CRST Van Expedited, Inc. v. EEOC (US Supreme Court 05/19/2016): After CRST fended off a Title VII suit brought by the EEOC and recovered over $4 million in attorney's fees in the District Court, the 8th Circuit said "No" to the attorney's fees award because CRST did not prevail "on the merits." CRST prevailed because the EEOC "wholly abdicated" its duty to make separate investigations, reasonable cause determinations, and conciliation attempts as to 67 women on whose behalf EEOC sued prior to bringing its sexual harassment suit against CRST. No court has decided "on the merits" of whether there was any sexual harassment. The US Supreme Court today ruled unanimously in favor (well, partly in favor) of CRST, saying:
"The Court now holds that a favorable ruling on the merits is not a necessary predicate to find that a defendant has prevailed."
According to Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978), a defendant can be awarded attorney's fees in a Title VII case if it is a "prevailing party" (see Title VII Section 706(k)) and the plaintiff's (here, the EEOC's) claim was frivolous, unreasonable, or groundless. But Christiansburg didn't tell us what's required for a defendant to be a "prevailing party."
We knew in advance that the 8th Circuit's "on the merits" requirement wasn't going to fly because both CRST and the EEOC told the Court that this requirement was wrong. So the Court played nice and explained why "common sense" and what "Congress intended" and what the courts have been doing all along all lead to the conclusion that an "on the merits" hurdle is bad law.
But the Court refused to decide three issues that the parties discussed at length in their briefs and at oral arguments.
(1) EEOC argued that in order to be a "prevailing party" a defendant must obtain a preclusive judgment, one that's "with prejudice." But Hey, the EEOC first cooked up this argument in between the certiorari stage and the merits stage in the Supreme Court. The Court suggested the argument might have been waived, and also bemoaned the "inadequate briefing on the issue." So, they sent this issue back to the 8th Circuit to wrestle with. Oh. Come. On. CRST – in spite of the late timing – did a fine briefing job. I think they sent this back because otherwise the Court was split 4-4.
(2) The Court also refused to decide whether CRST's judgment was in fact with prejudice. I winced at the oral arguments on this point because the record of nine years of litigation simply did not make it clear. And you can't expect the Supreme Court to do this kind of work. It's a court of review, and usually not the first-decider.
(3) The 8th Circuit never weighed in on whether the EEOC's actions were frivolous, unreasonable, or groundless. So that issue had to be sent back to the 8th Circuit. Again, this is not something the Supreme Court should decide without guidance from a lower court.
Justice Thomas concurred and also wrote separately. He thinks Christiansburg is "dubious precedent" because it sets up a dual standard for plaintiffs and defendants in Title VII cases. A prevailing plaintiff "ordinarily is to be awarded attorney's fees in all but special circumstances," but a prevailing defendant is to be awarded fees only "upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation."
My prediction is that the singular holding (defendants don't need to prevail "on the merits") will be applied across the board in nearly all statutes (not just Title VII) that have attorney's fees provisions.
For greater detail, see my post on SCOTUSblog: Opinion analysis: Title VII defendants can recover attorney’s fees without prevailing “on the merits”
[For recent decisions and pending employment law cases, see US Supreme Court Watch.]