant.

Page 827

76 Cal.Rptr.2d 827

65 Cal.App.4th 893, 77 Fair Empl.Prac.Cas. (BNA) 916,

98 Cal. Daily Op. Serv. 5789,

98 Daily Journal D.A.R. 8017,

98 Daily Journal D.A.R. 8895

Thaddeus KEIFFER, Plaintiff and Respondent, v. BECHTEL CORPORATION, Defendant and Appellant.

No. A078483.

District Court of Appeal, Fourth District, California.

July 24, 1998.

Certified for Partial Publication. ^*

As Modified on Denial of Rehearing Aug. 18, 1998.

Review Denied Oct. 14, 1998.

Katherine M. Quadros, Quadros & Johnson, San Mateo, Michael C. Hallerud, Daniel R. Sovocool, San Francisco, Curtis A. Cole, Fresno, Mary E. Wilcox, Thelen, Marrin, Johnson & Bridges, San Francisco, for Defendant and Appellant.

Edwin L. Bradley, Christopher A. Kerosky, Kerosky & Bradley, San Francisco, William C. Quackenbush, Quackenbush & Quackenbush, San Mateo, for Plaintiff and Respondent.

JONES, Associate Justice.

Bechtel Corporation terminated its employee, Thaddeus Keiffer, during a period of corporate "downsizing." Keiffer was informed of his termination on October 4, 1994. After filing a complaint with the California Department of Fair Housing and Employment (DFEH) and receiving a right-to-sue notice, Keiffer brought this action against his former employer. A trial was held on the merits and the jury found for Keiffer on his claims of age discrimination, breach of an implied contract to terminate only for cause and breach of the implied covenant of good faith and fair dealing. The jury awarded Keiffer $322,975 in compensatory damages, $225,000 in emotional distress damages and $800,000 in punitive damages. Bechtel challenges the jury's verdict on each of the three claims and challenges the award of punitive damages. We affirm.

I. FACTUAL BACKGROUND ^**

II. DISCUSSION

A. The Age Discrimination Claim

1. The jurisdiction issue.

To bring a civil action under the Fair Employment and Housing Act (FEHA), a person must first file a claim with the DFEH within one year of the date upon which the alleged act of discrimination occurred. (Gov.Code, § 12960.) Bechtel raises for the first time in its reply brief a contention that the jury based its verdict on instances of alleged discrimination for which Keiffer did not follow this procedure and therefore did not exhaust his administrative remedies. More specifically, Bechtel argues that Keiffer's DFEH complaint, while timely with respect to his termination, was untimely with respect to events allegedly occurring between 1990 and 1993. Bechtel therefore contends that the trial court should not have permitted the jury to base its verdict on events occurring during that time period. Bechtel contends that it can raise this issue in its reply brief because it presents a question of subject matter jurisdiction.

The adequacy of the court's subject matter jurisdiction must be addressed whenever that issue comes to the court's attention. For example, in In re Marriage of Oddino (1997) 16 Cal.4th 67, 65 Cal.Rptr.2d 566, 939 P.2d 1266, the question of the trial court's "subject matter jurisdiction was not raised by the parties in either of the lower courts and was not addressed by the Court of Appeal...." (Id. at p. 73, 65 Cal.Rptr.2d 566, 939 P.2d 1266.) The issue was raised "for the first time in [the] petition for review." (Ibid.) Nevertheless, the California Supreme Court considered itself bound to address the issue. (See also Minor v. Municipal Court (1990) 219 Cal.App.3d 1541, 1547, 268 Cal.Rptr. 919) Therefore, while it is unfortunate that Bechtel did not raise this issue earlier in the appellate process, we are compelled to consider its merits if, in fact, it questions the trial court's fundamental, subject matter jurisdiction.

Whether a failure to satisfy FEHA's administrative prerequisites concerns the trial court's fundamental, subject matter jurisdiction is unsettled, however. ¹ Bechtel cites several of the numerous cases that state that exhaustion of FEHA administrative remedies is a "jurisdictional" requirement. (See, e.g., Miller v. United Airlines, Inc. (1985) 174 Cal.App.3d 878, 889-890, 220 Cal.Rptr. 684; Bennett v. Borden, Inc. (1976) 56 Cal.App.3d 706, 708-710, 128 Cal.Rptr. 627.) As our Supreme Court has explained, however, the term "jurisdiction" has been "used continuously in a variety of situations." (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 287, 109 P.2d 942.) One meaning of that term is fundamental jurisdiction or the "entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties," "but [i]n its ordinary usage the phrase 'lack of jurisdiction' is not limited to these fundamental situations." (Id. at p. 288, 109 P.2d 942.)

Thus, the fact that many decisions describe FEHA's exhaustion requirement as a jurisdictional prerequisite to a civil action does not necessarily mean that the issue presented here concerns the court's fundamental subject matter jurisdiction. Okoli v. Lockheed Technical Operations Co. (1995) 36 Cal.App.4th 1607, 43 Cal.Rptr.2d 57 (Okoli ) illustrates this ambiguity. In Okoli, the Sixth District reiterated the oft-cited proposition that the exhaustion of the administrative remedy provided in FEHA is a jurisdictional prerequisite to resort to the courts. (Id. at p. 1613, 43 Cal.Rptr.2d 57.) Lockheed argued that plaintiff's verdict on a retaliation cause of action was barred by the exhaustion of remedies doctrine because plaintiff's DFEH charge included only claims for discrimination and harassment based on race and national origin. Plaintiff did not amend his DFEH claim to state subsequent alleged acts of retaliation. When the plaintiff argued that defendant Lockheed had waived any defense based on plaintiff's alleged failure to exhaust administrative remedies, the court concluded Lockheed had raised the issue at every stage of the proceeding, refuting the factual component of plaintiff's argument. (Id. at pp. 1613-1614, 43 Cal.Rptr.2d 57.) The court did not treat the issue as one involving subject matter jurisdiction, which cannot be waived.

Similarly, in Denney v. Universal City Studios, Inc. (1992) 10 Cal.App.4th 1226, 13 Cal.Rptr.2d 170, the court applied an equitable exception to FEHA's exhaustion requirement and permitted a plaintiff to advance claims which were not included in the administrative charge. (Id. at p. 1234, 13 Cal.Rptr.2d 170.) "... Denney, in propria persona, visited the United States Equal Employment Opportunity Commission (EEOC) to complain of his treatment. He filled out an EEOC intake questionnaire, in which he charged he had been 'gradually phased out' because of age, retaliation, and physical handicap. On May 30, an EEOC employee presented Denney with a prepared charge of discrimination, to be filed with both the EEOC and the California Department of Fair Employment and Housing (DFEH). The charge alleged only age discrimination. Denney objected to the omission of retaliation and handicap discrimination, but the representative replied that that was how a claim was commenced. Denney executed the charge, and it was filed with both agencies." (Id. at p. 1231, 13 Cal.Rptr.2d 170.) The Denney court concluded that "[o]n these facts, neither equity nor the purposes of the exhaustion requirement would support or permit barring Denney's claims [of retaliation and handicap discrimination]." (Id. at p. 1234, 13 Cal.Rptr.2d 170.) The Denney court could not have reached this result if the presentation of each and every claim to the DFEH was a prerequisite to the subject matter jurisdiction of a civil action based on those claims.

In several other contexts, California appellate courts have expressly recognized what is only implicit in Okoli and Denney. "[T]he exhaustion doctrine does not implicate subject matter jurisdiction but rather is a 'procedural prerequisite' 'originally devised for convenience and efficiency' ... [citation]. It is 'jurisdictional' only in the sense that a court's failure to apply the rule in a situation where the issue has been properly raised can be corrected by the issuance of a writ of prohibition." (Green v. City of Oceanside (1987) 194 Cal.App.3d 212, 222, 239 Cal.Rptr. 470 (Green ); see also Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, 1215-1216, 61 Cal.Rptr.2d 447; Wallis v. Farmers Group, Inc. (1990) 220 Cal.App.3d 718, 735-736, 269 Cal.Rptr. 299; but see People v. Coit Ranch, Inc. (1962) 204 Cal.App.2d 52, 57, 21 Cal.Rptr. 875 [in civil action challenging assessment levied by Director of Agriculture, failure to exhaust administrative remedies may be raised at any time].)

Accordingly, in an action for refund of property taxes, this division held that the defense that the plaintiff-taxpayers had not exhausted their administrative remedies by filing valid applications for reduction in assessment, although possibly jurisdictional, did not concern the trial court's subject-matter jurisdiction and hence the defense could be waived if not timely asserted. (Mission Housing Development Co. v. City and County of San Francisco (1997) 59 Cal.App.4th 55, 66-67, 69 Cal.Rptr.2d 185.) Thus, describing FEHA's administrative requirements as "jurisdictional" does not resolve the question of whether those requirements implicate the trial court's fundamental, subject matter jurisdiction.

Nor do we find dispositive the summary conclusion of some decisions that FEHA's exhaustion requirement is "not procedural." (See, e.g., Miller v. United Airlines, Inc., supra, 174 Cal.App.3d at p. 889, 220 Cal.Rptr. 684.) A requirement may be jurisdictional, not procedural and yet not affect the court's fundamental, subject matter jurisdiction. "The concept of jurisdiction embraces a large number of ideas of similar character, some fundamental to the nature of any judicial system, some derived from the requirement of due process, some determined by the constitutional or statutory structure of a particular court, and some...