United States Supreme Court Holds a Defendant Need Not Obtain a Favorable Judgment on the Merits to be a Prevailing Party under Title VII of the Civil Rights Act of 1964

On May 19, 2016, the United States Supreme Court clarified the circumstances under which a defendant can recover attorneys’ fees in a Title VII action. In CRST Van Expedited, Inc. v. Equal Employment Opportunity Commission, the Court firmly established that a defendant is not required to obtain a “ruling on the merits” to be considered a “prevailing party” entitled to fees under Title VII.

In CRST, the EEOC filed a sexual harassment suit against CRST Van Expedited, Inc. on behalf of 270 female employees. Two years after filing suit, the EEOC was unable to identify and produce the aggrieved women. The District Court granted CRST’s motions to dismiss many of the EEOC’s claims, finding that the EEOC did not adequately investigate or attempt to conciliate the claims before it filed suit. The District Court also assessed fees and costs against the EEOC in the amount of $4,560,285.11.

The Eighth Circuit reversed the District Court’s decision on the grounds that a Title VII defendant can only be a “prevailing party” eligible for an award of attorney fees if it obtains a “ruling on the merits” — which, according to the Eighth Circuit, does not include rulings on motions to dismiss.

The Supreme Court vacated the Eighth Circuit’s ruling. Finding that the purpose of an attorney’s fees award is to deter a plaintiff from bringing a suit without merit and that allowing an award of attorneys’ fees expended in frivolous, unreasonable, or groundless litigation when the case is resolved in the defendant’s favor — whether on the merits or not — is consistent with Congress’s intent in enacting the attorney’s fee provision of Title VII, the Supreme Court held that rulings on motions to dismiss in Defendants’ favor justified an attorneys’ fee award.

For more information on this Supreme Court decision and how the ruling may impact your business, contact:

Mary-Ellen H. Allen, Esquire or Maureen M. McBride, Esquire