No. 08-2483 ____________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT ____________________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Petitioner-Appellant, v. WATKINS MOTOR LINES, INC., Respondent-Appellee. _______________________________________________________ On Appeal from the United States District Court for the Northern District of Illinois, Eastern Division Hon. Rebecca Pallmeyer, Judge _______________________________________________________ REPLY BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS PETITIONER-APPELLANT RONALD S. COOPER GAIL S. COLEMAN General Counsel Attorney EQUAL EMPLOYMENT LORRAINE C. DAVIS OPPORTUNITY COMMISSION Acting Associate General Counsel Office of General Counsel 1801 L Street, NW, Room 7034 CAROLYN L. WHEELER Washington, DC 20507 Assistant General Counsel (202) 663-4055 gail.coleman@eeoc.gov TABLE OF CONTENTS Table of Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . ii Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A. Watkins Motor Lines wrongly seeks to achieve indirectly what it could not achieve directly: forcing a halt to the government's investigation of potential discrimination. . . . . . . . . 2 B. Watkins Motor Lines' continued insistence on the strength of its potential defense to a hypothetical future Title VII action is irrelevant in this subpoena enforcement proceeding. . . . . . . . . . . . 6 C. None of the arguments in the EEOC's opening brief has been waived. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Certificate of Service TABLE OF AUTHORITIES Cases Borg-Warner Protective Servs. Corp. v. EEOC, 245 F.3d 831 (D.C. Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Doe v. U.S., 253 F.3d 256 (6th Cir. 2001). . . . . . . . . . . . . . . 8 EEOC v. Caterpillar, Inc., 409 F.3d 831 (7th Cir. 2005). . . . . . . . . 9 EEOC v. Fed. Express Corp., ___ F.3d ___, 2008 WL 4149661 (9th Cir. Sept. 10, 2008). . . . . . . . . . . . . . . . . . . . . . . . 6 EEOC v. K-Mart Corp., 694 F.2d 1055 (6th Cir. 1982). . . . . . . . . . . . 8 EEOC v. Suburban Transit Sys., 538 F. Supp. 530 (N.D. Ill. 1982). . . 11 EEOC v. Tempel Steel Co., 814 F.2d 482 (7th Cir. 1987). . . . . . . . .8, 11 EEOC v. United Air Lines, Inc., 287 F.3d 643 (7th Cir. 2002). . . . . .8, 11 EEOC v. U.S. Fidelity & Guarantee Co., 414 F. Supp. 227 (D. Md. 1976). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 EEOC v. Waffle House, Inc., 534 U.S. 279 (2002). . . . . . . . . . . . . . 2 First Nat'l Bank of Chicago v. Comptroller of the Currency of the U.S., 956 F.2d 1360 (7th Cir. 1992). . . . . . . . . . . . . . . 4-5 FTC v. Standard Oil Co. of Calif., 449 U.S. 232 (1980). . . . . . . . . 4 Georator Corp. v. EEOC, 592 F.2d 765 (4th Cir. 1979). . . . . . . . . . . .3 Int'l Tel. & Tel. Corp., Commc'ns Equip. & Sys. Div. v. Local 134, Int'l Bhd. of Elec. Workers, 419 U.S. 428 (1975). . . . . 3, 4 McCottrell v. EEOC, 726 F.2d 350 (7th Cir. 1984). . . . . . . . . . . . 3 Otto v. Variable Annuity Life Ins. Co., 814 F.2d 1127 (7th Cir. 1986). . . . . . . . . . . . . . . . . . . . . 13-14 Statute Administrative Procedures Act, 5 U.S.C. § 704. . . . . . . . . . . . . . . 3 Miscellaneous Complaint, Ex. G, Watkins Motor Lines, Inc. v. EEOC (Watkins II), No. 05-1065 (M.D. Fla.). . . . . . . . . . . . . . . . . . 13 EEOC Compl. Man., "Race and Color Discrimination," § 15-VI (Apr. 19, 2006), available at 2006 WL 4673429. . . . . . . . . . . 7 EEOC Compl. Man., "Theories of Discrimination," § 604 App., available at 2006 WL 4672690. . . . . . . . . . . . . . . 7 Response of the EEOC to Watkins' Motion to Supplement Record, Watkins Motor Lines, Inc. v. EEOC (Watkins II Appeal), No. 06-12981 (11th Cir.). . . . . . . . . . . . . . . 13 ARGUMENT In its opening brief, the EEOC urged this Court to reverse the district court's order of dismissal and to remand for further proceedings. The EEOC emphasized that this is a subpoena enforcement proceeding, which is intended to be extremely limited in scope. EEOC Br. at 13-15. The EEOC argued that the district court had no authority to review the EEOC's decision refusing to allow Jackson to withdraw his charge. Id. at 11-13. The EEOC also noted that even assuming, arguendo, that the EEOC's decision not to consent to withdrawal of a charge is reviewable, the district court erred in holding that the EEOC abused its discretion by disallowing withdrawal in this case. Id. at 15-20. Accordingly, the EEOC concluded, the district court erred in treating Jackson's charge as withdrawn despite the EEOC's decision not to permit withdrawal. Id. at 11. In its responsive brief, Watkins Motor Lines argues emphatically that it did not engage in racial discrimination as alleged in Jackson's charge. Watkins Br. at 8-12. Watkins Motor Lines also argues that the district court appropriately reviewed the EEOC's refusal to permit Jackson to withdraw his charge, and that it appropriately found the refusal to constitute an abuse of discretion. Id. at 25-33, 45-55. Finally, Watkins Motor Lines argues that the EEOC has waived most of the arguments that it presented in its opening brief. Id. at 27-33, 56-58. For the reasons stated here and in the EEOC's opening brief, the EEOC asks this Court to reject Watkins Motor Lines' arguments and to reverse the district court's judgment. A. Watkins Motor Lines wrongly seeks to achieve indirectly what it could not achieve directly: forcing a halt to the government's investigation of potential discrimination. Title VII charges the EEOC, not the respondent employer, with determining whether continued investigation of a charge will further the public interest. EEOC v. Waffle House, Inc., 534 U.S. 279, 280 (2002). Presumably because it agrees with the EEOC that Title VII would not support a declaratory judgment action seeking to halt an EEOC investigation, Watkins Motor Lines has not cited Title VII as the basis for judicial review of the EEOC's refusal to allow Jackson to withdraw his charge. See Watkins Br. at 32-33 n.5 (disclaiming reliance on Title VII). Instead, Watkins Motor Lines seeks to thwart the EEOC's investigation by challenging the EEOC's denial of withdrawal as "final agency action" reviewable under the Administrative Procedures Act ("APA"). Watkins Br. at 31 n.4. This Court should reject Watkins Motor Lines' circuitous attempt to end the EEOC's investigation. Overwhelming case law rejects Watkins Motor Lines' position that the EEOC's denial of consent to withdrawal is reviewable under the APA.<1> The APA authorizes review only of "final agency action," 5 U.S.C. § 704, defined as action with "determinate consequences for the party to the proceeding." Int'l Tel. & Tel. Corp., Commc'ns Equip. & Sys. Div. v. Local 134, Int'l Bhd. of Elec. Workers, 419 U.S. 428, 443 (1975). The EEOC's refusal to consent to withdrawal of a charge does not satisfy this standard. This Court plainly stated in McCottrell v. EEOC, 726 F.2d 350, 351 n.1 (7th Cir. 1984), that "the Administrative Procedure Act does not provide a right to judicial review of an adverse EEOC determination." Other courts have concurred. See Borg-Warner Protective Servs. Corp. v. EEOC, 245 F.3d 831, 836 (D.C. Cir. 2001) (EEOC reasonable cause determination is not "final agency action" under APA because, rather than initiating proceedings, it merely informs charging party that he has a right to sue); Georator Corp. v. EEOC, 592 F.2d 765, 767 (4th Cir. 1979) (EEOC reasonable cause determination is not "final agency action" under ADA because "standing alone, it is lifeless and can fix no obligation nor impose any liability on the plaintiff"); see also FTC v. Standard Oil Co. of Calif., 449 U.S. 232, 241 (1980) (FTC reasonable cause determination does not constitute "final agency action" under the APA because "it represents a threshold determination that further inquiry is warranted and that a complaint should initiate proceedings"). Unlike a final agency action with "determinate consequences," Int'l Tel. & Tel. Corp., 419 U.S. at 443, the EEOC's denial of consent in this case simply allowed the EEOC to continue its investigation - an investigation that may or may not end in a finding of reasonable cause to believe that discrimination occurred. In this sense, it was even less final than the reasonable cause determinations discussed above, all of which did find a probable violation of law and none of which was reviewable under the APA. As the Supreme Court stated about the reasonable cause determination in Standard Oil, the agency's decision "had no legal force or practical effect upon [the company's] daily business other than the disruptions that normally accompany any major litigation." 449 U.S. at 495. Contrary to Watkins Motor Lines' argument, the EEOC's action is distinguishable from the Comptroller's action in First National Bank of Chicago v. Comptroller of the Currency of the United States, 956 F.2d 1360 (7th Cir. 1992). See Watkins Br. at 31 n.4. There, First National Bank sought permission to distribute individual properties (rather than cash or proportional interests in the entire portfolio) to withdrawing investors in a real estate investment fund. The Comptroller's refusal to agree with the bank's interpretation of the applicable regulations or to waive those regulations had an immediate, determinate effect on the bank: it could not make the proposed distributions. This Court therefore held that the Comptroller's denial of permission constituted final agency action. First Nat'l Bank, 956 F.2d at 1364-65. The EEOC's refusal to consent to withdrawal of Jackson's charge, in contrast, had no determinate consequences on anyone. Watkins Motor Lines disingenuously argues that the EEOC's denial of consent to withdraw the charge has deprived Jackson of the opportunity to settle his claim on terms that he found favorable. Watkins Br. at 51. As the EEOC explained in its opening brief, it is Watkins Motor Lines - not the EEOC - that has deprived Jackson of the opportunity to settle. EEOC Br. at 19. Watkins Motor Lines remains free to offer Jackson a settlement that is not contingent on securing withdrawal of his EEOC charge. Jackson remains free to enter into such a settlement. "As the Supreme Court recognized," however, "the EEOC controls the charge regardless of what the charging party decides to do." EEOC v. Fed. Express Corp., ___ F.3d ___ , 2008 WL 4149661, at *7 (9th Cir. Sept. 10, 2008) (citing Waffle House, 534 U.S. at 291). B. Watkins Motor Lines' continued insistence on the strength of its potential defense to a hypothetical future Title VII action is irrelevant in this subpoena enforcement proceeding. Completely ignoring the limited nature of subpoena enforcement proceedings, Watkins Motor Lines spends a portion of its brief explaining why it believes that it has not violated Title VII. Watkins Br. at 8-12, 47. Watkins Motor Lines details its history of workplace violence and insists that it has a business necessity for imposing a policy against hiring individuals who have been convicted of violent crimes. Id. At the end of its investigation, the EEOC may or may not agree with Watkins Motor Lines on this point. Until the investigation has been completed, however, it is too soon for the EEOC to reach an opinion on this issue. Too many relevant facts remain undiscovered. Watkins Motor Lines protests that neither Jackson's employment application nor his EEOC charge mentioned that his conviction for aggravated sexual abuse involved an assault against his then-estranged wife. Watkins' Br. at 7 n.2. This is precisely the sort of information that Watkins Motor Lines would have discovered if it had followed the EEOC's guidance and examined the particulars of Jackson's situation. The EEOC has specified that in order to justify a rejection based on an applicant's conviction record, an employer "must show that it considered the following three factors: (1) the nature and gravity of the offense(s); (2) the time that has passed since the conviction and/or completion of the sentence; and (3) the nature of the job held or sought." EEOC Compl. Man., "Race and Color Discrimination," § 15-VI (Apr. 19, 2006), available at 2006 WL 4673429; see also EEOC Compl. Man., "Theories of Discrimination," § 604 App., available at 2006 WL 4672690 (observing that EEOC has required examination of these three factors since 1985). Had Watkins Motor Lines investigated these three factors, it would have learned not only that Jackson's assault was against his then-estranged wife, but also that the assault occurred eleven years ago, that Jackson and his wife had since reconciled and had two more children in addition to the two they already had, and that subsequent to his conviction, Jackson had spent four years successfully employed as a security guard. (R.29, Ex. 3, Jackson Decl.) As the EEOC continues to investigate Jackson's charge, it may find that these facts weigh against Watkins Motor Lines' substantive defense. None of these facts, however, is at all relevant to the instant subpoena enforcement proceeding. As the EEOC explained in its opening brief, subpoena enforcement proceedings "are designed to be summary in nature," EEOC v. Tempel Steel Co., 814 F.2d 482, 485 (7th Cir. 1987), so that the government may proceed with its investigation as expeditiously as possible. Doe v. U.S., 253 F.3d 256, 263 (6th Cir. 2001). If both parties were already in possession of all relevant facts, the subpoena would be unnecessary. It makes no sense, therefore, for a subpoena enforcement proceeding to become bogged down in factual disputes on the merits. In deciding whether to enforce a subpoena, a district court may examine only whether an existing charge is in writing, under oath or affirmation, and includes a "clear and concise statement of the facts, including pertinent dates, constituting the alleged unlawful employment practices." EEOC v. K-Mart Corp., 694 F.2d 1055, 1062 (6th Cir. 1982) (quoting 29 C.F.R. § 1601.12(a)(3)). All other questions are irrelevant. If the charge satisfies these limited criteria, it is valid and suffices to support enforcement of the subpoena. EEOC v. United Air Lines, Inc., 287 F.3d 643, 650 (7th Cir. 2002). C. None of the arguments in the EEOC's opening brief has been waived. Contrary to Watkins Motor Lines' assertion, the EEOC has not waived any of the arguments that it made in its opening brief. Specifically, the EEOC has preserved its arguments that its denial of consent to withdraw Jackson's charge is unreviewable, that matters beyond the face of a charge exceed the scope of a subpoena enforcement proceeding, and that in any event the EEOC acted within its discretion in refusing to allow withdrawal. With respect to the unreviewability of the EEOC's denial of withdrawal, the EEOC specifically told the district court that "it is the EEOC's province - not that of the court - to determine whether public resources should be committed to this investigation." (R.29, EEOC Br. at 7.) Quoting this Court's observation in EEOC v. Caterpillar, Inc., 409 F.3d 831, 833 (7th Cir. 2005), that courts "have no business limiting the suit to claims that the court finds to be supported by the evidence obtained in the Commission's investigation," the EEOC further argued that courts "have no business limiting EEOC's investigations to cases [they] find promising based on briefings submitted in subpoena enforcement actions." (R.29, EEOC Br. at 7.) These statements clearly spell out the EEOC's position that the district court lacked authority to rule that the EEOC should have allowed Jackson to withdraw his charge. Notwithstanding this language in the EEOC's brief to the district court, Watkins Motor Lines argues that the EEOC waived any argument about unreviewability because it did not seek leave to file a surreply after Watkins Motor Lines erroneously interpreted the EEOC's position. Watkins Br. at 27-28. The EEOC, however, had no obligation to file a surreply. Moreover, the EEOC had no reason to believe that the district court would accept Watkins Motor Lines' mischaracterization of the EEOC's position. After the district court demonstrated that it did, in fact, believe that the EEOC had conceded that its denial of withdrawal was subject to judicial review, (R.32, Op. at 13, App. at A-15), the EEOC filed a motion for reconsideration reiterating its earlier position that the denial of withdrawal was unreviewable.<2> Since the language in the motion for reconsideration was merely an amplification of an argument the EEOC had already made, (R.29, EEOC Br. at 7), Watkins Motor Lines misses the mark in observing that this Court "may not consider arguments made for the first time in a motion for reconsideration." Watkins Br. at 33. The combined effect of the EEOC's original brief to the district court and its subsequent motion for reconsideration makes any suggestion of waiver absurd.<3> Watkins Motor Lines is also wrong that the EEOC has waived its argument about the limited nature of subpoena enforcement proceedings. See Watkins Br. at 34. The very first sentence of the EEOC's opposition to Watkins Motor Lines' motion to dismiss stated: "Administrative subpoena enforcement proceedings are meant to be summary in nature." (R.29, Response at 1 (citing EEOC v. United Air Lines, 287 F.3d 643, 649 (7th Cir. 2002); EEOC v. Tempel Steel Co., 814 F.2d 482, 485 (7th Cir. 1987); EEOC v. Suburban Transit Sys., 538 F. Supp. 530, 533 (N.D. Ill. 1982)). The EEOC gave the district court ample notice that this subpoena enforcement proceeding was the wrong forum to litigate the EEOC's charge processing decisions. See supra. Watkins Motor Lines lacks any basis for accusing the EEOC of fabricating post-hoc justifications for its decision not to allow Jackson to withdraw his charge. See Watkins Br. at 42. From the outset, the EEOC has explained that the public interest warrants a continued investigation.<4> The EEOC gave several reasons for this conclusion in its responsive brief to the district court, (R.29, EEOC Br. at 3-7), and then - when the district court, for the first time, suggested that the EEOC's concerns could be resolved with a Commissioner's charge, (R.32, Op. at 15, App. at A-17) - the EEOC expanded upon its reasons in its motion for reconsideration. (R.34, Motion at 2-4.) Contrary to Watkins Motor Lines' claim that the EEOC did not advise the district court of the inadequacy of a Commissioner's charge, Watkins Br. at 52, the EEOC devoted two full pages of its motion for reconsideration to this point. (R.34, Motion at 2-3.) Finally, because it is untrue, the EEOC has never conceded that it has dragged out its investigation because it was acting in bad faith in connection with Watkins Motor Lines' Freedom of Information Act ("FOIA") litigation. See Watkins Br. at 53. The fact that the EEOC held its investigation in abeyance during the pendency of the FOIA investigation does not mean - as Watkins Motor Lines suggests - that the EEOC did so in order to obtain "strategic advantage." Id. Any suggestion that the EEOC refused to consent to withdrawal as a litigation strategy in the FOIA matter is especially misguided, as the EEOC expressly argued in the FOIA case that "the relevant time frame for assessing the propriety of [the EEOC's] FOIA determination . . . [was] the time of that determination." Response of the EEOC to Watkins' Motion to Supplement Record at 1, Watkins Motor Lines, Inc. v. EEOC (Watkins II Appeal), No. 06-12981 (11th Cir.). The FOIA determination was made before Jackson even sought to withdraw his charge. Compare Complaint, Ex. G, Watkins Motor Lines, Inc. v. EEOC (Watkins II), No. 05-1065 (M.D. Fla.) (EEOC denial of FOIA request, dated March 9, 2005) with R.10, Ex. P, Withdrawal Request (Jan. 24, 2006). As the EEOC explained in its opening brief, EEOC Br. at 20-21, any delay that has occurred in this investigation is entirely attributable to Watkins Motor Lines. Since the EEOC initiated its investigation almost four years ago in January 2005, Watkins Motor Lines has repeatedly refused to turn over relevant documents. Watkins Motor Lines has brought multiple lawsuits in multiple fora in an effort to end the government's investigation. Now it asks this Court to remand for yet more proceedings if the Court reverses the district court's order of dismissal. Watkins Br. at 55-56. This Court should put an end to Watkins Motor Lines' strategic delay. See Otto v. Variable Annuity Life Ins. Co., 814 F.2d 1127, 1137-38 & n.11 (7th Cir. 1986) (for reasons of judicial economy, appellate court may decide issues itself and need not remand if resolution of issues is clear). CONCLUSION As described more fully in the EEOC's opening brief, the district court erred in treating Jackson's charge as withdrawn despite the EEOC's decision not to permit withdrawal. For the reasons stated above and in the EEOC's opening brief, this Court should reverse the district court's order of dismissal and remand with directions for the district court to enter an order enforcing the EEOC's subpoena. Respectfully submitted, RONALD S. COOPER General Counsel ________________________ GAIL S. COLEMAN LORRAINE C. DAVIS Attorney Acting Associate General Counsel EQUAL EMPLOYMENT OPPORTUNITY COMMISSION CAROLYN L. WHEELER Office of General Counsel Assistant General Counsel 1801 L Street, NW, Room 7034 Washington, DC 20507 (202) 663-4055 gail.coleman@eeoc.gov CERTIFICATE OF SERVICE I, Gail S. Coleman, hereby certify that I filed this brief with the Court by sending, this 1st day of October, 2008, via Federal Express, the original plus 15 copies and by uploading a digital version of the brief. I also certify that I served two copies of the brief, as well as a computer disk containing a digital version of the brief, this 1st day of October, 2008, by first-class mail, postage pre-paid, to the following counsel of record: Joan M. Canny Morgan, Lewis & Bockius 200 S. Biscayne Blvd. 5300 First Union Financial Center Miami, FL 33131-2339 _____________________________ GAIL S. COLEMAN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, NW, Room 7034 Washington, DC 20507 (202) 663-4055 gail.coleman@eeoc.gov *********************************************************************** <> <1> Although the district court in EEOC v. U.S. Fidelity & Guarantee Co., 414 F. Supp. 227, 246 (D. Md. 1976), decided that the EEOC did not abuse its discretion in declining to consent to withdrawal of a charge, the court identified no legal basis for its review of the EEOC's decision, and the case thus does not support the view of Watkins Motor Lines or the district court that the EEOC's administrative decision not to allow withdrawal is reviewable under the APA. See Watkins Br. at 32. <2> The motion for reconsideration stated that "a Commission subpoena enforcement action - directed at the Respondent to a Charge of discrimination - is not the appropriate forum for a court to engage in any review of a decision not to consent to the withdrawal of [a] Charge - a matter between the Commission and Charging Party, not the Respondent - regardless of the standard of review." (R.34, Motion at 6 (emphasis in original).) The motion also noted that "a decision not to consent to withdrawal of a Charge made while an investigation is ongoing is surely not a final agency action." (Id. at 7 (emphasis in original).) <3>Watkins Motor Lines wrongly asserts that the EEOC has waived any challenge to the district court's denial of reconsideration because it did not make any arguments about that denial in its opening brief. Watkins Br. at 56. This assertion overlooks the fact that the district court did not issue any opinion or explanation for its denial of reconsideration. (R.36, Order, reprinted at App. at A-21.) Accordingly, there are no arguments for the EEOC to make that are exclusive to the denial of reconsideration. The EEOC did appeal from the denial of reconsideration as well as the from the original order of dismissal. (R.37, Notice of Appeal.) <4> The EEOC objects to Watkins Motor Lines' characterization of a passage in the EEOC's opening brief as describing "the relevant considerations" for a withdrawal decision. Watkins Br. at 41-42 (quoting EEOC Br. at 14). In fact, the quoted passage says only that the district court erred by considering those factors because, while they are relevant to an administrative determination on withdrawal, they "are not, however, relevant to a district court's determination of whether a charge is valid on its face." EEOC Br. at 15 (emphasis added). The quoted list is not, and does not purport to be, an exhaustive recitation of all the factors the EEOC might consider in determining whether withdrawal will defeat the purposes of Title VII.