The city of Fresno plans to ask a federal judge to review a $15.4 million verdict in a racial discrimination case, which would buy the city time as it decides whether to file a formal appeal.
Last month, a federal jury ruled in favor of La-Kebbia “Kiki” Wilson and Charles Smith in their lawsuit claiming discrimination, harassment, and retaliation. Smith, a white former employee with the city’s code enforcement department, testified his supervisor used a racial slur to describe Wilson, a Black woman who at the time also worked in code enforcement. The jury awarded $15 million to Wilson and $400,000 to Smith.
“The city attorney would have to ask the judge to reconsider it. And that is not something in the purview of the city council,” Fresno City Attorney Andrew Janz told GV Wire.
Janz said it is standard practice to ask a judge — in this case federal Judge Kirk E. Sherriff — to review a verdict. Because asking for a review is procedural in nature, the city attorney does not need a vote from the city council.
Janz expects to make the request next week. The city has 30 days from the date the verdict was entered into the record — March 11 — to file an appeal. If Sherriff reviews the award, the 30-day deadline would be paused.
“The council is not yet in a position to make a decision on the appeal because it is waiting on the judge,” Janz said.
At last week’s city council meeting, several speakers — including former City Councilmember Cynthia Sterling — asked the city to pay the settlement. City Councilmember Miguel Arias has also publicly encouraged the city not to appeal.
Insurance Policy Covers $10 Million
City Manager Georgeanne White said the city’s insurance policy with carrier Safety National would cover $10 million of the verdict, but there are risks. The policy in place at the time of the 2019 incident says the city pays the first $3 million, the insurance pays the next $10 million, and the city pays the balance.
“However, I must tell you, we run the risk of losing coverage and control of our lawsuits if we don’t appeal the decision,” White told GV Wire.
An appeal is not required by the policy, but the city could risk losing the policy or its independence in defending future lawsuits.
“The insurance language says we have to exercise the utmost good faith and diligence in claims handling. It also says they have the right to take over the defense and settlement of all of our claims with them. If they take over the defense, that puts us in a precarious position when trying to renew our policy or get a new policy with the same terms as our current policy,” White said.
White said any share of the city’s settlement payment would come from the risk fund.
City Challenging Federal Court Costs
While the city council debates its next step on whether to appeal the verdict, its attorneys filed a motion objecting to court costs.
The U.S. District Court for the Eastern District of California, on behalf of the plaintiffs, sent the city a bill of $49,702 for items such as clerk fees, serving summons and subpoenas, and recording transcripts. The latter was the most expensive line item at $31,011.
The city, through its attorneys at Whitney, Thompson & Jeffcoach LLP, responded, claiming that $10,624 of the requests “are not recoverable.”
The city is challenging several items such as witness fees, parking, and meals. Attorneys for Wilson and Smith asked for $421 for meals — mainly at the in-court restaurant.
Attorneys for the city cite several federal rules of procedure and case precedents regarding what costs are allowable and what are not.