CRST Van Expedited, Inc. v. Equal Emp't Opportunity Comm'n

• Decision Date: 19 May 2016
• Docket Number: 14–1375.
• Citation: 136 S.Ct. 1642,578 U.S. 419,194 L.Ed.2d 707
• Parties: CRST VAN EXPEDITED, INC., Petitioner v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION.
• Court: U.S. Supreme Court

578 U.S. 419

136 S.Ct. 1642

194 L.Ed.2d 707

CRST VAN EXPEDITED, INC., Petitioner

v.EQUAL EMPLOYMENT OPPORTUNITY COMMISSION.

No. 14–1375.

Supreme Court of the United States

Argued March 28, 2016.

Decided May 19, 2016.

Paul M. Smith, Washington, DC, for Petitioner.

Brian H. Fletcher, Washington, DC, for Respondent.

John H. Mathias, Jr., James T. Malysiak, Jenner & Block LLP, Chicago, IL, Paul M. Smith, Jessica Ring Amunson, Benjamin M. Eidelson, Jenner & Block LLP, Washington, DC, for Petitioner.

P. David Lopez, General Counsel, Jennifer S. Goldstein, Associate General Counsel, Gail S. Coleman, Susan R. Oxford, Equal Employment, Opportunity Commission, Donald B. Verrilli, Jr., Solicitor General, Ian Heath Gershengorn, Deputy Solicitor General, Brian H. Fletcher, Assistant to the Solicitor, General, Department of Justice, Washington, DC, for Respondent.

Justice KENNEDY delivered the opinion of the Court.

This case involves the interpretation of a statutory provision allowing district courts to award attorney's fees to defendants in employment discrimination actions. Under Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U.S.C. § 2000e et seq., which prohibits discrimination in employment, a district court may award attorney's fees to "the prevailing party." § 2000e–5(k). The Court of Appeals for the Eighth Circuit held that a Title VII defendant prevails only by obtaining a " ruling on the merits." 774 F.3d 1169, 1179 (2014) ; Marquart v. Lodge 837, Machinists and Aerospace Workers, 26 F.3d 842, 851–852 (1994). This Court disagrees with that conclusion. The Court now holds that a favorable ruling on the merits is not a necessary predicate to find that a defendant has prevailed.

I

Title VII of the Civil Rights Act of 1964 authorizes an award of attorney's fees in certain circumstances. The statute provides that

"[i]n any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the [Equal Employment Opportunity] Commission or the United States, a reasonable attorney's fee (including expert fees) as part of the costs, and the Commission and the United States shall be liable for costs the same as a private person." § 2000e–5(k).

Before deciding whether an award of attorney's fees is appropriate in a given case, then, a court must determine whether the party seeking fees has prevailed in the litigation. Texas State Teachers Assn. v. Garland Independent School Dist., 489 U.S. 782, 789, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989) ; Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983).

Congress has included the term "prevailing party" in various fee-shifting statutes, and it has been the Court's approach to interpret the term in a consistent manner. See Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, 532 U.S. 598, 602–603, and n. 4, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). The Court has said that the "touchstone of the prevailing party inquiry must be the material alteration of the legal relationship of the parties." Texas State Teachers Assn., supra, at 792–793, 109 S.Ct. 1486. This change must be marked by "judicial imprimatur ." Buckhannon, 532 U.S., at 605, 121 S.Ct. 1835. The Court has explained that, when a plaintiff secures an "enforceable judgmen[t] on the merits" or a "court-ordered consent decre[e]," that plaintiff is the prevailing party because he has received a "judicially sanctioned change in the legal relationship of the parties." Id., at 604–605, 121 S.Ct. 1835. The Court, however, has not set forth in detail how courts should determine whether a defendant has prevailed.

Although the Court has not articulated a precise test for when a defendant is a prevailing party, in the Title VII context it has addressed how defendants should be treated under the second part of the inquiry—whether the district court should exercise its discretion to award fees to the prevailing party. When a defendant is the prevailing party on a civil rights claim, the Court has held, district courts may award attorney's fees if the plaintiff's "claim was frivolous, unreasonable, or groundless," or if "the plaintiff continued to litigate after it clearly became so." Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978) ; see also id., at 421, 98 S.Ct. 694.

The Court of Appeals' determination of the first part of the fee-shifting inquiry—whether petitioner is a prevailing party—presents the central issue in this case. Before addressing this question, however, a discussion of the facts and complex procedural history is warranted.

II

Petitioner CRST is a trucking company that employs a team driving system under which two employees share driving duties on a single truck. CRST requires its drivers to graduate from the company's training program before becoming a certified driver. Part of that training is a 28–day over-the-road trip with a veteran driver. In 2005, a new driver named Monika Starke filed a charge of discrimination with the Equal Employment Opportunity Commission (Commission) alleging that two male trainers sexually harassed her during her over-the-road training trip.

The Commission's receipt of a charge of an unlawful workplace practice starts Title VII's "detailed, multi-step procedure through which the Commission enforces the statute's prohibition on employment discrimination." Mach Mining, LLC v. EEOC, 575 U.S. ––––, ––––, 135 S.Ct. 1645, 1649, 191 L.Ed.2d 607 (2015). Under § 706 of Title VII, the Commission first must inform the employer about the charge and the details of the allegations. 42 U.S.C. § 2000e–5(b). The Commission next must investigate the allegation. Ibid. If the agency "determines after such investigation that there is not reasonable cause to believe that the charge is true," it shall dismiss the charge and notify the parties. Ibid. At that point, the Commission is no longer involved, and the aggrieved individual may sue the employer in his or her own name. § 2000e–5(f)(1). If, on the other hand, the Commission determines that there is reasonable cause to believe that a Title VII violation did occur, it "shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion." § 2000e–5(b). Only if the agency's attempt at conciliation fails may it file a court action in its own name on behalf of the aggrieved person who brought the charge. § 2000e–5(f)(1).

Following these procedures, the Commission notified CRST of Starke's charge and requested information regarding Starke's allegations. In response CRST denied any wrongdoing. During the investigation, the Commission discovered that four other women had filed formal charges against the company with the Commission. The Commission then sent CRST several followup requests. It asked if CRST had received other allegations of harassment, demanded contact information for any women who were instructed by the trainers Starke accused of harassment, and sought "detailed contact information for" CRST's dispatchers and female drivers. EEOC v. CRST Van Expedited, Inc., 679 F.3d 657, 667 (C.A.8 2012).

Over a year and a half after Starke filed her charge, the Commission sent CRST a letter of determination informing the company that the Commission had found reasonable cause to believe that CRST subjected Starke and "a class of employees and prospective employees to sexual harassment" and offering to conciliate. App. 811. Counsel for the Commission and for CRST discussed conciliation, but were unable to reach an agreement, and the Commission promptly notified the company that, in the agency's view, the conciliation efforts had failed.

In September 2007 the Commission, in its own name, filed suit against CRST under § 706 of Title VII. It alleged that CRST subjected Starke and "[o]ther similarly situated ... employees of CRST ... to sexual harassment and a sexually hostile and offensive work environment" in violation of §§ 703(a) and 704(a) of Title VII, 42 U.S.C. §§ 2000e–2 and 2000e–3. App. 794–795. The Commission is allowed to "seek specific relief for a group of aggrieved individuals [under § 706] without first obtaining class certification pursuant to" Federal Rule of Civil Procedure 23, because that rule "is not applicable to" a § 706 enforcement action. General Telephone Co. of Northwest v. EEOC, 446 U.S. 318, 323, 333–334, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980). The Commission sought to enjoin CRST from engaging in discriminatory employment practices and to obtain an order requiring CRST to take proactive steps to remedy and prevent sex-based discrimination in the workplace. The Commission also sought damages and costs.

During discovery, the Commission identified over 250 allegedly aggrieved women—far more than the Commission had forecast. CRST filed a motion for an order to show cause, alleging that the Commission "did not have a good-faith basis" for seeking relief on behalf of all the women. EEOC v. CRST Van Expedited, Inc., 2009 WL 2524402, *10 (N.D.Iowa, Aug. 13, 2009). The District Court did not strike any allegedly aggrieved persons at that time, although it did note its concern "that CRST still might unfairly face a ‘moving target’ of prospective plaintiffs as discovery winds down and trial approaches." Ibid. (alteration and internal quotation marks omitted).

The District Court proceeded to dispose of the Commission's claims in a series of orders responsive to various motions filed by CRST. Section 707 of Title VII authorizes the Commission to bring a claim "that any person or group of persons is engaged in a pattern or practice" of illegal sex-based discrimination. See 42 U.S.C. § 2000e–6. In the early stage of this litigation the Commission "made clear to the [district] court and CRST that it believe[d] CRST had engaged in ‘a pattern or practice’ of tolerating sexual harassment." Order in No. 07–CV–95 (ND Iowa), Doc. 197, p....