On December 4, the Supreme Court agreed to hear CRST Van Expedited, Inc. v. EEOC, a case which will have a significant impact on the availability of attorneys’ fees in cases brought by the EEOC, and perhaps more broadly. The Court will consider whether attorneys’ fees may be awarded to a successful defendant when a court does not reach the merits of an EEOC’s claims, but instead dismisses the government’s case as a result of the EEOC’s failure to satisfy its pre-suit investigation, reasonable cause, and conciliation obligations.
The CRST case involves a claim of sex discrimination in violation of Title VII of the Civil Rights Act of 1964 brought by the EEOC on behalf of a group of female CRST employees. According to the employer’s petition for certiorari, the EEOC began its case by filing a complaint on behalf of one of CRST’s employee and a class of other “similarly situated” female employees. CRST alleges that, as the discovery deadline approached, the EEOC “began identifying large numbers of claims and ultimately named 270 women” whom had alleged they were harassed at work. The EEOC represented that it had sufficient factual support for all 270 claims, but following depositions of 154 claimants, CRST alleged that “it became clear that EEOC did not have valid grounds for the vast majority of its claims.” Ultimately, the district court dismissed each and every claim, 67 of which were dismissed on grounds that the EEOC failed to investigate, make reasonable cause determinations, and attempt conciliation with respect to each claimant.
After an initial successful appeal, CRST moved for attorneys’ fees, citing Section 2000e-5(k) of Title VII, which permits a district court, “in its discretion, [to allow] a reasonable attorney’s fee (including expert fees)…” where the plaintiff’s case is “frivolous, unreasonable, or groundless.” The district court ruled in favor of CRST, and awarded it more than $4 million in attorneys’ fees and $500,000 in expenses and costs. The EEOC appealed, and the Eighth Circuit Court of Appeals reversed the district court’s decision, holding that a court must come to a decision on the merits of the EEOC’s claims before it can decide whether those claims were frivolous, unreasonable, or groundless sufficient to support an award of attorneys’ fees. Because CRST’s victory was procedural in nature, and not a determination its favor on the merits, the Eighth Circuit concluded that CRST was not entitled its $4.5 million-plus fee and cost award.
On appeal to the Supreme Court, CRST takes the position that a successful defendant can seek attorneys’ fees, even if a court has not come to a decision “on the merits,” relying on decisions from the Fourth, Ninth, and Eleventh Circuits, which have allowed defendants to recover attorneys’ fees after the EEOC failed to meet its pre-suit obligations. CRST further contends that the legislative purpose behind the fee-shifting rule – to discourage plaintiffs from bringing frivolous, unreasonable, or groundless claims – is frustrated by the Eighth Circuit’s reading of Section 2000e-5(k). In the alternative, CRST argues that existing Supreme Court case law (Arbaugh v. Y & H Corp. and Christiansburg Garment Co. v. EEOC) dictates that decisions based on the EEOC’s pre-suit actions constitute decisions “on the merits.”
In its responsive brief in opposition, the government argues that it is necessary for a court to reach a decision on the merits before deciding whether a plaintiff’s case is frivolous, unreasonable, or groundless. The government also claims that investigation and conciliation are merely “nonjurisdictional preconditions” or “administrative steps” that the EEOC must follow before filing suit (rather than matters affecting the merits of a claim). Thus, the EEOC contends, a fee award in this case is not appropriate.
The case, which has not yet been set for oral argument, could have nationwide implications for any case dismissed by a district court before the summary judgment stage, settlements excepted. If the Court sides with the government, employers may find themselves in the unenviable position of having to incur the costs of fighting even the most frivolous, unreasonable, or groundless of EEOC actions through summary judgment or trial – and thus to a determination on the merits – just to secure the mere opportunity to recover its fees and costs.
We will monitor this case and report on developments.