Labor & Employment Law Daily Attorney fee award to CRST in EEOC Title VII sexual harassment case stands despite lack of ‘mathematical precision’
Thursday, December 12, 2019

Attorney fee award to CRST in EEOC Title VII sexual harassment case stands despite lack of ‘mathematical precision’

By Kathleen Kapusta, J.D.

Although the district court’s fee award was “not based on mathematical precision and nicety,” it did not abuse its discretion in its award of attorneys’ fees to the trucking company in this long-running dispute.

Addressing for the second time, and after a remand from the U.S. Supreme Court, the EEOC’s appeal of an attorneys’ fee award in favor of CRST Van Expedited in the sweeping Title VII lawsuit against the trucking company alleging sexual harassment of female drivers, the Eighth Circuit found the court below did not abuse its discretion in calculating a fee award of more than $1.8 million. The district court, in its extensive 82-page order, determined the award using a “flexible and commonsense application of the Fox standard in light of the realities of the case, how it was litigated and the court’s unique understand[ing] of the issues,” said the appeals court in affirming its judgment (EEOC v. CRST Van Expedited, Inc., December 10, 2019, Smith, L.).

Prior proceedings. In 2007, the EEOC sued CRST after a female driver alleged that two male trainers sexually harassed her on an over-the-road training trip. The agency eventually sued CRST under Section 706 claiming that it was responsible for severe or pervasive sexual harassment and that it subjected approximately 270 similarly situated female employees to a hostile work environment. In a series of rulings, the district court barred the EEOC from pursuing relief for individual claims on behalf of all but 67 of the women, found the EEOC had not established a pattern or practice of tolerating sexual harassment, and dismissed the suit. Determining that CRST was the prevailing party and that the EEOC’s failure to satisfy its pre-suit obligations as to the final 67 women was unreasonable, the court awarded the company over $4,694,442 in attorneys’ fees and costs.

Prior appeals. On appeal, the Eighth Circuit reversed only the dismissal of claims on behalf of two women and vacated the fee award, finding that CRST was no longer a prevailing party because the EEOC had live claims. On remand, the agency settled one claim and withdrew the other. CRST again sought attorneys’ fees and was again awarded over $4 million. Reversing, the Eighth Circuit held that a Title VII defendant can be a prevailing party only through a ruling on the merits, and because the agency’s pre-suit requirements were not elements of a Title VII claim, dismissal of the claims concerning 67 women due to the EEOC’s failure to investigate or conciliate was not “on the merits.”

The appeals court also reversed the fee award because the court failed to make individualized findings in granting summary judgment against claims for 78 other women. The case was remanded, with the Eighth Circuit directing the lower court to make the 78 individualized findings and barring it from awarding fees based on the other 67 claims.

Supreme Court. Granting cert, the Supreme Court held in 2016 that a favorable judgment on the merits was not required for a defendant to be the “prevailing party” for purposes of attorneys’ fees. The Court vacated the Eighth Circuit’s decision and remanded for further proceedings.

New award. On subsequent remand from the Eighth Circuit, the district court, engaging in an individualized inquiry, found that most of the EEOC’s sexual harassment claims on behalf of 78 claimants were frivolous, unreasonable, or groundless. It also concluded that the dismissal of 67 other claims due to the agency’s failure to satisfy pre-suit statutory duties constituted a “material alteration” of the parties’ legal relationship that justified an award of attorneys’ fees. After reducing the award for certain non-frivolous claims brought on behalf of nine individuals, the court awarded the employer more than $1,860,127 in attorneys’ fees and costs.

Pre-suit conditions. The EEOC first argued on appeal that its lawsuit was not frivolous, unreasonable, or without foundation because it reasonably believed that it satisfied Title VII’s pre-suit requirements. But the district court’s finding that the EEOC’s failure to conciliate and investigate the claims was an unreasonable litigation tactic that resulted in frivolous, unreasonable, or groundless claims was consistent with the Eighth Circuit’s prior observation that the EEOC “wholly failed to satisfy its statutory presuit obligations,” said the appeals court, noting that “The EEOC could not hold a reasonable belief that it satisfied its presuit obligations when it ‘wholly failed to satisfy’ them.”

Further, the district court, complying with the appeals court’s directive, exhaustively explained why 71 of the claims dismissed on summary judgment were frivolous, unreasonable, or groundless. In addition, the appeals court rejected the EEOC’s assertion it reasonably sought relief for the remaining women on summary judgment based on a pattern-or-practice method of proof, noting the district court’s explanation that “As the master of its own complaint, it was frivolous, unreasonable and/or groundless for the EEOC to fail to allege a pattern-or-practice violation and then procced to premise the theory of its case on such a claim. Claims necessarily premised on the inclusion of this claim are likewise frivolous, unreasonable, and/or groundless.”

Fox standard. The EEOC next argued that even if some of its claims were frivolous, the lower court still erred in imposing fees because CRST failed to show any fees were incurred solely in defense of a frivolous claim. But in Fox v. Vice, 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.” Further, this “but for” standard, said the Court “may in some cases allow compensation to a defendant for attorney work relating to both frivolous and non-frivolous claims.”

Noting the Court’s declaration that a trial court has wide discretion in applying this standard, the appeals court explained that it was required to give substantial deference to the district court’s determinations due to its superior understanding of the litigation. Rejecting the EEOC’s assertion that CRST failed to satisfy the Fox standard, the appeals court observed that the court below properly articulated the standard and acknowledged “Fox’s admonition that only those fees attributable to frivolous claims should be awarded.”

Documentation was adequate. Observing further that the Supreme Court made clear that “frivolous claims may increase the cost of defending a suit in ways that are not reflected in the number of hours billed,” the court explained 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.” Satisfied that the district court “carefully and thoroughly examined the supporting documentation that CRST provided in support of its fee request,” the appeals court found the lower court correctly concluded that the documentation was adequate to support the fee award.

No pro-rata allocation. Also rejected was the EEOC’s assertion that the district court used a pro-rata allocation of fees based on the number of claims instead of an actual demonstration of what fees were incurred exclusively to defend against a frivolous claim. Faced with a substantial number of claims and claimants, the lower court took the original fee award and subtracted from that amount costs found to be unrecoverable and then divided the remainder of the award into two categories: an average amount for each claim dismissed on summary judgment and an average amount for each claim dismissed for failure to meet pre-suit requirements.

It then multiplied these averages by the number of claims the district court had previously deemed frivolous, unreasonable, or groundless, while “exclud[ing] from the factor of claims for which the court is granting fees” the EEOC’s claims on behalf of seven women that the district court had determined were not frivolous, unreasonable and/or groundless. It also “reduce[d] this factor by an additional [amount] for the portions of [two other] claims that the court found were not frivolous, unreasonable and/or groundless.”

Intertwined. Finally, as to the EEOC’s contention that fees were barred under Fox because all 154 claims were inextricably intertwined, the appeals court pointed out that the district court went to extraordinary lengths to calculate the fee award, reviewing CRST’s submissions in which the company “exhaustively walk[ed] through each of the seventy eight individual claims for which it [sought] costs, detailing why each claim was frivolous, unreasonable or groundless.” While the resulting fee award was not based on “mathematical precision and nicety,” the lower court did not abuse its discretion in calculating the award, held the appeals court.

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