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Dale Fiola got in about 10 words during his first 20 minutes before the California Supreme Court on Wednesday as one justice after another butted in to tell him why his age discrimination case has no chance. It’s plain and simple, the Anaheim, Calif., lawyer was told during oral arguments in San Francisco: While the state’s Fair Employment and Housing Act prevents employers from firing someone based on age, it does not stop them from denying certain benefits to employees over 40. “The court cannot read into statutes that which the Legislature did not include,” Justice Joyce Kennard lectured in leading the charge. “The Legislature knows how to include and exclude. Age is not included in the benefits provision.” In another FEHA case on Wednesday, the high court appeared ready to let the agency award emotional distress damages to individuals victimized by housing discrimination. Opponents had argued that such awards would constitute a violation of the judicial powers clause of the state Constitution. “It’s a changed legal landscape,” Chief Justice Ronald George said, referring to 1992 and 1993 legislative amendments that he and other justices said seem to have resolved any constitutional conflict. In the age discrimination case, Dan Esberg had sued the Union Oil Co. of California for refusing to let him pursue a master’s degree through a company-sponsored educational plan that paid tuition. Esberg, a telecommunications specialist at the time, had already been reimbursed $16,000 through the program while working for a bachelor’s degree at the University of Redlands, but at age 57 was advised he was too old “to invest in” further. Esberg had argued that he was protected from age discrimination by FEHA, but in a ruling last year the California 4th District Court of Appeal in Santa Ana disagreed. The court held that Government Code � 12940 of the state’s anti-discrimination statute covers virtually every category except age, and � 12941, which deals with age, makes no mention of preventing discrimination based on “compensation, terms, conditions or privileges of employment.” “We may question the wisdom of the law, but we cannot rewrite it,” the 4th District ruled. The California Supreme Court justices said essentially the same thing Wednesday. “The two statutes are different,” Chief Justice George told Fiola. He added that the lawyer was asking the court to “violate a cardinal rule of statutory construction” by suggesting that it interpret the anti-discrimination statute broadly enough to ignore the differences in the two sections. “Isn’t it the Legislature,” Justice Marvin Baxter asked, “that has the responsibility to decide whether discrimination in the area of benefits is appropriate or inappropriate, and under what circumstances?” Kennard, almost cruelly, pointed out that the state Legislature in 1998 passed a law that prevented age discrimination in regard to benefits. “That was right on point. It would have helped your case,” she said. “Guess what? The governor vetoed the bill.” Not all was gloom for older workers on Wednesday, though. Justice Kathryn Mickle Werdegar, for one, worried that “compensation, terms, conditions or privileges of employment” covered broad territory, giving employers plenty of ground to discriminate. “What might they include? Health benefits?” she asked David Ozeran, an associate at Los Angeles’ La Follette, Johnson, De Haas, Fesler, Silberberg & Ames who represented UNOCAL. “It could have very, very wide ramifications.” Justice Baxter offered a theoretical scenario in which a company forced all workers over 40 to work seven days a week, while younger employees were required to show up only four days. “A condition of employment! Would that be permissible?” he asked. “In an extreme case, couldn’t you have a constructive discharge, and wouldn’t that be actionable?” The case is Esberg v. Union Oil Co., S096524. In the housing discrimination case, the state had appealed after L.A.’s 2nd District Court of Appeal ruled two years ago that the state’s Fair Employment and Housing Commission was constitutionally prohibited from hitting discriminating property owners or landlords with emotional distress damages. The commission in 1997 had awarded Sheryl Annette McCoy, a black police officer, $10,000 after finding that Nancy Konig, a white landowner, had discriminated by refusing to rent McCoy a unit in her duplex in L.A.’s Virginia Country Club neighborhood. The appeal court, however, said FEHC’s action was prohibited by Walnut Creek Manor v. Fair Employment and Housing Commission, 54 Cal.3d 245. In that 1991 ruling, the state supreme court held that the substantive limitations prong of the Constitution’s judicial powers clause prevented the Legislature from authorizing the agency to award emotional distress damages. Government lawyers had argued, though, that amendments that brought the agency more in line with federal regulations overcame the constitutional problem. In particular, they said, an opt-out provision that lets either party request a court hearing prevents the agency from running afoul of the judicial powers clause. The appeal court disagreed, but the high court on Wednesday seemed more open to the idea. “It seems that the opt-out provision has cured whatever problem the court saw in Walnut Creek,” Justice Kennard said. James Harris, a partner in the L.A. office of Chicago’s Sidley Austin Brown & Wood who represented the Employers Group as amicus curiae for Konig, argued that the amendments made no substantive change. He also argued that informed consent is necessary to pass up a court hearing, and that didn’t occur in this case. But if both parties can opt out of the commission hearing, Justice Ming Chin asked, “doesn’t that make participation voluntary” and comply with tests set forth by the U.S. Supreme Court in 1986 in Commodity Futures Trading Commission v. Schor, 478 U.S. 833? Justice Baxter asked whether there might be instances in which the landlord would rather have a commission hearing, considering that the average judgment is far lower than that issued in a trial court. Baxter also asked how this situation differs from arbitration where a non-judicial officer adjudicates complex legal issues. “It’s based on consent, is it not?” he said. “And isn’t that legal?” “Yes,” Harris conceded. “But it’s based on informed consent.” Justice Chin later asked Oakland-based Deputy Attorney General Kathleen Mikkelson, representing FEHC, whether Konig knew she would be subject to emotional distress damages in a commission hearing. “Yes,” she said. “There’s a form sent to her explaining that.” The state had worried in court papers that stripping the commission of the power to award emotional distress damages would render the administrative forum “toothless and presumptively unappealing to complainants.” The case is Konig v. Fair Employment and Housing Commission of the State of California, S087843. The high court is expected to rule within 90 days.

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