Badillo v. Central Steel & Wire Co.

• Decision Date: 23 September 1983
• Docket Number: No. 82-2438,82-2438
• Citation: 717 F.2d 1160
• Parties: 32 Fair Empl.Prac.Cas. 1679, 32 Empl. Prac. Dec. P 33,837 George BADILLO, Plaintiff-Appellee, v. CENTRAL STEEL & WIRE COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1160

717 F.2d 1160

32 Fair Empl.Prac.Cas. 1679,

32 Empl. Prac. Dec. P 33,837

George BADILLO, Plaintiff-Appellee, v. CENTRAL STEEL & WIRE COMPANY, Defendant-Appellant.

No. 82-2438.

United States Court of Appeals Seventh Circuit.

Argued May 17, 1983.

Decided Sept. 23, 1983.

Marian C. Haney, Vedder, Price, Kaufman & Kammholz, Chicago, Ill., for defendant-appellant.

Michael B. Erp, Katz, Friedman, Schur & Eagle, Chicago, Ill., for plaintiff-appellee.

Before CUMMINGS, Chief Judge, ESCHBACH, Circuit Judge, and CAMPBELL, Senior District Judge. ^*

WILLIAM J. CAMPBELL, Senior District Judge.

Defendant Central Steel & Wire Company (Central) appeals from the denial of its motion for attorneys' fees and costs in a Title VII action in which it prevailed. Central argues that Badillo's suit was so patently frivolous that the district court abused its discretion in failing to award fees and costs. We disagree and affirm the decision of the district court.

I.

The plaintiff, George Badillo, a Mexican, was employed by Central from 1973 until his termination in 1977 for allegedly cursing at a foreman. Shortly after his termination Badillo filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). Following investigation, the EEOC found reasonable cause to believe that the charge was true.

Based on this finding, Badillo, on May 23, 1979, filed a pro se action under Title VII and 42 U.S.C. Sec. 1981. On September 25, 1979, counsel appeared for plaintiff, and on October 9, 1979 filed an amended complaint under Title VII and 42 U.S.C. Sec. 1981 seeking class-wide relief on behalf of hispanics, blacks, and women, alleging discriminations in terms of hiring, training, placement, assignments, promotion, transfer, termination, layoff, and discipline. The complaint further alleged that Badillo and other class members had been intimidated, threatened, and verbally abused.

On August 25, 1980, the district court struck Badillo's asserted class claims on behalf of women and blacks, and his claims relating to hiring practices, for lack of standing. The court also held that Badillo lacked standing to assert any claim that did not directly affect Badillo or his class. A second amended complaint was filed on October 8, 1980 which did not assert any claims to hiring or women, but instead alleged class claims based on "national origin and/or race." On February 3, 1981, the district court struck class claims relating to training, placement, assignments, promotion, and transfer, holding that Badillo was a suitable class representative for claims regarding termination, layoff, and discharge.

On March 24-25, 1981, Central, with the aid of a translator, took Badillo's deposition. At that deposition Badillo contradicted all of his individual claims of discrimination except for the charge relating to his termination and could only offer hearsay testimony concerning threats and intimidation of other minority employees.

On July 24, 1981, the district court granted summary judgment on all individual claims except for the claim regarding Badillo's termination. The court also granted summary judgment with respect to all Sec. 1981 class claims except those relating to discriminatory termination, discipline, and layoffs. On November 23, 1981, Badillo's counsel withdrew all remaining class claims leaving Badillo's termination as the only issue of the case.

Further discovery was then taken by both sides. During this period Badillo's counsel once failed to inspect documents gathered by Central pursuant to a production request. In another incident, there was no response to interrogatories served by Central.

On March 2, 1982, Central filed a motion for summary judgment. Badillo opposed the motion with only a four-page legal memorandum and no counter-affidavits. On May 26, 1982 the district court granted the motion and dismissed the case. Central appeals from the subsequent denial of its motions for attorneys' fees and costs.

II.

Central argues that it is entitled to attorneys' fees and costs under five separate theories. Central contends that fees and costs should be assessed against Badillo through (a) the provisions of 42 U.S.C. Sec. 2000e-5(k) and 42 U.S.C. Sec. 1988; (b) the inherent equitable powers of the court to assess fees against a non-prevailing party for bad faith conduct; and (c) the provisions of Rule 54(d) of the Federal Rules of Civil Procedure. Central also contends that fees and costs should be assessed against Badillo's counsel through (d) the provisions of 28 U.S.C. Sec. 1927, and (e) the provisions of Fed.R.Civ.P. 11.

A. 42 U.S.C. Sec. 2000e-5(k) and 42 U.S.C. Sec. 1988

It is Central's contention that Badillo's lawsuit was frivolous, unreasonable, and groundless from its inception. Central points to the dismissal of the class-base claims, the dismissal of the first amended complaint, and the subsequent grant of summary judgment, based in part on Badillo's own deposition testimony. Central thus seeks fees based upon 42 U.S.C. Sec. 2000e-5(k) which provides:

In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney's fee as part of the costs, and the Commission and the United States will be liable for costs the same as a private person.

In the alternative, Central bases its claims for fees on the provisions of 42 U.S.C. Sec. 1988 which this Court has held to be coterminous with 42 U.S.C. Sec. 2000e-5(k). Reichenberger v. Pritchard, 660 F.2d 280, 288 (7th Cir.1981). Central acknowledges that the denial of attorneys' fees in general is a matter for the sound discretion of the trial judge, Harrington v. DeVito, 656 F.2d 264, 266 (7th Cir.1981), cert. denied, 455 U.S. 993, 102 S.Ct. 1621, 71 L.Ed.2d 854 (1982), but nonetheless urges that the trial judge abused his discretion based on the record in this case.

Unlike the strong policy considerations favoring awarding attorneys' fees to prevailing plaintiffs in Title VII cases, see Ablemarle Paper Co. v. Moody, 422 U.S. 405, 415, 95 S.Ct. 2362, 2370, 45 L.Ed.2d 280 (1975); Bugg v. International Union of Allied Industrial Workers of America, Local 507 AFL-CIO, 674 F.2d 595, 597-600 (7th Cir.), cert. denied, --- U.S. ----, 103 S.Ct. 29, 74 L.Ed.2d 43 (1982), prevailing defendants may receive fees only in very narrow circumstances. Bugg; Silver v. KCA, Inc., 586 F.2d 138 (9th Cir.1978). The Supreme Court has stated: "[A] plaintiff should not be assessed his opponent's attorney's fees unless a court finds that his claim was frivolous, unreasonable or groundless, or that the plaintiff continued to litigate after it clearly became so." Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422, 98 S.Ct. 694, 701, 54 L.Ed.2d 648 (1978). In Christiansburg the Court cautioned against applying even this standard through hindsight lest uncertain, but meritorious, claims be discouraged by the threat of being saddled with a defendant's legal fees. Id.

Attorneys' fees have been awarded to prevailing defendants under Sec. 2000e-5(k) in two general sets of circumstances. First, such an award may be proper where the plaintiff proceeds in the face of an unambiguous adverse previous ruling. For example, the court in Sek v. Bethlehem Steel Corp., 421 F.Supp. 983 (E.D.Pa.1976), awarded attorneys' fees to the prevailing defendant where the plaintiff's claims had been found to be baseless by both the state human relations commission and the EEOC, and where plaintiff's own attorneys withdrew their appearances advising him that they did not think he could present a prima facie case. See also Davis v. Roadway Express, Inc., 590 F.2d 140 (5th Cir.1979) on re'h 621 F.2d 775 (5th Cir.1980); Prate v. Freedman, 583 F.2d 42 (2d Cir.1978); Carrion v. Yeshiva University, 535 F.2d 722 (2d Cir.1976); Flora v. Moore, 461 F.Supp. 1104 (D.Miss.1978); Davis v. Braniff Airways, Inc., 468 F.Supp. 10 (N.D.Tex.1979).

Awards under Sec. 2000e-5(k) may also be proper where a plaintiff is aware with some degree of certainty of the factual or legal infirmity of his claim. The court in Sierra v. Datapoint Corp., 459 F.Supp. 668 (W.D.Tex.1978), awarded fees and costs under this theory where the plaintiff knew at the time of her discharge that she had been terminated for her own misconduct and where four years of discovery failed to produce any relevant evidence. See also Durrett v. Jenkins Brickyard, 678 F.2d 911 (11th Cir.1982); Reed v. Sister of Charity of the Incarnate Word of Louisiana, Inc., 447 F.Supp. 309 (W.D.La.1978).

Accordingly, the courts have been careful to distinguish between claims that were ultimately found to be without merit and those "frivolous, unreasonable or groundless" claims within the meaning of Christiansburg. See EEOC v. Fruehauf Corp., 609 F.2d 434 (10th Cir.1979), cert. denied, 446 U.S. 965, 100 S.Ct. 2941, 64 L.Ed.2d 824 (1980); Little v. Southern Electric Steel Co., 595 F.2d 998 (5th Cir.1979); Mosby v. Webster College, 563 F.2d 901 (8th Cir.1977); EEOC v. Children's Hospital of Pittsburgh, 556 F.2d 222 (3d Cir.1977). As a result fees that have been assessed have been limited to situations where plaintiff's conduct was abusive, or merely a disguised effort to harass or embarrass the defendant.

This Court most recently interpreted Sec. 2000e-5(k) in Bugg v. International Union of Allied Industrial Workers of America, Local 507 AFL-CIO, 674 F.2d 595 (7th Cir.), cert. denied, --- U.S. ----, 103 S.Ct. 29, 74 L.Ed.2d 43 (1982). In Bugg we held a successful Title VII defendant was entitled to an award of attorneys' fees for a frivolous and unreasonable appeal brought without foundation. In that case, one of the plaintiff's four claims was dismissed for failure to file a proper claim before the EEOC, while another claim was dismissed for failure to file a timely claim with the EEOC. The remaining claims were subsequently dismissed under ...