No. 17-1828

 

 

IN THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

 

 

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

          Plaintiff/Appellant,

 

v.

 

CVS PHARMACY, INC.,

          Defendant/Appellee.

 

On Appeal from the United States District Court

for the Northern District of Illinois

Case No. 1:14-CV-863

Hon. John W. Darrah, District Judge

 

REPLY BRIEF OF THE EQUAL EMPLOYMENT

OPPORTUNITY COMMISSION AS APPELLANT

 

JAMES L. LEE

Deputy General Counsel

 

JENNIFER S. GOLDSTEIN

Associate General Counsel

 

LORRAINE C. DAVIS

Assistant General Counsel

 

 

 

ELIZABETH E. THERAN

JEREMY D. HOROWITZ

Attorneys

U.S. EQUAL EMPLOYMENT

   OPPORTUNITY COMMISSION

Office of General Counsel

131 M St., N.E., Room 5SW24J

Washington, D.C. 20507

(202) 663-4716

jeremy.horowitz@eeoc.gov

TABLE OF CONTENTS

Table of Authorities........................................................................................ ii

 

Introduction..................................................................................................... 1

 

Argument......................................................................................................... 2

 

I.       The EEOC’s Legal Theory and Approach to Conciliation Were Not Frivolous, Unreasonable, or Without Foundation...................... 2

 

II...... The District Court Did Not Abuse Its Discretion in Concluding the Factual Basis for the EEOC’s Case Was Not Frivolous, Unreasonable, or Without Foundation................................................................... 24

 

III..... The Amount of Fees Awarded Was Excessive.......................... 26

 

Conclusion..................................................................................................... 30

 

Certificate of Compliance.............................................................................. 32

 

 

 

 

 

Table of Authorities

     Page(s)

Cases

Badillo v. Central Steel & Wire Co.,
717 F.2d 1160 (7th Cir. 1983)................................................................. 1, 27

Burlington Northern & Santa Fe Railway Co. v. White,
548 U.S. 53 (2006)...................................................................................... 26

Christiansburg Garment Co. v. EEOC,
434 U.S. 412 (1978).............................................................................. passim

Edelman v. Lynchburg College,
535 U.S. 106 (2002)................................................................................. 7, 10

EEOC v. Doherty Enterprises, Inc.,
126 F. Supp. 3d 1305 (S.D. Fla. 2015).................................................. 22, 23

EEOC v. Mach Mining, LLC,
738 F.3d 171 (7th Cir. 2013)......................................................................... 8

EEOC v. Shell Oil Co.,
466 U.S. 54 (1984)...................................................................................... 10

EEOC v. West Customer Management Group, LLC,
678 F. App’x 836 (11th Cir. 2017).............................................................. 14

Ekanem v. Health & Hospital Corp.,
724 F.2d 563 (7th Cir. 1983)....................................................................... 27

Fox v. Hayes,
600 F.3d 819 (7th Cir. 2010)......................................................................... 6

General Electric Co. v. Gilbert,
429 U.S. 125 (1976)...................................................................................... 7

General Telephone Co. of the Northwest, Inc. v. EEOC,
446 U.S. 318 (1980)............................................................................... 16, 17

Greenfield Mills v. Carter,
569 F. Supp. 2d 737 (N.D. Ind. 2008)........................................................ 27

Greviskes v. Universities Research Association,
417 F.3d 752 (7th Cir. 2005)....................................................................... 27

Guckenberger v. Boston University,
8 F. Supp. 2d 91 (D. Mass. 1998)............................................................... 27

Hamer v. Lake County,
819 F.2d 1362 (7th Cir. 1987)....................................................................... 2

Hamilton v. Daley,
777 F.2d 1207 (7th Cir. 1985)..................................................................... 15

Illinois Migrant Council v. Pilliod,
672 F. Supp. 1072 (N.D. Ill. 1987)........................................................ 28, 29

Lightfoot v. Walker,
826 F.2d 516 (7th Cir. 1987)................................................................. 27, 28

Mach Mining, LLC v. EEOC,
135 S. Ct. 1645 (2015)................................................................................... 5

Morton v. Ruiz,
415 U.S. 199 (1974)...................................................................................... 9

Serpas v. Schmidt,
1986 WL 7063 (N.D. Ill. June 17, 1986)..................................................... 27

Serrano & EEOC v. Cintas Corp.,
699 F.3d 884 (6th Cir. 2012)................................................................. 18, 19

Sidney Hillman Health Center of Rochester v. Abbott Laboratories,  Inc.,
782 F.3d 922 (7th Cir. 2015)......................................................................... 6

Tarkowski v. County of Lake,
775 F.2d 173 (7th Cir. 1985)....................................................................... 26

In re TCI Ltd.,
769 F.2d 441 (7th Cir. 1985)....................................................................... 15

United States v. Allegheny-Ludlum Industries, Inc.,
517 F.2d 826 (5th Cir. 1975)....................................................................... 18

United States v. City of Yonkers,
592 F. Supp. 570 (S.D.N.Y. 1984)................................................................ 4

University of Texas Southwest Medical Center v. Nassar,
133 S. Ct. 2517 (2013)................................................................................... 7

Vitarelli v. Seaton,
359 U.S. 535 (1959)...................................................................................... 9

Yee v. City of Escondido,
503 U.S. 519 (1992)...................................................................................... 6

Young v. United Parcel Service, Inc.,
135 S. Ct. 1338 (2015)................................................................................... 4

Statutes

42 U.S.C. § 1981a(a)(1)................................................................................... 19

42 U.S.C. § 1981a(c)........................................................................................ 19

Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq......... passim

42 U.S.C. § 2000e-5.............................................................................. passim

42 U.S.C. § 2000e-5(b)................................................................................. 4

42 U.S.C. § 2000e-5(f)(1).............................................................................. 8

42 U.S.C. § 2000e-6.............................................................................. passim

42 U.S.C. § 2000e-6(a)......................................................................... passim

42 U.S.C. § 2000e-6(e)......................................................................... passim

42 U.S.C. § 2000e-12(a)...................................................................... 7, 9, 10

Other Authorities

29 C.F.R. Part 1601........................................................................................... 8

29 C.F.R. § 1601.24(a)................................................................................... 5, 6

29 C.F.R. § 1601.27........................................................................................... 5

Fed. R. Civ. P. 56............................................................................................ 21

 

INTRODUCTION

The EEOC’s Opening Brief explained that the district court’s decision to award attorneys’ fees to CVS because the EEOC did not conciliate prior to filing suit was an abuse of discretion.  Under the EEOC’s legal theory of the case, conciliation was not required because the alleged pattern or practice of resistance to Title VII rights at issue did not involve an unlawful employment practice or a charge of discrimination.  Although the EEOC did not prevail, this theory — which was consistent with the statutory language and this Court’s precedents — was entirely plausible, and the EEOC had no reason to believe with any certainty that it would not succeed.  Given these facts, the fee award was an abuse of discretion.  See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421-22 (1978); Badillo v. Cent. Steel & Wire Co., 717 F.2d 1160, 1163-64 (7th Cir. 1983).

In its response brief, CVS simply reiterates the merits of this case and argues, essentially, that the EEOC should have known prior to filing suit that its legal position ultimately would not prevail.  It also argues, contrary to the district court’s conclusion, that the EEOC had no factual basis to bring suit.  CVS claims the EEOC acted unreasonably in not conciliating prior to filing and implies, in addition, that the EEOC made no effort to resolve the matter informally.  None of these contentions has merit. 

ARGUMENT

I.            The EEOC’s Legal Theory and Approach to Conciliation Were Not Frivolous, Unreasonable, or Without Foundation.

Under Title VII, an attorneys’ fee award to a prevailing defendant is appropriate only when the plaintiff’s action was “frivolous, unreasonable, or without foundation.”  Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978).  Courts must make this determination looking at the case as it appeared at the outset of the litigation, resolving all reasonable doubts in the plaintiff’s favor, Hamer v. Lake Cty., 819 F.2d 1362, 1368 (7th Cir. 1987), and must be careful not to conclude post hoc that a defendant’s victory is tantamount to a plaintiff’s ex ante unreasonableness.  Christiansburg, 434 U.S. at 422.  This stringent standard is necessary to prevent chilling plaintiffs from pursuing potentially meritorious claims; in cases where the plaintiff’s action was not “frivolous, unreasonable, or groundless,” awarding such fees “would undercut the efforts of Congress to promote the vigorous enforcement of the provisions of Title VII.”  Id.  Contrary to CVS’s implication that the EEOC is held to a higher standard than private plaintiffs in this regard, see CVS Response Brief (Resp.) at 15, the Supreme Court explicitly stated that there are “no grounds for applying a different general standard whenever the Commission is the losing plaintiff.”  Christiansburg, 434 U.S. at 422 n.20.  Under the Christiansburg standard, attorneys’ fees were not warranted.

The EEOC interpreted Title VII to allow it to sue under Section 707(a) to stop a pattern or practice of resistance to Title VII rights, even if such resistance did not involve a charge of an unlawful employment practice.  As the EEOC explained in its merits briefs and its Opening Brief in this appeal, EEOC Opening Br. at 19-33, its interpretation — which was consistent with prior holdings of this Court and other circuits interpreting Section 707, and which the district court agreed with, to the extent it allowed for a Section 707(a) suit in the absence of a discrimination charge — gave meaning to every word in the statute rather than treating some as redundant.  It was also consistent with the 1972 amendments to Title VII transferring the Section 707 authority to sue to stop a pattern or practice of resistance to Title VII rights — an authority that did not require presuit conciliation — from the Attorney General to the EEOC.  See, e.g., United States v. City of Yonkers, 592 F. Supp. 570, 583 (S.D.N.Y. 1984).  Far from “bizarre,” Resp. at 20, an interpretation accounting for every word in a statute follows the Supreme Court’s admonition to construe statutes to avoid rendering any clauses “superfluous, void, or insignificant.”  Young v. United Parcel Serv., Inc., 135 S. Ct. 1338, 1352 (2015) (internal citations and quotation marks omitted). 

Because the EEOC based its reasonable theory on its belief that Section 707(a) did not require an underlying charge of discrimination, the Commission was similarly reasonable in its belief that the conciliation obligation, which is premised on the existence of a charge to be conciliated, did not apply to this case.  Section 706(b), which includes the conciliation obligation, explicitly applies only when an aggrieved individual or the Commission itself files a “charge” of an “unlawful employment practice.”  42 U.S.C. § 2000e-5(b).  Section 707(e), which gives the Commission authority to “act on a charge of a pattern or practice of discrimination” in accordance with Section 706 procedures (including conciliation), is similarly premised on the existence of an underlying charge.  Id. § 2000e-6(e).  Neither subsection purports to require conciliation in the absence of such a charge, and the relevant authorities indicate that a charge is necessary to give rise to the conciliation obligation.  See, e.g., Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1651 (2015) (noting the EEOC’s duty “to attempt conciliation of a discrimination charge”). 

The regulations on which the district court relied in imposing fees on the EEOC, 29 C.F.R. §§ 1601.24(a) and 1601.27, likewise require a predicate charge, as explained in the Commission’s Opening Brief.  EEOC Opening Br. at 33-36.  Section 1601.24(a) applies “where the Commission determines that there is reasonable cause to believe that an unlawful employment practice has occurred or is occurring,” and § 1601.27 authorizes suit against a non-government respondent “named in a charge.”  Under the EEOC’s theory — which, again, contended that the EEOC could combat efforts to resist the full enjoyment of Title VII rights even when those resistance efforts did not constitute discrimination themselves and were not part of a charge — these regulations did not apply.[1]  Based on the wording of the regulations, this was an entirely reasonable theory.

The EEOC also explained (Opening Br. at 33-35) that its regulations implementing Section 706’s charge-processing procedures should not be read to require conciliation in the absence of a charge, as such an interpretation would be inconsistent with the EEOC’s procedural, rather than substantive, rulemaking authority under Title VII.  CVS maintains that, “as a matter of black-letter administrative law,” the EEOC is free to adopt whatever procedural regulations it likes, no matter how far they may veer in the direction of substantive rulemaking, and once it does so it is automatically bound by them.  Resp. at 25-26.  This misstates the applicable law.

“Congress, in enacting Title VII, did not confer upon the EEOC authority to promulgate rules or regulations pursuant to that Title.”  Gen. Elec. Co. v. Gilbert, 429 U.S. 125, 141 (1976) (citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 431 (1975)).  As the Gilbert Court noted, the exception to this general principle is in 42 U.S.C. § 2000e-12(a), in which Congress gave the EEOC authority “to issue, amend, or rescind suitable procedural regulations to carry out the provisions of this subchapter.”  See Gilbert, 429 U.S. at 141 n.20.  As a matter of basic administrative law, the distinction is significant because, as the Supreme Court has noted, while the EEOC has “authority to adopt ‘suitable procedural regulations,’ … [it] has no rulemaking power [over substantive issues].”  Edelman v. Lynchburg Coll., 535 U.S. 106, 113 (2002) (internal citations omitted).

As both the Supreme Court and this Court have observed, Title VII is not a loosely written statute.  E.g., Univ. of Tex. Sw Med. Ctr. v. Nassar, 133 S. Ct. 2517, 2530 (2013) (describing Title VII as “precise, complex, and exhaustive”); EEOC v. Mach Min., LLC, 738 F.3d 171, 174 (7th Cir. 2013) (noting “the Supreme Court’s recent admonition that ‘Congress’ special care in drawing so precise a statutory scheme’ as Title VII ‘makes it incorrect to infer that Congress meant anything other than what the text does say’”), vacated & remanded on other grounds, 135 S. Ct. 1645 (2015).  As the EEOC understood this case at the merits stage, part of that scheme was the specification in Sections 706(b) and 706(f)(1) of Title VII that the EEOC’s mandatory obligation to conciliate arises only in response to a charge of discrimination.  While the EEOC certainly had procedural rulemaking authority to implement the scheme Congress established — authority it applied in 29 C.F.R. Part 1601 — it did not have the authority to alter Title VII substantively by changing that scheme to apply a mandatory conciliation requirement outside the charge-filing context, where Congress put it.

This is what the EEOC meant, in its Opening Brief in this appeal and at the merits stage, when it explained that “Title VII’s implementing regulations cannot require the EEOC to exceed the authority conferred by the statute.”  EEOC Opening Br. at 33.  Its position was not, as CVS apparently assumed (Resp. at 26), that it lacked authority to create procedural regulations at all, which would of course be “absurd” in light of 42 U.S.C. § 2000e-12(a).  But for CVS to take the position that the EEOC can unilaterally alter Title VII’s statutory scheme in any manner it likes, in the name of “procedural rulemaking,” flies in the face of black-letter administrative law, years of Supreme Court precedent, and its own position in this litigation. 

None of the cases CVS cites are to the contrary.  Morton v. Ruiz, 415 U.S. 199, 234-35 (1974), involved a regulation binding the agency to publish eligibility requirements for benefits, and in Vitarelli v. Seaton, 359 U.S. 535, 539-40 (1959), the Department pledged to provide procedural protections to individuals terminated on national security grounds during the McCarthy Era.  Neither case supports the proposition CVS argues here — that a regulation should be read to bind an agency outside of what the statute contemplates. 

Similarly, CVS’s argument finds no support in the concurrence in Edelman v. Lynchburg College, 535 U.S. 106, 123-24 (2002) (O’Connor, J., concurring), which CVS erroneously cites as a majority opinion, or EEOC v. Shell Oil Co., 466 U.S. 54, 67 (1984).  The snippets from these cases quoted in CVS’s Response Brief (Resp. at 26) stand for the unremarkable proposition that the regulations at issue are binding on the EEOC.  Neither case involved the proposition CVS advances: that a regulation can be read to exceed its statutory parameters and the EEOC must be bound to such an interpretation.  It is obviously well within the EEOC’s authority to establish procedural regulations to carry out the charge-processing functions delineated under Title VII.  42 U.S.C. § 2000e-12(a).  But this is a far cry from CVS’s argument that the EEOC must apply a statutorily defined process, mandatory conciliation, in an entirely different context never contemplated by the statute.

CVS bases its argument regarding the EEOC’s ostensible unreasonableness in not conciliating on its assertion that these regulations govern how a charge must be processed and require presuit conciliation when the EEOC believes an unlawful employment practice has occurred.  Resp. at 25, 28-29.  But the need for conciliation following an unlawful employment practice charge has never been in dispute.  Instead, because this case did not involve a charge alleging an unlawful employment practice, the Commission reasonably argued that the regulations did not apply.[2]

In its brief, CVS also repeatedly implies that the EEOC’s refusal to conciliate constituted a failure to negotiate, characterizing the Commission’s approach as “defiant[]” and “stubborn[].”  Resp. at 17.  This is simply false, as the parties’ communications during that period make abundantly clear.  The facts show that the EEOC repeatedly expressed its willingness to negotiate to resolve the matter, but CVS would only discuss the issue on its own narrow terms. 

The EEOC sent a letter to CVS on June 10, 2013, stating its belief that CVS’s form separation agreement violated Section 707(a) and seeking an assurance from CVS that it would replace the agreement with one clarifying the employee’s rights to speak with the EEOC.  To ensure its ability to enforce any resolution reached with CVS, the EEOC sought a Consent Decree, to be jointly filed by the parties, outlining the terms of the parties’ arrangement.  The parties spoke about the dispute on June 27 and July 16, 2013.  CVS’s attorney sent the EEOC a letter on July 29, 2013, emphasizing that CVS would not negotiate in any context other than conciliation.  R.17-1 Ex. J.  The parties spoke again on both July 29 and July 30, 2013.  Following these conversations, CVS’s attorney reaffirmed in a letter dated August 1, 2013, that CVS would “not consent to any public proceeding by EEOC without any pre-suit attempt at conciliation.”  R.17-1 Ex. K.  Absent an agreement to conciliate, CVS refused to negotiate further.  After the EEOC determined CVS was unwilling to engage in additional discussion, and determining it had no other means of ending CVS’s use of the potentially misleading Separation Agreement, the EEOC eventually filed this suit on February 7, 2014, eight months after it first brought its concerns to CVS’s attention.  CVS’s claims that the EEOC “refused CVS’s pleas,” “spurned CVS’s offers to clarify its agreement’s terms,” and instead “rush[ed] to file” suit, Resp. at 11, 18, 29; see also id. at 35, are misleading at best and a calculated misrepresentation at worst.

In addition, although CVS attempts to dramatize the “stark choice” it faced between litigating or “capitulat[ing] to a public consent decree,” Resp. at 5, it is worth noting the modest relief the EEOC sought through the negotiations that CVS spurned.  The EEOC asked for no monetary damages whatsoever: no backpay, front pay, compensatory damages, or punitive damages.  Instead, the Commission merely sought to end CVS’s use of a separation agreement that could discourage employees from exercising their legal rights under Title VII, to guarantee that anyone who had been misled by the agreement into forgoing their Title VII rights have the chance to exercise them, and to ensure that CVS’s employment agreements were clear about the employee’s ability to communicate with the EEOC going forward.  See R.17-1 Ex. H (Ltr., John Hendrickson to Thomas Moriarty, June 10, 2013).  Although CVS repeatedly complains that the EEOC brought a “nationwide pattern-or-practice suit” (Resp. at 2, 16, 32; see also id. at 44 (referring to a “nationwide pattern or practice claim against CVS, arguably the most serious kind of civil rights claim that the EEOC can bring against any employer”); id. at 47 (complaining of “EEOC’s class-action style claim”)), the relief sought was so narrow that the case could have been easily averted with good faith negotiations over the wording of future employment agreements to ensure employees were not misled about the scope of their legal rights.[3]

With respect to the EEOC’s core legal theory of the case, CVS repeatedly disparages the Commission’s interpretation of Title VII but cannot make the essential showing under Christiansburg — that the lawsuit was frivolous, unreasonable, or without foundation.  CVS acknowledges that this case was “novel and unprecedented” and asserts that it “required a careful and thorough review of five decades of statutory, legislative, and regulatory history and caselaw” to refute, Resp. at 44, yet proclaims that its victory was such a foregone conclusion that the EEOC was unreasonable in even presenting its arguments to the Court.  The contention is misguided for several reasons. 

First, as this Court has explained, a defendant’s extensive efforts to refute a plaintiff’s case are convincing evidence that a case was not frivolous.  See Hamilton v. Daley, 777 F.2d 1207, 1214 n.7 (7th Cir. 1985) (“[T]he more time and effort a defendant spends in defending a [civil rights] case, the less likely it is that the case was frivolous and that a fee award is appropriate in the first place.”); In re TCI Ltd., 769 F.2d 441, 448 (7th Cir. 1985) (noting that “defendants need not incur substantial costs” defending a “preposterous” case).  To the extent CVS emphasizes the extensive nature of the work required to defend against the lawsuit instead of merely “follow[ing] a well-worn playbook,” Resp. at 44, it highlights precisely why a fee award was unwarranted.

Second, by focusing on its success in the litigation, CVS invites this Court to engage in exactly the sort of post hoc reasoning Christiansburg forbids.  Christiansburg, 434 U.S. at 422.  As the caselaw and legislative history make clear, the meaning of Section 707(a) was an open question at the time the EEOC brought suit.  Nothing CVS cites in its Response shows otherwise.

CVS argues, interestingly, that although it might be “reasonable to believe that § 707(a) was ‘broader’ than patterns of discrimination,” EEOC cannot rely on that subsection because “[i]t is a grant of authority to the Attorney General” and not to the EEOC.  Resp. at 20.  But the Supreme Court has concluded otherwise.  In General Telephone, the Court explained that when Congress amended Title VII in 1972, it “transferred to the EEOC the Attorney General’s authority to bring pattern-or-practice suits on his own motion,” and following the transfer there was “no difference between the cases that the Attorney General can bring under section 707 as a ‘pattern or practice’ charge and those which the [EEOC is] able to bring.”  Gen. Tel. Co. of the NW, Inc. v. EEOC, 446 U.S. 318, 328 (1980) (internal quotation marks omitted).  Thus, even CVS acknowledges that if the EEOC had the same authority under Section 707(a) as the Attorney General to stop a “pattern or practice of resistance to the full enjoyment of rights” under Title VII, the belief that this authority reached beyond the power to stop discriminatory actions would be reasonable.  Given that this is how the Supreme Court has interpreted this language, the EEOC’s litigation position was clearly reasonable, albeit unsuccessful.

CVS further claims that the EEOC’s theory is inherently unreasonable because the EEOC cannot explain why Congress would have treated a subset of claims not involving charges of discrimination differently under Section 707(a).  Resp. at 22.  To the contrary, however, the EEOC carefully explained that the statute makes this distinction in providing for two paths to address employer practices: one focused on remedying discrimination against an individual or class of individuals, often involving make-whole or compensatory relief; and the other allowing the government to confront employer practices that pose a barrier to the exercise of rights under the statute, often requiring quick injunctive relief.  A.51-52, A.55-56, A.192-93, A.195.  Multiple circuit court opinions have drawn this distinction.  See, e.g., United States v. Allegheny-Ludlum Indus., Inc., 517 F.2d 826, 843 (5th Cir. 1975) (“It was unquestionably the design of Congress in the enactment of § 707 to provide the government with a swift and effective weapon to vindicate the broad public interest in eliminating unlawful practices, at a level which may or may not address the grievances of particular individuals.”); Serrano & EEOC v. Cintas Corp., 699 F.3d 884, 896 (6th Cir. 2012) (noting that “this is arguably the most logical interpretation of congressional intent given that the need for compensatory and punitive damages diminishes when the EEOC is not seeking compensation for a specific victim of discrimination”).  Again, there was nothing frivolous about this theory, even if this Court did not ultimately find it persuasive.

Quoting this Court’s conclusion that the EEOC’s interpretation of Section 707(a) would read Section 707(e) out of the statute, Resp. at 20, 22, CVS contends that, if accepted, the EEOC’s position would always allow the Commission to avoid conciliation.  But CVS exaggerates and misconstrues this Court’s opinion to argue the EEOC’s interpretation was unreasonable.  Under the EEOC’s argument, the Commission would need to engage in Section 706’s procedures (as noted in Section 707(e)) whenever the case involved a charge of discrimination, true in the vast majority of EEOC cases.  It would not have an incentive to “opt out” of the procedures to avoid conciliation in those cases, given that a jury trial and compensatory and punitive damages are available exclusively under Section 706.  See 42 U.S.C. §§ 1981a(a)(1), (c) (providing for compensatory and punitive damages and the right to a jury trial under § 706 but not § 707); Cintas, 699 F.3d at 896 (noting a diminished need for compensatory and punitive damages when the EEOC does not seek to compensate a specific discrimination victim).  It is only in the small number of cases involving a pattern or practice of resistance and not arising from a discrimination charge that the EEOC’s theory would come into play.

CVS cites a number of cases and several EEOC briefs that refer to the conciliation requirement in the context of Section 707 suits.  Resp. at 20-22.  But these cases and briefs all involved suits arising from a charge of discriminatory practices, a context in which it has always been clear that conciliation is required.  CVS similarly cites numerous cases discussing the use of Section 707 to stop discriminatory practices, Resp. at 38-39, but again, it is unsurprising that courts describe Section 707 as a tool to combat systemic discrimination in cases alleging systemic discrimination.  Nothing about these references suggests the EEOC knew or should have known that all section 707 suits require conciliation or that Section 707(a) exclusively applies to claims of discrimination and cannot also apply to other forms of resistance to Title VII rights.  In the same vein, CVS cites legislative history referring to the use of Section 707 in the discrimination context and EEOC briefs discussing the use of a “pattern or practice” evidentiary framework in discrimination cases, but none of this material indicates that Section 707(a)’s reference to a “pattern or practice of resistance” to Title VII rights refers exclusively to discrimination.  Before this litigation, no such case existed.  As such, it was an abuse of discretion to hold that the EEOC was unreasonable in pursuing its theory. 

CVS further contends that the EEOC’s stray reference to an unlawful employment practice in its complaint was somehow its basis for venue.  Resp. at 27.  As the EEOC has explained numerous times, however, its basis for both jurisdiction and venue did not turn on an allegation of an unlawful employment practice, from Ms. Ramos or anyone else.  See R.27 (EEOC Opp. to MSJ) at 20; EEOC Merits Opening Br. at 36-37 (A.62-63); EEOC Merits Reply Br. at 20 (A.210); R.65 (Opp. to Fees Mot.) at 11; R.28 (EEOC Opp. to CVS’s Rule 56 Statement of Facts) at 2 (“Disputed that the EEOC has alleged that CVS committed unlawful employment practices within the meaning of Title VII. … [V]enue is proper in this court under 42 U.S.C. § 2000e-6(b) because CVS has engaged in a pattern or practice of resistance to the full enjoyment of Title VII rights within this judicial district.”).  As the EEOC’s consistent, repeated explanations make clear, a Section 707(a) theory of a pattern or practice of resistance has been the basis for the EEOC’s suit from the beginning; CVS’s argument that this is somehow an eleventh-hour change of theory is obviously untrue.

Further supporting the reasonableness of the Commission’s theory is the fact that another federal court adopted it in its entirety in a published opinion after extensive analysis.  See EEOC v. Doherty Enters., Inc., 126 F. Supp. 3d 1305, 1310 (S.D. Fla. 2015) (“[S]ection 707 does not require the EEOC to receive a charge, nor does it require conciliation.  Moreover, section 707(e) provides that the EEOC must comply with the administrative requirements of section 706 (which includes engaging in conciliation) only when the EEOC is investigating or acting on a charge of discrimination.”).  CVS asserts that Doherty has no bearing on whether the EEOC’s theory was inherently unreasonable because it was “quite wrong.”  Resp. at 30 n.2.  To the contrary, a reasoned opinion from an Article III judge wholly adopting the EEOC’s theory is strong evidence that the theory was not “frivolous, unreasonable, or without foundation,” even if this Court ultimately disagreed with Doherty’s conclusion.  Christiansburg, 434 U.S. at 421.  CVS also contends that Doherty does not apply because the opinion did not consider the effect of the EEOC’s conciliation regulations.  Resp. at 30.  As explained in the Commission’s Opening Brief, however, the court in Doherty accepted the distinction the EEOC drew between Sections 706 and 707, agreeing that the EEOC could bring suit under Section 707(a) in the absence of a charge.  The regulations, which are predicated on the existence of a charge to be conciliated, did not apply to the court’s analysis.  This was not an inadvertent failure to “consider or address” the argument, as CVS would have it; instead, it is a rejection of the premise on which that argument is based.  See EEOC Opening Br. at 39-40.

In short, the EEOC’s theory was a fully plausible means of harmonizing the contrasting language in the various subsections of Sections 706 and 707 and the implementing regulations.  The EEOC pursued this case consistently with that theory, including in its extensive efforts to negotiate a resolution with CVS.  None of CVS’s arguments show that the EEOC’s case was frivolous, unreasonable, or without foundation when it was filed.  The district court’s award of attorneys’ fees — based on a regulation rendered inapplicable under the EEOC’s plausible theory— was therefore an abuse of discretion.

II.         The District Court Did Not Abuse Its Discretion in Concluding the Factual Basis for the EEOC’s Case Was Not Frivolous, Unreasonable, or Without Foundation.

CVS argues that the EEOC lacked a reasonable factual basis for its suit, relying principally on footnotes from the district court and this Court saying that an interpretation of the Separation Agreement to restrict contact with the EEOC would be “not reasonable” or “unreasonable.”  Resp. at 33.  But that is obviously not the same as saying the EEOC was unreasonable in filing suit.  When CVS made the same argument to the district court, relying on the same two footnotes, that court flatly rejected it.  The court explained, “[T]he fact that a plaintiff advocates an inference that the court declines to adopt does not lead to the conclusion that the plaintiff acted without foundation,” and concluded, “It cannot be said that the lawsuit was based on a frivolous factual premise.”  A.4 (quoting Sanglap v. LaSalle Bank, FSB, 194 F. Supp. 2d 798, 800 (N.D. Ill. 2002), aff’d, 345 F.3d 515 (7th Cir. 2003)).  This was clearly a decision within the district court’s discretion; indeed, CVS does not and cannot argue that this exercise of discretion constituted abuse.

CVS’s own description of the Separation Agreement supports the view that it was not unreasonable for the EEOC to think that the agreement might deter legally unsophisticated employees from exercising their Title VII rights.  CVS refers repeatedly to the “carve-outs” in the Agreement to argue that a reasonable employee could not be chilled by its provisions.  Resp. at 3, 7, 34.  But the need to resort to “carve-outs” is an implicit admission that, without additional clarification, the provisions on their face at least raise the question of the scope of an employee’s right to communicate with the EEOC and potentially create confusion.

CVS also chides the Commission for not identifying any employees who were actually chilled from communicating with the EEOC, but this issue is immaterial for several reasons.  First and foremost, the EEOC’s argument was that CVS’s use of the Agreement constituted a pattern or practice of resistance to Title VII rights because it “might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”  Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 68 (2006) (internal citations omitted).  The application of this objective standard did not turn on whether the EEOC identified individuals willing to testify about their subjective responses to it.  Thus, what CVS dismissively refers to as “the theoretical possibility” of the Agreement chilling employee behavior, Resp. at 35, is in fact the only possibility that matters in this litigation.  It is worth noting, moreover, that because the case was dismissed prior to discovery, it is unclear when the EEOC would have had an opportunity to identify any individuals whose communications were chilled.  Again, CVS presents no valid argument that the district court was wrong on this issue, let alone so unreasonable as to justify an affirmance on this alternate ground.

III.     The Amount of Fees Awarded Was Excessive.

Again, given the stringent Christiansburg standard and this Court’s admonition that such an award is appropriate only when, resolving all reasonable doubts in favor of the plaintiff, its claims were certain of losing at the time of filing, a fee award in this case is unwarranted.  See Christiansburg, 434 U.S. at 421; Tarkowski v. County of Lake, 775 F.2d 173, 176 (7th Cir. 1985); Ekanem v. Health & Hosp. Corp., 724 F.2d 563, 574-75 (7th Cir. 1983); Badillo v. Cent. Steel & Wire Co., 717 F.2d 1160, 1163-64 (7th Cir. 1983). Even if this Court concludes the fees were warranted, however, the nearly $308,000 the district court assessed was “facially excessive,” Guckenberger v. Boston Univ., 8 F. Supp. 2d 91, 100 (D. Mass. 1998), and “fundamentally wrong.”  Greviskes v. Univs. Research Ass'n, 417 F.3d 752, 758 (7th Cir. 2005).

CVS cites only three cases to support its claim that the time it spent litigating this case in district court was reasonable.  None is remotely comparable to CVS’s efforts here.  The plaintiffs in Serpas v. Schmidt prevailed on a summary judgment motion following extensive discovery, including at least eleven depositions, and ultimately secured a permanent injunction to enjoin multiple state practices that violated their Fourth Amendment rights.  1986 WL 7063, at *2 (N.D. Ill. June 17, 1986).  Greenfield Mills v. Carter involved “extensive summary judgment proceedings” in a complicated and fact-intensive Clean Water Act suit in which the plaintiff prevailed.  569 F. Supp. 2d 737, 753 (N.D. Ind. 2008).  In Lightfoot v. Walker, 826 F.2d 516 (7th Cir. 1987), the plaintiffs prevailed after fourteen years of class action litigation challenging unconstitutional prison conditions involving “massive discovery.”  Id. at 517, 520.  Notably, CVS cites no analogous fee awards for defendants prevailing on a motion to dismiss before discovery in a Title VII dispute.

CVS also cites only two cases in support of its argument that its time spent on the appeal “compares favorably to other cases.”  Resp. at 43.  Neither is similar to this case.  One, Illinois Migrant Council v. Pilliod, 672 F. Supp. 1072, 1074, 1076-80 (N.D. Ill. 1987), involved fees awarded to civil rights plaintiffs after “thirteen years of often hotly contested litigation” resulting in fundamental changes to INS policy regarding searches and arrests — obviously a far cry from CVS securing a right not to clarify language in its form Separation Agreements when the court granted its motion to dismiss.  The other appeal involved multiple summary judgment motions following discovery.  Given the complexity and extensive records involved in both cases, neither is comparable to the pre-discovery dismissal that occurred here. 

More egregiously, CVS neglects to mention that the court in Illinois Migrant Council reduced the requested fees for appellate work by nearly half, from 724.35 hours to 424.35 hours, in contrast to the more than 3,100 hours spent on the case in trial court, which the appeals court deemed reasonable.  Id. at 1083 (“[T]he total time for which compensation is sought — 3800 hours — is, in our judgment and experience, exceptionally reasonable for cases of the complexity, adversity and length of this case.”); id. at 1084 (“[T]he job [on appeal] should have been done in less time.  We conclude the time spent was excessive when viewed in the totality of the case.”). 

To support its excessive fees claim, CVS repeatedly refers to the “nationwide” nature of the suit and its “class-action style.”  Resp. at 2, 16, 32, 44, 47.  It also repeatedly refers to the risk of harm it faced if it lost.  Id. at 16 (“harm — both reputational and financial”), 32 (“potential downside risk”), 42 (“potentially enormous downside”), 49 (“the downside risk was huge”).  As explained above, however, the actual remedy the EEOC sought was exceptionally modest: an end to the use of potentially confusing language in CVS’s Separation Agreement, clearer language in CVS’s employment agreements going forward, clarification to employees of their right to communicate with the EEOC, training to ensure CVS management understood employee rights under Title VII, and the opportunity to exercise Title VII rights offered to anyone who may have been misled into forgoing them by the Separation Agreement.  The EEOC sought no monetary damages of any sort.  Ensuring employee familiarity with rights to which they are already entitled does not constitute a grave or extensive potential hardship on CVS.  Thus, even if CVS’s claims of enormous risk were relevant to its fee petition, CVS has produced no evidence that such danger existed.[4] 

CONCLUSION

For the foregoing reasons and the reasons stated in the EEOC’s Opening Brief, the judgment of the district court awarding attorneys’ fees should be reversed.

Respectfully submitted,

 

JAMES L. LEE

Deputy General Counsel

 

JENNIFER S. GOLDSTEIN

Associate General Counsel

 

LORRAINE C. DAVIS

Assistant General Counsel

 

/s/ Jeremy D. Horowitz

ELIZABETH E. THERAN

JEREMY D. HOROWITZ

Attorneys

U.S. Equal Employment

  Opportunity Commission

Office of General Counsel

131 M St. N.E., Room 5SW24J

Washington, D.C. 20507

(202) 663-4716

jeremy.horowitz@eeoc.gov

 

CERTIFICATE OF COMPLIANCE

I hereby certify that this brief complies with the type-volume requirements set forth in Federal Rules of Appellate Procedure Rule 32(a)(7)(B).  This brief contains 5,850 words, from the Introduction through the Conclusion, as determined by the Microsoft Word 2016 word processing program, with 14-point proportionally spaced type for text and footnotes.

/s/ Jeremy D. Horowitz

JEREMY D. HOROWITZ

Attorney

U.S. Equal Employment

  Opportunity Commission

Office of General Counsel

131 M St. N.E., Room 5SW24J

Washington, D.C. 20507

(202) 663-4716

jeremy.horowitz@eeoc.gov

 

Dated: September 13, 2017

CERTIFICATE OF SERVICE

I, Jeremy D. Horowitz, hereby certify that I electronically filed the foregoing brief with the Court via the appellate CM/ECF system this 13th day of September, 2017.  I also certify that the following counsel of record, who have consented to electronic service, will be served the foregoing brief via the appellate CM/ECF system:

Counsel for Defendant/Appellee:

Eric S. Dreiband

Jacob Moshe Roth

Jones Day

51 Louisiana Ave., N.W.

Washington, D.C. 20001

(202) 879-3720

esdreiband@jonesday.com

 

/s/ Jeremy D. Horowitz

JEREMY D. HOROWITZ

Attorney

U.S. Equal Employment

  Opportunity Commission

Office of General Counsel

131 M St. N.E., Room 5SW24J

Washington, D.C. 20507

(202) 663-4716

jeremy.horowitz@eeoc.gov