E.E.O.C. v. Pemco Aeroplex, Inc.

• Decision Date: 13 September 2004
• Docket Number: No. 03-10719.,03-10719.
• Citation: 383 F.3d 1280
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. PEMCO AEROPLEX, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1280

383 F.3d 1280

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. PEMCO AEROPLEX, INC., Defendant-Appellee.

No. 03-10719.

United States Court of Appeals, Eleventh Circuit.

September 13, 2004.

COPYRIGHT MATERIAL OMITTED

Barbara L. Sloan, EEOC, Washington, DC, for EEOC.

Jeffrey A. Lee, Stephen E. Brown, Maynard, Cooper & Gale, P.C., Birmingham, AL, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before MARCUS and WILSON, Circuit Judges, and DUPLANTIER^*, District Judge.

MARCUS, Circuit Judge:

At issue today is whether the plaintiff, Equal Employment Opportunity Commission ("EEOC"), may proceed with a Title VII enforcement action charging the defendant Pemco Aeroplex, Inc. ("Pemco") with companywide racial harassment, notwithstanding an adverse judgment rendered in a separate action brought by a number of individual plaintiffs who alleged racial harassment by the same defendant. The district court entered summary judgment for the defendant holding that the EEOC was bound by the prior judgment even though the Commission's suit covers employees who were not part of the earlier private suit and notwithstanding that the EEOC was twice denied the opportunity to consolidate its case with the private suit. Because we conclude that there was no privity between the EEOC and the private plaintiffs in the prior action, the district court erred in applying the doctrines of res judicata and collateral estoppel. Accordingly, we reverse and remand for further proceedings consistent with this opinion.

I

The facts and procedural history of this case are straightforward. On December 9, 1999, thirty-six African-American employees of Pemco, a military airplane repair and maintenance facility, filed suit in the Northern District of Alabama against their employer, claiming that Pemco violated 42 U.S.C. § 1981 by subjecting them to racial harassment and other forms of race discrimination. See Thomas v. Pemco Aeroplex, No. CV-99-AR-3280-S (N.D.Ala.). The case was initially brought as a class action, but the plaintiffs withdrew their class claim after Pemco opposed certification, and prosecuted the case as thirty-six individual plaintiffs consolidated in one action.

At the same time, the EEOC was investigating multiple charges of discrimination at Pemco, having uncovered possible evidence of nooses, racially inflammatory graffiti, racial slurs by coworkers and supervisors, and other disconcerting incidents of race-related conduct at Pemco's Birmingham facility dating back at least to the late 1980s. In September 2000, the EEOC brought its own suit (the instant case) against Pemco under Title VII of the Civil Rights Act, 42 U.S.C. § 2000e, alleging that Pemco subjected its 200 or more black employees to a racially hostile work environment. The EEOC sought injunctive relief and monetary compensation for all of the company's 200 or more black employees. This case was assigned to the same district judge who was hearing the Thomas case.

In October 2000, the EEOC moved to consolidate this suit with the private action (the Thomas case), noting that the two cases involved the same witnesses and issues, and raised common issues of law and fact. Pemco vigorously opposed the motion, arguing that the suits were substantially different and that consolidation would cause the company extreme prejudice. Specifically, Pemco argued that the EEOC's suit involved only one substantive claim — a hostile work environment claim covered by Title VII — while the Thomas suit involved dozens of individual plaintiffs, each with his own claims. The district court denied, without explanation, the request to consolidate the cases for trial, but granted the EEOC's application that discovery undertaken in either case could be used to the extent relevant in the other case.

In February 2002, after discovery in the private suit was completed, the EEOC again moved to consolidate the cases for trial, and offered to forgo further discovery in its own case for the chance to try the cases together. Pemco again opposed the motion, contrasting the EEOC's broad suit alleging class-wide discrimination with the thirty-one¹ private plaintiffs' individual claims. Indeed, Pemco argued that much of the evidence of class-wide discrimination pertinent to the EEOC's suit would be not only irrelevant but also prejudicial to the individual claims. Again, the district court denied the consolidation motion without explanation.

During discovery, the EEOC had attended most of the depositions of the witnesses. The EEOC's attorneys met or conferenced with counsel for the individual plaintiffs on many occasions prior to trial. In April 2002, nine of the Thomas plaintiffs, including the lead plaintiff, settled with Pemco. The remaining twenty-two plaintiffs — who had worked in various parts of Pemco's facility — went to trial before a jury in June. During that trial, an EEOC attorney was present in the courtroom about half the time according to the EEOC, and virtually each day, according to Pemco.² Notably, EEOC's counsel did not sit at counsel table during the trial, offer evidence, examine witnesses, or otherwise participate in the trial of the Thomas case.

On June 26, the jury found that none of the twenty-two plaintiffs had been subjected to a hostile work environment between December 9, 1997 and June 3, 2002. The jury was not asked to determine whether a racially hostile work environment existed at Pemco during that time frame. Rather, the jury was asked to decide whether each individual plaintiff had been subjected to a hostile work environment on account of race. The jury answered "no" as to each plaintiff. The court entered judgment against the twenty-two plaintiffs who had gone to trial in the Thomas case, and against Pemco as to the plaintiffs who had accepted offers of judgment.

Soon after, Pemco moved for summary judgment in the EEOC's suit, alleging that it was barred on the grounds of res judicata and collateral estoppel in light of the adverse verdicts in the Thomas suit. Pemco claimed that the two suits addressed the same question — whether a racially hostile work environment pervaded the work atmosphere at Pemco — and that the jury verdict answered this question in the negative. Pemco also argued that the EEOC was in privity with the twenty-two plaintiffs — and could therefore be bound by the verdict against them — essentially because EEOC attorneys attended the trial, participated in joint discovery, and met with plaintiffs' counsel on numerous occasions. The district court granted Pemco's motion, finding that the issues and the evidence in the EEOC's suit were "the same" as those in the Thomas case. See EEOC v. Pemco Aeroplex, Inc., No. 00-AR-2762-S (N.D.Ala. Dec. 13, 2002). Without unambiguously finding privity between the EEOC and the private plaintiffs, the district court observed that the EEOC had the opportunity to participate in discovery in Thomas, and that EEOC counsel sat in on the Thomas trial as an "alert and interested observer." Slip op. at 3. The EEOC appealed.

II

The threshold issue in this case is whether the EEOC was in privity with the twenty-two private plaintiffs in the Thomas action. If they were not, then plainly the EEOC cannot be bound by the judgment in that case no matter how identical the claims or similar the evidence may have been. Simply put, before the doctrines of either res judicata or collateral estoppel may be asserted against a party, it must be established that the party in the second action was either a party in the previous action or a privy of the party in that action. This principle is particularly important where the party in the second action is a governmental agency reposed with independent statutory power to enforce the law and having independent interests not shared by a private party.

In the case before us, we apply federal law, because "federal preclusion principles apply to prior federal decisions, whether previously decided in diversity or federal question jurisdiction." CSX Transp., Inc. v. Brotherhood of Maint. of Way Employees, 327 F.3d 1309, 1316 (11th Cir.2003). We have held that res judicata can be applied only if all of four factors are shown: "(1) the prior decision must have been rendered by a court of competent jurisdiction; (2) there must have been a final judgment on the merits; (3) both cases must involve the same parties or their privies; and (4) both cases must involve the same causes of action." In re Piper Aircraft Corp., 244 F.3d 1289, 1296 (11th Cir.2001) (citing Israel Discount Bank Ltd. v. Entin, 951 F.2d 311, 314 (11th Cir.1992); In re Justice Oaks II, Ltd., 898 F.2d 1544, 1550 (11th Cir.1990)). Likewise, in this Circuit, collateral estoppel can apply only"when the parties are the same (or in privity) [and] if the party against whom the issue was decided had a full and fair opportunity to litigate the issue in the earlier proceeding." In re Southeast Banking Corp., 69 F.3d 1539, 1552 (11th Cir.1995) (citing Allen v. McCurry, 449 U.S. 90, 95, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980); In re St. Laurent, 991 F.2d 672, 675 (11th Cir.1993)). If identity or privity of parties cannot be established, then there is no need to examine the other factors in determining whether res judicata or collateral estoppel applies. Thus, if there was no privity between the EEOC and the Thomas plaintiffs, summary judgment was improvidently granted and the district court's order must be reversed.

We review a district court's order granting summary judgment de novo. See Madray v. Publix Supermarkets, Inc., 208 F.3d 1290, 1296 (11th Cir.2000). A motion for summary judgment should be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a...