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Great Steaks beat a court rap for treating its female employees like meat in 2009, but lost an argument for attorneys' fees this week in the Fourth Circuit Court of Appeals.
The Equal Employment Opportunity Commission accused Great Steaks of subjecting female employees to a sexually hostile work environment in 2005. The EEOC claim went to trial, and a jury ruled in favor of Great Steaks four years later. Great Steaks, in turn, moved for attorneys' fees under several federal statutes, including a Title VII's fee-shifting provision and the Equal Access to Justice Act's (EAJA) mandatory fee provision.
The district court denied Great Steaks' motion. The court found that the EEOC claim was not unreasonable, without foundation, or a frivolous lawsuit which precluded attorneys' fees under Title VII. Great Steaks' EAJA argument was rejected because EEOC's case was substantially justified. Finally, the court ruled that the fee award would be improper because the EEOC did not act in bad faith or vexatiously multiply the proceedings.
The Fourth Circuit Court of Appeals affirmed the district court on all three arguments.
One of the issues between Great Steaks and the EEOC in the attorneys' fees appeal was how the district court's denials of Great Steaks' motions for summary judgment motion and judgment as a matter of law during the trial should be regarded when determining whether the EEOC's case was frivolous, unreasonable, or groundless. The EEOC argued that its success on the trial motions was an indicator that the EEOC claim was not baseless.
The Fourth Circuit Court of Appeals said that the analysis isn't so simple, noting that frivolous lawsuits can survive summary judgment because sometimes courts need time to "blow away the smoke screens" that plaintiffs throw up. The court found that it is also possible for a plaintiff to establish a prima facie case which is weak, but which is sufficient to survive a directed verdict; the case could be groundless nonetheless in light of a defense readily apparent to the plaintiff from the outset of the litigation.
Denial of judgment as a matter of law, however, is a particularly strong indicator that the plaintiff's case is not frivolous, unreasonable, or groundless.
While the appellate court found that the EEOC claim in the Great Steaks case was not a frivolous lawsuit, the EEOC's success on trial motions was not enough to reach that conclusion. If you're engaged in a court battle over attorneys' fees in the Fourth Circuit Court of Appeals, don't rely solely on the outcome of summary judgment motions to make your case.