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Equal Employment Opportunity Commission v. CVS Pharmacy, Inc.

United States District Court, N.D. Illinois, Eastern Division

January 18, 2017

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
v.
CVS PHARMACY, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          JOHN W. DARRAH United States District Court Judge

         Defendant CVS Pharmacy, Inc. filed a Motion for Attorney's Fees [63] pursuant to 42 U.S.C. § 2000e-5(k), Federal Rule of Civil Procedure 54(d), and Local Rule 54.3. For the reasons stated below, Defendant's Motion for Attorney's Fees [63] is granted in part and denied in part.

         BACKGROUND

         The Equal Employment Opportunity Commission (the “EEOC”) filed suit against CVS Pharmacy, Inc., alleging a pattern or practice of resistance to the full enjoyment of rights secured by Title VII of the Civil Rights Act of 1964 in violation of 42 U.S.C. § 2000-e6(a). Defendant filed a Motion to Dismiss or, in the Alternative, for Summary Judgment, which was granted on October 7, 2014. On December 5, 2014, Plaintiff filed a Notice of Appeal. On December 17, 2015, the Seventh Circuit upheld the grant of summary judgment in favor of Defendant. Plaintiff's petition for rehearing en banc was denied on March 9, 2016.

         LEGAL STANDARD

         The attorney's fee provision of Title VII states that “the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs, and the [EEOC] . . . shall be liable for costs the same as a private person.” 42 U.S.C. § 2000e-5(k). However, in Title VII cases, attorney's fees should be awarded to a prevailing defendant only “upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith.” Christiansburg Garment Co. v. Equal Employment Opportunity Comm'n, 434 U.S. 412, 421 (1978). This standard is the same for the EEOC and for private litigants. Id. at 422 n. 20.

         ANALYSIS

         Courts generally have awarded attorneys' fees to prevailing defendants under 42 U.S.C. § 2000e-5(k) in two circumstances: (1) when the plaintiff “proceeds in the face of an unambiguous adverse ruling”; or (2) when the plaintiff “is aware with some degree of certainty of the factual or legal infirmity of his claim.” Badillo v. Central Steel & Wire Co., 717 F.2d 1160, 1163 (7th Cir. 1983). It is not disputed that CVS was the prevailing party. In determining whether a prevailing defendant is entitled to fees, the court considers the following factors: “(1) whether the suit is one of first impression; (2) whether there is or was a real threat of injury to the plaintiff; and (3) whether the record supports a finding that the plaintiff's action was frivolous.” E.E.O.C. v. Sears, Roebuck & Co., 114 F.R.D. 615, 627 (N.D. Ill. 1987) (citing LeBeau v. Libbey-Owens-Ford Co., 799 F.2d 1152, 1156 (7th Cir. 1986); Reichenberger v. Pritchard, 660 F.2d 280, 288 (7th Cir. 1981)). A case is frivolous when it “has no reasonable basis, whether in fact or law.” Tarkowski v. County of Lake, 775 F.2d 173, 176 (7th Cir. 1985). The claim that a Title VII “pattern or practice” case was frivolous must be carefully scrutinized. Sears, 114 F.R.D. at 629 (citing Hermes v. Hein, 742 F.2d 350, 357 (7th Cir. 1984); Ekanem v. Health and Hospital Corp. of Marion County, Indiana, 724 F.2d 563, 575 (7th Cir. 1983)).

         Defendant argues that the lawsuit was frivolous for two reasons: (1) because the factual premise of Plaintiff's case was unreasonable and (2) because the lawsuit was filed in violation of Title VII and the EEOC's regulations. Plaintiff argues that the lawsuit was not frivolous or, in the alternative, that Defendant's proposed fees are unreasonable.

         There is no claim that Plaintiff acted in the face of an unambiguous, advese ruling. It must therefore be determined whether or not the claim was factually or legally infirm.

         Factual Premise

         Defendant argues that it was unreasonable for the EEOC to claim that the severance terms were a pattern or practice of resistance to the rights secured by Title VII. Under Section 707(a), civil complaints may be brought when there is “reasonable cause to believe that any person or group of persons is engaged in a pattern or practice of resistance to the full enjoyment of any of the rights secured by” Title VII and “that the pattern or practice is of such a nature and is intended to deny the full exercise of the rights herein described.” 42 U.S.C. § 2000e-6(a). This Court found that the severance agreement contained a carve-out to the “covenant not to sue” provision, which enabled former employees to file a complaint with the EEOC and participate in enforcement of discrimination laws. The Seventh Circuit agreed. E.E.O.C. v. CVS Pharmacy, Inc., 809 F.3d 335, 341 n. 4 (7th Cir. 2015) (“. . . the district court correctly concluded that it is unreasonable to construe the Agreement as restricting the signatory from filing a charge or otherwise participating in EEOC proceedings.”).

         However, “there is a significant difference between making a weak argument with little chance of success . . . and making a frivolous argument with no chance of success.” Khan v. Gallitano, 180 F.3d 829, 837 (7th Cir. 1999). The EEOC argued that a combination of factors would lead a former employee to believe that they were precluded from exercising their rights under Title VII. And, as this Court has previously stated, “[t]he fact that a plaintiff advocates an inference that the court declines to adopt does not lead to the conclusion that the plaintiff acted without foundation.” Sanglap v. LaSalle Bank, FSB, 194 F.Supp.2d 798, 800 (N.D. Ill. 2002), aff'd, 345 F.3d 515 (7th Cir. 2003) (citing EEOC v. Elgin Teachers Ass'n, 27 F.3d 292, 295 (7th Cir. 1994)).[1] It cannot be said that the lawsuit was based on a frivolous factual premise.

         Legal ...


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