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Reid v. Google

August 5, 2010

BRIAN REID, PLAINTIFF AND APPELLANT,
v.
GOOGLE, INC., DEFENDANT AND RESPONDENT.



Santa Clara County Ct.App. 6 H029602 Super. Ct. No. CV023646. Judge: William J. Elfving.

The opinion of the court was delivered by: Chin, J.

Plaintiff Brian Reid filed an age discrimination lawsuit against his former employer, Google, Inc. The trial court granted Google's summary judgment motion relating to plaintiff's claims. The Court of Appeal reversed.

In this case, we decide two issues. First, does a trial court's failure to rule on a party's evidentiary objections relating to a summary judgment motion waive the objections on appeal? Second, should California courts follow the federal courts in adopting the "stray remarks doctrine" in employment discrimination cases? Under this doctrine, statements that non-decision-makers make or that decision makers make outside of the decisional process are deemed "stray," and they are irrelevant and insufficient to avoid summary judgment.

In this case, the Court of Appeal found that the trial court's failure to rule expressly on evidentiary objections did not waive those objections on appeal. Specifically, it ruled that Google's filing of written evidentiary objections before the summary judgment hearing was sufficient to preserve those objections on appeal. Accordingly, it reviewed Google's evidentiary objections on the merits. The Court of Appeal further refused to apply the stray remarks doctrine to exclude alleged discriminatory statements that Reid's supervisors and co-workers made. In reversing the trial court's grant of Google's summary judgment motion, the Court of Appeal considered those alleged statements and other evidence Reid presented in opposition to the motion.

We agree with the Court of Appeal's conclusions. Regarding the waiver issue, the Court of Appeal correctly determined that a finding of waiver does not depend on whether a trial court rules expressly on evidentiary objections and that Google's filing of written evidentiary objections before the summary judgment hearing preserved them on appeal. (Code Civ. Proc., § 437c, subds. (b)(5), (d).)*fn1 After a party objects to evidence, the trial court must then rule on those objections. If the trial court fails to rule after a party has properly objected, the evidentiary objections are not deemed waived on appeal. Regarding the stray remarks issue, the Court of Appeal also correctly determined that application of the stray remarks doctrine is unnecessary and its categorical exclusion of evidence might lead to unfair results.

I. FACTUAL AND PROCEDURAL HISTORY

Reid worked at Google between June 2002 and February 2004. Google's vice-president of engineering, Wayne Rosing (then age 55) hired Reid (then age 52) as director of operations and director of engineering. Reid has a Ph.D. in computer science and is a former associate professor of electrical engineering at Stanford University.

In addition to Rosing, Reid also interacted with other high-level employees, including chief executive officer (CEO) Eric Schmidt (then age 47), vice-president of engineering operations Urs Hölzle (then age 38), and founders Sergey Brin (then age 28), and Larry Page (then age 29). Reid reported to Rosing and at times to Hölzle.

In a review of Reid's first year's job performance (his only written performance review while employed at Google), Rosing described Reid as having "an extraordinarily broad range of knowledge concerning Operations, Engineering in general and an aptitude and orientation towards operational and IT issues." Rosing noted that Reid "project[ed] confidence when dealing with fast changing situations," "ha[d] an excellent attitude about what 'OPS' and 'Support' mean," and was "very intelligent," "creative," "a terrific problem solver," and that the "vast majority of Ops [ran] great." Rosing gave Reid a performance rating indicating he "consistently [met] expectations."

In Reid's performance review, Rosing commented: "Adapting to Google culture is the primary task for the first year here . . . . [¶] . . . [¶] Right or wrong, Google is simply different: Younger contributors, inexperienced first line managers, and the super fast pace are just a few examples of the environment." Reid received bonuses from February 2003 to February 2004, including stock options for 12,750 shares.

Reid alleged that Hölzle and other employees made derogatory age-related remarks to Reid while he was employed at Google. According to Reid, Hölzle told Reid that his opinions and ideas were "obsolete" and "too old to matter," that he was "slow," "fuzzy," "sluggish," and "lethargic," and that he did not "display a sense of urgency" and "lack[ed] energy." Hölzle allegedly made age-related comments to Reid "every few weeks." Other co-workers called Reid an "old man," an "old guy," and an "old fuddy-duddy," told him his knowledge was ancient, and joked that Reid's CD (compact disc) jewel case office placard should be an "LP" instead of a "CD."

In September 2003, cofounder Brin sent an e-mail to several executives commenting about Google's payroll: "We should avoid the tendency towards bloat here particularly with highly paid individuals." Rosing responded, "Excellent memo and very timely . . . . Let me disclose what I am up to organizationally . . . . We are looking for a senior Director (note I did not capitalize Sr.) or VP level person to run this operation. . . ."

In October 2003, Rosing removed Reid from the director of operations position, and relieved him of his responsibilities as director of engineering, though he was allowed to retain the title. Hölzle, 15 years younger than Reid, assumed Reid's position as director of operations, and Douglas Merrill, 20 years younger than Reid, took over his other duties. Google asked Reid to develop and implement an in-house graduate degree program ("Graduate Degree Program") and an undergraduate college recruitment program ("Google Scholar Program"). The Graduate Degree Program was aimed at retaining engineers by allowing them to attend courses that Carnegie Mellon University professors taught at Google and to obtain master's degrees in engineering. According to Reid, Google's CEO, Schmidt, assured Reid that the graduate program was important and would last at least five years. But Reid was given no budget or staff to support it.

In January 2004, Brin, Page, Rosing, and Hölzle collectively decided not to pay Reid a bonus for 2003. CEO Schmidt sent an e-mail to Rosing asking for "a proposal from [him] . . . on getting [Reid] out . . . ." On February 7, 2004, Rosing responded to Schmidt, expressing concern about the decision not to pay Reid a bonus. He stated that he was "having second thoughts about the full zero out of the $14K bonus [versus] treating it consistent with all similarly situated performers." Rosing suggested that Reid should receive a bonus of $11,300, in addition to a severance package, to avoid "a judge concluding we acted harshly."

On February 13, 2004, Rosing told Reid the engineering department no longer had a place for him. Google asserts Rosing told Reid that the Graduate Degree Program was being eliminated and that it terminated Reid because of job elimination and poor performance. On the other hand, Reid maintains he was given no reason for his termination other than lack of "cultural fit," and he was told the graduate program would continue and his termination was not performance based.

After Reid asked if he could look for a job elsewhere in the company, Rosing encouraged him to apply for positions with other departments. However, e-mails circulating among various department heads indicated that no other department intended to hire Reid. Vice-president of business operations Shona Brown wrote to Rosing and human resources director Stacy Sullivan, asserting, "you should make sure I am appropriately prepped. My line at the moment is that there is no role for him in the HR organization." Sullivan responded: "Seems [Reid's] first interest is to continue his work on the college programs he's been working on . . . . He'll explore that option first with both of you . . . . I propose [Brown] . . . meets with [Reid] [on February 24] and lets him know there's no role [for him] in her org . . . . I've talked with [chief financial officer George] Reyes live, he will not have an option for [Reid] . . . . [T]his is The Company Decision." Sullivan concluded: "We'll all agree on the job elimination angle . . . ."

On February 24, 2004, Reid met with chief financial officer Reyes, who told him no positions were open in Reyes's department. Reid then met with Brown, who stated no positions were available for him in her department. According to Reid, Brown commented that he was not a "cultural fit" at Google. On February 27, Reid left Google with a two-month severance package.

On July 20, 2004, Reid sued Google. The complaint alleged 12 causes of action, including claims for age discrimination under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.) and California's unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.); wrongful termination in violation of public policy; failure to prevent discrimination; and both negligent and intentional infliction of emotional distress. Reid sought injunctive relief, disgorgement of profits, restitution of lost stock options, and attorney fees and costs.

Google demurred and brought motions to strike as to various causes of action, which were granted in part. Google then filed a motion for summary judgment as to Reid's remaining causes of action (those specified above), based on claims of age discrimination by Google. Although Google filed written objections to evidence Reid submitted, the trial court did not rule specifically on those objections. Instead, it stated it was relying only "on competent and admissible evidence."

The trial court granted the summary judgment motion. It found that Google's evidence, while "not sufficient to prove that Plaintiff cannot establish a prima facie case of age discrimination," "is sufficient to prove that [Google] had legitimate nondiscriminatory reasons for . . . terminating [plaintiff's] employment in February 2004."*fn2 The court further found that Reid's evidence was "not sufficient to raise a permissible inference that in fact, [Google] considered Plaintiff's age as a motivating factor in . . . terminating his employment." The trial court noted that, because Reid had failed to raise a triable issue of material fact as to whether Google's reasons were pretextual, his age discrimination claims should be dismissed. (§ 437c, subd. (c) ["motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law"].)

As relevant here, the Court of Appeal, in a published opinion, reversed the trial court's granting of Google's summary judgment motion relating to Reid's causes of action for age discrimination under FEHA and the UCL, wrongful termination, failure to prevent discrimination, and both negligent and intentional infliction of emotional distress. The Court of Appeal found that undisputed evidence supported both a prima facie case of age discrimination and a legitimate, nondiscriminatory reason for Reid's termination, i.e., the elimination of the Graduate Degree Program.

However, on the issue of whether the stated reason for termination was pretextual, the Court of Appeal held that evidence Reid had presented raised a triable issue of material fact. Reid offered statistical evidence of discrimination at Google, discriminatory comments that co-workers and decision makers made, and evidence that Google demoted Reid to a nonviable position before terminating him and advanced changing rationales for his termination. Although Google filed written objections to Reid's evidence and raised its objections at the hearing, the trial court did not expressly rule on them. The Court of Appeal held that the trial court's failure to rule on the objections did not waive them on appeal. The Court of Appeal considered and rejected Google's challenges to the methodology Reid's statistical expert used and Google's argument that alleged ageist comments by Google decision makers and Reid's co-workers were stray remarks and therefore insufficient proof of pretext. The court explained that judgments regarding such discriminatory comments "must be made on a case-by-case basis in light of the entire record." The court concluded that, because Reid's evidence and inferences of discrimination raised a triable issue of fact as to the existence of pretext, the trial court erred in granting the summary judgment motion.

We granted Google's petition for review to determine: (1) whether evidentiary objections on which the trial court has not expressly ruled when it decided a summary judgment motion are preserved on appeal, and (2) whether California law should adopt the stray remarks doctrine.

II. DISCUSSION

A. Evidentiary Objections Not Ruled on at Summary Judgment

We first address the issue whether evidentiary objections are preserved on appeal when the trial court does not expressly rule on them when it decides a summary judgment motion. Section 437c, governing summary judgment motions, contains two waiver provisions relating to evidentiary objections.

Section 437c, subdivision (b)(5) states that: "Evidentiary objections not made at the hearing shall be deemed waived."*fn3

Section 437c, subdivision (d) states that: "Supporting and opposing affidavits or declarations shall be made by any person on personal knowledge, shall set forth admissible evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated in the affidavits or declarations. Any objections based on the failure to comply with the requirements of this subdivision shall be made at the hearing or shall be deemed waived."

In this case, Google submitted 31 pages of written objections to Reid's evidence. For the most part, Google raised its objections at the hearing by incorporating those written objections. In the trial court's written order granting summary judgment, it did not rule specifically on Google's evidentiary objections, but stated it was relying only on "competent and admissible evidence pursuant to Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, 1419-1429."

1. Background: Biljac and the Waiver Rule

In Biljac, plaintiffs filed voluminous evidentiary objections and asked the trial court to make written rulings on all of them. (Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, 1419 (Biljac).) The trial court declined to render formal rulings, finding that it would be " 'a horrendous, incredibly time-consuming task' " to rule individually on each piece of evidence and that such rulings "would serve very little useful purpose." (Id. at p. 1419, fn. 3.) Plaintiffs argued failure to rule was reversible error, but the Court of Appeal disagreed. It held that express evidentiary rulings were unnecessary because appellate review of a summary judgment determination was de novo, and "the parties remain[ed] free to press their admissibility arguments on appeal, the same as they did in the trial court." (Id. at p. 1419.) Thus, under Biljac, a trial court may decline to rule on specific evidentiary objections so long as it states it relied only on "competent and admissible evidence" in ruling on the summary judgment motion. (Id. at p. 1424.)

A few years later, we applied waiver principles to evidentiary objections at the summary judgment stage without mentioning Biljac. In Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666 (Ann M.), plaintiff filed a civil complaint against the owners of a shopping center after she was raped at her place of employment, located in the shopping center. We noted that "[i]n the trial court, defendants made a series of objections to evidence submitted by [plaintiff] in opposition to the summary judgment motion," but "[t]he trial court did not rule on the objections." (Id. at p. 670, fn. 1.) We held that "[b]ecause counsel failed to obtain rulings, the objections are waived and are not preserved for appeal. (Code Civ. Proc., ยง 437c, subds. (b) & (c); Golden West Baseball Co. v. Talley (1991) 232 Cal.App.3d 1294, 1301, fn. 4 [284 Cal.Rptr. 53]; Ramsey v. City of Lake Elsinore (1990) 220 Cal.App.3d 1530, 1540 [270 Cal.Rptr. 198]; Haskell v. Carli (1987) 195 ...


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