scotusBy Christina M. Janice and Alex W. Karasik

In high-stakes litigation brought by the EEOC against trucking company CRST Van Expedited, Inc., (“CRST”), CRST recently submitted its final reply brief before the U.S. Supreme Court hears oral argument in the case later this month.  At issue in EEOC v. CRST Van Expedited, Inc. is whether and under what circumstances an employer can recover attorneys’ fees from the EEOC when the EEOC fails to satisfy its pre-suit investigation duties under Title VII.

As our loyal blog readers who have been riding with us for the long haul know, we have covered every “pit-stop” of this litigation journey here, here, here, here, here, here, here, here, here, and here.  With the “end of the road” approaching as oral arguments are set for March 28, 2016, this case is a must-follow for all employers, especially those facing EEOC-initiated lawsuits.

The Context And The Stakes

After CRST successfully obtained the dismissal of the EEOC’s Title VII claims for sexual harassment, the District Court granted CRST’s motion for an award of attorneys’ fees and costs and directed the EEOC to pay CRST nearly $4.7 million, finding that the EEOC’s actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII, and imposed an unnecessary burden upon both CRST and the District Court.

On the EEOC’s appeal, the Eighth Circuit reversed and held that the District Court “did not make particularized findings of frivolousness, unreasonableness, or groundlessness as to each individual claim” and remanded these claims to the District Court to make such individualized determinations.  Further, the Eighth Circuit found that that District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations “[did] not constitute a ruling on the merits,” and that “[t]herefore, CRST is not a prevailing party as to these claims.”   The Eighth Circuit also held that CRST could not satisfy the standard of Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978), for the same reason: “[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.”

The U.S. Supreme Court granted CRST’s petition for certiorari on December 4, 2015.  Thereafter, in its merits brief, CRST asserted two arguments as to why the Eighth Circuit’s decision was improper: (1) the Eighth Circuit’s rule that a prevailing defendant may recover fees only when a case is decided “on the merits” has no basis in the statute, conflicts with Christiansburg Garment, and severely undermines the policy of Section 706(k); and (2) even if the “on the merits” standard applied, CRST was successful on the merits.  In its merits brief the EEOC pivoted away from its earlier argument that fees are recoverable only when dismissal is “on the merits”, and argued that the District Court’s finding that the EEOC failed to satisfy Title VII’s administrative preconditions to filing a lawsuit does not authorize an award of attorneys’ fees under 42 U.S.C. 2000e-5(k), because such a dismissal does not make the defendant a “prevailing party.”  The EEOC also contended that the award of attorneys’ fees and costs in this litigation was improper because the Commission’s suit was not “frivolous, unreasonable, or groundless.”

CRST’s Reply Brief

On March 10, 2016, CRST filed its reply brief, quickly observing the EEOC’s abandonment of the Eighth Circuit’s rule that a resolution “on the merits” is a precondition for a fee award, id. at 1, and requesting the Supreme Court to abrogate that rule as being without foundation in Title VII.  Id. at 3.

CRST then attacked the EEOC’s new theory that attorneys’ fees were unwarranted because only preclusive judgments in favor of defendants support “prevailing party” status, and that the judgment in this case did not preclude further litigation of the 67 claims at issue.  CRST argued that because the EEOC has not raised this “prevailing party” argument at any time during the last six years of litigation, the argument has been “thoroughly and repeatedly waived.”  Id. at 7.  Addressing the substantive argument raised by the EEOC, CRST asserted that the only substantive issue properly before the Supreme Court is whether the EEOC’s pre-suit conduct rendered its lawsuit “frivolous, unreasonable, or groundless” under Christianburg.  Id. at 17-18. CRST argued that during the course of its investigation, the Commission never made a reasonable-cause determination as to any common discriminatory practice, and never attempted to conciliate with CRST over any alleged common discriminatory practice. Id. at 20-22.  Accordingly, CRST contended that the District Court, which has overseen the case for years, acted well-within its discretion when it found that the EEOC abandoned the statutory process required by Title VII.

What’s Next

The Supreme Court is set to hear oral arguments on March 28, 2016.  As we discussed here, with the passing of Justice Scalia, CRST likely has one less vote in its corner.  Nonetheless, the outcome of the case still remains equally important for both employers and the EEOC, as it will likely provide guidance as to the EEOC’s accountability for satisfying its statutory obligations under Title VII.

We will be sure to keep our loyal blog readers updated on the developments of this crucial case.

Readers can also find this post on our Workplace Class Action blog here.