Loeffler v. Tisch

• Decision Date: 08 December 1986
• Docket Number: 84-2574,Nos. 84-2553,s. 84-2553
• Citation: 806 F.2d 817
• Parties: 42 Fair Empl.Prac.Cas. 792, 42 Empl. Prac. Dec. P 36,813, 55 USLW 2334 Theodore J. LOEFFLER, Appellee/Cross-Appellant, v. Preston R. TISCH, * Postmaster General of the United States, Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 817

806 F.2d 817

42 Fair Empl.Prac.Cas. 792,

42 Empl. Prac. Dec. P 36,813, 55 USLW 2334

Theodore J. LOEFFLER, Appellee/Cross-Appellant, v. Preston R. TISCH, ^* Postmaster General of the

United States, Appellant/Cross-Appellee.

Nos. 84-2553, 84-2574.

United States Court of Appeals,

Eighth Circuit.

Submitted May 15, 1986.

Decided Dec. 8, 1986.

Stephen E. Alpern, Washington, D.C., for appellant/cross-appellee.

Lisa S. Van Amburg, St. Louis, Mo., for appellee/cross-appellant.

Before LAY, Chief Judge, FLOYD R. GIBSON, Senior Circuit Judge, HEANEY, ROSS, McMILLIAN, ARNOLD, JOHN R. GIBSON, FAGG, BOWMAN, WOLLMAN, and MAGILL, Circuit Judges, en banc.

BOWMAN, Circuit Judge.

This is a Title VII case brought against the Postmaster General of the United States in his capacity as head of the United States Postal Service. The plaintiff, Theodore J. Loeffler, complained that he had been fired because of his sex. He has prevailed on the merits. The question presented is whether prejudgment interest can be awarded as an element of the relief. We hold that it cannot be.

This issue first came before us in Cross v. United States Postal Service, 733 F.2d 1327 (8th Cir.1984). There, a panel of this Court held, with Judge Arnold dissenting, that sovereign immunity bars an award of prejudgment interest in actions against the Postal Service under Title VII. Thereafter, rehearing en banc was granted, thus vacating the panel opinion. On rehearing, the judges of this Court were evenly divided. 733 F.2d 1332 (8th Cir.1984), cert. denied, 470 U.S. 1051, 105 S.Ct. 1750, 84 L.Ed.2d 815 (1985). As a result, the judgment of the District Court in Cross's case, holding prejudgment interest unavailable, was affirmed, but our decision had no precedential effect. The issue was left open for future determination in someone else's case, either by another panel or by the Court en banc. Decisions by an equally divided court decide only the particular case. They have res judicata, but not stare decisis, effect.

The issue next came before a panel in the present case. The panel held, as the Cross panel had, that prejudgment interest could nor be awarded. Loeffler v. Carlin, 780 F.2d 1365 (8th Cir.1985). The Court again granted rehearing en banc. On rehearing, we find the reasoning of the Cross panel persuasive, and we adopt the substance of the opinion of that panel.

Our conclusion is strongly reinforced by the recent decision of the Supreme Court in Library of Congress v. Shaw, --- U.S. ----, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986), holding that Congress, in enacting Title VII, did not waive the Government's immunity from interest. The reasoning of Shaw is quite instructive. The Court's opinion, written by Justice Blackmun, forcefully expresses the long-established rule that absent express congressional consent, interest cannot be awarded against the Government.

In the absence of express congressional consent to the award of interest separate from a general waiver of immunity to suit, the United States is immune from an interest award. This requirement of a separate waiver reflects the historical view that interest is an element of damages separate from damages on the substantive claim.

Id. at 2961. The Court emphasizes "the rule that interest cannot be recovered unless the award of interest was affirmatively and separately contemplated by Congress." Id. at 2962. Rejecting Shaw's argument that Congress waived the Government's immunity from interest in Title VII actions by making the United States liable "the same as a private person" for "costs," including "a reasonable attorney's fee," 42 U.S.C. Sec. 2000e-5(k), the Court noted that "we must construe waivers strictly in favor of the sovereign and not enlarge the waiver 'beyond what the language requires.' " Id. at 2963. The Court further noted that "[t]he no-interest rule provides an added gloss of strictness upon these usual rules." Id.

In addition, the Court specifically disagreed with Shaw's claim that Congress, by equating the liability of the United States with that of a private party, waived the Government's immunity from interest. The Court reasoned as follows:

It was not until 1972 that Congress waived the Government's immunity under Title VII as a defendant, affording federal employees a right of action against the Government for its discriminatory acts as an employer. See Sec. 717, 42 U.S.C. Sec. 2000e-16(d). That Sec. 706(k) already contained language equating the liability of the United States [as a plaintiff] for attorney's fees to that of a private person does not represent the requisite affirmative congressional choice to waive the no-interest rule....

Id. at 2964.

The reasoning of the Court in Shaw is fully applicable to the present case. In the Postal Reorganization Act of 1970, Congress provided that the Postal Service may "sue and be sued in its official name." 39 U.S.C. Sec. 401(1). That act, however, did not authorize Title VII actions against the Postal Service. Instead, such authorization did not come until 1972, when Congress amended Title VII and extended it for the first time to the Postal Service and other federal entities. See 42 U.S.C. Sec. 2000e-16. As Shaw establishes, this extension of Title VII to the federal sector did not waive the immunity of these federal entities with respect to interest.

Nor does the sue-and-be-sued clause of the Postal Reorganization Act provide congressional authorization for awarding interest in Title VII actions against the Postal Service. In the first place, for reasons discussed in the panel opinion in Cross, we are convinced that Congress did not intend to place postal employees in a better position than all other federal employees with respect to interest in Title VII cases. See Cross, 733 F.2d at 1330. Moreover, we believe the case is governed by a fundamental principle: that 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. Loeffler's action was not brought under the sue-and-be-sued clause of the Postal Reorganization Act. Instead it was brought under Title VII as amended in 1972. As required by Title VII, the defendant in Loeffler's action is the Postmaster General, not the Postal Service in its official name. There can be no doubt that the 1972 amendments to Title VII created "an exclusive, pre-emptive administrative and judicial scheme for the redress of federal employment discrimination." Brown v. General Services Administration, 425 U.S. 820, 829, 96 S.Ct. 1961, 1966, 48 L.Ed.2d 402 (1976). Thus it is apparent that the sue-and-be-sued clause of the Postal Reorganization Act has no bearing upon the present case, and that the scope of Loeffler's remedy must be determined by reference to Title VII, just as in the case of any other federal agency.

It is noteworthy that in both Federal Housing Administration v. Burr, 309 U.S. 242, 60 S.Ct. 488, 84 L.Ed. 724 (1940), and Franchise Tax Board v. United States Postal Service, 467 U.S. 512, 104 S.Ct. 2549, 81 L.Ed.2d 446 (1984), sue-and-be-sued clauses are discussed in terms of amenability to process. On the other hand, interest is an aspect of damages. Thus, interest is relevant to remedy rather than to amenability to process. See Shaw, 106 S.Ct. 2957. Yet in the present case, the sue-and-be-sued clause does not even make the Postal Service amenable to process. Instead, the Postal Service is amenable to process in a Title VII case only under the federal sector provisions of Title VII. It follows that the scope of Loeffler's remedy must be determined by reference to the federal sector provisions of Title VII, and not by reference to the sue-and-be-sued clause of the Postal Reorganization Act.

The foregoing discussion exposes the fundamental flaw in the reasoning of Nagy v. United States Postal Service, 773 F.2d 1190 (11th Cir.1985), holding the Postal Service liable for interest on a Title VII back pay award. In Nagy, the court starts with the premise that the Postal Reorganization Act presumptively waived the Postal Service's immunity for all purposes, including Title VII. That premise, however, is completely invalid, because in enacting the Postal Reorganization Act Congress specifically rejected the idea of making the Postal Service liable under Title VII as a private employer. See Cross, 733 F.2d at 1330. Until Congress some two years after passing the Postal Reorganization Act amended Title VII to extend it to the federal sector with additional provisions applicable only to that sector, there had been no congressional waiver, presumptive or otherwise, of the Postal Service's immunity to Title VII actions. Thus, with all respect, we cannot agree that the Nagy opinion reached a correct result. ¹

The situation in the present case is closely analogous to that in cases arising under the Federal Tort Claims Act (FTCA), 28 U.S.C. Secs. 1346(b), 2671-2680. As this Court held in Peak v. Small Business Administration, 660 F.2d 375, 377 (8th Cir.1981), the FTCA is the exclusive remedy in tort actions against the Government, and this is so despite the statutory authority of any federal agency "to sue and be sued in its own name." See 28 U.S.C. Sec. 2679(a). Accordingly, tort actions against the Postal Service may not proceed under the sue-and-be-sued clause as if the Postal Service were a private company, but must proceed under the FTCA with all of that Act's limitations on its waiver of sovereign immunity. See Insurance Co. of North America v. United States Postal Service, 675 F.2d 756 (5th Cir.1982) (per curiam); Contemporary Mission, Inc. v. United States Postal Service, 648 F.2d 97, 104-05 n. 9 (2d Cir.1981); Sportique Fashions, Inc. v. Sullivan, 597 F.2d 664, 665-66 n. 2 (9th Cir.1979). Congress made the Postal Service subject to the FTCA, and therefore in a tort action the Postal Service is treated like any other...