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Equal Employment Opportunity Commission v. CRST Van Expedited, Inc.

United States Court of Appeals, Eighth Circuit

December 22, 2014

Equal Employment Opportunity Commission, Plaintiff - Appellant
v.
CRST Van Expedited, Inc., Defendant - Appellee

Submitted September 11, 2014

Page 1170

[Copyrighted Material Omitted]

Page 1171

Appeal from United States District Court for the Northern District of Iowa - Cedar Rapids.

For Equal Employment Opportunity Commission, Plaintiff - Appellant: Ann Marie Henry, Jean P. Kamp, Jeanne Bowman Szromba, EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Chicago, IL; Susan Ruth Oxford, EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Washington, DC; Nicholas J. Pladson, EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Minneapolis, MN; Brian C. Tyndall, EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Milwaukee, WI.

For CRST Van Expedited, Inc., Defendant - Appellee: Richard P. Campbell, James T. Malysiak, Robert T. Markowski, John H. Mathias, Jr., Carla J. Rozycki, Sally K. Sears Coder, Ema J. Sullivan, JENNER & BLOCK, Chicago, IL; Kevin James Visser, SIMMONS & PERRINE, Cedar Rapids, IA; Thomas D. Wolle, Attorney, MOYER & BERGMAN, Cedar Rapids, IA.

Before RILEY, Chief Judge, SMITH and KELLY, Circuit Judges.

OPINION

Page 1172

SMITH, Circuit Judge.

The Equal Employment Opportunity Commission (EEOC) appeals the district court's award of $4,694,442.14 in attorneys' fees, expenses, and costs to CRST Van Expedited, Inc. (CRST) following the parties' $50,000 settlement of the only remaining claim, out of 154 individual claims, against CRST. For the reasons discussed infra, we reverse and remand for further proceedings consistent with this opinion.

I. Background

A more extensive factual background of this case is available in our prior opinion. See EEOC v. CRST Van Expedited, Inc., 679 F.3d 657 (8th Cir. 2012) (" CRST IV " ). We will provide only an abbreviated procedural history to provide context for the present dispute.

A. Underlying Action

" The . . . EEOC . . . filed suit in its own name against CRST . .., alleging that CRST subjected Monika Starke 'and approximately 270 similarly situated female employees' to a hostile work environment, in violation of Title VII of the Civil Rights Act of 1964 ('Title VII'), 42 U.S.C. § 2000e et seq." Id. at 664. Specifically, " [t]he EEOC alleged that CRST was responsible for severe and pervasive sexual harassment in its New-Driver Training Program ('Training Program')." Id. at 665.

Thereafter, the district " court granted Janet Boot, Barbara Grant, Cindy Moffett, Remcey Jeunenne Peeples, Starke and Latetsha Thomas's request to intervene." EEOC v. CRST Van Expedited, Inc., No. 07-CV-95-LRR, 2013 WL 3984478, at *4 n.5 (N.D. Iowa Aug. 1, 2013) (" CRST III " ).

For approximately two years after the filing of the suit, the EEOC failed to identify the women comprising the putative class; as a result, the district court ordered the EEOC " to (1) immediately amend its list of 270 women as soon as it learned of any women whose claims it no longer wished to pursue and (2) make all women on whose behalf it sought relief available to CRST for deposition." CRST IV, 679 F.3d at 670 (citation omitted). The penalty for failing to present a particular woman for deposition before the conclusion of discovery " would result in a 'discovery sanction' forbidding that woman from testifying at trial and barring the EEOC from seeking relief on her behalf in the case." Id. (citation omitted). " Although the EEOC complied with the court's directive and filed updated and corrected lists of allegedly aggrieved individuals, it failed to make all of the identified individuals available for deposition before [the deadline]." CRST III, 2013 WL 3984478, at *3. The district court then enforced its prior order and " barred the EEOC from pursuing relief for any individual not made available for deposition before the deadline." Id. Thereafter, " the EEOC filed an Updated List of Class Members, which listed 155 allegedly aggrieved individuals for whom the EEOC was still pursuing relief and 99 individuals who the EEOC alleged were sexually harassed but for whom the EEOC was not pursuing relief based on the court's . . . [o]rder." Id . (footnote omitted).

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In a series of orders, the district court ruled on CRST's various motions for summary judgment. First, CRST moved for summary judgment on the EEOC's purported pattern-or-practice claim. The district court found the motion " odd" because no " pattern[-]or[-]practice claim" appeared in the EEOC's complaint. " '[T]he EEOC did not allege that CRST was engaged in 'a pattern or practice of illegal sex-based discrimination or otherwise plead a violation of Section 707 of Title VII, 42 U.S.C. § 2000e-6.'" CRST IV, 679 F.3d at 676 n.13 (quoting EEOC v. CRST Van Expedited, Inc. (" CRST II " ), No. 07-CV-95-LRR, 2009 WL 2524402, at *7 n.14 (N.D. Iowa Aug. 13, 2009)).

The district court had " assumed [that] the EEOC had the right to maintain a pattern-or-practice claim in this case but dismissed it with prejudice. The court held as a matter of law that there was insufficient evidence from which a reasonable jury could find that it was CRST's 'standard operating procedure' to tolerate sexual harassment." [1]

Id. (alteration in original) (emphasis added) (quoting CRST II, 2009 WL 2524402, at *7 n.14); see also CRST III, 2013 WL 3984478, at *3 (" Specifically, the court held that, to the extent the EEOC asserted a pattern[-]or[-]practice claim, such claim was dismissed with prejudice and, consequently, CRST was liable only to the extent the EEOC could prove individual claims of sexual harassment." ). In CRST IV, " [w]e, like the district court, 'express[ed] no view as to whether the EEOC's investigation, determination and conciliation of Starke's Charge would be sufficient to support a pattern [-]or-practice lawsuit.'" 679 F.3d at 676 n.13 (quoting CRST II, 2009 WL 2524402, at *16 n.21).

Second, CRST moved for summary judgment based on the statute of limitations and other grounds; the district court " found that the applicable statute of limitations barred the EEOC from seeking relief on behalf of 9 individuals and barred, in part, the EEOC from seeking relief on behalf of another 3 individuals." CRST III, 2013 WL 3984478, at *3 (citation omitted).

Third, " the district court granted CRST summary judgment against three women, including Starke, reasoning that the women were judicially estopped from prosecuting their claims." CRST IV, 679 F.3d at 670 (footnote omitted) (citing EEOC v. CRST Van Expedited, Inc. (" CRST I " ), 614 F.Supp.2d 968 (N.D. Iowa 2009)).

Fourth, CRST moved for summary judgment against certain interveners' claims, and the district court granted in part and denied in part the motion. CRST III, 2013 WL 3983378, at *4. The court concluded that Boot's claims were frivolous or, in the alternative, that she did not generate a genuine issue of material fact regarding CRST's knowledge of the purported harassment and CRST's alleged failure to take proper remedial action. Id. Additionally, the court dismissed Peeples's claims and Nicole Cinquemano's claims, concluding that CRST lacked actual or constructive knowledge of the alleged harassment. Id. " The court further held that the EEOC was barred from seeking relief at trial to the same extent these Plaintiffs-Interveners were barred." Id. (citation omitted).

Fifth, CRST moved for summary judgment based on the class members' failure to report the alleged harassment or CRST's prompt and effective response to the reported harassment. Id. The district

Page 1174

court granted the motion in part and denied it in part, finding " that the EEOC was barred from seeking relief on behalf of [(1)] 11 individuals because CRST did not know or have reason to know that they were sexually harassed and [(2)] 4 individuals because CRST adequately addressed the sexual harassment." Id.

Sixth, CRST moved for summary judgment against class members who did not experience severe or pervasive sexual harassment, and the court granted the motion in part and denied it in part, concluding " that the EEOC had failed to generate a genuine issue of material fact as to whether 11 individuals had experienced severe or pervasive sexual harassment and, consequently, held that the EEOC was barred from seeking relief on their behalf." Id.

Seventh, CRST moved for summary judgment against class members whose claims purportedly failed on two or more grounds, and the court granted the motion in part and denied it in part. Id. The court prohibited the EEOC from seeking relief on behalf of 46 women. Id. The EEOC conceded that " 4 individuals did not suffer actionable sexual harassment," and the court

found that a reasonable jury could not find 42 individuals suffered from actionable sexual harassment because they did not suffer severe or pervasive sexual harassment and/or there was insufficient evidence to show that CRST knew or should have known that the individuals suffered sexual harassment yet failed to take proper remedial action.

Id.

" Finally, . . . the district court barred the EEOC from seeking relief for the remaining 67 women after concluding that the EEOC had failed to conduct a reasonable investigation and bona fide conciliation of these claims--statutory conditions precedent to instituting suit." CRST IV, 679 F.3d at 671 (citing CRST II, 2009 WL 2524402). The district court dismissed the EEOC's complaint because it had " disposed of all the allegedly aggrieved women in the EEOC's putative 'class.'" Id.

After the district court dismissed the action, CRST filed a bill of costs pursuant to Federal Rule of Civil Procedure 54(d) and 28 U.S.C. § 1920 and moved for attorneys' fees pursuant to 42 U.S.C. § 2000e-5(k). The district " court awarded CRST $92,842.21 in costs, $4,004,371.65 in attorneys' fees[,] and $463,071.25 in out-of-pocket expenses, for a total of $4,560,285.11." CRST III, 2013 WL 3984478, at *5 (citations omitted).

B. Appeal

" [T]he EEOC appeal[ed] the district court's dismissal of its claims as to 107 women." CRST IV, 679 F.3d at 670. On appeal, the EEOC argued that the district court (1) erroneously barred it " from pursuing claims as to 67 women based on its failure to reasonably investigate or good-faith conciliate," id. at 671; (2) erroneously granted summary judgment on Starke's, Payne's, and Timmons's individual claims, as well as on the EEOC's claims on their behalf, based on judicial estoppel, id. at 677; (3) erroneously granted summary judgment on the merits of several of its hostile work-environment claims against CRST, id. at 682-86; and (4) abused its discretion in awarding CRST attorneys' fees and expenses, id. at 694.

After analyzing each of the EEOC's contentions,

we affirm[ed] in part, reverse[d] in part, and remand[ed] for further proceedings consistent with this opinion. Specifically, we reverse[d] the district court's grant of summary judgment on the EEOC's claims as to Monika Starke because

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the EEOC, suing as a plaintiff in its own name under ยง 706, may not be judicially estopped because of Starke's independent conduct. Additionally, we reverse[d] the district court's grant of summary judgment on the EEOC's claims on behalf of Tillie Jones because the EEOC . . . produced sufficient evidence to create a genuine fact issue as to the severity or pervasiveness of harassment that she allegedly suffered. Finally, we vacate[d], without prejudice, the district court's award of attorneys' fees to CRST because, in light of these aforementioned rulings, CRST [wa]s no longer a " prevailing" defendant under 42 ...

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