486 U.S. 549 (1988), 86-1431, Loeffler v. Frank

Docket Nº:No. 86-1431
Citation:486 U.S. 549, 108 S.Ct. 1965, 100 L.Ed.2d 549, 56 U.S.L.W. 4554
Party Name:Loeffler v. Frank
Case Date:June 13, 1988
Court:United States Supreme Court
 
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Page 549

486 U.S. 549 (1988)

108 S.Ct. 1965, 100 L.Ed.2d 549, 56 U.S.L.W. 4554

Loeffler

v.

Frank

No. 86-1431

United States Supreme Court

June 13, 1988

Argued January 11, 1988

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE EIGHTH CIRCUIT

Syllabus

Petitioner was discharged from his position with the United States Postal Service. Contending that his discharge resulted from sex discrimination, petitioner brought this suit against the Postmaster General in Federal District Court pursuant to § 717 of Title VII of the Civil Rights Act of 1964. The court found for petitioner and ordered his reinstatement with backpay, but refused to award prejudgment interest. The Court of Appeals affirmed the denial of prejudgment interest. Relying in part on Library of Congress v. Shaw, 478 U.S. 310, which held that sovereign immunity barred the payment of interest on attorney's fees awarded against the Library of Congress under Title VII, the court concluded that Congress had not waived the Postal Service's sovereign immunity as to prejudgment interest in a Title VII suit, even though Congress had provided in the 1970 Postal Reorganization Act, 39 U.S.C. § 401(1), that the Postal Service may "sue and be sued."

Held: Prejudgment interest may be awarded in a suit against the Postal Service brought under Title VII. Pp. 554-565.

(a) By launching the Service into the commercial world and including a sue-and-be-sued clause in the Postal Reorganization Act, Congress removed the Service's cloak of sovereignty and gave it the status of a private commercial enterprise. The clause must be liberally construed, and the Service's liability must be presumed to be the same as that of any other business. Thus, Congress is presumed to have waived any otherwise existing immunity of the Service from interest awards. None of the exceptions to the liberal construction rule operate to overcome this presumption. Franchise Tax Board of California v. USPS, 467 U.S. 512. Pp. 554-557.

(b) Since Title VII authorizes interest awards as a normal incident of suits against private parties, and since Congress, by enacting the sue-and-be-sued clause in the Postal Reorganization Act, has waived the Service's immunity from such awards, respondent may be subjected to an interest award in this case. Pp. 557-558.

(c) There is no merit to respondent's contention that the waiver of sovereign immunity effected by the sue-and-be-sued clause has no force in this case. The history of the Postal Reorganization Act, with its emphasis

Page 550

on the availability of strong remedies for discrimination in the federal employment context, makes clear that Congress' failure to extend Title VII protections to Postal Service employees did not reflect an intent to circumscribe the waiver of sovereign immunity effected by the sue-and-be-sued clause, but, rather, was a determination that a Title VII cause of action was unnecessary in light of such alternative remedies. Nor is the sue-and-be-sued clause irrelevant merely because, when Congress extended a Title VII cause of action to federal employees in 1972, it included special procedures and limitations applicable only in actions against federal defendants. Neither the language of § 717 nor its legislative history indicates that the waiver of sovereign immunity it effected was intended to narrow the waiver of sovereign immunity of entities subject to sue-and-be-sued clauses. Pp. 560-562.

(d) Nor is there merit to respondent's contention that the statute that provides petitioner with his cause of action, § 717 of Title VII, does not authorize interest awards. Congress expressly incorporated in § 717 provisions of Title [108 S.Ct. 1967] VII that allow an interest award, and a § 717 suit, once commenced, is delineated by the same provisions as a suit against a private employer, who is liable for prejudgment interest in a Title VII suit. Library of Congress v. Shaw, supra, is not to the contrary. That case started from the rule that, absent express consent by Congress, the Government is immune from interest awards, and found that Title VII did not waive the Library of Congress' immunity from interest. However, the Library of Congress, unlike the Postal Service, was not a sue-and-be-sued agency that Congress had launched into the commercial world, and thereby broadly waived the agency's sovereign immunity. Pp. 563-565.

806 F.2d 817, reversed and remanded.

BLACKMUN, J., delivered the opinion of the Court, in which BRENNAN, MARSHALL, STEVENS, and SCALIA, JJ., joined. WHITE, J., filed a dissenting opinion, in which REHNQUIST, C.J., and O'CONNOR, J., joined, post, p. 566. KENNEDY, J., took no part in the consideration or decision of the case.

Page 551

BLACKMUN, J., lead opinion

JUSTICE BLACKMUN delivered the opinion of the Court.

This case presents the question whether prejudgment interest may be awarded in a suit against the United States Postal Service brought under Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U.S.C. § 2000e et seq.

I

Petitioner Theodore J. Loeffler was discharged from his position as a rural letter carrier for the United States Postal Service.1 Petitioner appealed his termination to the Merit Systems Protection Board, and, when his discharge was affirmed there, sought administrative relief from the Equal Employment Opportunity Commission. This also was without success. Contending that his discharge resulted from

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sex discrimination, petitioner subsequently brought this suit against the Postmaster General of the United States in his official capacity,2 pursuant to § 717 of Title VII, as amended, 42 U.S.C. § 2000e-16. After a bench trial, the United States District Court for the Eastern District of Missouri concluded that petitioner was a victim of discrimination and ordered his reinstatement with backpay. App. to Pet. for Cert. A-26. Relying on a decision of its controlling court, Cross v. USPS, 733 F.2d 1327, 1332 (CA8 1984) [108 S.Ct. 1968] (en banc), cert. denied, 470 U.S. 1051 (1985), the District Court refused to award prejudgment interest. App. to Pet. for Cert. A-21. (In Cross, an equally divided Court of Appeals had affirmed the same District Judge's conclusion that sovereign immunity barred an award of prejudgment interest in a Title

Page 553

VII suit against the Postal Service.)

The United States Court of Appeals for the Eighth Circuit affirmed the denial of prejudgment interest. Loeffler v. Carlin, 780 F.2d 1365, 1370-1371 (1985). Concluding that the District Court's reliance on Cross was "understandable and proper," id. at 1370, the court stated: "If the question of prejudgment interest is to be reconsidered, it should be reconsidered by the Court en banc." Id. at 1371.

Subsequently, the Eighth Circuit undertook that en banc reconsideration, and, by a 6-to-5 vote, affirmed the judgment of the District Court. Loeffler v. Tisch, 806 F.2d 817 (1986). The majority adopted the reasoning of the majority of the original panel in Cross, 733 F.2d 1327, which concluded that Congress had not waived the sovereign immunity of the Postal Service with regard to prejudgment interest in a Title VII suit. The majority found its conclusion "strongly reinforced" by this Court's recent decision in Library of Congress v. Shaw, 478 U.S. 310 (1986), which the majority interpreted as "holding that Congress, in enacting Title VII, did not waive the Government's immunity from interest."3 806 F.2d at 818. In the majority's view, Congress' provision in the 1970 Postal Reorganization Act, 39 U.S.C. § 401(1), that the Postal Service may "sue and be sued" was irrelevant to the question before it, because

a sue-and-be-sued clause does not expand the obligations of a federal entity in a suit brought pursuant to another statute that is itself a waiver of immunity and which constitutes an exclusive remedy.

806 F.2d at 819.

The 5-judge dissent adopted the reasoning of the dissent in the Cross panel submission. That dissent had concluded that "limits on prejudgment interest have been imposed solely because of the barrier of sovereign immunity," 733 F.2d at 1332, and that the sue-and-be-sued clause in the Postal Reorganization Act had eliminated that barrier in actions against the Postal Service. The dissent noted this Court's observation in Shaw:

"The no-interest rule is . . . inapplicable where the Government has cast off the cloak of sovereignty and assumed the status of a private commercial enterprise."

806 F.2d at 822, quoting Shaw, 478 U.S. at 317, n. 5. In the dissent's view, the Postal Service fits within this exception and, therefore, "an award of prejudgment interest against the Postal Service under Title VII is not barred by sovereign immunity." 806 F.2d at 823.

Page 554

Because of a conflict with the views of the Eleventh Circuit expressed in Nagy v. USPS, 773 F.2d 1190 (1985), we granted certiorari to decide whether, in a Title VII suit, prejudgment interest may be awarded against the Postal Service. Sub nom. Loeffler v. Tisch, 483 U.S. 1004 (1987).

II

A

The question of statutory interpretation here presented, involving the interaction of the Postal Reorganization Act and [108 S.Ct. 1969] Title VII, lends itself to straightforward resolution. Absent a waiver of sovereign immunity, the Federal Government is immune from suit. United States v. Sherwood, 312 U.S. 584, 586 (1941). Congress, however, has waived the sovereign immunity of certain federal entities from the times of their inception by including...

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