In CRST Van Expedited, Inc. v. EEOC, No. 14-1375 (S. Ct. May 19, 2016), the Supreme Court unanimously ruled that a defendant in a Title VII case can be eligible for attorney's fees as a "prevailing party" even if the defendant does not prevail on the merits. The Court's rejection of the Eighth Circuit's on-the-merits standard seemed almost a foregone conclusion, given the failure by either CRST or the EEOC to defend that standard and given the Justices' skeptical questions and comments during oral argument. In defense of the Eighth Circuit's decision, the EEOC argued, in the alternative, that a defendant is not a prevailing party unless it obtains a ruling that has a preclusive effect (i.e., a dismissal with prejudice). While the Court declined to address this argument since it was raised at the 11th hour, I think the Court's reasoning in CRST effectively pulls the rug out from under it.
In particular, the underpinning of the preclusive-judgment standard relies heavily on the Court's earlier decision in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001), which stated that the "touchstone of the prevailing party inquiry must be the material alteration of the legal relationship of the parties," including a change marked by "judicial imprimatur." As Justice Breyer observed during oral argument, the EEOC was arguing that "what's sauce for the goose is sauce for the gander." In CRST, however, the Court characterized Buckhannon as setting forth the rule for determining whether a plaintiff is a prevailing party, and the Court stated that it had not, by contrast, set forth the standard for assessing whether a defendant has prevailed. The Court further explained:
Plaintiffs and defendants come to court with different objectives. A plaintiff seeks a material alteration in the legal relationship between the parties. . . . The defendant has . . . fulfilled its primary objective whenever the plaintiff's challenge is rebuffed, irrespective of the precise reason for the court's decision.The Court also reasoned that, since the fee-shifting provision is intended to spare defendants the costs of frivolous litigation, Congress must have intended for a defendant to be eligible for fees expended in frivolous litigation when a case in resolved in its favor, regardless of whether the case involved merits-based frivolity. The Court concluded that an on-the-merits requirement would undermine this intent by carving out a category of defendants that Congress had intended to make eligible for fees. By extension, limiting fee awards to decisions with a preclusive effect would likewise carve out a large category of defendants that Congress had intended to make eligible for fee awards for having had to engage in frivolous litigation. Essentially, when it comes to defendants' eligibility for fee awards, frivolousness is frivolousness.
During oral argument, Justice Alito and Chief Justice Roberts both noted that, if a case involving frivolous litigation is dismissed without prejudice, then, under a preclusive-judgment standard, whether the defendant will subsequently be eligible for fees lies within the plaintiff's control. Brian Fletcher (the Assistant to the Solicitor General defending the EEOC) defended this seemingly peculiar result by contending that the fee-shifting provision is merely intended to protect defendants against frivolous suits. The Court, however, has now clarified that the fee-shifting provision is intended to compensate more broadly for the defense against frivolous litigation.
This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.