tagline
logo

Lewis v. Chicago, No. 08-974 (U.S. S. Ct. May 24, 2010); Hardt v. Reliance Standard Life Ins. Co., No. 09-448 (U.S. S. Ct. May 24, 2010)

| May 23, 2010 | Daily Developments in EEO Law |

Two unanimous employee-side victories from the Supreme Court — one under Title VII, the other under ERISA — demonstrate that fidelity to the legislative text will ordinarily lead to a plaintiff-friendly outcome.

Lewis v. Chicago, No. 08-974 (U.S. S. Ct. May 24, 2010): In the interest of full disclosure, I sit as an executive and on the board of the Chicago Lawyers’ Committee, and in that capacity had a little involvement in this case. The plaintiff class of minority applicants for firefighter positions in my home town alleged that a pen-and-paper exam had a disparate impact against them.  The city announced in January 1996 that it would hire randomly-selected applicants who scored 89 out of 100 on the test, and would retain those who scored 65 and above on the eligibility list, but advised the lower-scoring “qualified” that they probably would not be hired. In May 2006 hiring commenced, and in March 1997 minority “qualified” filed a charge of discrimination with the EEOC. 

The class prevailed at trial on the merits: “After an 8-day bench trial, the District Court ruled for petitioners, rejecting the City’s business-necessity defense. It ordered the City to hire 132 randomly selected members of the class (reflecting the number of African-Americans the Court found would have been hired but for the City’s practices) and awarded backpay to be divided among the remaining class members.” But in an interlocutory appeal, the Seventh Circuit reversed, holding (in an opinion signed by Judge Richard Posner) that the Title VII claim commenced no later than the city’s initial announcement that it would hire off of the disputed list.

The Supreme Court unanimously reverses, in an opinion signed by Justice Scalia. While a disparate treatment claim may accrue when the employee knew or should have known about an impending “unlawful employment practice,” the accrual date of a disparate impact claim is governed by different language, i.e., when “a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin” (42 U. S. C. §2000e-2(k), emphasis added).

Here, the Court holds, the hiring list was “use[d]” not when it was announced, but (rather) each time that the city resorted to it to fill vacancies:

“Title VII does not define ’employment practice,’ but we think it clear that the term encompasses the conduct of which petitioners complain: the exclusion of passing applicants who scored below 89 (until the supply of scores 89 or above was exhausted) when selecting those who would advance. The City ‘use[d]’ that practice in each round of selection. Although the City had adopted the eligibility list (embodying the score cutoffs) earlier and announced its intention to draw from that list, it made use of the practice of excluding those who scored 88 or below each time it filled a new class of firefighters. Petitioners alleged that this exclusion caused a disparate impact. Whether they adequately proved that is not before us. What matters is that their allegations, based on the City’s actual implementation of its policy, stated a cognizable claim.”

The Court resisted any analogy to the disparate treatment line of cases:

“The Seventh Circuit . . . reason[ed] that the difference between disparate-treatment and disparate-impact claims is only superficial. Both take aim at the same evil-discrimination on a prohibited basis-but simply seek to establish it by different means. 528 F.3d, at 491-492. Disparate-impact liability, the Court of Appeals explained, ‘is primarily intended to lighten the plaintiff’s heavy burden of proving intentional discrimination after employers learned to cover their tracks.’ Id., at 492 (quoting Finnegan v. Trans World Airlines, Inc., 967 F.2d 1161, 1164 (CA7 1992)). But even if the two theories were directed at the same evil, it would not follow that their reach is therefore coextensive. If the effect of applying Title VII’s text is that some claims that would be doomed under one theory will survive under the other, that is the product of the law Congress has written. It is not for us to rewrite the statute so that it covers only what we think is necessary to achieve what we think Congress really intended.

*     *     *     *

“By enacting §2000e-2(k)(1)(A)(i), Congress allowed claims to be brought against an employer who uses a practice that causes disparate impact, whatever the employer’s motives and whether or not he has employed the same practice in the past.”

The case is remanded to consider whether the first round of non-hires were time-barred.

Hardt v. Reliance Standard Life Ins. Co., No. 09-448 (U.S. S. Ct. May 24, 2010): ERISA, as with many labor-protective statutes, awards attorneys’ fees and costs as a remedy.  Many lower courts had held that one must be a “prevailing party” to obtain such an award. But the Supreme Court, in an opinion authored by Justice Alito, holds that the language of the statute — 29 U.S.C. §1132(g)(1) — makes no such imposition. The statute provides simply that “the court in its discretion may allow a reasonable attorney’s fee and costs . . . to either party.”

In this case, the district court denied cross-motions for summary judgment on a long-term disability benefit claim, and remanded for the plan administrator to reconsider the denial of benefits. The judge admonished that the evidence clearly supported the employee. The plan administrator then awarded the benefits. The plaintiff applied to the district court for an award of fees and costs. Though she prevailed below, the Fourth Circuit vacated her award, finding that a remand order alone did not make the employee a “prevailing party.”

The unanimous Court (Justice Stevens concurring in the result) holds that because the statute does not specify that an award must go to a “prevailing party,” the Fourth Circuit (and indeed many other lower courts) had erred in interposing such a requirement. Borrowing from case law developed under a parallel fee and cost section in the Clean Air Act, the Court holds that it is sufficient for a fees claimant to show “some degree of success on the merits” for an award under §1132(g)(1): “A claimant does not satisfy that requirement by achieving ‘trivial success on the merits’ or a ‘purely procedural victor[y],’ but does satisfy it if the court can fairly call the outcome of the litigation some success on the merits without conducting a ‘lengthy inquir[y] into the question whether a particular party’s success was ‘substantial’ or occurred on a ‘central issue.'”

Notably the Court rejects direct application of a five-factor test widely in use in the lower courts to decide whether a party met the requirements for a fee award*:  “Because these five factors bear no obvious relation to §1132(g)(1)’s text or to our fee-shifting jurisprudence, they are not required for channeling a court’s discretion when awarding fees under this section.” The Court does, however, regard the five-factor test as possibly relevant to a court’s exercise of discretion in awarding fees after deciding that the participant is otherwise eligible.

 = = = = = = = = = = = = = = =

*The five factors are “(1) the degree of opposing parties’ culpability or bad faith; (2) ability of opposing parties to satisfy an award of attorneys’ fees; (3) whether an award of attorneys’ fees against the opposing parties would deter other persons acting under similar circumstances; (4) whether the parties requesting attorneys’ fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and (5) the relative meritsof the parties’ positions.”

tell us about your case

Archives

our office locations

Outten & Golden LLP
685 Third Avenue, 25th Floor  
New York, NY 10017  
Phone: 212-245-1000
Map and Directions

Outten & Golden LLP
One California Street, 12th Floor
San Francisco, CA 94111
Phone: 415-638-8800
Map and Directions

Outten & Golden LLP
601 Massachussetts Avenue NW
Second Floor West Suite 200W
Washington, DC 20001
Phone: 202-847-4400
Map and Directions