Seyfarth Synopsis: After over a decade of litigation between the EEOC and trucking company CRST Van Expedited, the Eighth Circuit recently affirmed a federal district court’s order requiring the EEOC to pay $3.3 million in attorneys’ fees to CRST for pursuing claims that it knew or should have known were frivolous and failing to satisfy its pre-suit obligations under Title VII. As such, it is the largest fee award entered against the Commission in 2019.The ruling is EEOC v. CRST Van Expedited, Inc., No. 18-1446 (8th Cir. Dec. 10, 2019).
This is the latest in a series of favorable rulings in this case for employers and provides a useful tool in future litigation where the EEOC fails to fulfill its pre-suit obligations. We have chronicled the developments of this case in our previous blog posts, which can be found here.
The case began in 2007 when the EEOC filed suit against CRST after a female driver alleged that two male trainers sexually harassed her during a training trip. The EEOC eventually sued CRST under § 706 on behalf of a group of approximately 270 female employees, claiming that CRST was responsible for severe or pervasive sexual harassment and that it subjected its female employees to a hostile work environment. The district court ultimately barred the EEOC from seeking relief for individual claims on behalf of all but 67 of the women, found that the EEOC had not established a pattern or practice of tolerating sexual harassment, and dismissed the suit. Finding that CRST was the prevailing party and that the EEOC had failed to satisfy its pre-suit obligations, the district court entered a startling attorneys’ fee sanction of nearly $4.7 million against the EEOC .
On appeal, the Eighth Circuit affirmed the dismissal of all claims but those pertaining to two women and vacated the fee award, determining that CRST was no longer the “prevailing party” because the EEOC now had active claims. On remand, the EEOC settled one claim and withdrew the other. Thereafter, CRST again sought attorneys’ fees and was again awarded over $4 million. However, on the second appeal, the Eight Circuit again reversed the district court’s fee award, holding that CRST was not a prevailing party under Title VII because the dismissal of the claims concerning EEOC’s failure to satisfy its pre-suit obligations was not a ruling “on the merits.” In addition, the Eighth Circuit reversed the fee award because the district court failed to make individualized findings in granting summary judgment against the other 78 women. The Eighth Circuit directed the district court to make such individualized findings and barred it from awarding fees for the claims that had been dismissed as a result of the EEOC’s failure to satisfy its pre-suit obligations.
CRST appealed the ruling to the U.S. Supreme Court, which reversed and remanded. The Supreme Court held that a favorable judgment on the merits is not a requirement to be a “prevailing party” for purposes of awarding attorneys’ fees. On remand, the Eighth Circuit vacated its prior judgment and remanded back to the district court for additional proceedings consistent with the Supreme Court’s opinion.
In 2017, the district court, after engaging in an individualized inquiries, found that most of the EEOC’s claims on behalf of 78 claimants for sexual harassment were “frivolous, unreasonable, and/or groundless.” It further found that the dismissal of the 67 other claims as a result of the EEOC’s failure to satisfy its pre-suit obligations constituted a “material alteration” of the parties’ legal relationship, thereby justifying a fee award. After settling on a method of fee calculation, which involved a “per-claimant-average-fee,” the district court ultimately issued a fee award of $3,317,289.17. Subsequently, the EEOC appealed the fee award again to the Eighth Circuit.
The Court’s Decision
On December 10, 2019, the Eighth Circuit affirmed the district court’s $3.3 million fee award against the EEOC, holding that the district court did not abuse its discretion in calculating the fee award. Citing the Supreme Court’s Christiansburg opinion (which held that fee awards to a prevailing defendant are permissible if the plaintiff’s lawsuit was “frivolous, unreasonable, or without foundation”), the Eighth Circuit found that, after conducting individualized inquires, the district court did not abuse its discretion in determining that 71 of the claims it had dismissed on summary judgment were frivolous and that a fee award was warranted.
The Eighth Circuit also upheld the district court’s method of fee calculation pursuant to the Fox standard. In Fox v. Vice, 563 U.S. 826 (2011), the Supreme court held that “a court may grant reasonable fees to the defendant” where “the plaintiff asserted both frivolous and non-frivolous claims,” “but only for costs that the defendant would not have incurred but for the frivolous claims.” The Supreme Court made it clear that trial courts have “wide discretion” in applying this standard. The appeals court took no issue with the district court’s fee calculation method, as it determined that the district court “carefully and thoroughly examined the supporting documentation that CRST … provided in support of its fee request” in crafting its calculation.
The EEOC made several arguments against both the determination that it had brought frivolous claims and the method used to calculate the fee award. Most notably, the EEOC argued that its lawsuit was not frivolous because it reasonably believed it had satisfied the Title VII pre-suit requirements and that the district court erred in granting fees because CRST had not established that any fees were incurred solely in defense of a frivolous claim.
The Eighth Circuit rejected the EEOC’s arguments. It opined that the EEOC could not hold a reasonable belief that it satisfied its pre-suit obligations when it actually “wholly failed to satisfy them.” The Eighth Circuit also determined that the district court’s methods of calculating the fee award, which involved subtracting unrecoverable amounts from the original fee award and then creating an average fee per claimant, achieved “rough justice” and was acceptable under Fox. In so holding, the Eighth Circuit reiterated that “frivolous claims may increase the cost of defending a suit in ways that are not reflected in the number of hours billed,” and that CRST was not required “to provide detailed, minute-by-minute documentation of the work it specifically performed on each individual claim that the court has determined are frivolous, unreasonable and/or groundless.”
Implications For Employers
Even despite the reduction in the attorneys’ fees award from $4.7 million to $3.3 million, the Eighth Circuit’s ruling is a stunning victory. This case continues to serve as a warning to the EEOC to avoid rushing through its mandatory pre-suit duties in an effort to catch employers off-guard in litigating claims. When the EEOC engages in these tactics, this ruling can be used by employers to hold the agency accountable