The EEOC has filed its brief in CRST Van Expedited, Inc. v. EEOC, arguing that it is not liable for nearly $4.7 million in attorney's fees – the largest ever fee award against the EEOC. After the EEOC lost its case against CRST the district court awarded CRST its attorney's fees. But wait. The 8th Circuit reversed on the ground that CRST was not a "prevailing party" because CRST's victory was not based "on the merits" of the EEOC's claims. CRST won because the EEOC had not fulfilled its pre-suit statutory duty to investigate the claims, make a reasonable cause determination, or attempt conciliation. EEOC's suit claimed Title VII violations involving 67 individuals. The district court never did rule on whether CRST violated Title VII, but dismissed the case due to EEOC's failure to perform its pre-suit duties.
The district court awarded attorney's fees to CRST based on Title VII § 706(k):
"the court, in its discretion, may allow the prevailing party … a reasonable attorney’s fee (including expert fees) as part of the costs … ."
Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978) established the rule that a prevailing defendant is awarded attorney's fees only when the district court has found that the plaintiff's actions were "frivolous, unreasonable, or without foundation."
The 8th Circuit overturned the fees award for two reasons.
- CRST did not win "on the merits," so it is not a "prevailing party" under § 706(k).
- "[P]roof that a plaintiff’s case is frivolous, unreasonable, or groundless is not possible without a judicial determination of the plaintiff’s case on the merits."
CRST's brief pushed back on the "on the merits" concept, and also argued that it actually did prevail on the merits.
The EEOC's brief does not ask the Supreme Court to follow the 8th Circuit's reasoning. The EEOC proposes that the correct rule is that to be a prevailing party a defendant must obtain a "judicially sanctioned change in the parties' legal relationship." That means CRST must get a judgment that has res judicata effect. And CRST's judgment did not have res judicata effect. Why? Because after a dismissal for failure to comply with pre-suit obligations, EEOC remained free to perform those duties and return to court.
I see a red flag here. CRST has already represented that the claims were dismissed "with prejudice," and the EEOC vehemently disagrees. So the Supreme Court will need to sort through this disagreement on what's in the record. Yuck.
Frivolous, unreasonable, or groundless
EEOC argues that it really was not required to investigate the claims of each one of its 67 claimants because it is allowed to do this on a class-wide basis. EEOC points to others who share this view (other circuit courts; one of the 8th Circuit judges), so the view cannot be unreasonable.
EEOC's brief points out two interesting facts, and I'm wondering what the Supreme Court will do with these:
- Only about 3 percent of CRST's attorney's fees related to litigating the EEOC's compliance with its pre-suit duties.
- CRST went through 18 months of litigation before challenging the EEOC's compliance with its pre-suit duties.