Metropolitan News-Enterprise


Wednesday, January 3, 2024


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C.A. Upholds $24.3 Million Award to Lawyer for Retaliation

Attorney Was Fired by Farmers Insurance Based on His Intended Deposition Testimony


By a MetNews Staff Writer


The Court of Appeal for this district yesterday affirmed a judgment in the amount of $24.3 million in compensatory and punitive damages in favor of a lawyer who was fired by Farmers Insurance based on his willingness to render testimony at a deposition favorable to female attorneys who were suing Farmers for gender discrimination.

Thousand Oaks attorney Andrew Rudnicki was the plaintiff. The jury, in addition to awarding him $5,413,344 in compensatory damages, set punitive damages at $150 million.

However, Los Angeles Superior Court Judge Ruth Ann Kwan slashed the award of punitive damages to $18,945,000. Not involved in the appeal was Kwan’s additional award last Jan. 20 of $2,266,704 in attorney fees.

Presiding Justice Judith Ashmann-Gerst wrote the unpublished opinion which upholds the judgment.

Rudnicki, who was senior vice president of claims litigation, was concerned over possible discrimination against female attorneys and sought information as to relative salaries of men and women lawyers, particularly those in the litigation department. He was denied access to the statistics.

Putative Class Action

On April 29, 2015, attorney Lynne Coates filed a putative class action against Farmers, contending:

“Farmers systematically pays female attorneys less than similarly-situated male attorneys. Not only are male attorneys paid more, they are routinely given higher profile work assignments; are given raises and promotions more frequently; and are recognized for their accomplishments while female attorneys are not. In general, Farmers advances the careers of its male attorneys more quickly while treating its female attorneys more like support staff.”

 Farmers was represented by Paul Hastings which prepared Rudnicki for an anticipated deposition of him. In 2015, Rudnicki informed Chief Claims Officer Keith Daly that he would be testifying as to the denial of information to him concerning gender-based pay disparities and, as Rudnicki recounted it, Daly became red-faced, declared that “I don’t see that you need to testify about that,” and, after that, was icy toward him, discriminated against him, and, shortly after the Coats lawsuit was settled, he was fired.

Ashmann-Gerst’s Opinion

He sued for a retaliatory discharge. Ashmann-Gerst wrote:

“Rudnicki proved all elements of retaliation. (1) He engaged in a protected activity, namely he prepared for a deposition that would have gone against Farmers’s interests. (2) He was subjected to an adverse employment action—his employment was terminated. And, (3) Rudnicki proved a causal link between the two—Rudnicki told Daly about his intended deposition testimony, and a reasonable jury could infer that Rudnicki’s employment was terminated because Farmers did not want him to offer adverse testimony in Coates.”

Farmers insisted that Rudnicki obtained a favorable judgment through improper means: by breaching the attorney-client privilege. Ashmann-Gerst said Kwan was correct in rejecting that contention, saying:

“Here, Rudnicki was able to prove his claim without breaching the attorney-client privilege. As the trial court aptly noted, ‘Rudnicki’s testimony focused on his conversation with Daly and Daly’s verbal and non-verbal responses that supported a reasonable inference that Farmers perceived Rudnicki’s anticipated testimony as adverse to it, which testimony would supply the jury with sufficient evidence to find retaliation.’ We agree. Rudnicki’s claim is based upon what he told Daly about his intended deposition testimony in the Coates litigation. His statement, and resulting conversation with Daly, was not a confidential communication between client and attorney. It did not involve legal strategy. The communication could have been made by any employee who had information concerning Farmers’s HR failures; it was not made in the course of Rudnicki’s representation of Farmers.”

Ashmann-Gerst also said that Kwan “did not err in setting the ratio for a punitive damages award to compensatory damage award to 3.5-to-one.”

The case is Rudnicki v. Farmers Insurance Exchange, B321691.

Carney R. Shegerian and Jill McDonell of Shegerian & Associates represented Rudnicki and Theodore J. Boutrous Jr., Julian W. Poon, Jeremy S. Smith, Patrick J. Fuster, Matthew N. Ball and Yan Zhao of Gibson, Dunn & Crutcher acted for Farmers.


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