IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ________________________________________ No. 06-55110 & 06-55386 __________________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. ROBERT L. REEVES & ASSOCIATES, A Professional Corporation, Defendant-Appellee. _______________________________________________________ On Appeal from the United States District Court for the Central District of California No. CV-00-10515-DT _______________________________________________________ BRIEF OF PLAINTIFF-APPELLANT THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION _______________________________________________________ RONALD S. COOPER EQUAL EMPLOYMENT OPPORTUNITY General Counsel COMMISSION Office of General Counsel CAROLYN L. WHEELER 1801 L Street, N.W., 7th Floor Acting Associate General Counsel Washington, D.C. 20507 (202) 663-7049 DONNA J. BRUSOSKI Attorney TABLE OF CONTENTS PAGE TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . .i TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . .iv STATEMENT OF JURISDICTION . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE ISSUES . . . . . . . . . . . . . . . . . . . . . 2 STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . . . 2 1. Nature of the Case and Course of Proceedings . . . . . . 2 2. Statement of Facts . . . . . . . . . . . . . . . . . . . 3 a. Pregnancy Discrimination . . . . . . . . . . . . . . 5 b. Hostile Environment . . . . . . . . . . . . . . . . 7 c. The Investigation and Litigation . . . . . . . . . 26 d. The "Conspiracy". . . . . . . . . . . . . . . . . 32 3. District Court Decision . . . . . . . . . . . . . . . . 35 STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . 35 SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . . . . . 36 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 I. The Court Prejudiced the EEOC's Presentation of its Case Through Numerous Evidentiary Errors . . . . . . . . . . . . 38 A. The Court Erroneously Admitted Irrelevant Evidence . . 38 1. The Court Admitted Irrelevant and Prejudicial Evidence About the Administrative Investigation . . . . 38 2. The Court Admitted Irrelevant and Prejudicial Evidence Supporting the Defendant's "Conspiracy" Theory . . . . . . . . . . . . . . . . . . . . . . . . 42 3. The Court Admitted Irrelevant and Prejudicial Evidence It Should Have Excluded under Fed. R. of Evid. 412 . . . . . . . . . . . . . . . . . 49 4. The Court Admitted Irrelevant and Prejudicial Evidence that Other Women Were Not Offended or Were Not Sexually Harassed . . . . . . . . . . . . . 52 B. The Court Erroneously Excluded Relevant Evidence . . . 55 1. The Court Improperly Excluded Relevant Background Evidence That Would Have Supported the Commission's Pregnancy Discrimination Claim . . . . 55 2. The Court Improperly Excluded Relevant Evidence of Harassing Incidents Victims Learned of Second-Hand 56 3. The Court Improperly Excluded Relevant Evidence of Leering . . . . . . . . . . . . . . . . . . . . . . 61 II. The District Court Abused its Discretion in Awarding Fees under Title VII . . . . . . . . . . . . . . . . . . . . . . 62 A. The EEOC's Action Was Not Frivolous, Unreasonable or Without Foundation . . . . . . . . . . . . . . . . 63 B. The EEOC's Investigation and Reasonable Cause Determination Do Not Support a Fee Award . . . . . . . 73 C. The EEOC's "Litigation Conduct"Does Not Support a Fee Award . . . . . . . . . . . . . . . . . . . . . . . . . 75 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . 80 STATEMENT OF RELATED CASES CERTIFICATE OF COMPLIANCE APPENDIX CERTIFICATE OF SERVICE TABLE OF AUTHORITIES CASES B.K.B. v. Maui Police Department, 276 F.3d 1091 (9th Cir.2002)35, 50, 51 Barry v. Fowler, 902 F.2d 770 (9th Cir. 1990). . . . . . . 62, 68 Carter v. Chrysler Corp., 173 F.3d 693 (8th Cir. 1999) . . . . 60 Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978) 35, 62, 64 Dominguez-Curry v. Nevada Transport Department, 424 F.3d 1027 (9th Cir. 2005) 59 EEOC v. Astra USA, Inc., 94 F.3d 738 (1st Cir. 1996) . . . . . 77 EEOC v. Bruno's Restaurant, 13 F.3d 285 (9th Cir. 1993)35, 62, 64, 66, 72, 75 EEOC v. Caterpillar, Inc., 409 F.3d 831 (7th Cir. 2005).39-40, 65 EEOC v. Keco Industries, 748 F.2d 1097 (6th Cir. 1984) . . . . 40 EEOC v. Waffle House, Inc., 534 U.S. 279 (2002). . . . .47, 76-77 Ellison v. Brady, 924 F.2d 872 (9th Cir. 1991) . . . . 53, 54, 59 Georator Corp. v. EEOC, 592 F.2d 765 (4th Cir. 1979) . . . . . 39 Harris v. Forklift Systems, Inc., 510 U.S. 17 (1993)53, 54, 59, 60, 61, 69 Hughes v. Rowe, 449 U.S. 5 (1980). . . . . . . . . . . . . . . 67 Leibovitz v. New York City Transit Authority, 252 F.3d 179 (2d Cir. 2001).60 McDonnell Douglas v. Green, 411 U.S. 792 (1973). . . . . . . . 39 National R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002) . 68 Obrey v. Johnson, 400 F.3d 691 (9th Cir. 2005) . . . . 35, 42, 56 Richardson v. United States, 841 F.2d 993 (9th Cir. 1988). . . 63 Sheffield v. Hilltop Sand & Gravel Co., 895 F.Supp. 105 (E.D. Va. 1995)62 TABLE OF AUTHORITIES CASES PAGE Socks-Brunot v. Hirschvogel, Inc., 184 F.R.D. 113 (S.D. Ohio 1999)50, 51, 52 Steiner v. Showboat Operating Co., 25 F.3d 1459 (9th Cir. 1994)62, 69 Stoll v. Runyon, 165 F.3d 1238 (9th Cir. 1999) . . . . . . . . 62 Swinton v. Potomac Corp., 270 F.3d 794 (9thCir. 2001) . . . . 59 United States v. Brown, 562 F.2d 1144 (9th Cir. 1977). . . .58-59 United States v. Dickens, 775 F.2d 1056 (9th Cir. 1985). . 45, 46 Upjohn Co. v. United States, 449 U.S. 383 (1981) . . . . . . . 79 Virk v. INS, 295 F.3d 1055 (9th Cir. 2002) . . . . . . . . . . 45 Wolak v. Spucci, 217 F.3d 157 (2d Cir. 2000) . . . . . . . . . 52 Woods v. Graphic Communications, 925 F.2d 1195 (9th Cir. 1991) 59 Wynn v. NBC, 234 F. Supp.2d 1067 (C.D. Cal. 2002) . . . . . . 45 Yamaguchi v. U.S. Department of the Air Force, 109 F.3d 1475 (9th Cir. 1997) 62 STATUTES and RULES 28 U.S.C. § 1291 . . . . . . . . . . . . . . . . . . . . . . . .2 28 U.S.C. § 1331 . . . . . . . . . . . . . . . . . . . . . . . .1 28 U.S.C. § 1345. . . . . . . . . . . . . . . . . . . . . . . . 1 28 U.S.C. § 1920 . . . . . . . . . . . . . . . . . . . . . . . .3 29 U.S.C. § 215(a)(3) . . . . . . . . . . . . . . . . . . . . 77 42 U.S.C. § 2000e, et seq . . . . . . . . . . . . . . . . . . .1 42 U.S.C. §2000e-5(f)(3) . . . . . . . . . . . . . . . . . . . .1 TABLE OF AUTHORITIES STATUTES and RULES PAGE 42 U.S.C. § 2000e-5(k) . . . . . . . . . . . . . . . . . . . . 36 Fed. R. App. P. 4(a)(1)(B) . . . . . . . . . . . . . . . . . . .2 Fed. R. Evid. 401. . . . . . . . . . . . . . . . . . . . . 44, 47 Fed. R. Evid. 402 . . . . . . . . . . . . . . . . . . . . 44, 47 Fed. R. Evid. 403. . . . . . . . . . . . . . . . . . . . . 47, 58 Fed. R. Evid. 404. . . . . . . . . . . . . . . . . . . . . 45, 47 Fed. R. Evid. 608 . . . . . . . . . . . . . . . . . . . . 45, 47 Fed. R. Evid. 412 . . . . . . . . . . . . . . . . . . . . .2, 49 Fed. R. Evid. 412(b)(2) . . . . . . . . . . . . . . . . . . . 50 Fed. R. Evid. 802 . . . . . . . . . . . . . . . . . . . . . . 58 Fed. R. Evid. 803 (2), (3) . . . . . . . . . . . . . . . . . . 58 MISCELLANEOUS Weinstein & M. Berger, Weinstein's Evidence ¶ 801(c) [01], at 801-77 (1987) 58 Rule 412, Advisory Committee Notes . . . . . . . . . . . . . .50 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ________________________________________ No. 06-55110 & 06-55386 _________________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. ROBERT L. REEVES & ASSOCIATES, A Professional Corporation, Defendant-Appellee. STATEMENT OF JURISDICTION a. The Equal Employment Opportunity Commission ("EEOC" or "the Commission") sued Robert L. Reeves & Associates ("Reeves") under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq., alleging pregnancy discrimination and sexual harassment against a class of female former employees. The district court had jurisdiction under 42 U.S.C. § 2000e-5(f)(3), and 28 U.S.C. §§ 1331 and 1345. b. The jury returned its verdict on November 2, 2005, and the court entered final judgment against the EEOC on November 17, 2005. RE1017.<1> On January 13, 2006, the court awarded attorneys' fees and expenses to Reeves (RE1035), and on January 17, 2006, it awarded costs to Reeves (RE1052). On January 20, and March 13, 2006, the EEOC timely appealed. Fed. R. App. P. 4(a)(1)(B). RE1054-59. e. This Court has jurisdiction over these judgments. 28 U.S.C. § 1291. STATEMENT OF THE ISSUES 1. Whether the district court committed reversible error in admitting irrelevant and prejudicial evidence, including: evidence of the scope and conduct of the EEOC's administrative investigation; evidence of Reeves' "conspiracy" theory to explain the EEOC's lawsuit; evidence covered by Fed. R. Evid. 412; and evidence that other women at the firm were not offended by Reeves' conduct or did not believe they were sexually harassed by Reeves. 2. Whether the district court committed reversible error in excluding relevant evidence at trial, including: background testimony of former alleged victims of pregnancy discrimination; evidence of harassing incidents victims learned of second-hand; and evidence of Reeves' leering at women. 3. Whether the district court abused its discretion in awarding attorneys' fees against the EEOC. STATEMENT OF THE CASE 1. Nature of the Case and Course of Proceedings The EEOC sued Reeves for pregnancy discrimination and sexual harassment against a class of female former employees. RE1. In 2001 and 2002, the district court granted Reeves' motions for summary judgment (RE42, 74), dismissed the EEOC's case (RE88), and awarded fees and costs to Reeves (RE123). The EEOC appealed and this Court reversed, remanded for trial on the pregnancy and harassment claims, and vacated the attorneys' fee award. See Appendix to brief. On remand, the district court denied defendant's motion to dismiss, holding that the EEOC had satisfied all jurisdictional prerequisites to suit, and it denied defendant's motion for summary judgment on the affirmative defense of laches. RE210. The court specifically rejected defendant's arguments that the investigation and conciliation were inadequate. RE225-233. After an eleven-day trial, the jury returned a verdict for Reeves (RE1013), and the court entered judgment accordingly (RE1017). The court awarded attorneys' fees to Reeves in the amount of $995,780.72, expenses not taxable as costs under 28 U.S.C. § 1920 in the amount of $29,872.97 (RE1035), and costs in the amount of $7,234.49 (RE1052). 2. Statement of Facts Robert L. Reeves founded Reeves & Associates, a law firm specializing in immigration law, and he made all ultimate employment decisions. In August 1997, Judith Quilaton filed an EEOC charge against the firm, alleging Reeves fired her because she was pregnant. RE740. Reeves said he fired Quilaton<2> because of performance problems. RE805. Investigator Deborah Kinzel-Barnes asked for documentation and Reeves assigned Colin Greene as her contact. RE740. Kinzel-Barnes identified two other pregnant employees who were fired–Deanna Saez and Rowena Silva. RE743, 745-46, 296-97. Based on the evidence, Kinzel-Barnes concluded that the reasons given for the terminations were questionable, and decided it was more likely than not that the women were fired because of pregnancy. RE805-08. Before the EEOC issued a cause finding on the pregnancy charge, Kinzel-Barnes received an anonymous call suggesting she should look into Reeves' sexual harassment of female employees. RE747. The caller said she was afraid to file a charge (RE747-49), but provided names of other individuals she thought had been harassed, and indicated that Daniel Hanlon and Colin Greene could provide information about harassment (RE751-52). Kinzel- Barnes sent a letter to Reeves in August 1999, telling him that the EEOC was investigating a sexual harassment claim. RE813, 815. Reeves denied the allegations. RE804. Kinzel-Barnes was directed to interview Hanlon, Greene, and Nikki Jacobson, the anonymous caller, to investigate the harassment allegation. RE753. Greene and Hanlon substantiated Jacobson's allegations of a sexually hostile work environment. RE760, 763, 809-10. On June 30, 1999, Jacobson told Kinzel-Barnes that Hanlon and Greene had quit Reeves' firm. RE751-52. Hanlon mentioned he and Reeves were in litigation, but Kinzel-Barnes did not think it relevant to the sexual harassment or pregnancy discrimination allegations. RE757-59, 776. Kinzel- Barnes testified she made a cause recommendation on the harassment claim because she believed it was more likely than not that the harassment was severe or pervasive, given that the harasser was the owner of the firm, his comments were frequent, and a number of people were affected. RE774. a. Pregnancy Discrimination Reeves hired Saez to work as a receptionist (RE609-10, 613); she was a good worker (RE625-26, 832), but Reeves fired her after he learned that she was pregnant (RE619-20). Reeves explained that (1) she was only hired temporarily until she paid her legal fees and was let go when she did (RE425-26), and (2) she was let go because she refused to make photocopies and her supervisor, Anna Reyes, had to work overtime as a result (RE427, 434-35, 837-41). Reeves' asserted reasons for firing Saez were contradicted by the information he submitted to a state disability insurance agency in May 1997, stating that Saez was terminated because of "illness, injury or pregnancy." RE428-32, 944. Saez testified that Reeves' reasons were untrue. She would not have accepted a job that lasted only temporarily until she paid off her legal fees because by that point her pregnancy would be "showing." RE612-13. She was three months pregnant, but not "showing," when Reeves hired her, and she was six months pregnant when he fired her. RE611-12, 625. In addition, Reeves did not tell Saez she was being laid off because she had paid her legal fees. RE621, 434-35. Indeed, Saez continued to work for about three weeks after having paid her legal fees. RE620-23. Saez's job duties included primarily greeting clients, answering the phone, and photocopying one to two hours a day (RE613-14), and evidence was presented that Saez never refused to make photocopies (RE624-25), but that her supervisor, Reyes, voluntarily assumed that task (RE846-48). Undisputed evidence showed that one receptionist was always needed at the front desk, to greet clients and answer telephones. RE613-14, 618, 834, 845-46, 848. The EEOC also introduced evidence of Reeves' negative treatment of other pregnant women. For example, while receptionist Silva was visibly pregnant, she was stationed at a desk out of sight of the incoming clients. RE614-19. The EEOC sought to introduce testimony from Silva and Quilaton about Reeves' attitude towards them when they were pregnant. This included evidence that Reeves' conduct toward Silva went from complimentary and flirtatious to hypercritical once her pregnancy became apparent (RE402-405, 850-52), and that Quilaton was fired shortly after passing her probationary period, when she began wearing maternity clothes (RE296). The court excluded testimony from Quilaton and Silva on the ground that summary judgment had already been granted, and not appealed, on their claims of pregnancy discrimination. RE402-405, 1117. The court refused to allow Silva to testify about the change in Reeves' conduct toward her even after admitting evidence that Reeves had been very nice to Marita Jurado, another employee, when she was pregnant (RE850-52), and that a number of Reeves' employees, including Silva, took maternity leave or were otherwise provided leaves of absence (RE886, 903-06, 915). The court also issued instructions that the jury was not to consider that Quilaton filed a charge of discrimination because she was terminated for legitimate, non- discriminatory business reasons (RE942-43), and that neither Quilaton nor Silva was discriminated against on the basis of pregnancy (RE943). b. Hostile Environment In support of the harassment claim, the EEOC presented, or sought to present, testimony of five women for whom the EEOC sought relief in this suit, of three other women who had worked for Reeves, and of Reeves himself. The court refused to allow the EEOC to present evidence of Reeves' conduct the women learned of second-hand and evidence of Reeves' leering at women. Further, the court admitted extensive testimony from women who were not offended by any conduct Reeves directed toward them, as well as evidence about alleged deficiencies in the EEOC's investigation and about an alleged conspiracy to damage the Reeves firm as the motive for this suit. Nadia Preciado Preciado, who worked for Reeves as a file clerk and, later, a receptionist (RE535-36), testified that: Reeves referred to his wife as a "bitch" (RE540- 41); Reeves told jokes that involved sexual acts or parts of a woman or man, including one she specifically remembered involving Santa and Mrs. Clause and lingerie, which she thought was inappropriate for a boss to tell an employee (RE538, 541-44); other women told Preciado about Reeves' conduct toward them, including comments about their legs (RE538-39); and Reeves asked Preciado whether her children had the same father (RE539-40). Preciado testified that she was offended by and felt uncomfortable about Reeves' conduct and comments. RE539-40, 552-53, 558-63. Preciado avoided Reeves but never complained because she did not want to lose her job. RE545-46. She resigned as "a way of getting out" of Reeves' firm. RE551. The court asked Preciado whether the EEOC had coached her on what to say. RE547. The court rejected the EEOC's offer of proof that: Preciado would testify that Reeves stared at her "a lot," "not in a normal way," from "head to toe;" that the stares would last for more than a few seconds; and that she would often turn around and catch Reeves staring at her, and he would grin. RE374. Preciado would also have testified to a specific instance when Reeves was staring at a female client's back side with his head crooked sideways, which shocked her, and that he looked at women "like he's a pervert." RE374. The EEOC also provided an offer of proof that Preciado would testify that Jacobson told her about harassing events. RE374. Clarice "Fang" Liao Liao, whose first attorney job was with the Reeves firm (RE511), testified that: Reeves made constant jokes about sex, penises, erections and Viagra (RE521-23, 527-29); Reeves remarked to Liao that it was "too bad [the firm] wouldn't be getting X-rated [cable] channels" (RE519-20); Reeves asked Liao to dance at a conference in Houston, gyrating his hips in front of her in a sexually suggestive way, which made her believe he was trying "to come on" to her (RE514- 19, 533); and Reeves looked at her and told her that she was "looking very beautiful" (RE514). In addition, Jacobson testified that she observed Reeves' attempt to dance with Liao at the Houston conference and Liao's discomfort. RE662-69. Coworker Maureen Rodriguez also testified that she observed Liao's reaction after this incident: Liao came back to the hotel room very upset, close to tears, and told Rodriguez that Reeves had been making advances. RE732. Rodriguez also testified that the three women discussed ways to avoid Reeves, and stay together, at the conference. RE731. However, when Liao was testifying about Reeves' conduct toward her at the Houston conference, the court questioned her reactions. RE517-18 (the court asked "Did he touch you in any way?" and "Did he force himself on you at any - - in any way?"; to which Liao responded, "No."). Liao testified that she was offended by Reeves' comments, jokes, and conduct.<3> Specifically, she thought the X-rated channel comment was inappropriate from her boss (RE519-20), she found a joke about a Japanese golfer bending down with a fax coming out of his ass "very repulsive" and "graphic" (RE522-23), and she testified, "What offended me most was the constant stream of jokes" (RE527). Liao also testified that she tried to avoid Reeves as much as possible, and she came into the office early, and used the back door during the work day, to avoid Reeves. RE525-26. Liao testified that Reeves' conduct made her so upset that when she went home she cried. RE523-24. However, sustaining a defense objection on the basis of relevance, the court did not allow Liao to answer whether she felt comfortable being in the office alone with Reeves (RE525), nor Jacobson to testify about statements Liao made to her about how Liao felt about the way Reeves treated her (RE669-70). Notwithstanding the above testimony, the court asked Liao whether the EEOC had told her she was sexually harassed. RE512-13. The court also noted Liao's use of the phrase "personal space" when testifying, and questioned whether the EEOC put words in her mouth (RE517). The court did not permit Liao to testify about Reeves' conduct that she learned about second-hand. RE527. The EEOC's offer of proof stated that Liao would testify that during her employment with defendant, she heard that Reeves had sex at the office with a firm client. RE374. Jeanette Catuira (Suarez) Catuira, who was in her early twenties at the time, worked as a secretary and, then, paralegal for Reeves. RE494. Catuira described an incident when Reeves brushed his body against hers in the hallway while she was making photocopies. She testified that: Reeves said something like, "this is why I put the photocopy machine here for some body bumping" as he brushed the front of his body against her back, moving more slowly than Catuira felt necessary, even though he could have walked around in another direction without touching her (RE498-503, 508-10). She also testified that Reeves asked another attorney if anything sexual had happened on his date (RE495-97).<4> Catuira testified that Reeves' behavior and comments made her feel uncomfortable, and that she "felt violated" by the copy machine incident (RE497-504). The court excluded some of Catuira's testimony, rejecting the EEOC's offer of proof that: "Reeves looked at [Catuira] from head to toe, ‘checking her out,' and when he saw her in his peripheral vision, he would turn his head to watch her. This happened at least 5 times, maybe 10 but probably not 20 times in [a] span of about 10 months." RE374. The EEOC also made an offer of proof about sexual jokes and inappropriate comments: "Reeves made unwelcome and inappropriate sexual jokes and comments in [Catuira's] presence from about a half dozen times." RE374. The EEOC's offer of proof about Reeves' comments/conduct that Catuira learned of second-hand stated: Latman told Catuira that Reeves told Latman, "You look healthy today" while looking at her chest, and Latman was "grossed out" by that. RE374. The court also admitted evidence, over the EEOC's objection (RE280), that Catuira had dated Hanlon while working for Reeves (RE 447).<5> Lisa Wilkerson (Pullin) Wilkerson, who worked for Reeves as a receptionist and, later, office coordinator (RE449-50), testified that: Reeves touched her inappropriately once or twice, moving his hand slowly down her back and once patting her butt (RE451-52, 458-61, 478-87, 498- 90); she overheard Reeves make the comment about another woman, "she gives good head," (RE463-67, 489); and Reeves suggested several times that Wilkerson wear shorter skirts and tighter blouses (RE453). Wilkerson testified that she was offended by Reeves' behavior and comments, which made her feel uncomfortable and demeaned, and she tried to avoid him; however, she did not complain because he was the boss and she was afraid of repercussions. RE451-455, 459-61, 465-469, 475. She felt violated by the touching incidents. RE451, 459. Although she liked her job before these incidents, she did not want to go to work afterwards (RE462), and she sent out her resume, looking for other jobs, but received no offers (RE471- 72, 492). The court excluded proffered testimony that many secretaries told Wilkerson that "sexual favors were performed for Mr. Reeves" and that Reeves would sometimes look Wilkerson up and down. RE374. The court also did not allow Wilkerson to testify about how she would describe the work environment after she was promoted to office coordinator (she called it "hell" at deposition). RE473. However, the court allowed testimony that Wilkerson had worked at Frederick's of Hollywood, a lingerie store, prior to working at the Reeves firm. RE476-77. Nikki Mehrpo Jacobson Jacobson worked as an attorney for the Reeves firm for over a year, and after she quit the firm, she took several deportation cases to trial at Reeves' request. RE627-28, 677. Jacobson testified that: while they were looking in a catalog for a new conference table, Reeves commented to Jacobson, "Wouldn't it be . . . a great table to have sex on?" with a big smile on his face (RE635); when the table was delivered, Reeves said it would be nice for a candle-lit dinner and he would bring the champagne, to which Jacobson responded, "only if we can bring dates" and Reeves said, "only if you don't tell my wife" (RE638-39); when she was looking for an over-the-counter pain medicine for a headache, Reeves showed Jacobson some condoms from his office desk and told Jacobson his son called them "Kennedy's" (RE629-31). Jacobson also testified that Reeves commented after a boating injury, "I hurt all over except one place" or "except my organ" or something like that and "lucky for you I don't hurt in that place" (RE660-62);<6> at happy hour one evening, when Jacobson declined another drink, Reeves commented, "Don't worry. I'll give you a ride home, and I have even taken my Viagra for tonight." (RE644); Reeves joked to Jacobson and another attorney, Nancy Miller, that men with small briefcases have small dicks (RE640-42); Reeves asked about Jacobson's date, saying, "I want to know who my competition is" (RE632-33); Reeves stated at an office meeting that women could not be both smart and beautiful (RE632). Jacobson testified that Reeves stated that he would keep a male assistant around for a little while "even though he doesn't have boobs" (RE645-46); Reeves commented twice about Jacobson's breasts: once, after her biopsy, he said "they're still big enough" or "large enough" (RE673-74), and the other time, in her office, he said something like "oh, look at those" while staring at her chest (RE650-54); Reeves told Jacobson sexual jokes (RE629, 656-58); Reeves hugged Jacobson in a way that made her uncomfortable (RE670); Jacobson witnessed Reeves' attempt to get Liao to dance with him at the Houston conference (RE662-70); and she witnessed Reeves put his hand on Liao's and tell her, "I've never noticed how beautiful you are" and "You're going to go far in this firm" (RE664-65). The court questioned Jacobson about this testimony. RE664-65 (Q: You saw him put his hand on Liao's hand? You saw this? A: Yes); RE666-67 (questions about how long Reeves left his hand on Liao's hand and Liao's reaction). Jacobson testified that: Reeves' sexual innuendo embarrassed her and made her feel awkward and upset (RE631, 667, 642, 653); she was offended by the sexual jokes Reeves told in the office (RE657-58); and his conduct made her scared, stressed, anxious, depressed, and she had trouble concentrating (RE713- 14). Jacobson testified that after Reeves made the "lucky for you" comment following his boating injury, she was getting more and more scared of him. RE662. She told her mother and law school friends about Reeves' sexual comments, jokes, and hugs, which upset her enough to make her cry. RE672-73. Jacobson decided to leave Reeves' firm when she learned her "buffers," Greene and Hanlon, were leaving, because she did not want to deal with Reeves directly on her cases. RE674-75. Although Jacobson highlighted the firm's sexual harassment policy and put it in Reeves' box anonymously (RE684-86, 711-12), she did not talk with Reeves about the subject because he was the boss and she was too afraid of him (RE684, 711), and she thought she would lose her job (RE685). Jacobson did call the EEOC's investigator, anonymously, about Reeves' sexual harassment in June 1999. RE707. She did not discuss the sexual incidents with Reeves when she gave her two-weeks notice, because she was scared of him and wanted to leave without dealing with the issues. RE676. However, she agreed to continue working for Reeves' clients on deportation cases until the fall of 1999, because she was able to reduce the amount of time she had contact with Reeves to a few hours a week. RE627-28, 677-78. The EEOC was barred from introducing evidence that Reeves watched Jacobson intently and leered at her. The EEOC's offer of proof set forth that Jacobson would have testified: Every time she wore her red suit, he would look her up and down in a "looky kind of way that you go, ‘God, stop doing that.'" RE374. Although Rodriguez testified that she saw Reeves watch Jacobson intently and then comment about how her body looked in a gray suit (RE726-27), the court struck the testimony about Reeves' comment as a "characterization" (RE727). The EEOC was also barred by the court's ruling on motions in limine from introducing evidence of events that Jacobson learned of second-hand. The EEOC's offer of proof provided: Jacobson learned through other women that Reeves told "off-color" jokes and made sexual comments to other female employees; Preciado, Liao, "Joyce," and "Sarah" discussed Reeves' making comments to them in groups in which Jacobson was present; Preciado told Jacobson about the way Reeves looked at her and the comments he made; other women, including Arai and Liao, came to Jacobson and said, "Reeves told me this joke" and it was the same joke Reeves had told Jacobson; Jacobson was told that Reeves was having sexual relations with Yindi Boetcher in the office on a Sunday when Frank Nelson came to work, and Jacobson avoided coming into the office to work on Sundays as a result. RE374. Over the EEOC's objection (RE280), the court allowed testimony about Jacobson on the following subjects: (1) Jacobson swore in the office. RE605, 654-56, 830, 862-63, 866, 887-88, 891. Reeves testified that he reprimanded Jacobson for one incident of swearing in front of two clients and another incident of swearing in the office (which Jacobson denied), and also testified that she swore outside of the office as well. RE893-94. (2) Jacobson received a gift basket in the office from an admirer and the basket contained pasta in the shape of penises and breasts. RE531. Yet, the court sustained objections to questions whether she welcomed the gift basket or, rather, was surprised and embarrassed by it. RE649-50. (3) Jacobson engaged in sexual discussions with coworkers; specifically, she once had a conversation with a coworker about another coworker's "getting laid" (RE691-92), and she had another conversation with a coworker in which she compared their breasts (RE830). (4) Jacobson did undergraduate research on the effect of AIDS on college students' sexual behavior. RE692-94. (5) Jacobson wore blouses that others thought were too tight across the bust, showing her bra (RE573-74, 595), or cleavage (RE887). Clarissa Jamir Belmonte testified that Jacobson told her Reeves commented on the size of her breasts (RE858), but it was really about his appreciating the low cut of her blouse, a reaction Jacobson did not want from him (RE859-60, 864-65). (6) Jacobson used the word "breast" to Reeves when telling him that she needed time off for a biopsy (RE895), and, once, at a happy hour with a group from the office, including Reeves, she complained about a date with a man who kept staring at her breasts, instead of her face, and said that he "wanted to get laid on the first night." RE895-96. (7) Jacobson and Greene dated one another from December 1998 to about September 1999. RE671, 897-98.<7> Maureen Rodriguez Rodriguez worked as an attorney for the Reeves firm for a year (RE717), and testified that Reeves often made sexual jokes and comments at Monday morning staff meetings, almost at every meeting, and she tried to avoid these meetings (RE718- 19). Rodriguez saw Reeves stand too close, leaning into one woman in the office. RE720-21 ("bodies brushing"). Rodriguez also testified that office support staff discussed Reeves' behavior with her, and one young woman was upset because she felt Reeves was making sexual advances toward her, standing too close, and hovering. RE722-24. Rodriguez did not talk to Reeves about this because she did not think it would help, and she feared retaliation. RE723-24. In addition, Rodriguez testified that Reeves commented to her about Jacobson's, Liao's, and Nancy Miller's physical attractiveness (RE724-25); and Reeves commented on Jacobson's breast size, her appearance, and how it added to the attractiveness of the office (RE725-27). Rodriguez also testified that Jacobson told her about Reeves' sex-on-the-conference-table comment, which upset Jacobson, and they discussed ways to avoid being alone with Reeves. RE728-29. Rodriguez attended the Houston conference with Jacobson and Liao. RE730. On the first night, when Reeves commented on Liao's physical attractiveness and said she could go far in the firm, Rodriguez testified that Liao was upset and pulled back. RE730-31. However, Rodriguez was not permitted to testify whether she was offended by Reeves' conduct towards Liao. RE731. The three women discussed ways to avoid Reeves, and to stay together, at the conference. RE731. On the last night of the conference, Liao came back to the hotel room very upset, close to tears, and told Rodriguez that Reeves had been making advances. RE731-32. Rodriguez testified that: she did not complain to Reeves, because he displayed inappropriate behavior and it was acceptable to him; she thinks he intended to do exactly what he was doing; he did it throughout the office and was not going to change his behavior; it was not just one person, one incident; and she did not remember names because it was too many years ago. RE733-34. Rodriguez testified that although she did not feel she had been sexually harassed, she was uncomfortable and disappointed with the abusive attitudes. RE738. She further testified that "it was to be expected at any moment that there would be inappropriate behavior" and "we never knew when the inappropriate times would arise." RE735-38. Miwi Arai Reeves offered Arai her first job as an attorney after law school and she worked for him for over three years. RE564-565. Arai testified that Reeves made inappropriate comments to her. RE567-68. She testified to an incident, during a happy hour at the Peppermill, when Reeves invited her to share a hot tub and have a threesome with his wife. Id. Although Arai thought Reeves was joking and she was not offended, she believed the comment was inappropriate because he was her employer and had a position of power over her. Id. Arai also testified that Reeves told jokes at Monday morning staff meetings. RE569. Although Arai testified that she was not offended, she explained that she "has a pretty tough skin" and "isn't easily offended." RE579. However, Arai also testified that she did not think jokes involving sexual content were appropriate; "in a professional workplace, you shouldn't have to be subjected to things that . . . make you feel uncomfortable." RE571. The court did not allow Arai to testify that Jacobson or Liao told her about offensive comments by Reeves. RE566-67. However, the court did admit Arai's deposition testimony that she thought Reeves "probably" did not intentionally mean to violate the sexual harassment policy. RE576. Nancy Miller Miller is an attorney who has worked for Reeves since 1998. RE585-86. At the time of trial, she was one of the firm's sexual harassment officers; she received sexual harassment training in 2000 or 2001, after this lawsuit was filed. RE586, 597, 600. Miller was with Jacobson in Reeves' office when he made the comment to Jacobson comparing penis size with briefcase size. RE587-87a. Miller testified that she was surprised by the comment, not offended, but she thinks it was a dumb joke and not the best joke to tell a female subordinate. RE588. She testified that Jacobson looked surprised by Reeves' comment and left the room. RE588-89. Miller also testified that Jacobson came out of her office one day and said she was leaving, she could not take it anymore; this was after Reeves' "lovely view" comment to Jacobson. RE590. Miller testified that Jacobson assumed Reeves' comment was referring to her breasts, and Jacobson was angry. RE590-91. Miller acknowledged that Reeves told sexual jokes on occasion. RE593-94. She specifically recalled that he made a joke at a party and a joke about Viagra. RE591-92. Opinions of other female employees Over the EEOC's objection, the court allowed women to testify that they were not offended or did not feel sexually harassed by Reeves. RE269a. Arai testified that Reeves' conduct towards her did not offend her and that she was a "reasonable person." RE572, 579. Miller testified that she was not offended by Reeves' jokes, that she was a reasonable woman, and that she did not find the environment hostile or abusive. RE596-97, 599.<8> Latman testified that she never felt she was sexually harassed by Reeves. RE828-29, 831, 835-36. Reyes testified that she never felt sexually harassed (RE842-43), as did Clarissa Jamir Belmonte (RE862), Margaret Eum (RE867), Maria Marcelo (RE883-85, 889-90), Sharon Chen (RE914), and Jackie Phan (RE916-17). In addition to allowing the above testimony from non-class members that they did not feel harassed, the court excluded evidence from a non-class member that she was offended by Reeves' comments. Specifically, it precluded testimony from witness Margaret Eum (RE874-75) on the ground that her reaction is not relevant because she is not a claimant (RE 880-82) (jury present). The EEOC made an offer of proof, stating that Eum would have testified: that Kevin Garcia told Eum that Reeves said if a client was unable to pay, then maybe Reeves should ask the client to have his wife give Reeves a blow job; that because of the environment at the firm, and the comments Reeves made about women, the consensus among female staff was "don't be alone with Mr. Reeves." RE374. The offer of proof also set out that Eum would have testified that Reeves engaged in sexual innuendo. RE374. However, when called as a defense witness, Eum testified that during her job interview, Reeves said to Hanlon, "This one's a looker," referring to Eum, and she thought the comment was inappropriate. RE873a- b. Eum also testified that she attempted to avoid Reeves and did not want to be alone with him. RE873b-c. Reeves' Testimony Reeves himself admitted to telling a few jokes of a sexual nature in the workplace. RE437. He admitted to repeating a joke–cigars have a new warning label: not for vaginal use–but did not recall how many times he repeated the joke. RE411-13. Reeves also admitted making jokes about Viagra when it first came out, including a joke about a man who took a Viagra pill that got stuck in his throat so he had a stiff neck all night (RE413-14); Reeves testified, "I don't think that's an inappropriate joke; I think an occasional joke in the office is good for morale" (RE414). Reeves testified that he told "a few" jokes of a sexual nature at staff "happy hours" and at work, but he did not tell "offensive" jokes and he told them only to those employees who shared jokes with him. RE419-22, 437. When Reeves acknowledged regularly inviting attorney-employees to happy hour on Friday nights (RE418-19), the court asked several questions about whether the happy hour was in a restaurant or in the law firm (RE419). Although Reeves admitted that he may have told jokes of a sexual nature at these happy hours (RE419-20), he testified, "I never told any of the claimants a joke of a sexual nature inside the workplace."<9> (RE420). However, he admitted that female employees were present when he told jokes of a sexual nature in the workplace, but the jokes were not improper. RE420-21, 423. Evidence of sexual liaison in the office The court excluded evidence that Reeves engaged in a sexual liaison in the office one Sunday with former client/employee, Yindi Botcher, stating that this would be trial by innuendo and "[t]his is turning into a soap opera." RE855-57. The court ruled in response to the EEOC's offer of proof that several class members heard that Reeves engaged in sex in the office and they would have testified that it impacted their view of their work environment. RE854-56, 374. For example, Jacobson heard about the episode with Botcher and she refrained from coming into the office on Sundays as a result. RE374. At his deposition, Reeves denied having sexual relations with Botcher at the office. RE339-41. Shortly before trial, the EEOC learned from former employee Frank Nelson that Reeves admitted to Nelson that he had sex with Botcher in the office. The court refused to allow the EEOC to inquire into this subject at Reeves' direct examination (RE415-16), and refused to allow the EEOC to call Nelson for impeachment purposes (RE855). c. The Investigation and Litigation Prior to trial, the EEOC brought four motions in limine to exclude: (1) evidence that the EEOC was "duped" by Jacobson, Hanlon, and Greene, to prosecute this "false" harassment claim (RE240); (2) evidence of the procedural history of the case (RE262); (3) evidence of the EEOC's administrative investigation (RE267), and (4) testimony by investigator Kinzel- Barnes, except testimony going to Reeves' laches defense (RE270). The court admitted evidence that: (1) Kinzel- Barnes did not interview potential witnesses about the Saez pregnancy claim (RE746); (2) Kinzel-Barnes interviewed only Jacobson, Hanlon, and Greene before recommending cause on the harassment claim (RE752- 55), and she did not interview any of the women identified as having been harassed, or any witnesses still working for the Reeves firm (RE752-54, 769, 774-75, 809-10); (3) Kinzel-Barnes was directed by her superiors to conclude the sexual harassment investigation after interviewing only Hanlon, Greene, and Jacobson (RE769-73); (4) Kinzel-Barnes sent Hanlon, Greene, and Jacobson their affidavits for signature eight months after interviewing them (RE756- 57, 762, 768-69), and recommended cause before obtaining their signed affidavits (RE765, 773); (5) Kinzel-Barnes took Greene's statement on sexual harassment even though he represented Reeves in the EEOC's investigation into the pregnancy claim (RE765-68); (6) Kinzel-Barnes became aware before recommending cause that Hanlon and Greene were in litigation with Reeves but did not include that fact in her analysis or modify their affidavits to reflect this (RE757-760, 775-78); see also RE822-26 (lengthy questioning of Kinzel-Barnes about the many causes of action that Hanlon and Greene brought against Reeves, and the state court decisions in Reeves' favor); see infra 32-33; (7) Kinzel-Barnes was aware that Hanlon, Greene, and Jacobson all quit within a short time period (RE751-52); and (8) when Reeves called Kinzel-Barnes to ask who was the sexual harasser, she told him it was he (RE813), but when he asked who had alleged he harassed them, she did not give him the names and told Reeves she "can't identify who the witnesses are because the case is still open" (RE814). The court also allowed counsel to question Kinzel-Barnes at length about her verification of the EEOC's responses to interrogatories. RE781-792, 795-802. Finally, although Kinzel-Barnes' testimony was not contradicted by her deposition, the court allowed a lengthy replaying of portions of her video deposition, which reiterated all the same points. RE789-96. In addition, the court extensively examined Kinzel-Barnes on the witness stand, and negatively commented on her testimony, in the presence of the jury, as follows: Q: Did you know there was a partnership dispute going on at this time over the break up of the firm? A: No, sir, I had no idea. Q: Yet you interviewed one side of the partnership breakup and not the other side. Do you think that that was full and fair investigation on your part? A: I didn't know there was a breakup. RE755. Q: Do you know about the attorney- client privilege? A: Yes, sir, I do. * * * Q: Didn't you feel it was unusual for an attorney that was representing one of the parties in the case to contact you and give you information about the . . . firm? RE767-68. Q: When you interviewed Mr. Greene, Mr. Hanlon, and Miss Jacobson, did you think you were getting hoodwinked? A: I did not, sir. RE777. Q: Other than the witnesses Greene, Hanlon, and Jacobson, did you attempt to interview or did you interview any other potential victim in this case prior to June of 2000? A: No, I did not. RE781; see also RE809-10 (same). Q: Did you get another side of the story from anyone at the Reeves & Hanlon firm regarding Miss Saez? A: No, sir, I did not. Q: You just took what Miss Saez told you as being correct without investigating? A: I typed it up and put it in an affidavit for her signature, yes. Q: But did you do any independent investigation or contact any other people other than Miss Saez with regard to her claim for pregnancy discrimination? A: No, sir, I did not. RE744. Q: Now, taking that answer that you just gave [that it was an evidence- based investigation regarding pregnancy discrimination and it had nothing to do with outside issues, such as any possible conspiracy against Reeves], I want you to tell us exactly what investigation you did to form that opinion [that Reeves had fired Saez because she was pregnant]. A: I investigated Ms. Ignacio [Quilaton]'s claim when she led me to believe that another individual was terminated–she was told that another individual was terminated that was also a receptionist that was pregnant at the law firm. Then I followed up on that and interviewed that individual, Ms. Saez. She also confirmed that she had been with the law firm and after a short period of time was terminated for a reason of not being able to photocopy, which made no sense. Q: Ms. Saez told you that? A: Yes. Q: She told you that was the reason she was given to terminate her, Ms. Saez? A: That's correct. Q: Did you ever have a discussion with Mr. Reeves regarding what Ms. Saez had told you? A: No, I did not. RE806-07. Q: Now, you have to be very careful. Did Mr. Reeves deny that he terminated Ms. Saez because she couldn't make photocopies? A: Yes. I believe he did. Q: He told you that? A: Not verbally. In a position statement. Q: He denied discriminating against pregnant women in his position statement, didn't he? A: He did. Q: But did he ever put in that paper that ‘I deny terminating Ms. Saez because she couldn't make photocopies'? A: I don't believe that was in the position statement, no, because the position statement was to the first charge [by Quilaton], sir. Q: And so you concluded that he terminated Ms. Saez because she couldn't make photocopies? A: She was another individual found, yes, to be terminated during her pregnancy, and the reason that was given was she couldn't make photocopies. RE812. Q: Did you know that Ms. Jacobson and Mr. Greene were boyfriend and girlfriend during this period of time? A: I don't recall that, sir. RE810-11. Q: Do you know what due process means? A: Yes, sir. Q: What is your understanding of due process? A: That individuals have a right to - - to the evidence or the allegations against them and a right to respond to them. Q: In this particular case, Ms. Savitt is asking you whether or not you specifically discussed any of the individuals who had made claims with Mr. Reeves? A: No. Q: And the question then becomes if this is an evidence-based examination, wouldn't you expect the person who has been accused to know who has accused him so that they [sic] could adequately offer an explanation to defend themselves [sic]? RE816-17. In addition to its questions of Kinzel-Barnes about the investigation, the court allowed, and itself asked, questions of witnesses about whether they ever authorized the EEOC to represent them (RE580-83, 868-73, 876-79), and then permitted, or asked, questions about whether they authorized the EEOC to respond to interrogatories on their behalf (RE584, 869); see also RE696-698 (opining outside the presence of the jury that when a woman said she did not wish to be a claimant it was "troublesome" for EEOC to keep "pushing this case" and that the court was "troubled by the motivation with regard to the EEOC in keeping on pursuing this claim" since "one of the claims is that the EEOC was duped into prosecuting this case as a result of a partnership dispute that took place between Hanlon & Greene on one side and Reeves on the other"). d. The "Conspiracy" The court denied the EEOC's motion to exclude evidence of a "conspiracy" to damage Reeves' law firm, between Hanlon and Greene, on one hand, and Jacobson, Catuira, Preciado, and the EEOC, on the other. RE392-94; RE240. This evidence centered around a state court lawsuit Reeves brought in 1999 against Hanlon and Greene alleging interference with contracts and prospective business, and misappropriation of trade secrets. The state court ruled for Reeves, based on the abrupt manner of Hanlon and Greene's departure, their solicitations of Reeves' personnel and clients, including taking case files and using Reeves' confidential client data, and their failure to return firm property, and awarded $200,000 in damages. RE945 (April 11, 2001, trial court decision). The court refused to award punitive damages, however, finding that Hanlon and Greene's conduct was "the result of immaturity" and "an apparent get-rich-quick mentality," and the court declined to find "oppression, fraud or malice in these circumstances." RE961a; see also RE964 (February 20, 2003, decision of Court of Appeals, affirming judgment); RE994 (August 12, 2004, decision of California Supreme Court, affirming). Evidence of this dispute was admitted in the EEOC's case even though Reeves conceded that the California decisions do not criticize or put blame on any individuals other than Hanlon and Greene (RE909), and all three decisions were given to the jury as exhibits. Although not mentioned in the state court decisions, the district court allowed Miller, over objection, to characterize Hanlon and Greene's business announcement as implying that Mr. Reeves had died. RE604, 607-08. The court also allowed testimony, over hearsay objection, that Greene had told Miller of his intention to report Reeves to every agency he could in order to hurt the firm. RE602-03. Over the EEOC's objection, the court admitted evidence of some of the witnesses' close ties to Hanlon and/or Greene. For example, Reeves testified that Preciado left to go to work at Hanlon's office about a month after Hanlon and Greene left the Reeves firm. RE424. Reeves testified that Catuira brought a claim of sexual harassment against Alan Favish that Reeves believed to be false, and that he thought she brought it at the behest of Hanlon (RE424, 446-48); Reeves also testified that Catuira dated Hanlon while she worked at Reeves' firm (RE447); and Catuira testified that she and Hanlon took a vacation to Jamaica together after Catuira left Reeves' firm (RE505-06). The most extensive testimony about ties between the EEOC's sexual harassment case and the Hanlon and Greene dispute related to Jacobson. The following evidence was admitted, due to the court's adverse ruling on the EEOC's motion in limine. Jacobson dated Greene for about nine months (RE671, 907-08); she, Greene, and Hanlon were close friends while working at the firm, and they maintained a friendly professional relationship thereafter (RE687-88, 700, 709-10); she made sure that she did not know the details of Hanlon and Greene's departure so that she would not "spill the beans" (RE604); she talked with Greene and Hanlon about putting the highlighted sexual harassment policy in Reeves' in-box (RE684-86, 689-90, 711-12); she made an anonymous call to Kinzel-Barnes (having gotten her telephone number from Greene), told her about sexual harassment at Reeves' firm and, later, identified Hanlon and Greene, among others, as individuals who could provide information about the harassment (RE679-80, 705-08, 746-752);<10> she, Hanlon, Greene, and other attorneys bad-mouthed Reeves while working there (RE658-60); she tendered her resignation in early July 1999, within days of Hanlon and Greene's departure (RE715-16, 751-52); and after Hanlon and Greene quit, she encouraged a paralegal to leave the firm, saying she would be stupid to stay as the firm would probably go under in the next six months (RE701-04, 917-18). However, Jacobson also testified that Hanlon and Greene did not recruit her to join their firm (RE672), and even after she submitted her resignation notice to Reeves, she took steps to ensure that her departure went smoothly and, when Reeves asked her to stay on to take several cases to trial, she did so (RE675-78). 3. District Court Decision The court granted Reeves' motion for attorneys' fees. RE1035. The court based its award on its conclusions that the EEOC's investigation was indadequate, that the EEOC had engaged in improper discovery and litigation tactics prior to the original grant of summary judgment reversed by this Court, and that, on the merits, "all of the EEOC's claims proved to be frivolous, unreasonable, or without foundation." RE1038. STANDARD OF REVIEW This Court reviews evidentiary rulings for abuse of discretion and reverses if errors caused prejudice. B.K.B. v. Maui Police Dep't, 276 F.3d 1091, 1104 (9th Cir. 2002). This Court presumes that evidentiary errors are prejudicial, and must reverse unless it concludes that the result was not tainted by the errors. Obrey v. Johnson, 400 F.3d 691, 699-701 (9th Cir. 2005). This Court reviews attorneys' fee awards under 42 U.S.C. § 2000e-5(k) in accordance with Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978), for abuse of discretion. EEOC v. Bruno's Restaurant, 13 F.3d 285, 287 (9th Cir. 1993). SUMMARY OF ARGUMENT The district court did not conduct a trial de novo of the Commission's pregnancy and harassment claims, but rather allowed its courtroom to be used to excoriate the Commission for its handling of the case. Because of the court's improper focus it committed two principal errors in admitting prejudicial and irrelevant evidence: (1) it allowed the jury to hear about the scope of the Commission's investigation; and (2) it allowed the jury to hear about a so-called "conspiracy" between the witnesses and the EEOC to destroy the Reeves law firm. The court's other evidentiary errors were less dramatic, but no less damaging to the Commission's case. The court allowed the jury to hear evidence about the witnesses' sexual histories; it allowed the jury to hear extensive testimony from women who were not offended by Reeves' conduct; it excluded evidence that would have helped to demonstrate Reeves' bias against pregnant employees; it excluded evidence of harassment that victims learned about second-hand; and it excluded evidence this Court had previously considered relevant of Reeves' leering at female employees. The effect of these errors, individually and cumulatively, was to taint the jury's deliberations. Obrey mandates reversal and remand to permit the EEOC to present its claims in a full, fair, and impartial trial. The district court abused its discretion in awarding attorneys' fees by mischaracterizing the facts, misunderstanding the nature of the EEOC's authority and this lawsuit, and misapplying the Christiansburg standard. This Court previously reversed the grant of summary judgment and remanded this case for trial of the pregnancy and harassment claims, and that determination necessarily means the EEOC had a sufficiently plausible case to satisfy the minimal evidentiary threshold imposed by Christiansburg. The court's conclusions that the pregnancy and harassment claims were deficient all reflect the same fundamental error of hindsight evaluation of witness credibility criticized by this Court in Bruno's Restaurant. Further, the EEOC's pre-suit and litigation conduct provide no independent basis for a fee award in this case: the reasonableness of its investigation and cause finding are subsumed in the analysis of the merits of the lawsuit itself, and in any event, were entirely reasonable; and the EEOC's discovery conduct did not warrant sanctions. Thus, the fee award cannot stand. ARGUMENT I. The Court Prejudiced the EEOC's Presentation of its Case Through Numerous Evidentiary Errors Although this Court remanded the EEOC's case for a trial of pregnancy discrimination and sexual harassment claims, the district court did not conduct a trial de novo, but rather turned the trial into a forum for criticizing the EEOC for what it saw as an inadequate investigation and for being "hoodwinked" by individuals with a grudge against Reeves into pursuing claims with no merit. The court's jaundiced view of the EEOC's case led it to commit serious errors both in admitting irrelevant, prejudicial evidence, and excluding relevant, probative evidence. A. The Court Erroneously Admitted Irrelevant Evidence 1. The Court Admitted Irrelevant and Prejudicial Evidence About the Administrative Investigation Despite granting the EEOC's motion to limit the scope of the inquiry into the EEOC's administrative investigation (RE397-401), and despite ruling that the EEOC's investigation met the jurisdictional prerequisites to suit (RE210, 742), the court permitted the EEOC's investigator Kinzel-Barnes to testify for nearly a day and a half about her investigation of the pregnancy discrimination and sexual harassment claims, answering many questions posed by the court itself. Supra at 26-31. The court refused to issue an instruction (RE378) informing the jury that the EEOC's pre-suit investigation was adequate as a matter of law, offered to put the investigator's testimony into the proper perspective. The court explained, "there are some . . . significant flaws in the investigation of this case by Ms. Barnes," and, because of this, "in good conscience I can't give this instruction." RE912-13 (outside the presence of the jury).<11> On the basis of the "evidence" that was admitted, defendant argued, repeatedly, to the jury that the Commission's investigation was incomplete, inadequate, biased, and flawed. RE923-33, 938; e.g. RE 923-24 ("[T]hey [Hanlon, Greene, and Jacobson] manipulated the EEOC and they got the EEOC into a position where they did a terrible investigation."), RE925 ("Ms. Kinzel-Barnes had the nerve to get up there and tell you she did an evidence-based investigation . . . ."). Questions about the investigation elicited irrelevant information, and the erroneous admission of this "evidence" tainted the jury's deliberations. The law is settled that the adequacy of an administrative investigation is beyond the scope of a trial on the merits of Title VII claims. Because Title VII proceedings are de novo, McDonnell Douglas v. Green, 411 U.S. 792, 798 (1972), it is improper to delve into the adequacy of the EEOC's underlying investigation. Georator Corp. v. EEOC, 592 F.2d 765, 767 (4th Cir. 1979) ("the court will not determine whether substantial evidence supported the Commission's pre-adjudication finding of reasonable cause"). As the Seventh Circuit recently held, in EEOC cases, "[t]he existence of probable cause to sue is . . . not judicially reviewable." EEOC v. Caterpillar, Inc., 409 F.3d 831, 832 (7th Cir. 2005). The Caterpillar court specifically addressed the fact that EEOC suits may not be confined to the allegations in a charge when an investigation has led to finding cause on additional claims, and concluded that these prerogatives of the Title VII enforcement scheme mean that courts "have no business" limiting suits to claims "that the court finds to be supported by the evidence obtained in the Commission's investigation." Id. In short, courts should not inquire into the scope of an investigation or the quality of the evidence the EEOC relied on to support a cause finding. Because these matters are not justiciable, it was error for the district court to engage in or permit this inquisition during the trial of the EEOC's pregnancy and harassment claims. See EEOC v. Keco, 748 F.2d 1097, 1100 (6th Cir. 1984) (error to "inquire into the sufficiency of the Commission's investigation."). The rationale of decisions barring inquiry into the EEOC's investigations and cause findings is that the administrative process does not adjudicate rights or liabilities. As the Sixth Circuit emphasized, "[i]f the charge is not meritorious, procedures are available to secure relief, i.e., a de novo trial in the district court." Id.(citation omitted). The existence of a de novo trial is thus the cure for any deficiencies in the EEOC's investigation–if the evidence does not support a verdict, the jury will so find. But in this case, the court did not allow the cure to work, apparently because it did not trust the jury to come to a decision based on the evidence without steering it to a conclusion based on the court's own skepticism about whether the EEOC had conducted an evidence-based investigation. By asking the investigator whether she asked Reeves for his explanation for firing Saez, the court implied that if she had, she would not have found cause on the pregnancy charge. But it was for the jury to decide if Reeves' shifting explanations were pretextual, and the court's questions to Kinzel-Barnes usurped the jury's role of making that determination. Further, the court's questions suggested that it was not fair for Kinzel- Barnes to reach a cause finding on the harassment claim without asking Reeves' side of the story. But Reeves' side of the story was fully presented at trial and thus there was no harm that flowed from the investigator's arguably truncated investigation. However, harm was done to the Commission's presentation of its case because the court's comments and questions implying that the EEOC's suit was improperly based on an inadequate investigation surely signaled to the jury how the court expected it to view the evidence. This inquiry into the conduct of the EEOC's investigation confused the jury and deflected its attention from the main purpose of the trial, that is, to determine whether Reeves actually violated Title VII. The admission of this "evidence" was erroneous and presumptively prejudicial under Obrey. As the Obrey Court explained, a reviewing court cannot "‘usurp the jury's function, by merely deleting improper evidence from the record and assessing the sufficiency of the evidence to support the verdict below.'" Obrey, 400 F.3d at 701 (citation omitted). As in Obrey, it is impossible to conclude that the erroneous admission of this evidence did not taint the jury's verdict and therefore this Court should reverse and remand for a new trial. 2. The Court Admitted Irrelevant and Prejudicial Evidence Supporting the Defendant's "Conspiracy" Theory In addition to allowing the trial to focus on short-comings in the EEOC's investigation, the court permitted Reeves to offer extensive evidence of a "conspiracy" to harm the firm by Hanlon and Greene, who had left Reeves to form their own firm. Neither was a party in the EEOC's suit, nor were they individuals for whom the EEOC sought relief, nor were they called as witnesses. The court denied the EEOC's motion to preclude evidence of the partnership dispute and resulting lawsuit, or suggestions of a conspiracy among Hanlon, Greene, Jacobson, the EEOC, or any witness or class member, or suggestions that the EEOC was "duped" into pursuing this lawsuit, and ruled this evidence was relevant to the motivation and bias of witnesses. RE393; supra at 32-35. Although no affirmative evidence was presented at trial that the EEOC acted in concert with Hanlon and Greene, that was the implication behind much of the testimony on this subject.<12> Reeves presented extensive evidence of Hanlon and Greene's misconduct with respect to the firm. Supra at 32-33. The court also admitted hearsay evidence that Hanlon or Greene advised employees to complain about Reeves to outside agencies. RE602-03. In addition, the court admitted into evidence, over the EEOC's objections, all three published state court opinions from Reeves' lawsuit against Hanlon and Greene, which went to the jury as trial exhibits. Supra at 33. Moreover, the court issued a jury instruction that it was taking judicial notice of Hanlon and Greene's malfeasance (over EEOC's objection that judicial notice was unnecessary and overly emphasized that evidence). RE920-21. As a result, defendant relied heavily on its "conspiracy" theory in arguing to the jury that Reeves had been set up and the EEOC's suit was improper. RE923-32, 934-941; e.g. RE923 ("The defense is that ... Hanlon & Greene, along with Nikki Mehrpoo Jacobson, vindictively hatched a scheme to discredit Mr. Reeves, to harass and embarrass him and then they enlisted the EEOC to do the job for [them]."). The court erred in making these rulings. Evidence of Reeves' business dispute with Hanlon and Greene is not relevant to the issues of whether Reeves discriminated against Saez because she was pregnant or whether Reeves maintained a sexually hostile work environment. Fed. R. Evid. 401, 402. It is pure speculation to draw from Hanlon and Greene's tort liability in a separate action an inference that the EEOC, by virtue of bringing and maintaining this lawsuit, or any class members or witnesses, by virtue of being called by the EEOC to testify in this case, were involved in a conspiracy to bring down the Reeves firm. Nevertheless, Reeves attempted to extrapolate just such an ongoing "conspiracy" to "collapse" the Reeves law firm based on the class members' and witnesses' association with Hanlon and Greene and the EEOC's reliance on evidence provided by these individuals in this suit. Supra at 33-35. There was no evidence that Jacobson, Catuira or Preciado ever joined Hanlon or Greene in their misdeeds. They were not named, involved, or implicated in Reeves' suit against Hanlon and Greene. But the jury was urged to believe that because of the relationships among these people it could infer their "participation" in Hanlon and Greene's misconduct. RE923-24. This is classic "guilt by association" evidence which should have been excluded under Rules 404 and 608 of the Federal Rules of Evidence. It is well settled that evidence, allegations, suggestions, or innuendoes of "guilt by association" with others who have committed bad acts or are of unsavory character is impermissible character evidence, irrelevant, and highly prejudicial, and, if allowed to be introduced and considered by the fact finder, can constitute reversible error. See, e.g., United States v. Dickens, 775 F.2d 1056, 1057-59 (9th Cir. 1985) (reversing criminal defendant's conviction obtained in part through admission of prejudicial guilt by association evidence of defendant's connection with an infamous drug ring). This doctrine is most often invoked in criminal cases where such character evidence is used to support conviction and this Court cabins its use because of its inherent prejudice and unfairness. For example, in Dickens this Court rejected the argument that evidence about mob associations was admissible for impeachment purposes, and held that the defendant's association with others engaged in criminal activity "did not bear on [his] truthfulness." Id. at 1058. This doctrine has also been invoked in other types of proceedings. See Virk v. INS, 295 F.3d 1055, 1060 (9th Cir. 2002) (consideration of conduct of an individual not a party to immigration proceeding an improper form of guilt by association); Wynn v. NBC, 234 F. Supp.2d 1067, 1089 (C.D. Cal. 2002) (severing claims against multiple defendants in age discrimination case to prevent unfair taint of guilt by association). While the stakes are different in a civil case in which the witnesses whose credibility is being challenged are the complainants rather than the defendant, the doctrine of "guilt by association" still applies as a general rule of evidence. Although witness credibility is obviously a relevant concern, the issue here is whether the court improperly allowed the complaining witnesses' credibility to be impugned by their association with others who committed unrelated bad acts. What happened here is exactly like what happened in Dickens. As in Dickens, the witnesses' "bias" in their own behalf and against Reeves for the conduct of which they complain is self-evident, and questions about their relationships with Hanlon or Greene do not demonstrate any motive for lying. 775 F.2d at 1059. The evidence of social, dating relationships in 1998 and 1999 (long over and superseded by marriages to other individuals) does not demonstrate a motive for bias or perjury in testimony offered under oath in a trial in 2005. The evidence of the relationships and the conduct of Hanlon and Greene was offered only to create a prejudicial implication because there was no apparent similarity between Hanlon and Greene's conduct and that of the harassment witnesses. And finally, the evidence adduced very specific descriptions of wrong-doing (although, of course not criminal conduct) and imputed it by association to the witnesses in this case. As in Dickens, the result of this line of inquiry was prejudicial and mandates reversal. Id. Although the erroneous admission of this evidence did not lead to a prison sentence, this attack on the credibility of three of the EEOC's witnesses undermined its right to a fair, de novo trial on the merits of its claims. Even if this evidence were not irrelevant and inadmissible under Fed. R. Evid. 401 and 402, and impermissible character evidence under Fed. R. Evid. 404 and 608, the evidence suggesting that the EEOC was involved in a "conspiracy" or was "duped" or "fooled" into bringing this lawsuit should have been excluded because any probative value it has was "substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury." Fed. R. Evid. 403. As the Commission explained to the district court, the EEOC is an independent agency of the federal government and it makes decisions to litigate only after a multi-level agency review, which is independent of any charging parties or aggrieved victims. RE99-100. Individual class members and charging parties have no control over how an investigation is conducted, or over whether the EEOC files suit on a particular charge. The Supreme Court recognized in EEOC v. Waffle House, Inc., 534 U.S. 279, 291 (2002), that "[o]nce a charge is filed, . . . the EEOC is in command of the process." The EEOC believed that Reeves discriminated against pregnant employees and created a sexually hostile environment. It reached that determination long before any ruling that Hanlon and Greene had engaged in tortious conduct, and without any knowledge of the nature of the dispute between Reeves and his former associates.<13> Independent witnesses corroborated the class members' allegations in depositions. This Court found that the EEOC presented sufficient evidence to warrant trial on the sexual harassment and pregnancy discrimination claims. Appendix 1-2. It should have been up to jurors to decide whether pregnancy discrimination and actionable sexual harassment occurred. Any alleged conspiracy between Hanlon and Greene had no bearing on the merits of this case. Moreover, even assuming that Hanlon and Greene concocted a conspiracy to harm the Reeves firm, and that the EEOC's investigator was somehow influenced or "duped" by their conspiracy, that does not explain the factual testimony of the witnesses in the EEOC's suit, many of whom had no ties at all to Hanlon and Greene. Nor does it demonstrate that Jacobson, Preciado, and Catuira, who were close to Hanlon and Greene in 1998-99, would perjure themselves in court in 2005. For these reasons, it was prejudicial error for the court to admit this evidence, which could easily have confused the jury and deflected its attention from making determinations on the merits of the discrimination claims. Although this "conspiracy theory" was the subject of much discussion, because it had nothing to do with the merits of the claims being tried, the court issued no instructions to the jury about how to evaluate the "evidence" of the "conspiracy." Nothing was said about the elements necessary to prove an actual conspiracy, so the jury was left to its unguided speculations about the significance and relevance of the arguments it heard about improper motivation on the part of the witnesses and the EEOC itself. The witnesses and the EEOC were indicted by innuendo and the court's plainly conveyed disapproval, which surely tainted the jury's ultimate verdict, mandating reversal under Obrey. 3. The Court Admitted Irrelevant and Prejudicial Evidence It Should Have Excluded under Fed. R. of Evid. 412 The EEOC moved to exclude evidence of victims' sexual history or predisposition under Fed. R. of Evid. 412. RE280. The court granted the EEOC's motion in part (for the pregnancy victim, Saez), but denied it in part (for the hostile environment victims). RE385-393. The court stated that this evidence was relevant to the claim of sexual harassment, to show the conduct was not offensive or unwelcome, and to show bias and motive. RE392. As a result, the court allowed extensive, prejudicial testimony covered by Rule 412 with respect to Jacobson (supra at 17-19), and it allowed evidence that Wilkerson had worked at Frederick's of Hollywood prior to working for Reeves (supra at 14), and that Catuira had dated Dan Hanlon in the past (supra at 12). Rule 412 prohibits the admission of this evidence. It provides that evidence relating to a victim's "sexual predisposition" or "other sexual behavior" is inadmissable, unless it is "otherwise admissible under these rules and its probative value substantially outweighs the danger of harm to any victim and of unfair prejudice to any party." Fed. R. Evid. 412(b)(2) (emphasis added). This Court has explained that the balancing test under Rule 412 shifts "the burden to the proponent to demonstrate the admissibility rather than making the opponent justify exclusion of the evidence," raises the bar for admission "by requiring that the probative value of the evidence substantially outweigh the specified dangers," and puts "harm to the victim on the scale in addition to prejudice to the parties." B.K.B., 276 F.3d at 1104 (citations omitted) (sexual harassment action). The rule "is designed to exclude evidence . . . that the proponent believes may have a sexual connotation for the factfinder," and inadmissible evidence of sexual predisposition includes evidence "relating to the alleged victim's mode of dress, speech, or life-style." Rule 412, Advisory Committee Notes (1994 Amendment). Under this rule, evidence of the dating relationships between Jacobson and Greene, and between Catuira and Hanlon, should have been excluded. See, e.g., Socks-Brunot v. Hirschvogel, Inc., 184 F.R.D. 113, 117 (S.D. Ohio 1999) (evidence of sexual conduct with other co-workers or supervisors "is both intrusive and, as importantly, without any relevance. Employees are free to engage or not engage in amorous conduct with co-workers. . . . That Federal Rule 412 prohibits such testimony is beyond debate."). Here, the court admitted evidence of the dating relationships as relevant to bias. As discussed (supra 45-47), this "guilt by association" evidence constituted impermissible character evidence and was irrelevant and highly prejudicial. Moreover, that they had dating relationships several years earlier is not probative of the truth of Jacobson's or Catuira's fact testimony at trial as to Reeves' conduct that the EEOC alleged constituted sexual harassment. In addition, any discussions of a sexual nature between victims or witnesses and coworkers in which Reeves did not take part should have been barred under Rule 412. B.K.B., 276 F. 3d. at 1103-06, 1109 (reversible error to admit testimony of sexual discussions between plaintiff and coworkers who were not alleged harassers); Socks-Brunot, 184 F.R.D. at 119, 120 (error to admit evidence of workplace conversations that plaintiff initiated or contributed to regarding sexual matters, even if offered to disprove "unwelcomeness" in a sexual harassment case). Under B.K.B., Jacobson's discussions with coworkers (other than Reeves) about sexual matters should have been excluded. For the same reason, Jacobson's receipt of the penis-shaped pasta gift from a third party and her undergraduate research on the effects of AIDS on the sexual behavior of college students were completely unrelated to whether she welcomed harassing conduct from Reeves at work and should have been excluded under Rule 412. Wilkerson's employment at Fredrick's of Hollywood also should have been barred by Rule 412. See Wolak v. Spucci, 217 F.3d 157, 160 (2d Cir. 2000) (stating that "[w]hether a sexual advance was welcome, or whether an alleged victim in fact perceived an environment to be sexually offensive, does not turn on the private sexual behavior of the alleged victim, because a woman's expectations about her work environment cannot be said to change depending upon her sexual sophistication"). Finally, Jacobson's use of swear words at work and elsewhere should have been excluded under Rule 412. See Sheffield v. Hilltop Sand & Gravel Co., 895 F.Supp. 105, 108 (E.D. Va. 1995) (excluding evidence of plaintiff's use of vulgar language at work because it is certainly "offered to prove an alleged victim's sexual predisposition"); Socks-Brunot, 184 F.R.D. at 123 (Rule 412 "encompasses an alleged victim's speech when such speech is used to rebut a claim that conduct constituting sexual harassment was ‘unwelcome'"). Admission of the above-described irrelevant and prejudicial testimony covered by Rule 412 painted the victims in the EEOC's suit in an unfavorable light and could easily have tainted the jury's deliberations on the sexual harassment claim, mandating reversal under Obrey. 4. The Court Admitted Irrelevant and Prejudicial Evidence that Other Women Were Not Offended or Were Not Sexually Harassed Eight female employees or former employees for whom the EEOC did not seek relief in this suit were permitted to testify that they were not offended by Reeves' conduct and they did not feel sexually harassed, after the court denied the EEOC's motion to exclude this testimony. Supra at 22-23. Their testimony was not relevant to the claim before the jury and its admission confused the issues and may have misled the jury about the appropriate legal standard for determining whether there was a hostile environment. RE269a. As the Supreme Court has held, for workplace harassment to be actionable, the work environment must be both subjectively and objectively hostile or abusive. Harris v. Forklift Systems, Inc., 510 U.S. 17, 21-22 (1993). The objective standard requires a jury to consider all of the conduct to determine whether a reasonable woman would have concluded that the environment was hostile or abusive. "It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the [employee] did, that the harassment so altered the working conditions as to make it more difficult to do the job." Id. at 25 (Ginsburg, J. concurring) (internal citations and quotation marks omitted); Ellison v. Brady, 924 F.2d 872, 879 (9th Cir. 1991) (adopting "reasonable woman" standard). Admission of testimony that eight female employees were not harassed or did not subjectively find Reeves' sexually suggestive conduct toward them to be offensive constituted reversible error for several reasons. First, the implication is that, unless all or most of the women in a workplace are sexually harassed, then the harassment is not "pervasive." This is not the law. It is beyond dispute that severity and pervasiveness turn on the totality of the conduct experienced by each person claiming to be aggrieved, not on the total number of people seeking relief for sexual harassment. See, e.g., Harris, 510 U.S. at 21-22 (standard requires proof that a reasonable person in the victim's position would find conduct sufficiently severe or pervasive to alter working conditions, and that each victim subjectively perceived her environment to be abusive). Nothing in the law suggests that all women in the workplace have to perceive the environment to be hostile for any woman to be able to recover for workplace harassment. Second, allowing testimony that other female employees did not subjectively perceive their work environment to be abusive or hostile distracted the jury from its obligation to look at the evidence from the "reasonable woman" perspective, as required under the objective prong. Ellison, 924 F.2d at 878-79. For example, after hearing Nancy Miller testify that she was not offended when Reeves made the comment "lawyers with small briefcases have small penises," a juror might conclude that Miller appeared reasonable (and, in fact, she testified that she was "a reasonable woman") and, therefore, a reasonable woman would not be offended by Reeves' conduct. But Ellison makes clear that it is the victim's perspective that matters, and so long as she is a "reasonable" woman, her view that conduct has altered conditions of employment and created an abusive working environment is what should inform the jury's deliberations. Id. at 878. Third, because the other female employees did not experience the same comments and conduct as did the victims in the EEOC's case, they were not competent to testify about the existence of a hostile environment (or lack thereof) based upon the comments and events experienced by those victims. Fourth, admission of evidence that some women who worked for Reeves were not offended by his conduct turns the question of the objective hostility or abusiveness of the work environment into a vote among the women who worked for Reeves. This question should have been put to the jurors for a vote, not to the women who worked (and some of whom continue to work) for Reeves. The error in admitting this evidence tainted the outcome and mandates reversal under Obrey. B. The Court Erroneously Excluded Relevant Evidence 1. The Court Improperly Excluded Relevant Background Evidence That Would Have Supported the Commission's Pregnancy Discrimination Claim The court excluded testimony from both Quilaton and Silva because claims of pregnancy discrimination on their behalf had been "dismissed" from the suit and not appealed. The court permitted testimony that Reeves had been very nice to employee Marita Jurado when she was pregnant, and that a number of Reeves' employees (including Silva) went on maternity leave or leaves of absence. However, the court refused to allow Silva to testify about the change in Reeves' attitude and conduct toward her after learning of her pregnancy, or Quilaton to testify that she was fired shortly after she began wearing maternity clothes. The court also issued an instruction that the jury must accept as true that Quilaton was terminated for legitimate, non-discriminatory reasons and that neither Quilaton or Silva were discriminated against on the basis of pregnancy. Supra at 6-7. The testimony of Silva and Quilaton should have been admitted as background evidence of pregnancy animus. The fact that the EEOC did not continue to seek relief for Silva or Quilaton does not mean that their evidence is irrelevant or inadmissible. They stand in the same shoes as any other employee who witnessed workplace events but had no personal claim of discrimination. This Court has held that evidence of an employer's discriminatory treatment of other employees in the same protected class is highly probative of discriminatory intent. See Obrey, 400 F.3d at 696 (evidence of treatment of others in plaintiff's class relevant to show "discriminatory state of mind" and thus it was an abuse of discretion to exclude testimony going to bias and pretext). If this evidence had been before the jury, as it should have been, the EEOC's pregnancy discrimination claim would have been stronger. This error could have changed the jury verdict thus reversal is required under Obrey. 2. The Court Improperly Excluded Relevant Evidence of Harassing Incidents Victims Learned of Second-Hand As this Court observed after reviewing the summary judgment record, the evidence, "viewed in the light most favorable to the EEOC, shows that Reeves' conduct was widely known throughout the firm." Appendix at 2. The district court, however, frustrated the EEOC's efforts to get the evidence of this widespread knowledge before the jury. For example, the court refused to allow a witness to testify that Reeves engaged in a sexual liaison in the office one Sunday with a former client/employee, Yindi Botcher, holding that to allow this in would be trial by innuendo. Supra at 25. The sexual liaison evidence was crucial however, because Jacobson heard about it and stayed out of the office on Sundays as a result. Id.; RE374. Liao and Wilkerson also heard rumors about sexual favors in the office and they impacted their view of their work environment. RE374. If the EEOC had been able to establish a factual basis for the belief that Reeves had sex in his office, the testimony that several victims had heard the stories about this would have been admissible and relevant to support the claim that their working environment was objectively hostile and that they subjectively perceived it to be hostile. Believing that Reeves had sex with a client/employee in his office surely influenced how his employees viewed his comments about their appearance, his leering, his suggestive sexual remarks, and his dirty jokes. The jury was entitled to hear this evidence to understand the context of the other testimony in the case. The court also excluded evidence of other harassing incidents that the victims learned about second-hand, as unduly prejudicial under Fed. R. Evid. 403 and hearsay under Fed. R. Evid. 802. The EEOC filed a written offer of proof about "second-hand" incidents known to Preciado (supra at 9), Liao (supra at 11), Catuira (supra at 12), and Jacobson (supra at 17). Several of these proffered bits of evidence are admissible under an exception to the hearsay rule or are not hearsay at all. For example, some proffered statements are the "excited utterances" or statements about the "then existing mental conditions" of those who had been subjected to comments or jokes, such as Latman's description to Catuira of Reeves' remarks to her and the other women's reports to Jacobson of jokes Reeves told them. Fed. R. Evid. 803 (2), (3). Testimony by Jacobson, Preciado, and Arai about statements made by the victims was not hearsay because it was not offered to prove the truth of those matters but to show the state of mind of the declarants about the comments and jokes Reeves had directed at them. 4J. Weinstein & M. Berger, Weinstein's Evidence ¶ 801(c) [01], at 801-77 (1987) (verbal conduct offered to show state of mind or effect on state of mind is not hearsay). This Court has long recognized that such statements may be admissible as circumstantial evidence of the declarant's state of mind. United States v. Brown, 562 F.2d 1144, 1148 (9th Cir. 1977). In a sexual harassment case, because victims must establish that they subjectively viewed their working environment as abusive, such evidence is critical. See Harris, 510 U.S. at 21-22; Ellison, 924 F.2d at 875-76. All of the excluded evidence–of a sexual liaison and of jokes and comments directed at others–is probative and relevant to the hostile environment claim. This Court has recognized the admissibility of such evidence, and its relevance in a hostile environment case, even though it encompasses conduct that is not directed at the victim claiming relief. See, e.g., Dominguez-Curry v. Nevada Transp. Dep't, 424 F.3d 1027, 1036 (9th Cir. 2005) (district court erroneously disregarded evidence of discriminatory comments directed "to other women" because a plaintiff may establish a violation even if she is not "‘directly targeted'" by the hostility)(citation omitted); Swinton v. Potomac Corp., 270 F.3d 794, 800 & n.1 (9th Cir. 2001) (affirming verdict based in part on testimony about "the ubiquity of the racist atmosphere" and assertions "that the majority of the people at U.S. Mat. had actually witnessed the use of racially offensive language" and "that ‘just about everybody' at U.S. Mat. had heard Fosdick use ‘racial slurs and comments'"); Woods v. Graphic Communications, 925 F.2d 1195, 1201 (9th Cir. 1991) (affirming judgment for plaintiff, Court held that "the atmosphere of the plant was unquestionably polluted" and the plaintiff was "subjected directly to some of [the racial hostility]"; "[e]ven if only a few of the[] acts were directed at [the plaintiff] personally, they were far from isolated incidents"). While there may be reasonable hearsay objections to some of the proffered evidence, see Leibovitz v. New York City Transit Auth., 252 F.3d 179, 190 n.8 (2d Cir. 2001) (plaintiff's testimony that coworkers told her of incidents of harassment outside her presence is likely inadmissible hearsay), the court swept much too broadly in excluding all of the so- called second-hand evidence in this case. Some of it would have simply corroborated the victims' statements about what they themselves had experienced, and some of it would have simply demonstrated that they heard about similar incidents which intensified the hostility of the working conditions they experienced. The jury should have been allowed to hear this evidence to understand the "totality of the circumstances" relevant to assessing the existence of a hostile environment. Harris, 510 U.S. at 23 (assess all the circumstances); see Carter v. Chrysler Corp., 173 F.3d 693, 700 & n. 7 (8th Cir. 1999) (plaintiff was told about graffiti and Chrysler contended she knew of it only through hearsay; court deemed it relevant because "there is no dispute that she heard about its existence during the time in which she experienced harassment"). In this case, as in Carter, this evidence, though second-hand, is "relevant on whether a hostile environment existed" and whether the victims "reasonably perceived other conduct to be hostile or abusive." Id. at 700 n.7. Its exclusion was thus error, and this error was presumptively prejudicial, mandating reversal under Obrey. 3. The Court Improperly Excluded Relevant Evidence of Leering When this Court reversed and remanded the district court's grants of summary judgment, it recited the evidence supporting its determination that there were triable issues of fact concerning the existence of a sexually hostile environment, including evidence of Reeves' leering at female employees. Appendix at 2. Notwithstanding that this Court considered this evidence relevant, the district court excluded it. RE406-09. The EEOC explained that the evidence would show that Reeves subjected all of the victims to head-to-toe sexual leers, that he stared at them in a sexually suggestive way, that this made them feel uncomfortable, afraid, and/or disgusted, and that Reeves' behavior made it unpleasant to come to work and some victims tried to avoid him. RE291. Additionally, the EEOC filed written offers of proof about the leering experienced by Preciado (supra at 8- 9), Catuira (supra at 12), and Jacobson (supra at 16-17), and observed by Rodriguez (supra at 17). This evidence is clearly admissible in a sexual harassment case, where the trier of fact is to examine the "totality of the circumstances" in determining whether a hostile environment has been created. See Harris, 510 U.S. at 23. The jury in this case should have determined whether the claimants' subjective perception of these stares and leers was reasonable. This Court has routinely noted that evidence of a harasser following and/or staring at an employee can support a finding of sufficient severity or pervasiveness. See Stoll v. Runyon, 165 F.3d 1238, 1239 (9th Cir. 1999) ("stalked her throughout the postal facility"); Yamaguchi v. United States Dept. of the Air Force, 109 F.3d 1475, 1478 (9th Cir. 1997) ("stare at her during work"); Steiner v. Showboat Operating Co., 25 F.3d 1459, 1462 (9th Cir. 1994) ("stares, glares, snickers, and comments"). Excluding this evidence improperly limited the EEOC's presentation of its sexual harassment case and could have changed the jury's verdict, mandating reversal under Obrey. II. The District Court Abused its Discretion in Awarding Fees. "Attorneys' fees in civil rights cases should only be awarded to a defendant in exceptional circumstances." Barry v. Fowler, 902 F.2d 770, 773 (9th Cir. 1990) (citation omitted). No exceptional circumstances justify fees in this case. The court abused its discretion by misapplying the Christiansburg standard, which permits fees to be awarded to prevailing defendants only "upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation." 434 U.S. at 421; see Bruno's Restaurant, 13 F.3d at 287 (Title VII fee award reviewed for abuse of discretion). The court's decision to award fees (RE1035) was based on a view of the evidence that was limited by numerous prejudicial errors that tainted the entire trial, and on the same mischaracterizations of the EEOC's administrative proceedings and misunderstanding of the nature of the EEOC's authority and this lawsuit that infected the initial fee award after summary judgment, which this Court vacated. Appendix at 1. This Court's prior judgment implicitly determined that the EEOC's suit was not frivolous, and the law of the case doctrine mandated the district court's adherence to that determination. See, e.g., Richardson v. United States, 841 F.2d 993, 996 (9th Cir. 1988) (courts ordinarily precluded from reexaminining an issue previously decided by a higher court in the same case). Therefore, this Court should reverse the district court's award of attorneys' fees. A. The EEOC's Action Was Not Frivolous, Unreasonable, or Without Foundation This Court held on the first appeal in this case that the EEOC established genuine issues of material fact as to its pregnancy discrimination and harassment claims, precluding an award of fees and warranting trial. At trial, the EEOC presented the evidence upon which this Court relied in reversing summary judgment, except evidence erroneously excluded by the district court. Moreover, correcting for the above described evidentiary errors (supra at 38-61), the merits of the EEOC's claims have stronger evidentiary support than the court and jury realized, and cannot fairly be characterized as frivolous. Since this Court already determined that the EEOC had a sufficiently plausible case to clear the minimal evidentiary threshold imposed by the Christiansburg standard, that judgment should not have been overturned because of the district court's hindsight view of the case. See Richardson, 841 F.2d at 996. The court's rationale for the fee award presents a classic example of a failure "to resist the understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation." Christiansburg, 434 U.S. at 422. This Court has particularly warned against the temptation to take a hindsight view of witness credibility. As this Court explained in Bruno's Restaurant, 13 F.3d at 290, even though the district court in that case explicitly found that the EEOC had failed to present credible evidence of discriminatory conduct, the court abused its discretion in awarding fees to the prevailing defendant, because "[t]o justify an award of attorney's fees, . . . the district court would have had to find . . . that the EEOC should have anticipated at the outset that none of its evidence of discriminatory conduct was credible." The EEOC has two claims in this lawsuit – one for pregnancy discrimination and one for sexual harassment – and it represents the public interest, not the individuals for whom it sought relief. The pregnancy discrimination claim should not be seen as groundless because when the EEOC filed suit, it reasonably believed that Reeves fired or threatened to fire three pregnant receptionists for reasons the EEOC believed were untrue, and after discovery and one successful appeal, the EEOC proceeded to trial based on a reasonable belief that Reeves fired Saez for pretextual reasons. The court offered two justifications for awarding attorneys' fees on the EEOC's pregnancy discrimination claim. RE1042-43. First, Saez and the EEOC's investigator concluded that Reeves fired Saez because of her pregnancy, but relied on different reasoning. This rationale does not support an award of attorneys' fees. In fact, as a matter of law, the different and inconsistent reasons given for the termination support an inference of pretext. Moreover, there was other evidence offered at trial to support this inference. Supra at 5-7. More importantly, the court's reasoning suggests that the EEOC is limited in its litigation, not only by the claims on which it finds reasonable cause, but also by the information or reasoning upon which it bases its reasonable cause findings. This view of the relationship between an EEOC investigation and subsequent litigation is untenable. See Caterpillar, 409 F.3d 832 (mistake to think complaint must be closely related to charge or that suit is limited to claims a court thinks are supported by evidence obtained in investigation). Second, the court stated that the EEOC offered no evidence to rebut testimony that Reyes was required to work overtime to compensate for Saez's refusal to do photocopying and offered no testimony from other employees to support Saez's claim. RE1042-43. To the contrary, the EEOC offered evidence from coworkers that Saez was a good worker and that she did not refuse to make photocopies. In addition, the EEOC offered undisputed evidence that one receptionist was always needed at the front desk to greet clients and answer telephones and, therefore, at all times, at least one receptionist was unavailable for photocopying. A reasonable inference was that Saez was not responsible for the overtime that Reyes worked to handle photocopying. Finally, the court failed to acknowledge evidence that Reeves submitted a form to a State agency, stating that Saez was terminated because of "illness, injury or pregnancy." Thus, whatever this Court's ruling on the merits of the pregnancy discrimination verdict, it should reverse the fee award because the EEOC's pregnancy discrimination claim was not "frivolous, unreasonable, or without foundation." The district court should not have awarded fees merely because it did not think Saez or the EEOC had good reasons for believing she was a victim of pregnancy discrimination. Those reasons were supported by evidence and the jury's rejection of the EEOC's claim cannot justify the hindsight determination that the claim was frivolous. See Bruno's Restaurant, 13 F.3d at 290. The district court abused its discretion in finding the EEOC's sexual harassment claim frivolous and awarding fees because it disaggregated the claim as if five separate individuals had sued and in each instance viewed the evidence of harassment and credibility of witnesses with hindsight rather than as the Christiansburg and Bruno's Restaurant standard requires. The court's approach necessitates response to its criticisms of the EEOC's evidence as to each victim, but the reasonable foundation of the harassment claim ultimately must be viewed in light of all the evidence adduced and offered as to all victims. 1. The court cited to its 2002 order granting attorneys' fees (RE102) with regard to Wang, Arai, Eum, Babida, Quilaton, and Silva, and noted that the EEOC "did not even challenge the [summary] judgment [ruling] or fee award as to these claims" and then reaffirmed its prior findings of frivolity and lack of foundation (RE1041-42). The court misunderstood the EEOC's prior appeal, in which the EEOC challenged the fee award in its entirety. Because the EEOC's claim of sexual harassment was at issue in the fee appeal–not separate claims of individual claimants–the EEOC did not argue the merits of the suit as to individual "claimants," nor did it need to. Rather, the EEOC argued that the sexual harassment claim itself was not frivolous (EEOC Opening Brief at 51-53), and this Court agreed when it reversed the summary judgment rulings and vacated the fee award. In addition, the court's fee order implicitly justified attorneys' fees with regard to the "claimants" named above on the ground that the EEOC failed to present a jury question as to them. Even if that were the proper focus in an EEOC case alleging hostile environment on behalf of a group of victims, the court's approach conflicts with the rule of cases applying Christiansburg that fees are not necessarily warranted even if claims are not submissible. See Hughes v. Rowe, 449 U.S. 5, 15-16 (1980) (claims "legally insufficient to require a trial are not, for that reason alone, ‘groundless' or ‘without foundation' as required by Christiansburg"); Barry, 902 F.2d at 771 n.2, 773 (reversing fee award although district court directed verdict for defendant in civil rights action). 2. The court justified the award of attorneys' fees as to the EEOC's claim on behalf of Preciado on the ground that she was "impeached all over the place," citing two examples. RE1043. First, the court stated that Preciado admitted she did not consider certain incidents to constitute sexual harassment, and that she did not consider Reeves' jokes to adversely affect her work performance. Second, the court stated that when she testified in the Hanlon and Greene lawsuit, Preciado acknowledged that she had not been sexually harassed at Reeves' firm. The court's rationale cannot be sustained because Preciado's "admissions" do not render the EEOC's sexual harassment claim frivolous. It is settled law that hostile environment claims must be analyzed under the totality of the circumstances rather than by disaggregating each harassing incident. See National R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 115 (2002) ("Hostile environment claims are different in kind from discrete acts. Their very nature involves repeated conduct. . . . The ‘unlawful employment practice' therefore cannot be said to occur on any particular day. It occurs over a series of days or perhaps years and, in direct contrast to discrete acts, a single act of harassment may not be actionable on its own."). Such claims are based on the cumulative effect of individual acts. Further, Preciado's answer–when asked in the Hanlon and Greene litigation if she had been harassed–was a layperson's effort to respond to a question seeking a legal conclusion, and her answer has no bearing on the legal sufficiency of the EEOC's claim that Reeves created a hostile environment for many of his female employees. A grant of attorneys' fees is not justified where, as here, one individual did not view certain events, in isolation, as constituting sexual harassment or did not appreciate the legal significance of the cumulative effect of all of the harassing conduct. In addition, the court's reliance on Preciado's testimony that the jokes did not impair her work performance is misplaced. "[T]he test is not whether work has been impaired, but whether working conditions have been discriminatorily altered." Harris, 510 U.S. at 25 (Scalia, J., concurring). A plaintiff need only prove the harassment made it more difficult to do the job. See id. (Ginsburg, J., concurring); see also Steiner, 25 F.3d at 1463 (abusive sexual conduct violates Title VII "if such hostile conduct pollutes the victim's workplace, making it more difficult for her to do her job, to take pride in her work, and to desire to stay in her position"). 3. The court found that "the trial evidence did not support the EEOC's claim as to Liao." RE1043. The court stated the primary basis of the claim on behalf of Liao was "her characterization of Reeves' conduct during a three-day conference in Houston" (id.), ignoring all of Liao's testimony about Reeves' suggestive remarks and sexual jokes. Supra at 9-10. The court discounted Liao's "characterization of Reeves' conduct" because she "could not remember anything specific that Reeves did that made her want to avoid him." RE1043. To the contrary, Liao testified with specificity (supra at 9-10), and the fact that she did not remember more does not support the court's fee order. The court also stated that it believed the EEOC had told Liao to use the phrase "personal space" (RE1043-44), despite her testimony that "personal space" was her own phrase, but suggested by the EEOC. Liao did not testify that the EEOC told her what to say or suggested that she testify untruthfully. The court's statement reflects its distrust of the EEOC, nothing more. It does not demonstrate that the claim on Liao's behalf was frivolous, unreasonable or without foundation. 4. The court justified its fee award with respect to the claim on behalf of Catuira because it thought the EEOC "grossly exaggerated Catuira's allegations" (RE1044), by describing (in its opening statement) the physical contact between Catuira and Reeves as a "grind" rather than as an "inadvertent bump." The court also noted that the testimony about the time the body contact lasted was variable (five seconds or a couple of seconds). However, the duration of the incident was not the only fact in evidence (supra at 11), and Caturira's description of the incident supported her testimony that she felt "violated. The EEOC's characterization of the physical contact as a "grind" may have been an exaggeration, but that word choice alone does not render the EEOC's claim as to Catuira frivolous, unreasonable, or lacking foundation. The court also noted that Catuira used the term "personal space" (RE1044), again implying that the EEOC coached her. There was no evidence presented that the EEOC did so, because it did not. 5. The court justified its fee award with respect to the claim on behalf of Wilkerson, stating that "the EEOC exaggerated Wilkerson's claims as well." RE1044. The court again pointed to the EEOC's opening statement, that Reeves patted Wilkerson's butt on numerous occasions. Id. Wilkerson's testimony at trial was that Reeves slid his hand down her back once or twice, but he only patted her butt once. Again, the court's observations do not establish that the EEOC's claim as to Wilkerson was frivolous, unreasonable, or lacking foundation, particularly in light of evidence presented at trial that Reeves suggested to Wilkerson that she wear tighter blouses and shorter skirts, and made an off-hand reference to oral sex, and taking into account information that sexual favors were done in the office and Reeves looked women up-and-down in a sexual manner. Supra at 13. 6. With respect to the EEOC's claim on behalf of Jacobson, the court stated, "[w]hile this [c]ourt previously found the EEOC's evidence in support of its claim on Jacobson's behalf, while not enough to survive summary judgment, was sufficient to establish it was not frivolous, the evidence at trial showed that many of Jacobson's allegations were exaggerated or even fabricated." RE1045. The court highlighted a number of discrepancies it identified between Jacobson's trial testimony and her deposition testimony. Id. Some of these discrepancies are minor, and some merely reflect a more detailed recollection at trial than at deposition, but none reveal significant inconsistencies. The court's conclusion that these discrepancies rendered the entire case as to Jacobson frivolous, unreasonable and lacking foundation is itself unreasonable, because fees would be appropriate only if the court could have concluded that the EEOC should have anticipated at the outset that none of its evidence of discriminatory conduct, including Jacobson's testimony, was credible. Under the analysis provided in Bruno's Restaurant, 13 F.3d at 287-90, the court's fee award cannot stand. The district court itself acknowledged that this standard could not be met at summary judgment, and this Court's reversal of the summary judgment ruling implicitly acknowledged that the Commission's case was not frivolous, unreasonable, or lacking in foundation at the outset. However, the court accepted defendant's argument that "Jacobson's contradictions and distortions are particularly troubling because Jacobson provided the anonymous tip which initiated the EEOC's sexual harassment investigation and was the only woman the EEOC interviewed on this issue before rendering its ‘cause' finding." RE1045. Even if the discrepancies in Jacobson's testimony can be viewed as meaningful (which they cannot), the court's view of her diminished credibility cannot logically support a fee award based on the EEOC's failure to anticipate that development when it first found cause or filed this lawsuit. Even assuming arguendo that Jacobson's trial testimony was "largely contradicted" by her deposition testimony, the "contradiction" would be that her trial testimony provided stronger support for the EEOC's sexual harassment claim than her earlier statements. This simply does not provide a basis for the district court to conclude in hindsight that the EEOC's sexual harassment claim was frivolous at the outset. The district court's error in this respect is identical to that of the district court in Bruno's Restaurant, and reversal of the fee award is compelled in this case for the same reason. B. The EEOC's Investigation and Reasonable Cause Determination Do Not Support a Fee Award The court also justified its fee award because "[t]he lack of a meaningful investigation combined with Hanlon and Greene's scheme to undermine Defendant evidence an unreasonable action." RE1038; supra at 42-43n.12. The court found the EEOC's investigation "was woefully inadequate to justify [the] initial reasonable cause determination against Defendant." RE1046; see also RE913. Whatever this Court's finding as to the merits of the EEOC's lawsuit, this rationale does not support an award of attorneys' fees. This Court need not separately consider the EEOC's pre-suit conduct, or the Hanlon and Greene "conspiracy," because any alleged defects in the EEOC's investigation or reasonable cause determination relevant to the Christiansburg standard would necessarily resurface in an analysis of whether the EEOC's lawsuit was frivolous, unreasonable, or without foundation, making it redundant to apply the Christiansburg standard by analyzing the EEOC's pre- suit conduct as well. The court's inadequate-investigation rationale for awarding fees is belied by the court's own holding that the EEOC had satisfied all jurisdictional prerequisites to suit and specific rejection of arguments that the investigation was inadequate (RE225-33) and that the EEOC did not engage in a "genuine investigation" of the sexual harassment claim because the investigator interviewed only one of the women for whom the EEOC later sought relief (RE227). In addition, as discussed (supra at 42), no affirmative evidence was presented at trial that the EEOC acted in concert with Hanlon and Greene; however, the court clearly drew that inference from the testimony on this subject, which it should not have admitted into evidence. Further, the court's reasoning is unsound. If the information Hanlon, Greene, and/or Jacobson provided to the EEOC was true, their conduct would be viewed not as a conspiracy but as whistle-blowing. It is irrelevant whether Jacobson contacted the EEOC at Hanlon or Greene's urging or whether Hanlon, Greene and/or Jacobson were motivated to report sexual harassment because they disliked Reeves. The issue is not what motivated the complaint, but whether the EEOC reasonably believed the complained-of conduct occurred. There was no evidence that the EEOC investigated or prosecuted this lawsuit knowing that the allegations of discrimination were false. The question of whether or not the EEOC was "duped" by Hanlon, Greene, or Jacobson is essentially a question of whether or not the EEOC believed the wrong witnesses. If the EEOC was "duped," by definition it did not know that it was being misled, and could not anticipate this outcome. But even if it had been misled by Hanlon, Greene, and Jacobson, it identified many other witnesses who essentially told the same story of a workplace permeated with sexual jokes, comments, and innuendo, as well as leering and sexual advances. The EEOC presented most of this evidence at trial and, as in Bruno's Restaurant, 13 F.3d at 290, could not have predicted in advance that the jury would not credit the evidence or would not find it legally sufficient to prove a pervasive hostile environment. Thus, the fee award cannot stand. C. The EEOC's "Litigation Conduct" Does Not Support a Fee Award The district court also justified its fee award on the ground that "the EEOC's improper discovery tactics" support its determination that "the EEOC was making improper use of the legal system to prosecute what it knew, or should have known, were groundless claims." RE1040. Once again, there is no evidence that the EEOC prosecuted this lawsuit knowing that the allegations of discrimination were false. In addition, as the EEOC argued in the first appeal, the court's award of fees for the EEOC's alleged discovery misconduct is particularly inappropriate because the magistrate – who was in the best position to determine whether the EEOC actually engaged in any misconduct – never awarded any sanctions against the EEOC. The court persists in its mistaken view that the EEOC's actions with respect to "purported Equal Pay violations asserted by the EEOC on Miwi Arai's behalf," and with respect to responding to defendant's request for factual allegations underlying "the supposed claims of Wang, Arai or Eum," resulted in the magistrate judge granting "terminating sanctions." RE1040. But no such sanctions were granted. The magistrate explicitly declined to issue such sanctions in response to Reeves' motion.<15> RE68. The magistrate also decided that attorney's fees were unwarranted. RE69. Thus, the court mistakenly and improperly awarded fees for conduct the magistrate found did not warrant monetary sanctions or fees. As for the EEOC's refusal "to stipulate to the dismissal of these claimants and [its] oppos[ition to] Defendant's summary judgment motions as to their claims" (RE1040, referring to Wang, Arai or Eum),<16> the court's finding again reflects a misunderstanding of the EEOC's authority and its relationship to discrimination victims. The EEOC is a federal agency charged with vindicating the public interest – not a private attorney representing a group of plaintiffs. See, e.g., Waffle House, 534 U.S. at 291, 296 (stating that the EEOC is "the master of its own case" and can pursue its claim with or without the charging party's consent; and that it vindicates the public interest even when it pursues victim-specific relief). Since the victims for whom the EEOC seeks relief in this case are not parties to the action, there is no technical way they can be "dismissed" from the suit, and the EEOC's statement that it would not be pursuing the claims for relief on behalf of Wang, Arai, and Eum was sufficient. The court's misunderstanding of the EEOC's authority and the facts of this case also led it to conclude that the EEOC's investigation of a potential EPA violation as to Arai was improper and warranted attorney's fees–an error it made in its 2002 fee award as well. RE1040; RE102. The EEOC learned that Reeves had Arai sign a release prohibiting her from initiating administrative proceedings or from participating in any administrative proceedings or lawsuits against Reeves & Associates. RE9 ¶5. Such a waiver violates public policy and the EPA. See, e.g. EEOC v. Astra USA, Inc., 94 F.3d 738, 743-44 (1st Cir. 1996); 29 U.S.C. § 215(a)(3) (anti-retaliation provision of EPA). The EEOC initiated a separate investigation and issued a separate director's charge (RE93), and explained the independent nature of the charge to the district court (RE122). Therefore, the EPA investigation and charge cannot properly justify the fee award in this case. The court also misunderstood what occurred during discovery when it stated that in pursuing the EPA claim, "the EEOC filed a frivolous motion to compel discovery of irrelevant and improper information – social security numbers of third parties not involved in this action," which led the magistrate "to issue a sua sponte protective order." RE1040; see also RE102. In fact, the EEOC's request for the social security numbers of Reeves' employees was related to this action–not to investigation of the EPA charge–and the court failed to cite anything in the record to the contrary. Moreover, the court's own order on reconsideration of the protective order makes no finding that the EEOC's request for social security numbers and other information was related to the EPA charge. RE18, 39. In addition, the court's fee order stated that EEOC investigator Kinzel-Barnes testified that she verified interrogatory responses without having the underlying responses or litigation file. RE1041. While this is unfortunate, it was simply a staff mistake and should not be a basis for awarding fees because it does not provide a basis for concluding at this stage, post- appeal and post-trial, that the EEOC's lawsuit was frivolous. Instead, this represents the sort of post hoc reasoning and hindsight judgment that the Christiansburg standard forbids. Finally, the court criticized the EEOC for seeking discovery from Reeves' counsel "with flagrant disregard for the attorney-client privilege." RE1041. The attorneys in question were Greene, Jack Schaedel, Richard Wilner, and Sue Ben David-Arbiv. Id. Kinzel- Barnes interviewed Greene in September 1999, three months after Greene had resigned from Reeves' firm (RE761-62), because the EEOC believed Greene to have information about possible harassment at Reeves' firm (RE767-68). To the extent Greene provided information to the EEOC about Reeves' harassing speech or actions, such information would not be covered by attorney-client privilege unless he learned of it through communications with Reeves while giving legal advice about sexual harassment. See Upjohn Co. v. U.S., 449 U.S. 383, 394 (1981). There is no evidence that Greene's knowledge was obtained in that context. Moreover, even if that had been the case, the appropriate remedy for any violation of attorney-client privilege would be to sanction the violator, Greene, and not to impose attorneys' fees against the EEOC. The other attorneys the court identified as improper targets of the EEOC's discovery efforts were never deposed or called as witnesses. However, to the extent Wilner and Schaedel were percipient witnesses either to potentially adverse admissions by a claimant (as known through their conversations with Silva), or to retaliatory conduct (such as Wilner's adverse treatment of Jacobson's request for employment verification), they were not immune from being subject to discovery. RE41. Ben David-Arbiv represented Reeves during the administrative conciliation process. The EEOC did not depose Ben David-Arbiv, but if it had, she was not immune from being subject to discovery if she was a percipient witness to events that Reeves put at issue in the litigation, such as the conciliation efforts. RE1022, 1032. In sum, none of the criticisms the district court mounted of the EEOC's conduct of this investigation and litigation nor its assessment of the merits of the suit itself can support an award of fees under Christiansburg and Brunos's Restaurant and the fee order must be set aside. CONCLUSION This Court should reverse the entry of judgment in favor of Reeves & Associates on the EEOC's pregnancy discrimination and sexual harassment claims, reverse the award of attorney's fees and costs, and remand this case for a new trial. Respectfully submitted, RONALD S. COOPER General Counsel CAROLYN L. WHEELER Acting Associate General Counsel _____________________ DONNA J. BRUSOSKI Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W. Washington, D.C. 20507 (202) 663-7049 STATEMENT OF RELATED CASES This consolidated appeal (Civ. No. 06-55110 and Civ. No. 06-55386) is not related to any other known case pending in this Court. CERTIFICATE OF COMPLIANCE I hereby certify that this brief complies with the order of this Court entered September 27, 2006, granting EEOC's motion to file an oversize brief that does not exceed 19,000 words. The brief contains 18,875 words. __________________________________ Donna J. Brusoski APPENDIX CERTIFICATE OF SERVICE I, Donna J. Brusoski, hereby certify that I served two copies of the foregoing brief, this 11th day of October 2006 by Fed Ex, to the following: John J. Manier BALLARD, ROSENBERG, GOLPER & SAVITT 10 Universal City Plaza, 16th Floor Universal City, CA 91608-1097 ______________________ DONNA J. BRUSOSKI Attorney EEOC, Office of General Counsel 1801 L Street, N.W., Washington, D.C. 20507 (202) 663-7049 *********************************************************************** <> <1> RE refers to record excerpts. <2> Portions of Tr. Exh. 272, the investigation file, were admitted into evidence and the file was discussed extensively throughout the investigator’s testimony, notwithstanding that the court granted the EEOC’s motion to limit the scope of questions to be asked of the investigator. RE395-96; RE742; infra at 26-32. <3> The court asked Liao whether she was offended by television advertisements for Viagra; Liao replied, “No. It was a different context, though.” RE528-29. <4> The court cross-examined Catuira, who testified that she recalled the gist of the comment–Reeves was inquiring of Alan Favish whether anything sexual had happened on Favish’s date the previous evening–but not the exact words. E506-07. <5> At the time of the trial Catuira had recently married and changed her name to Suarez. See RE504. <6> However, the court did not allow Jacobson to testify to what she thought Reeves meant by this remark. RE661. <7> Jacobson testified that Greene broke up with her in the fall of 1999 (RE671), and she married someone else the next year (RE683-84). <8> Because Miller was the current sexual harassment officer of the firm at the time of trial, the EEOC elicited testimony about her view of whether Reeves’ jokes were inappropriate or offensive, for purposes of injunctive relief. <9> Reeves testified that happy hour was not a work activity and attendance was not required. RE900. <10> The court asked Jacobson, “Were you still dating Greene when you called the EEOC?” RE681-82. <11> The court also said, “If I were the trier of fact I would have found that Ms. Barnes had been manipulated by Hanlon, Greene, and Jacobson, especially in view of the fact that Mr. Greene was the attorney that was appointed to represent the interests of Hanlon and Reeves, and during the time that he was the attorney of record in dealing with the EEOC, he was giving information in violation of his attorney-client privilege to the EEOC to enable the EEOC to bring charges against Mr. Reeves to benefit Hanlon and Greene’s new venture.” RE913. There are two problems with the court’s musings on this issue. First, as a matter of fact, Greene did not violate any privilege. See infra at 79. Second, and more importantly, no such “finding” would be relevant in a Commission discrimination case because the perceptions of the investigator have no bearing on any element of the claims in the lawsuit. <12> In the attorneys’ fee order, the court stated: “[T]he evidence at trial showed that the EEOC either knew or inexcusably failed to deduce that it was being used as a weapon in Hanlon and Greene’s campaign to destroy Defendant and his firm. The EEOC investigator, Barnes, interviewed only one woman, Jacobson, with respect to alleged sexual harassment, and otherwise relied exclusively on two attorneys who were embroiled in litigation against Defendant, one of whom, Greene[,] had been Defendant’s in-house attorney and Barnes’s contact person on the discrimination charge.” RE1039. The court’s conclusions highlight the error it committed in admitting this “evidence.” First, the court’s statement ignores the fact that the evidence of harassment at trial came not from Hanlon and Greene, but from numerous women who testified to the jokes, comments, conduct, and touching that created what they perceived to be a hostile environment. See supra at 7-22. The jury should have been evaluating that testimony, not the court’s view that the EEOC was improperly used by disgruntled former members of Reeves’ firm. Second, the court’s statement confirms the prejudice flowing from its error. The statement admits the jury heard evidence that the EEOC was “used as a weapon” and demonstrates that this was not a de novo trial on the merits. <13> The EEOC found cause in September 1999 and filed suit in September 2000. RE1. The California state trial court ruled in Reeves’ favor on April 11, 2001. RE945. <14> difference, if the jury had been allowed to hear it.Evidence of the Botcher liaison was also important for the purpose of impeaching Reeves. As discussed (supra at 25), at deposition, Reeves denied having had sexual relations with Botcher at the office. However, the EEOC learned from former Reeves employee, Frank Nelson, that Reeves admitted to Nelson that he had sex with Botcher in the office. The court refused to allow the EEOC to inquire into this subject during Reeves’ direct examination, and it refused to allow the EEOC to call Nelson. This evidence could have made a <15> Reeves & Associates first requested Rule 37 sanctions in a September 14, 2001, motion that the magistrate judge denied without prejudice for failure to give proper notice. RE60. <16> The EEOC did not oppose summary judgment as to Wang, Arai, and Eum because it had already agreed not to pursue relief for them and thought the request for judgment was moot. RE72.