Many employers are familiar with the fact that an employee who brings and wins a discrimination case will recover his or her attorney’s fees. In order for a winning employer to recover its attorney’s fees, by contrast, the employer is required to show that the employee’s claims were frivolous, unreasonable or groundless, which is an extremely difficult standard to meet. The policy underlying this distinction is not to discourage employees from bringing discrimination lawsuits out of fear they will, if they lose, be “on the hook” for thousands of dollars in attorney’s fees.

Notwithstanding this limitation on a prevailing employer’s ability to recover attorney’s fees, winning employers have historically been able to claim and obtain a judgment for out-of-pocket litigation costs, without a showing the claims were frivolous, unreasonable and groundless. These costs include filing fees, deposition and court transcript fees and certain witness expenses.

A case now pending before the California Supreme Court, Williams v. Chino Valley Independent Fire District, will resolve a split of authority among California appellate courts whether prevailing employers in discrimination cases will continue to be able to claim litigation costs without being required to meet the frivolous, unreasonable or groundless standard. The plaintiff bar is urging the Supreme Court to resolve the split of authority by holding that prevailing employers seeking to recover attorney’s fees or costs must prove the claim was frivolous, unreasonable or groundless.

Every one of us carries a measure of optimism whenever we decide to undertake something. Undoubtedly owing to a cluster of deep-seated personality defects, I find I often see a glass as half empty. I don’t begrudge this aspect of my personality; it tends to make me a conservative investor and a boring gambler.

Most successful plaintiff lawyers I’ve worked with, however, seem more often than not to be glass half-full types. Let me clarify what I mean for the benefit of any readers who aren’t familiar with the American system of jurisprudence. I’m referring specifically to lawyers who agree to take on clients and cases on a contingency basis. Under these circumstances, a lawyer agrees to represent a client or clients in a lawsuit without any fees unless and until there is some recovery, by settlement or judgment. There is always an investment of the lawyer’s time and often the lawyer also agrees to advance the costs of litigation against the chance of recovery. If the case or claim is successful, the lawyer is reimbursed the costs she advanced and she also receives an agreed upon percentage of the recovery.

It’s not difficult to see how one would have to be something of an optimist to take any case on contingency, though a better quality case against a deeper-pocketed defendant tends to reduce the risk. In fact, some of the wealthiest practicing lawyers earned their fortunes through contingency fee litigation.

Not long ago, I handled a case against someone so optimistic about his client’s case that he was literally “drunk” on his own Kool Aid. So drunk, in fact, that he didn’t sober up until after he lost the trial and his client hired another lawyer to represent her in her appeal. It wasn’t that his client had a drop dead loser of a case. The case actually had some sexy facts; the kind of facts that can make jurors rock back and forth in their seats with interest. Things could have gone the other way, and he could have won. But it wasn’t that good of a case, and he could have and should have tried earnestly to settle before rolling the dice with the jury. He was just too buzzed to see the glaring weaknesses or put a realistic settlement value on the case. He never got within a range in which it made the remotest sense for my clients to make any serious offer–so they didn’t.

I recognize the counter-argument can seem compelling. After all, some of the biggest jury verdicts came out of situations in which David took on Goliath and prevailed against all odds. And I’ve already admitted I tend to see the glass a half empty. But what set my “drunkard” opponent apart from another, wiser lawyer was his steadfast refusal to give any weight to the opinions of two separate neutrals (a mediator he had selected and a USDC Magistrate Judge sitting as a settlement officer), who both told him he was being ridiculous in his expectations and wrong on a pretty important issue of the law.

Is it possible to be a “sober” optimist? Sure. One way is to pay attention if multiple neutrals (including one you selected) suggest you’re off the mark. Of course, neutrals may not always be truly neutral, even when you’re paying them to (i.e., when they’re leaning on you in a mediation). Another approach is to submit your facts and arguments, including what you expect the other side will say, to a mock jury–even a cheap one like I described here. I’ve also known lots of lawyers (even really skilled ones) who will ask every colleague they know what they think about a set of facts, just to see if they’re missing something. There’s nothing wrong with this, as long as you don’t inadvertently waive the attorney-client privilege.

One final thought: being a “drunk” optimist is fine: (1) as long as you’re gambling only with your own time or money; or (2) just like elective surgery, if you fully inform the client of all circumstances, including the risks (or likelihood) of walking away with nothing, and the client understands and is just as eager to roll the dice, then by all means roll the dice.