The U.S. Supreme Court will likely require the Equal Employment Opportunity Commission (EEOC) pay $4.7 million in attorney fees to the attorneys who successfully defended a case alleging sex discrimination, in violation of Title VII. Reuters Legal reported, “[d]uring Monday's oral argument, Justices Stephen Breyer and Sonia Sotomayor joined three of the conservative justices in signaling their agreement that CRST Van Expedited Inc definitively won the case, which allowed for the fee award, despite the EEOC's arguments that the matter was not technically finished.”
The case originated in 2007, when the EEOC brought the action on behalf of 270 employees against their employer, a large, Iowa-base interstate trucking firm (CRST). The U.S. District Court for the Northern District of Iowa barred the EEOC from seeking recovery for 67 claims, due to its failure to reasonably investigate or good faith conciliate. In addition, the court granted the employer’s motion for attorney fees and costs, based on the standard which is “designed [t]o discourage the litigation of frivolous, unreasonable, groundless, or vexatious claims, but without discouraging the rigorous enforcement of federal rights under Title VII.” 2010 WL 520564.
The 8th U.S. Circuit Court of Appeals later reversed the lower court’s holding. The 8th Circuit held that the district court’s decision to dismiss the 67 claims due to EEOC’s failure to investigate or conciliate did not qualify as a judgment on the merits, therefore CRST was not the prevailing party entitled to attorney fees. E.E.O.C. v. CRST Van Expedited, Inc., 774 F.3d 1169 (8th Cir. 2014) cert. granted, 136 S. Ct. 582, 193 L. Ed. 2d 464 (2015).
Petition for writ of certiorari was granted on December 4, 2015 and the Supreme Court heard oral arguments earlier this week. During oral arguments, the EEOC did not rely on the holding from the 8th Circuit and instead argued that it was not responsible for legal fees because CRST was not the prevailing party according to the standard set forth in Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep't of Health & Human Res., 532 U.S. 598 (2001). The EEOC stated that “prevailing party under Buckhannon is a term of art that, in a Title VII case, means that the defendant's victory ends the dispute such that the plaintiff cannot sue again.” However, Justice Sotomayor agreed with CRST, who argued that the district court ruling undoubtedly ended the case, since the court prohibited the EEOC from bringing these claims before the court.
This would be good news for employers since such a holding could potentially deter the EEOC from bringing actions without a good faith belief after investigation that a meritorious claim exists.