SCOTUS rules in favor of CRST on fees

By Dave DeWitte
dave@corridorbusiness.com

A dispute over $4.7 million in legal fees between CRST International and the U.S. Equal Employment Opportunity Commission (EEOC) that went all the way to the Supreme Court has been decided in the company’s favor.

The court on May 19 unanimously rejected the commission’s argument that it should not be required to pay CRST’s legal fees because the trucking company could only be considered a ‘prevailing party’ in a case filed under Title VII of the Civil Rights Act of 1964 by obtaining a ruling on the merits.

The case, involving a class of female CRST truck drivers alleging sexual harassment, had originally been decided in U.S. District Court by Judge Linda Reade, who awarded the $4.7 million in fees after dismissing all of the claims, including those on behalf of 67 women. The court found the claims were barred on the ground that the EEOC had not adequately investigated or attempted to conciliate the claims on their behalf before filing suit.

The Eighth Circuit Court of Appeals reversed the dismissal of only two claims, but that also caused it to dismiss the award of attorney’s fees, leading CRST to appeal.

CRST President and CEO David Rusch was pleased, saying the EEOC had conducted a “witch hunt” to find the company did not confront sexual harassment in its tandem-driver teams. He said the company offers several ways for employees to report sexual harassment, conducts annual training on sexual harassment prevention and requires all new drivers to receive sexual harassment training.

“They tried to build this into a monumental class action lawsuit without any investigation or conciliation,” Mr. Rusch said.

He said the $4.7 million awarded by the trial court represents less than a third of CRST’s total legal fees of $15 million. He said the case also required about a third of his time for four years, and required the company to hire general counsel to deal with the legal issues. He said CRST hopes to recover more of its legal fees when the case is sent back to the Eighth Circuit Court of Appeals to be revisited.

“I think we’re very close now to getting a check cut to us,” he added.

CRST dug in to fight the EEOC on the case because allowing it to prevail threatened a key portion of the company’s business model, which requires tandem teams to expedite deliveries over long distances, Mr. Rusch said.

The opinion, written by Justice Anthony Kennedy, said “common sense undermines the notion that a defendant cannot prevail unless the relevant disposition is on the merits.”

The court declined to consider an alternate argument by the commission that a defendant must obtain a “preclusive judgment” in order to prevail, saying that it was raised too late in the case to create an adequate record the court to evaluate.

Jenner & Block, one of the largest law firms in Chicago, represented CRST at the Supreme Court. Simmons Perrine Moyer Bergman PLC in Cedar Rapids has also supported CRST in the EEOC case.