SCOTUS: Defendant May Be Awarded Attorneys' Fees as Title VII Prevailing Party Without a Ruling on the Merits | Practical Law

SCOTUS: Defendant May Be Awarded Attorneys' Fees as Title VII Prevailing Party Without a Ruling on the Merits | Practical Law

In CRST Van Expedited, Inc. v. EEOC, the US Supreme Court held that a defendant in a Title VII case may be awarded attorneys' fees as a prevailing party even without obtaining a favorable ruling on the merits.

SCOTUS: Defendant May Be Awarded Attorneys' Fees as Title VII Prevailing Party Without a Ruling on the Merits

by Practical Law Labor & Employment
Published on 24 May 2016 • USA (National/Federal)
In CRST Van Expedited, Inc. v. EEOC, the US Supreme Court held that a defendant in a Title VII case may be awarded attorneys' fees as a prevailing party even without obtaining a favorable ruling on the merits.
On May 19, 2016, in CRST Van Expedited, Inc. v. EEOC, the US Supreme Court interpreted Title VII's provision allowing district courts to award attorneys' fees to prevailing parties and held that a defendant may be awarded attorneys' fees as a prevailing party even without obtaining a favorable ruling on the merits. The court reversed a decision by the US Court of Appeals for the Eighth Circuit that vacated an award of attorneys' fees to the defendant employer. ( (May 19, 2016).)

Background

A driver for trucking company CRST filed a discrimination charge with the EEOC alleging sexual harassment. After the EEOC investigated and determined that it had reasonable cause to believe that CRST subjected multiple drivers to sexual harassment, the EEOC filed suit under Title VII in US district court. The district court disposed of the EEOC's claims in a series of orders responsive to motions filed by CRST. Among other things, the district court dismissed claims the EEOC brought on behalf of 67 women for failure to investigate and conciliate as part of the EEOC's presuit obligations. Ultimately, the district court:
  • Dismissed the EEOC's lawsuit.
  • Held that CRST was a prevailing party under Title VII.
  • Invited CRST to apply for attorneys' fees as a Title VII prevailing party.
The district court awarded CRST over $4 million in attorneys' fees. After an initial appeal, the Eighth Circuit affirmed the district court's dismissal of almost all of the claims the EEOC had appealed, vacated the attorneys' fee award without prejudice, and remanded to the district court to address some remaining employee claims. After the case was remanded, the EEOC withdrew its claim on behalf of one remaining individual and settled its claim on behalf of the other remaining individual. The EEOC had no claims left, and CRST once again moved for attorneys' fees. The district court again awarded CRST over $4 million in attorneys' fees. The EEOC appealed, and the Eighth Circuit reversed and remanded, holding that:
  • A defendant must receive "a favorable determination on the merits" to be:
    • a Title VII prevailing party; and
    • eligible for attorneys' fees.
  • The district court's dismissal of many of the employees' claims on the ground that the EEOC failed to investigate or conciliate the claims was not a ruling on the merits.
  • CRST was not a prevailing party entitled to attorneys' fees under Title VII.
CRST appealed. The Supreme Court granted certiorari and noted that the Eighth Circuit's decision conflicted with the decisions of three other Courts of Appeals (see EEOC v. Propak Logistics, Inc., 746 F. 3d 145, 152–154 (4th Cir. 2014); EEOC v. Asplundh Tree Expert Co., 340 F. 3d 1256, 1261 (11th Cir. 2003); EEOC v. Pierce Packing Co., 669 F. 2d 605, 608-609 (9th Cir. 1982)).

Outcome

The Supreme Court, in a unanimous opinion by Justice Kennedy:
  • Reversed the Eighth Circuit's decision.
  • Held that a defendant in a Title VII case may be awarded attorneys' fees as a prevailing party even without obtaining a favorable ruling on the merits. A defendant may be a prevailing party when plaintiffs' Title VII litigation is disposed of for non-merits-based reasons.
The Supreme Court noted that:
  • Title VII provides for attorneys' fees to be awarded to a prevailing party (42 U.S.C. § 2000e-5(k); Texas State Teachers Assn. v. Garland Independent School Dist., 489 U. S. 782, 789 (1989)).
  • It has held that district courts may award attorneys' fees to a prevailing party defendant if the plaintiff:
    • brought a "frivolous, unreasonable or groundless" claim; or
    • continued to pursue the claim after it became clear that the claim was frivolous, unreasonable, or groundless.
    (Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422 (1978).)
  • It has articulated the situations in which a plaintiff is a prevailing party in a Title VII case but has not clearly outlined when a defendant is a prevailing party.
  • As a matter of "common sense," a defendant achieves its main objective whenever the plaintiff's claim fails, regardless of the reason. Therefore, a defendant may prevail in situations when a court issues a judgment rejecting a plaintiff's claim "for a nonmerits reason."
  • Congress did not indicate any intention to allow defendants to recover attorneys' fees only when they prevail for merits-based reasons.
  • Congress' goal of protecting defendants from incurring costs associated with defending frivolous litigation should not depend on whether the litigation was disposed of for a merits-based reason or for a non-merits-based reason (see Christiansburg Garment Co., 434 U.S. at 422; Fox v. Vice, 563 U. S. 826, 840 (2011)).
The Supreme Court remanded to the Eighth Circuit to address whether:
  • A defendant must obtain a "preclusive judgment" to be a prevailing party.
  • Even if CRST is a prevailing party, an attorneys' fee award is not warranted because the EEOC's argument that it met its pre-suit investigation and conciliation obligations is not "frivolous, unreasonable, or groundless."
In a concurring opinion, Justice Thomas noted his view that Christiansburg is a "dubious precedent" because the court concluded that a prevailing plaintiff " ordinarily is to be awarded attorney's fees in all but special circumstances," but that a prevailing defendant is to be awarded fees only "on a finding that the plaintiff's action was frivolous, unreasonable, or without foundation."

Practical Implications

The Supreme Court's decision in CRST holds that a Title VII defendant need not obtain a favorable ruling on the merits to be a prevailing party entitled to attorneys' fees. A defendant may recover attorneys' fees even when the plaintiff's Title VII case failed for "a nonmerits reason." The decision clarifies the definition of prevailing party and expands the ability of Title VII defendants to recover attorneys' fees in situations when the plaintiff's claim was frivolous, unreasonable, or groundless.