EEOC Urges Court to Drop $4.6 Million Fee Award

, The Litigation Daily

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The Equal Employment Opportunity Commission has asked an appeals court to set aside a record-setting $4.6 million attorney fee award imposed on the agency following a botched sexual harassment lawsuit against trucking company CRST Van Expedited Inc.

In a 127-page brief, filed on Thursday at the U.S. Court of Appeals for the Eight Circuit, EEOC argued that U.S. District Judge Linda Reade in Iowa City, Iowa, erred in her Aug. 1 ruling that CRST was the prevailing party in the case and ordering the agency to reimburse the company $4.1 million in attorney fees and $500,000 in costs—believed to be the largest such award in EEOC's history.

Pointing out that it secured a settlement for one of the 270 CRST employees in the case, EEOC argues that it was the prevailing party and therefore shouldn't be on the hook for fees and costs.

Monika Starke, a female truck driver employed by CRST, filed an EEOC claim against the company in 2006, alleging that she was subjected to verbal harassment and unwelcome sexual advances by male employees. In 2007 the EEOC sued CRST on behalf of Starke and a class of similarly situated female employees. During discovery, the class swelled to 270 employees. EEOC alleged a "pattern or practice" of sexual harassment at the company.

What got EEOC in trouble was its use of the discovery process to identify potential class members—a strategy defense lawyers call "sue first, ask questions later." Under Title VII of the Civil Rights Act, EEOC must conduct a presuit investigation and "good faith conciliation" prior to bringing suit. Reade determined that the agency "wholly abdicated" that responsibility and granted summary judgment to CRST's lawyers, led by Chicago-based Jenner & Block partner John Mathias Jr.

An en banc Eight Circuit panel mostly affirmed Reade in May 2012, writing that "CRST faced a continuously moving target of allegedly aggrieved persons." However, the appeals court revived sexual harassment claims filed individually by Starke and one other claimant. CRST settled Starke's claim for $50,000, far less than it would have cost CRST to defend itself at trial.

EEOC has now taken the case back to the Eighth Circuit in hopes of undoing the fee award. EEOC points out that, in addition to nabbing the $50,000 settlement, it prevailed on a few legal issues during the prior Eighth Circuit appeal. "[A] plaintiff is the prevailing party if it obtained at least some relief on the merits, even if only a technical victory with nominal damages," the agency wrote. "Under this definition, EEOC is the prevailing party here."

Last year was a tough one for EEOC. Judges accused the agency of relying on flawed expert reports and sending out unduly burdensome subpoenas, as we reported here and here.

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