Tag Archives: Dora Lane

May 20, 2016

Employers Who Prevail In A Title VII Case May Seek Attorneys’ Fees Even Without A Ruling On The Merits

Lane_DBy Dora Lane

In a unanimous decision, the U.S. Supreme Court ruled that a Title VII defendant is not required to obtain a favorable judgment on the merits of the underlying discrimination case to be eligible to recover its attorneys’ fees. The decision means that employers who are able to dispose of Title VII claims for non-merits reasons, such as a dismissal on statute-of-limitations grounds, lack of subject matter jurisdiction, failure of the EEOC to conciliate, or something similar, may ask a court to award the attorneys’ fees incurred in contesting the claims (assuming, of course, it satisfies the remaining requirements for an attorneys’ fees award). Refusing to decide whether the EEOC must pay the $4 million attorney fee award at issue, the Court sent the case back to the Eighth Circuit Court of Appeals to consider an alternative theory proposed by the EEOC. CRST Van Expedited, Inc. v. EEOC, 578 U.S. ___ (2016).

Trucking Company Gets Sexual Harassment Claims Dismissed 

In the case before the Court, a new female driver at a large trucking company, CRST Van Expedited, Inc., filed a discrimination charge with the EEOC alleging that she was sexually harassed by two male trainers during her 28-day over-the-road training trip. After a lengthy investigation and unsuccessful conciliation, the EEOC filed suit alleging sexual harassment on behalf of the driver and other allegedly similarly situated female employees. During discovery, the EEOC identified over 250 other women who had supposedly been harassed.

Years of legal battles ensued, during which the district court ultimately dismissed all of the EEOC’s claims for various reasons, including expiration of the statute of limitations, lack of severity or pervasiveness of the alleged harassment, employees’ failure to complain timely, CRST’s prompt and effective response to harassment complaints, and discovery sanctions for the EEOC refusing to produce certain women for depositions. Upon dismissing the lawsuit, the court ruled that CRST was a prevailing party and invited them to apply for attorneys’ fees. CRST did, and the court awarded CRST over $4 million in fees.

The EEOC appealed (twice) and the Eighth Circuit Court of Appeals, among other things, reversed the award of attorneys’ fees. Bound by previous decisions in its circuit, the Court of Appeals held that before a defendant could be deemed to have prevailed for purposes of recovering attorneys’ fees, the defendant had to obtain a favorable judicial determination on the merits of the case. The Eighth Circuit then determined that CRST had not prevailed on the claims brought on behalf of 67 women because their claims were dismissed due to the EEOC’s failure to investigate and conciliate, which was not a ruling on the merits. As a result, the Eighth Circuit ruled that CRST was not entitled to an award of attorneys’ fees on those claims. CRST appealed to the Unites States Supreme Court.

Defendant As “Prevailing Party” 

Title VII provides that a court, in its discretion, may award reasonable attorneys’ fees to the prevailing party. Accordingly, before deciding whether to award attorneys’ fees in any given case, a court must determine whether the party seeking fees has, in fact, prevailed. That determination is relatively clear when a plaintiff proves his or her discrimination case and a favorable judgment or court order is entered in the plaintiff’s favor. But there has been no clear definition on how courts should determine whether a defendant has prevailed, especially when the complaint is dismissed for procedural deficiencies or on jurisdictional grounds.

In rejecting the Eighth Circuit’s requirement that “prevailing party” status depends on a ruling on the merits, the Court stated that “[c]ommon sense undermines the notion that a defendant cannot ‘prevail’ unless the relevant disposition is on the merits.” Instead, the Court held that a defendant fulfills its primary objective whenever it can rebuff the plaintiff’s case, irrespective of the precise reason for the court’s decision. Looking to the congressional intent for Title VII’s fee-shifting provision, the Court ruled that a defendant may “prevail” even when the court’s final judgment in not on the merits.

Fees Expended in Frivolous, Unreasonable, or Groundless Litigation

The Court noted that under Title VII’s fee-shifting provision, prevailing defendants may seek attorneys’ fees whenever the plaintiff’s claim was frivolous, unreasonable, or groundless. The Court recognized that defendants spend significant attorney time and expenses contesting frivolous and unreasonable claims that result in their favor, whether on the merits or not, and that a request for an award of fees in such cases is appropriate.  

Good News For Employers

The Court’s decision is good news for employers defending Title VII claims because it makes clear that a defendant may ask for attorneys’ fees when it gets a favorable judicial result for reasons not on the merits, where the defendant can show that the plaintiff’s claim was frivolous, unreasonable, or groundless. That clarification may help deter the EEOC and individual plaintiffs from filing or continuing to litigate groundless claims.

That said, we may not have seen the final word on application of the Title VII fee-shifting provision as the Court sent the CRST case back to the Eighth Circuit to consider a new argument put forth by the EEOC, namely that a defendant must obtain a preclusive judgment in order to be the “prevailing party.” We’ll keep tabs on this case and let you know of any further developments.

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May 16, 2016

FCRA Lawsuit Sent Back To Ninth Circuit For Further Analysis on Standing to Sue

Lane_DBy Dora Lane

A bare procedural violation of the Fair Credit Reporting Act (FCRA) is not sufficient to permit an individual to sue for a willful FCRA violation, ruled the U.S. Supreme Court today. But, if the alleged procedural violation entails a risk of real harm, the plaintiff may have a concrete injury sufficient to have standing to sue. In a 6-to-2 decision, the Court sent the case back to the Ninth Circuit for further analysis of the injury-in-fact requirement of Article III standing. Spokeo, Inc. v. Robins, 578 U.S. ___ (2016).

People Search Engine Allegedly Produced False Information 

Spokeo, Inc. operates a website that provides users with information about other people, including contact data, marital status, age, occupation, economic health, hobbies, shopping habits, musical preferences, and wealth level. It collects that information from various sources including phone books, real estate listings, and social networks.

According to Thomas Robins' allegations, he found that Spokeo’s website published false information about him. It stated that he was married, in his fifties, had children, held a job, was relatively affluent, and had a graduate degree – none of which was accurate. Robins sought to file a class action against Spokeo, asking to recover the $1,000 in damages allowed by the FCRA for each willful violation of the statute. The potential class could include millions of people.

Ninth Circuit Reversed on Whether Actual Harm Needed for Willful FCRA Violations

The trial court focused on Robins’ allegations of harm, which were “that he has been unsuccessful in seeking employment, and that he is concerned that the inaccuracies in his report will affect his ability to obtain credit, employment, insurance, and the like.” It dismissed his complaint without prejudice, ruling he lacked standing to sue Spokeo because he had not alleged “any actual or imminent harm.” Despite filing an amended complaint in which he more fully described the inaccuracies in the information on Spokeo’s website, the district court ruled that Robins had failed to plead an injury-in-fact and that any injuries pled were not traceable to Spokeo’s alleged violations.

The Ninth Circuit Court of Appeals reversed. Spokeo had argued that Robins could not sue under the FCRA without showing actual harm, but the Ninth Circuit found that the FCRA does not require a showing of actual harm when a plaintiff sues for willful violations. Therefore, the Ninth Circuit held that a plaintiff can suffer a violation of the statutory right without suffering actual damages.

Injury-In-Fact Requires Concrete and Particularized Harm

The Supreme Court vacated the Ninth Circuit’s decision, stating that the appellate court had failed to consider both aspects of the injury-in-fact requirement for standing to sue, namely that the plaintiff suffered an invasion of a legally protected interest that is both concrete and particularized, rather than hypothetical. Justice Alito, writing for the majority, stated that the Ninth Circuit focused on the “particularized” aspect of Robins’ injury – in other words, that he had been affected in a personal and individual way – but failed to consider whether his injury was “concrete.” The Court emphasized that Article III standing requires a concrete injury, even in the context of a statutory violation.

The Court pointed out, however, that a concrete injury does not have to be tangible. An intangible harm may constitute an injury-in-fact and Congress can identify and elevate intangible harms to give rise to a case or controversy sufficient for standing to sue. A risk of real harm may satisfy the concreteness requirement.

As it relates to Robins’ allegations of Spokeo’s willful FCRA violations, the Court wrote that although Congress clearly sought to prevent the dissemination of false information by adopting the safeguards in the FCRA, Robins could not satisfy the injury-in-fact requirement for standing simply by alleging a bare procedural violation of the FCRA. The Court noted that a violation of one of the FCRA’s procedural requirements, such as providing an incorrect zip code, may not result in harm. The Court, without taking a position on whether the Ninth Circuit’s ultimate conclusion was correct, sent the case back to the Ninth Circuit to further analyze whether Robins’ particular procedural violations, as alleged, involve a degree of risk sufficient to meet the concreteness requirement.

Effect of Ruling

By remanding this case back to the appellate court, the Supreme Court may have muddied the waters for defendants who face a statutory violation of the FCRA (or other federal statutes). Although it is good news that a bare statutory violation without concrete harm will not be sufficient to confer standing to sue, the analysis of the injury-in-fact requirement will likely mean that most cases will not be dismissed early in the proceeding, say on a motion to dismiss. That will raise the cost of defending such cases. Today’s opinion also leaves the door open for Robins’ class action case to proceed, should the Ninth Circuit find that the plaintiffs’ face the risk of real harm from false information in Spokeo’s people search database. We will continue to follow the case as the liability for statutory violations of the FCRA in a class action is huge.

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