CRST Van Expedited, Inc. v. Equal Employment Opportunity Commission

Under Section 706(k) of Title VII, a district court may award fees to the prevailing party, although under the standard set by the Court in Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978), fees are normally only awarded to a prevailing defendant should the plaintiff’s action be found frivolous or unreasonable. CRST contends that EEOC’s suit failed this reasonableness test and, whether or not a ruling on the merits of EEOC’s case is held necessary to reach that conclusion, fees should be awarded. EEOC argues that not only was the suit reasonable, but the defendant was not a prevailing party capable of receiving an award of attorney’s fees because there was no judgment that precluded further litigation on the subject matter of the case.

MUST A PREVAILING PARTY IN A TITLE VII CASE SUCCEED ON THE MERITS TO OBTAIN AN AWARD OF ATTORNEY’S FEES?

CRST maintains that a ruling on the merits is an unnecessary step toward determining the prevailing party under Christianburg and is inconsistent with the plain meaning of Section 706(k). While acknowledging that plaintiffs cannot acquire prevailing party status without garnering some relief in their favor on the merits, CRST contends that a defendant can become a prevailing party by acquiring a dismissal with prejudice, even on non-merits grounds. CRST, moreover, contends that Section 706(k) has no restrictions on which prevailing parties can be awarded fees, and that a district court’s discretion is only controlled by the equitable considerations espoused in Christianburg. Specifically, CRST claims that the Court in Christianburg deliberately did not limit the scope of the awards available to defendants in Title VII cases because of the often disproportionate power relationship between the federal government as the plaintiff and the small- and mid-sized employers that are often the defendants.

In contrast, EEOC argues that the relevant consideration is the two-part test that the Court adopted in Buckhannon Bd. & Care Home, Inc. v. West Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001). In Buckhannon, the Court held that the status of a prevailing party required (1) a “material alteration” in the parties’ legal relationship, and (2) a judicial decision reflecting such change. EEOC asserts that this “material alteration” cannot be derived from any dismissal of a case that leaves the door open to future litigation on the same issue. In addition, EEOC notes that mere procedural grounds for dismissal are inadequate whether the party is a plaintiff or a defendant. Indeed, EEOC notes that the prevailing party must obtain a judgment that proscribes further litigation on the matter. As this relates to the pre-suit requirements of a Title VII case, EEOC contends that dismissal on the grounds that the aforementioned requirements have not been met does not constitute a material change, and the proper remedy under Mach Mining, LLC v. EEOC, 575 U.S. __ (2015), is a stay of the litigation rather than dismissal. Finally, EEOC argues that the lower court’s dismissal of its case was not with prejudice attached to foreclose future litigation, whether under Rule 41(b) of Federal Rules of Civil Procedure, for involuntary dismissal, or otherwise.

IF A DETERMINATION ON THE MERITS IS NECESSARY, CAN CRST STILL RECOVER ATTORNEY’S FEES?

If a decision on the merits is required under Section 706(k), CRST asserts that the pre-suit requirements necessary for a Title VII claim are elements of the cause of action and failure to meet them constitutes grounds for awarding attorney’s fees. Since the pre-suit requirements are an element of the claim and not merely procedural, CRST contends that a dismissal for failing to meet them is a decision on the merits and thus would qualify the defendant as a prevailing party. Although the pre-suit requirements do not establish whether the allegations are true, CRST points to Arbaugh v. Y&H Corp., 546 U.S. 500 (2006), in which the Court held that the number-of-employees requirement of Title VII was a substantive requirement of the claim, to illustrate that such requirements are nevertheless substantive elements of the cause of action. Even if the pre-suit requirements are not elements of the claim, CRST argues that the statutory language of Title VII renders the pre-suit requirements mandatory and thus an issue on the merits. CRST draws a parallel to Hallstrom v. Tillamook County, 493 U.S. 20 (1989), in which the Court held that a sixty-day notice-and-delay requirement for citizen suits was a mandatory condition to bring suit rather than an optional one. According to CRST, such administrative requirements serve a substantive goal in preventing unnecessary lawsuits.

EEOC contends that a focus on whether the relevant grounds were on the merits is misguided because the relevant test for identifying a prevailing party in Buckhannon renders such a concern irrelevant. EEOC asserts that because a dismissal for a failure to satisfy pre-suit requirements would not have preclusive effects, a key component of the test in Buckhannon, it cannot be held as a factor in determining the prevailing party. EEOC argues that because the mandatory requirement in Hallstrom similarly did not preclude further litigation on the issue, it is also not applicable to the Buckhannon test. As far as Arbaugh is concerned, EEOC distinguishes the Title VII pre-suit requirements as procedural requirements that must be undertaken before a suit is filed, whereas the number-of-employees requirement in Arbaugh was an element of the cause of action because it established whether the employer was subject to Title VII.

REASONABLENESS TEST FOR TITLE VII LITIGATION

Notwithstanding whether a decision on the merits is required, CRST claims that a failure to meet the reasonableness standard in Christianburg can be a ground in and of itself for awarding attorney’s fees. Citing examples in which attorney’s fees were awarded for cases that ended prematurely due to Eleventh Amendment immunity, statutory time bars on litigation, and issue preclusion, CRST maintains that a decision on the merits is not necessary if the decision to litigate is unreasonable under Christianburg. CRST points to Christianburg itself, in which the Court refused to award defendant attorney’s fees because the underlying basis of EEOC’s case was reasonable, to assert that the reasonableness standard is separate from any consideration of the claim’s merits. CRST also argues that a defendant need not be cleared of the discrimination charge alleged in a Title VII claim to be awarded attorney’s fees. In addition, CRST contends that the merits of the charges have no bearing on the reasonableness with which the EEOC used its investigatory powers and brought the claim.

EEOC concurs that the Christianburg reasonableness test is relevant insofar as it dictates when to award attorney’s fees but also argues that because EEOC’s underlying case was reasonable, an award for merely failing to satisfy the Title VII pre-suit requirements would be inappropriate. EEOC points to Mach Mining, in which EEOC sued on behalf of a class of women who had applied for mining jobs, to indicate that certifying a class does not require an in-depth examination of each individual member of the class to be reasonable. EEOC contends that, at the very least, its understanding of the pre-suit requirements as set out by Mach Mining was not so unreasonable as to fall afoul of Christianburg. EEOC also notes that CRST did not challenge EEOC’s compliance with its pre-suit requirements until the district court prompted it to do so over a year-and-a-half into litigation. EEOC argues that the defendant’s failure to challenge its compliance sooner is a sign of the reasonableness of the case, as was the vigorous support of one of the panel judges on the appeals court.