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January 26, 2006
EEOC Sanctioned $1 Million By Court for Filing Frivolous Lawsuit
From PlanSponsor.com:
A federal district court has ordered the Equal Employment Opportunity Commission (EEOC) to pay $1,022,653.69 in attorney’s fees and expenses to a Pasadena immigration law firm it unsuccessfully sued for sexual harassment and pregnancy discrimination.
The award consists of $995,780.72 in attorneys' fees and $26,872.97 in additional expenses.Ballard, Rosenberg, Golper & Savitt LLC, the firm that represented Robert L. Reeves & Associates in the case, said in a news release that the US District Court Judge Dickran Tevrizian said in his opinion that the lawsuit was "unreasonable, frivolous and without foundation."
Reeves maintained that the EEOC either knew or unreasonably failed to learn that its lawsuit was part of a scheme by two of Reeves' former law associates, Daniel Hanlon and Colin Greene, to destroy Reeves and his firm, according to the release. In 2001, a Los Angeles Superior Court judge found Hanlon and Greene liable to Reeves for interference with contract and prospective economic relations, misappropriation of trade secrets and related claims, and awarded Reeves and his firm a total judgment of nearly $200,000. The award was upheld by the California Supreme Court in 2004.
Just as a side note here, when I practiced employment discrimination law and defended employers during EEOC investigations, many times (not always), the EEOC investigators seemed set on making a cause finding against my clients (without much evidence).
On the other hand, unlike some of the investigators who were not attorneys, when the EEOC attorneys decide to bring a case, they should be more careful in having all their ducks in order. This is not to say that the EEOC won't appeal and have the judgment overturned here, but with an agency that is already stretched so thin, why waste resources on these type of marginal cases with clear red flags?
PS
January 26, 2006 in Labor and Employment News | Permalink
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Comments
Paul writes "when I practiced employment discrimination law and defended employers during EEOC investigations, many times (not always), the EEOC investigators seemed set on making a cause finding against my clients (without much evidence)." I think it is worthy to note, though, that the EEOC found reasonable cause in only 4.9% of the cases in FY 2004.
Suja A. Thomas, Professor, University of Cincinnati College of Law
Posted by: Suja Thomas | Jan 26, 2006 10:57:31 AM
It is worth noting that the same district court judge who has now sanctioned the EEOC for this "frivolous" case also granted summary judgment on it and was reversed by the 9th Circuit, which held that the evidence was sufficient to create a genuine issue of fact on the merits. See EEOC v. Reeves and Associates, 2003 WL 21480317.
The case was brought on behalf of 12 claimaints, and the EEOC appealed the order granting summary judgment as to six of them. While Judge Tevrizian's finding that the suit was frivolous as to the other six might be sustainable, it seems difficult to believe that the 9th Circuit will agree with him as to the six on whom a trial was required. It's possible, I admit, but not likely. Much more likely, it seems to me, is that this is a judge who was angry he had to try this case, thought he was right all along to dismiss it in the first place, and is handing the EEOC its collective head on a platter.
Having spent eight years in the EEOC's appellate division, I am certain of this: the original order dismissing the case would never have been appealed if the claims were frivolous.
Posted by: Sam Marcosson | Jan 26, 2006 12:23:31 PM
Suja and Sam:
All very good and important points.
In my defense though, as I said in the initial post, I was only talking from my own experience (and did not mean to suggest a pattern and practice on the part of the EEOC) and I conceded that there was every chance this sanctions decision would be overturned on the appeal. I think it even more likely now given Sam's elaboration on the case.
Posted by: Paul | Jan 26, 2006 1:03:51 PM
It seems to me that a case that survives summary judgment is not frivolous because the judge has determined that there is sufficient evidence to go to the jury. I know, however, that this argument was made before the 11th Circuit a number of years ago in a Rule 11 sanction matter and the court rejected this argument. The court concluded that even though there was sufficient evidence to survive summary judgment, it could still be frivolous and Rule 11 sanctions could still be available. I am bothered by this because it creates a chilling effect on plaintiffs who have worthy cases.
Ann McGinley
William S Boyd Prof of Law
UNLV
Posted by: Ann McGinley | Jan 26, 2006 8:28:12 PM
I agree with Ann almost entirely. However, I think I would reject a blanket rule stating that every case that survives summary judgment is automatically non-frivolous for Rule 11 purposes. I'd leave open the possibility for the rare case in which the trial itself reveals facts and evidence that shows that the case was frivolous, and that the party and his/her attorney should have known that it was. There are times when the full picture is not known to the court when it rules on the summary judgment. But it ought to be very, very rare -- and this isn't the case. I strongly doubt that a case in which the EEOC's General Counsel, acting on a recommendation from the Appellate Division, decided to appeal (and did so successfully) was even close to frivolous.
Posted by: Sam Marcosson | Jan 27, 2006 11:59:55 AM
The Ninth Circuit reversed because it found, CONSTRUING THE ALLEGATIONS IN THE LIGHT MOST FAVORABLE TO EEOC, there were potentially triable issues of fact. In rendering his award, Judge Tevrizian found the case for awarding fees more compelling post-trial than pre-trial because the trial revealed that EEOC exaggerated and outright distorted the evidence. It made a number of factual assertions in its opening statement that the evidence did not support. Its witnesses (the alleged victims) were, to be polite, extremely inconsistent and incoherent, and they admitted being coached by EEOC trial counsel as to what to say about the alleged harassment.
Gee, the order as to the frivolous nature of the six claimants on whose behalf the EEOC did not bother to appeal "might" be sustainable? The EEOC had never even SPOKEN with any of them prior to issuing the reasonable cause finding, prior to filing the lawsuit, or in some cases, prior to their depositions. Yet the agency demanded money on their behalf and certified to the court that they had been harassed or discriminated against.
Why is it unlikely that the 9th Circuit will disagree with him as to the six for whom trial was required? What evidence do you have that suggests there was a reasonable basis for proceeding with the case?
What is the basis for this statement: "Having spent eight years in the EEOC's appellate division, I am certain of this: the original order dismissing the case would never have been appealed if the claims were frivolous." The EEOC's appeal ipso facto can make a claim nonfrivolous? Is it impossible that EEOC erred? It must be, since you are "certain." It couldn't possibly be because EEOC did not want to pay the initial $387K and assumed things couldn't possibly get worse? It couldn't be that EEOC hoped it could drag matters past Judge Tevrizian's retirement? "Trust us, we're the government," isn't flying here.
Finally, I am shocked that a law professor would state, "a case that survives summary judgment is not frivolous because the judge has determined that there is sufficient evidence to go to the jury." Credibility determinations cannot be made at summary judgment. A lying plaintiff can survive summary judgment. When her lies are detected by a jury, should the very fact that she lied in an affidavit or a deposition defeat summary judgment immunize her from a finding that her claim was frivolous?
What you should be bothered by is not the "chilling effect" this will have on plaintiffs who have worthy cases. You should be bothered by the thought of the putative plaintiffs whose worthy cases were not brought because the EEOC invested so much money and time in this utterly frivolous lawsuit.
Posted by: John Peters | Jan 28, 2006 3:35:31 AM
Frivolous lawsuits that should be sanctioned survive motion of summary judgement all the time, and sometimes even go on to be awarded damages.
Easiest example of patent ridiculousness: Leibeck v McDonalds, the hot coffee case.
There have been at least 12 other suits just like it, all dismissed. There are have been at least millions if not billions of cups of coffee all sold at the temperature alleged to be "too hot" SINCE the trial - go to any Starbucks, among other places.
She spilled the coffee ON HERSELF. She was awarded over $1 million. That's insane.
To say that cases that survive summary judgement inherently aren't sanctionable is crazy. The system makes far too many mistakes.
Posted by: Deoxy | Feb 6, 2006 3:30:03 PM
I just lost a cas pro-se on summary judgement. I am a first year law student and could not afford a lawyer. As looking in the window from the other direction. What I have seen is that you can have the greatest defense in the world and your case not be friv and it will still be tossed out.
I had a lawyers firm non disclose over 30+ documents and not have a waiver of confidentiality signed and I objected to it from the the get go with all the denile and evidence in the objection to dispute it. Seeing that the defenses summary judgement was in violation of the Maine Rules of Civil Procedure from the beginning, I did not deny and admit and it was tossed out do to a technicality. Can you say Bias? Doug
Posted by: Doug Going | Oct 14, 2006 7:36:44 PM
