Equal Emp't Opportunity Comm'n v. Steaks

• Decision Date: 26 January 2012
• Docket Number: No. 10–1756.,10–1756.
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff–Appellee, v. GREAT STEAKS, INCORPORATED, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

114 Fair Empl.Prac.Cas. (BNA) 289

667 F.3d 510

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff–Appellee,

v.GREAT STEAKS, INCORPORATED, Defendant–Appellant.

No. 10–1756.

United States Court of Appeals, Fourth Circuit.

Argued: Oct. 28, 2011.Decided: Jan. 26, 2012.

ARGUED: Fred Thurman Hamlet, Sr., Greensboro, North Carolina; Daniel Charles Nash, Morgan, Herring, Morgan, Green & Rosenblutt, LLC, High Point, North Carolina, for Appellant. Elizabeth Ellen Theran, U.S. Equal Employment Opportunity Commission, Washington, D.C., for Appellee. ON BRIEF: P. David Lopez, General Counsel, Vincent J. Blackwood, Acting Associate General Counsel, Lorraine C. Davis, Assistant General Counsel, U.S. Equal Employment Opportunity Commission, Washington, D.C., for Appellee.

Before NIEMEYER, DUNCAN, and FLOYD, Circuit Judges.

Affirmed by published opinion. Judge FLOYD wrote the opinion, in which Judge NIEMEYER and Judge DUNCAN joined.

OPINION

FLOYD, Circuit Judge:

This appeal arises from an unsuccessful Title VII action brought by the Equal Employment Opportunity Commission (EEOC) against Great Steaks, Inc. The EEOC accused Great Steaks of subjecting female employees to a sexually hostile work environment. Although at the start of the case the EEOC asserted its claim on behalf of multiple claimants, that number diminished to one by trial. After a three-day trial, the jury rendered a verdict in Great Steaks' favor. Great Steaks subsequently moved for an award of attorneys' fees, maintaining it was entitled to such an award under the following three statutory provisions: Title VII's fee-shifting provision, 42 U.S.C. § 2000e–5(k); the Equal Access to Justice Act's (EAJA) mandatory fee provision, 28 U.S.C. § 2412(d); and 28 U.S.C. § 1927. The district court denied the motion for attorneys' fees in its entirety. On appeal, Great Steaks contends that the district court erred in doing so. We affirm.

I.

A.

On February 14, 2005, Dorathy Carter filed a charge of discrimination against Austin's Restaurant with the EEOC. Carter, a former employee of Austin's Restaurant, claimed that during her employment the owner, John Pantazis, sexually harassed her. The harassment, she alleged, began on January 10, 2005, and lasted until February 8, 2005. She mentioned specifically that he subjected her to sexual comments and touching, and that he persisted even after she advised him that she did not welcome his advances. The day after Carter filed the charge, Thomas Colclough, the acting director of the EEOC's local office, issued a notice of charge of discrimination on behalf of the EEOC. He provided Mr. Pantazis with a copy of the charge and requested a position statement and certain relevant information from Austin's Restaurant.

Bessie Pantazis, Mr. Pantazis's daughter, submitted a position statement dated March 20, 2005. In the position statement, she asserted that she co-owned Austin's Restaurant with her father. She indicated that the name of the restaurant was actually Great Steaks, Inc., but that it did business as Austin's Restaurant. She also mentioned that Austin's Restaurant had two locations, one in High Point, North Carolina, and another in Greensboro, North Carolina. But, when listing an address, she provided only the address of the Greensboro restaurant. According to Ms. Pantazis, Carter worked one day in the High Point location before transferring to the Greensboro location when it opened on January 25, 2005. Throughout the statement, Ms. Pantazis denied that Mr. Pantazis subjected Carter, or anyone else, to sexual harassment and insisted that Carter was fired for “calling in too many times at the last minute.” Ms. Pantazis hypothesized that a desire for money and for revenge for the firing motivated Carter's charge.

Colclough subsequently conducted an investigation on behalf of the EEOC. An affidavit that the EEOC filed with the district court describes his efforts. During the investigation, he visited Austin's Restaurant in Greensboro and interviewed Mr. Pantazis. He also interviewed a number of female waitresses and hostesses who claimed Mr. Pantazis had sexually harassed them. According to Colclough, his investigation revealed that either Mr. Pantazis or Ms. Pantazis directly hired the majority of these women. Most of them, Colclough stated, were hired for the Greensboro location, but they trained in High Point, and some worked in the High Point location before transferring to Greensboro. He also noted that Mr. Pantazis managed and helped supervise the waitresses at the High Point location before the Greensboro location opened.

On May 31, 2005, Colclough issued a letter of determination on the merits of the charge of discrimination. In it, he concluded evidence existed establishing that Mr. Pantazis sexually harassed Carter and a class of similarly situated female employees. Colclough also noted the existence of evidence indicating that several female class members were forced to resign because of the sexual harassment. As a result, he determined evidence existed that established violations of Title VII. He therefore invited the parties to enter into the conciliation process. In his affidavit, Colclough attested that he informed the attorney representing Austin's Restaurant that conciliation would be on a class basis and would include both of the restaurant's locations.

The parties held a conciliation conference on June 22, 2005. Ms. Pantazis and the attorney for Austin's Restaurant attended on behalf of the restaurant. Conciliation was unsuccessful, and the EEOC issued a notice of conciliation failure on June 29, 2005. According to the EEOC, it subsequently discovered that Clipper Seafood Restaurant, Inc., was the corporate entity that owned Austin's Restaurant's High Point location.

B.

The EEOC instituted this action in federal court by filing a complaint on August 26, 2005. The complaint named two defendants: Great Steaks and Clipper Seafood, doing business as Austin's Restaurant. The EEOC maintained Great Steaks did business in Greensboro and that Clipper Seafood did business in High Point. It asserted, however, that they “jointly operated” Austin's Restaurant's two locations as “joint employers” or “an integrated business enterprise.” The EEOC alleged that Great Steaks and Clipper Seafood, through their male co-owner, subjected Carter and other similarly situated female employees to a sexually hostile work environment and that the employment conditions caused some of the female employees to resign. It sought injunctive relief, monetary relief for the aggrieved claimants, and its costs in bringing the action.

Great Steaks and Clipper Seafood answered on December 5, 2005, and simultaneously moved to dismiss the complaint. In their motion, they asserted that the district court lacked subject-matter jurisdiction over Great Steaks. They further claimed that the complaint failed to state a claim of relief against Clipper Seafood, insisting that Clipper Seafood and Great Steaks were separate entities and that the EEOC had failed to identify any employees of Clipper Seafood who were harassed. The EEOC filed a response opposing the motion and provided Colclough's affidavit in support.

The district court referred the motion to dismiss to a magistrate judge, who subsequently held a hearing. At the hearing, the magistrate judge granted a motion for discovery made by the EEOC and stayed the motion to dismiss. He then entered an order bifurcating discovery into two phases. The first phase dealt with the substantive claims and the issues raised by the motion to dismiss. The order expressly prohibited the parties from deposing unnamed class members without the court's leave during the first phase. It required, however, that the EEOC disclose the identity of all individuals on whose behalf it was seeking relief at the conclusion of the first phase. The second phase of discovery, which was not to begin until the court had ruled on the motion to dismiss, would address the remaining discovery.

The parties proceeded with the first phase of discovery. Great Steaks attempted to depose Carter, but was unsuccessful. She ultimately ceased participation in the lawsuit during the summer of 2006. At the end of the first phase of discovery, the EEOC notified Great Steaks and Clipper Seafood that it was seeking relief on behalf of three individuals: Stephanie Jones, Alea Lovett, and Tricia Allen. This number of claimants was down from the seven or eight class members that the EEOC originally estimated. Allen soon thereafter ceased participation in the lawsuit as well, leaving Jones and Lovett as the only claimants.

Following the first phase of discovery, on December 21, 2006, the EEOC, Great Steaks, and Clipper Seafood filed a joint stipulation requesting dismissal of the claims against Clipper Seafood with prejudice. That same day, Great Steaks withdrew its motion to dismiss. As a result, at this point of the litigation, the case involved the EEOC asserting claims on behalf of Jones and Lovett against only Great Steaks.

The second phase of discovery then commenced. In August 2007, Great Steaks deposed Jones. During her deposition, she recalled her employment at Austin's Restaurant as a hostess and alleged that Mr. Pantazis made unwelcome sexual comments to her and touched her on her lower back and buttocks. She asserted that on multiple occasions he commented on her breasts while looking down her shirt, and she recounted that he once asked her if she wanted to have sex with him. She alleged various other sexually charged comments and solicitations made by Mr. Pantazis. Throughout the deposition, Great Steaks' attorney pressed her on purported inconsistencies within her testimony as well as inconsistencies between her testimony and earlier statements.

That same month, Great Steaks deposed Lovett, but the deposition ended prematurely when Lovett, in response to questioning, announced she was finished. In December 2007, the EEOC notified...