Borg-Warner Protective Services Corporation v. Equal Empoyment Opportunity Commission 00-5094 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 00-5094 BORG-WARNER PROTECTIVE SERVICES CORPORATION, Plaintiff-Appellant, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant-Appellee. On Appeal from the United States District Court for the District of Columbia Honorable Henry H. Kennedy, Judge REPLY OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION ("EEOC") TO BORG-WARNER'S RESPONSE TO THE EEOC'S MOTION FOR SUMMARY AFFIRMANCE On April 14, 2000, appellee Equal Employment Opportunity Commission ("EEOC" or "Commission") filed a motion asking this Court summarily to affirm the district court's decision to dismiss the complaint of appellant Borg-Warner Protective Services Corporation ("Borg-Warner") for lack of subject matter jurisdiction. Borg-Warner filed its response to the Commission's motion on April 27, 2000. As this reply memorandum will demonstrate, this Court should grant the Commission's motion for summary affirmance. DISCUSSION In this action, Borg-Warner asks the federal courts to review the Commission's Determination (issued in connection with Rudy Lee's charge of discrimination), National Enforcement Plan ("NEP")<1>, and Policy Statement on Mandatory Binding Arbitration of Employment Disputes as a Condition of Employment ("Policy Statement"). The district court dismissed Borg-Warner's action for lack of subject matter jurisdiction, and this Court now should summarily affirm because Borg-Warner still has not pointed to any statute or rule of law that establishes subject matter jurisdiction over its claims against the Commission.<2> Indeed, summary affirmance clearly is appropriate here because the lack of jurisdiction is patent, and additional briefing and argument would simply waste the Court's time and resources. See Taxpayers Watchdog, Inc. v. Stanley, 819 F.2d 294, 297 (D.C. Cir. 1987) (outlining standard for summary affirmance). A. No statute or rule of law allows for subject matter jurisdiction over this action In this appeal, Borg-Warner renews its arguments that subject matter jurisdiction may be predicated on Title VII, the Administrative Procedure Act and the Declaratory Judgment Act. In so arguing, however, Borg-Warner fails to direct this Court to any case where a federal court has held that it has subject matter jurisdiction over an action like this one against the Commission.<3> The reason for this omission is obvious -- there is no such case. Instead, the relevant cases all point towards dismissal, because there is no basis or need for review of the Commission's nonbinding actions (like the Policy Statement, NEP and Determination) that have no real legal consequences. See, e.g., Georator v. EEOC, 592 F.2d 765, 767 (4th Cir. 1979) (affirming dismissal of employer's suit against Commission for lack of jurisdiction and for failure to state a claim); Circuit City Stores, Inc. v. EEOC, 75 F. Supp.2d 491, 512 (E.D. Va. 1999) (dismissing employer's suit against Commission for lack of jurisdiction), appeal docketed, No. 99-2360 (4th Cir. October 15, 1999). See also Smith v. Casellas, 119 F.3d 33, 34 (D.C. Cir. 1997) (affirming dismissal of employee's suit challenging Commission's conduct in processing his charge of discrimination). Beginning with Title VII, Borg-Warner argues that the federal courts have jurisdiction to review the ultra vires acts of the Commission. See Response at 4-5. In so arguing, Borg-Warner relies on the line of cases stemming from the Supreme Court's decision in Leedom v. Kyne, 358 U.S. 184 (1958). The problem with Borg-Warner's argument, however, is that it fails to direct this Court to any case that has applied the reasoning in Leedom to an action like this one against the Commission. As far as the Commission is aware, there is no such case because (among other things) the holding in Leedom was based on the fact that the National Labor Relations Board has the authority to issue orders that have legal consequences for affected individuals. The Commission, by contrast, has no such authority. See Associated Dry Goods Corp. v. EEOC, 720 F.2d 804, 809, 812 (4th Cir. 1983) (observing that "no rule or decision of the Commission, however denominated, can affect the rights or impose any obligation on any party"); EEOC v. Continental Oil Co., 548 F.2d 884, 890 (10th Cir. 1977) (explaining that, unlike the NLRB, the EEOC does not have the authority to issue cease and desist orders). Even if we accept, arguendo, the proposition that Leedom and its progeny establish that the Commission's actions are subject to judicial review under Title VII when the Commission acts ultra vires, where is the ultra vires action in this case? Borg-Warner claims that the Commission's Determination, NEP and Policy Statement are prohibited by section 118 of the Civil Rights Act of 1991, but that provision only states that "[w]here appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including settlement negotiations, conciliation, facilitation, mediation, factfinding, minitrials, and arbitration, is encouraged to resolve disputes arising under" Title VII. Pub. L. 102-166, § 118, reprinted in 42 U.S.C. § 1981 (notes). See also District Court Opinion at 6-8 (explaining that judicial review of agency action claimed to be ultra vires should only be granted in the extraordinary circumstance where a specific provision of an Act, although clear and mandatory, was nevertheless violated) (citing Dart v. U.S., 848 F.2d 217, 231 (D.C. Cir. 1988)); American Airlines, Inc. v. Herman, 176 F.3d 283, 293 (5th Cir. 1999) (expressing the same view and dismissing action against agency for lack of jurisdiction). Because the Commission does encourage the use of alternative dispute resolution, including arbitration (see EEOC Motion at 6-7 n.3), and because section 118 expressly recognizes that arbitration and other forms of alternative dispute resolution are not always appropriate or authorized by law,<4> there is absolutely no validity to Borg-Warner's claim that it may sue the Commission on the theory that the Commission's Determination, NEP and Policy Statement are ultra vires under Title VII. Accordingly, the district court correctly rejected this theory as a basis for jurisdiction. Borg-Warner's claim that jurisdiction here may be predicated on the APA also fails. As with its arguments based on Title VII, Borg-Warner does not refer this Court to any case holding that the Commission's issuance of a letter of determination, its NEP, or its Policy Guidance constitutes final agency action reviewable under the APA. Instead, Borg-Warner draws this Court's attention to inapposite case law relating to the administrative actions of other agencies (see Response at 12), and makes no attempt to address the cases that hold that the Commission's actions like the ones at issue here are nonbinding, nonfinal, and thus not reviewable under the APA. See EEOC Motion at 9 (collecting cases). Given Borg-Warner's failure to address this fundamental jurisdictional defect in its APA claim, this Court should not hesitate in summarily affirming the district court's correct conclusion that it did not have jurisdiction over Borg-Warner's APA claim against the Commission. See District Court Opinion at 11-14.<5> Finally, this Court should summarily affirm the district court's holding that Borg-Warner cannot rely on the Declaratory Judgment Act as the basis for jurisdiction in this action. In its motion for summary affirmance, the Commission provided several arguments supporting its view that there is no jurisdiction over Borg-Warner's declaratory judgment action. See EEOC Motion at 11-14. The Commission stands by each of those arguments, but does not rehash them here, except to point out that (1) once again, Borg-Warner fails to cite to any case holding that an employer may bring a declaratory judgment action like this one against the Commission; (2) because the Commission's actions were not ultra vires (see supra at pp. 4-5), this Court's analysis in Chamber of Commerce of the U.S. v. Reich, 74 F.3d 1322, 1329 (D.C. Cir. 1996) does not preclude the application of the doctrine of sovereign immunity in this case as a bar to Borg-Warner's declaratory judgment action; and (3) it was well within the district court's discretion to decline to exercise jurisdiction because "a declaratory judgment would serve no useful purpose, as it would not change the law in the Ninth Circuit, or otherwise redress Borg-Warner's alleged injury." District Court Opinion at 18. B. Subject matter jurisdiction also is lacking here because Borg-Warner's action against the Commission is not ripe, and because Borg-Warner lacks standing As the Commission noted in its initial motion (see EEOC Motion at 14-17), there are two additional grounds that preclude subject matter jurisdiction over Borg-Warner's action and warrant summary affirmance: (1) ripeness and (2) standing. On the issue of ripeness, Borg-Warner argues that this action was ripe when filed because, in connection with its attempt to conciliate Lee's charge of discrimination, the Commission proposed that Borg-Warner stop using its Pre-Dispute Resolution Agreement. Response at 18. The mere fact that the Commission proposed a conciliation agreement, however, does not mean that the Commission had terminated its administrative process. Instead, the administrative process remained active at least until the Commission determined that it would not commence litigation against Borg-Warner and then issued Lee a notice of right to sue. Because Borg-Warner rushed to court and filed this action before the Commission issued Lee's notice (and thus before the administrative process had concluded - see EEOC Motion at 2-3), there was no justiciable controversy at the time this action was filed.<6> Accordingly, this action is not ripe, and there is no subject matter jurisdiction. Last, Borg-Warner lacks Article III standing to bring this action against the Commission because Borg-Warner's purported injuries are not redressable. In its response at 16-18, Borg-Warner asserts that it is being injured by the uncertainty about the validity of its Pre-Dispute Resolution Agreement due to the continued challenges to the Agreement that (according to Borg-Warner) are being raised by the Commission and by individual plaintiffs. Putting to one side the question of whether Borg-Warner's fears are reasonable, the bottom line is that the district court is simply powerless to resolve (or go a long way towards resolving) this uncertainty, even if it were inclined to take the unprecedented step of requiring the Commission to rescind its Policy Statement, NEP and Determination. Individual plaintiffs (including Borg-Warner's employees), other agencies, and private entities would remain free to challenge Borg-Warner's Agreement and to share information about successful litigation strategies; courts addressing for the first time the validity of mandatory pre-dispute agreements to arbitrate employment discrimination claims would still be free to align themselves with either side of the dispute; and the law in the Ninth Circuit (where Lee's charge was filed and processed) would still deem Borg-Warner's Agreement unenforceable as to Title VII claims. See Duffield v. Robertson Stephens Co., 144 F.3d 1182, 1199-1200 (9th Cir.) (holding that mandatory pre-dispute agreements to arbitrate employment discrimination disputes are not enforceable under Title VII), cert. denied, 525 U.S. 996 (1998). Because a favorable ruling in this action could not redress Borg-Warner's claimed injuries, summary affirmance is appropriate because Borg-Warner lacks Article III standing. WHEREFORE, the Commission respectfully requests that the Court grant its motion for summary affirmance of the district court's decision to dismiss Borg-Warner's action for lack of jurisdiction. Respectfully submitted, C. GREGORY STEWART General Counsel PHILIP B. SKLOVER Associate General Counsel CAROLYN L. WHEELER Assistant General Counsel GEOFFREY L.J. CARTER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, NW, Room 7022 Washington, D.C. 20507 May 8, 2000 (202) 663-4728 CERTIFICATE OF SERVICE This is to certify that on May 8, 2000, one copy of the foregoing reply memorandum was mailed first class, postage prepaid, to the following counsel of record: Thomas Steindler, Esq. McDermott, Will & Emery 600 13th Street, NW Washington, DC 20005 John M. Stephen, Esq. Priscilla L. Hapner, Esq. Porter, Wright, Morris & Arthur 41 S. High St., 32nd Fl. Columbus, OH 43215 GEOFFREY L.J. CARTER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, NW, Room 7022 Washington, D.C. 20507 May 8, 2000 (202) 663-47281 1 Borg-Warner apparently has waived its challenge to the Commission's NEP, as it does not discuss that document in its response. For the sake of completeness, however, the Commission includes the NEP in its analysis. 2 Borg-Warner devotes much of its response to contesting the wisdom of the views the Commission expresses in its Policy Statement, NEP and Determination. See, e.g., Response at 1, 5-7 (contesting the Commission's views and suggesting that the disagreement about those views should preclude summary affirmance). The only issue for this Court, however, is whether the district court correctly held that it lacked jurisdiction. 3 Of the three cases that Borg-Warner cites that involve the EEOC (see Response at 4), none analyzes issues that are relevant to the question of whether there is subject matter jurisdiction in this action. Neither Sears, Roebuck & Co. v. EEOC, 581 F.2d 941 (D.C. Cir. 1978) nor Newport News Shipbuilding & Dry Dock Co., 510 F. Supp. 66, (E.D. Va. 1981), rev'd, 667 F.2d 448 (4th Cir. 1982) discusses the issue of jurisdiction. The decision in A.A.R.P. v. EEOC, 655 F. Supp. 228, 235-36 (D.D.C.), rev'd, 823 F.2d 1987 (D.C. Cir. 1987) discusses jurisdiction under the APA, but only does so in connection with judicial review under 5 U.S.C. § 706(1) and a claim that the Commission delayed unreasonably in a contemplated rulemaking. That jurisdictional issue is not presented here. 4 On page 5 of its Response, Borg-Warner seems to take the position that the Commission acts ultra vires if it expresses any discouragement of arbitration, regardless of the type of arbitration at issue. Obviously, such a rule would be absurd. See, e.g., Cole v. Burns Int'l Sec. Servs., 105 F.3d 1465, 1482 (D.C. Cir. 1997) (explaining that arbitration agreements are valid in the employment discrimination context only if the agreements meet minimum requirements). Section 118 of the Civil Rights Act clearly recognizes that arbitration may not always be appropriate, and it is certainly within the Commission's authority to articulate its (nonbinding) views on the appropriate uses of arbitration. 5 Borg-Warner is mistaken in arguing that it faces serious adverse financial consequences if it "complies" with the Commission's Policy Statement and "serious litigation" if it does not. See Response at 13. The Commission's Determination, NEP and Policy Statement do not require Borg-Warner to do anything with its Pre-Dispute Resolution Agreements. Moreover, the Commission's actions did not change the governing legal regime, and Borg-Warner remains free to assert the validity of its Agreements in court if/when they are challenged. See EEOC Motion at 10-11 n.5 (discussing these issues). 6 Borg-Warner also argues that this action is ripe because the Commission has acted ultra vires. As discussed above, that contention is wrong on its face. See supra at pp. 4-5.