The only thing sweeter than winning a civil case against the federal government is to win the case and then be awarded your attorneys’ fees. But the winning defendant in EEOC v. Great Steaks, Inc., decided last week by the Fourth Circuit, will have to resign itself to eating cake without icing, notwithstanding three colorable fee arguments which were shot down by the Court.
The EEOC sued Great Steaks on behalf of several employees who claimed they had been sexually harassed in their work at Great Steaks’ restaurant in Greensboro. Great Steaks won the case after a three day jury trial and moved for its fees under Title VII’s fee-shifting provision, under the Equal Access to Justice Act (the "EAJA") and under 28 U.S.C. § 1927. Judge Beaty of the Middle District of North Carolina denied the fee request and was affirmed by the Fourth Circuit.
Title VII’s Fee-Shifting Provision
Title VII contains a provision allowing the Court in its discretion to award reasonable attorneys’ fees to prevailing parties in actions brought under it. 42 U.S.C. § 2000e-5(k). The statute makes no distinction between the standard for prevailing plaintiffs versus prevailing defendants, but in Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978), the Supreme Court established a more stringent standard governing when prevailing defendants may recover as compared to prevailing plaintiffs. The Supreme Court said in Christianburg Garment that a prevailing defendant is entitled to fees only if the trial court:
finds that [the plaintiff’s] claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so.
Id. at 422. A Title VII plaintiff who prevails, on the other hand, "is ordinarily entitled to attorneys’ fees unless special circumstances militate against such an award."
The reasons for the difference are discussed by the Court on pages 9-10 of the opinion.
A highly significant factor to the Fourth Circuit in its determination that no fees were warranted was that Great Steaks had made a motion for judgment as a matter of law at the close of the EEOC’s evidence at trial, which had been denied. So the case was strong enough to go to the jury. Judge Floyd said that the denial of a Rule 50 motion was a ""particularly strong indicator that the plaintiff’s case is not frivolous,unreasonable, or groundless." He said that "we are hard-pressed to imagine circumstances where the district court could make this determination and nevertheless deem the plaintiff’s case frivolous, unreasonable, or groundless." Op. at 12.
The review was for abuse of discretion, and the appellate court said that Judge Beaty was "in the best position" to make the fee assessment" since he had "managed the litigation and conducted the trial." Op. at 14.
All Great Steaks had to offer in support of its motion was that the EEOC’s case had steadily eroded over time from being a class action on behalf of numerous Great Steaks’ employees to a case involving only one employee who turned out not to be very credible and whose testimony had been deemed "troubling" by the Magistrate Judge who recommended that a summary judgment motion made by Great Steaks be denied. One potential class member had refused to appear for her deposition, and another announced that she was quitting the case at her deposition. This wasn’t enough to establish frivolity or groundlessness, according to the Court
Great Steaks took two more shots at a fee award.