Oral argument on EEOC's new theory of attorney's fees liability

On Monday, the US Supreme Court heard oral arguments in CRST Van Expedited v. EEOC, the case involving about $4.7 million in attorney's fees awarded against the EEOC. Following is an abbreviated version of my argument analysis published today at SCOTUSblog, Argument analysis: The EEOC’s new theory of attorney’s fees liability. The EEOC abandoned the 8th Circuit's theory that attorney's fees can be awarded to victorious defendants only if they prevail "on the merits." Here's what the EEOC wants now (per Assistant to the Solicitor General Brian H. Fletcher):

(1) a defendant becomes a "prevailing party" only by obtaining a court order that precludes further litigation, and

(2) CRST did not meet this threshold requirement because the district court did not dismiss the case "with prejudice."

CRST's basic arguments, by Paul M. Smith, Chair of Jenner & Block's Appellate and Supreme Court Practice:

(1) "Prevailing" means winning. Hey, we won.

(2) If you need us to have a dismissal with prejudice, well, we got one.

(3) EEOC waived its new legal theory; they didn't raise it during six years of litigation.

The EEOC wants the rule for prevailing defendants to be the same as the rule for prevailing plaintiffs. In Buckhannon Board v. West Virginia Dept. of Health (2001) the Court said that a plaintiff becomes a "prevailing party" only by obtaining a "judicially sanctioned change in the legal relationship of the parties." That's what the EEOC wants for defendants. That would mean CRST would have to show that it got a dismissal with prejudice.

CRST argued that a win is a win. This idea seemed attractive to Chief Justice Roberts. He said defendants want to win; they are less interested in the grounds for winning. Justice Breyer said he favored a rule that is simple, consistent with the statutory language, and easy to administer. As he put it, "Now, maybe [the EEOC] can bring another case tomorrow; that's another case. But they won this case."

Justice Alito displayed some creativity by pointing out that CRST did obtain a "material alteration" in the relationship between it and the EEOC – "not as big a one as the defendant would like," but nevertheless cause for the defendant to celebrate.

Did CRST get a dismissal with prejudice? Oh my. The lawyers combed through the trial court record, quoted docket entries, cited Federal Rule 41(b), and so on. But really, the record is not clear, and Justice Sotomayor suggested remanding the case for the lower courts to determine what was meant.

CRST's waiver argument didn't seem to catch fire, so I expect the Court will pick one of two simple rules:

(1) a defendant prevails by winning in any fashion

(2) a defendant must gain a dismissal with prejudice.

[For recent decisions and pending employment law cases, see Supreme Court Watch.]