Nelia Virtusio v. Financial Industry Regulatory Authority, Inc.

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NELIA VIRTUSIO,
Plaintiff - Appellant,
v.
FINANCIAL INDUSTRY
REGULATORY AUTHORITY, INC.,
Defendant - Appellee.
No. 13-16153
D.C. No. 3:12-cv-00602-NC
MEMORANDUM*
NELIA VIRTUSIO,
Plaintiff - Appellant,
v.
FINANCIAL INDUSTRY
REGULATORY AUTHORITY, INC.,
Defendant - Appellee.
No. 14-15834
D.C. No. 3:12-cv-00602-NC
Appeal from the United States District Court
for the Northern District of California
Nathanael M. Cousins, Magistrate Judge, Presiding
FILED
AUG 25 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

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Argued and Submitted August 13, 2015
San Francisco, California
Before: KOZINSKI and TALLMAN, Circuit Judges, and ROSENTHAL,** District
Judge.
1. Financial Industry Regulatory Authority (“FINRA”) did not breach any
implied-in-fact contract that existed between it and Nelia Virtusio because a
reasonable person would understand FINRA promised to pay only worker’s
compensation benefits—not additional short-term disability benefits—for work-
related injuries. Cf. Guz v. Bechtel Nat’l, Inc., 24 Cal. 4th 317, 336-37, 344
(2000). FINRA’s employee handbook indicated outside guidelines would
determine an employee’s eligibility for short-term disability benefits and that
worker’s compensation benefits covered work-related injuries. The handbook also
directed employees to the human resources department, which told Virtusio that
short-term disability benefits were not available for her work-related injuries. No
FINRA employee made a contrary representation, and no document said she could
have both. A reasonable person would understand that the benefits are mutually
exclusive. Because the remainder of Virtusio’s claims depend on FINRA’s alleged
** The Honorable Lee H. Rosenthal, United States District Judge for the
Southern District of Texas, sitting by designation.
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obligation to pay her short-term disability benefits, they also fail as a matter of law,
and the district court properly granted summary judgment for FINRA.
2. The district court also properly awarded FINRA attorney’s fees because
amended California Labor Code § 218.5 attached “new legal consequences to
events completed before its enactment,” and thus has an impermissible retroactive
effect. Landgraf v. USI Film Prods., 511 U.S. 244, 270, 280 (1994); cf.
Californians for Disability Rights v. Mervyn’s, LLC, 39 Cal. 4th 223, 230-31
(2006).
However, the district court failed to discuss whether it specifically
considered Virtusio’s inability to pay when calculating the attorney’s fees award
for FINRA. Cf. Ass’n of Mexican-American Educators v. California, 231 F.3d
572, 592 (9th Cir. 2000) (en banc) (finding that a district court abuses its discretion
by “denying a losing . . . plaintiff’s motion to re-tax costs without considering
(1) the plaintiff’s limited financial resources; and (2) ‘the chilling effect of
imposing such high costs on future civil rights litigants’” (quoting Stanley v. Univ.
of S. Cal., 178 F.3d 1069, 1079 (9th Cir. 1999)). The district court awarded
$74,187.74 in attorney’s fees against a woman whose total annual household
income is $78,000—all of which comes from disability benefits programs.
Refusing to consider whether a claimant such as Virtusio is able to pay would
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discourage suits by employees who are wrongfully refused disability benefits.
Therefore, we remand for reconsideration of Virtusio’s ability to pay when
recalculating the proper amount of attorney’s fees to award FINRA.
AFFIRMED in part; REVERSED and REMANDED in part with
instructions to reconsider the appropriate amount of attorney’s fees. Each side
shall bear its own costs on this appeal.
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