UPDATES & ANALYSIS

5.20

Iowa trucking company gets unanimous U.S. Supreme Court victory

by Rox Laird | May 20, 2016

A sexual harassment lawsuit against Cedar Rapids trucking company CRST that has bounced around the federal courts for more than a decade took yet another bounce at the U.S. Supreme Court Thursday.

The history of this case is so contorted that the Supreme Court devoted 11 pages of the 16-page opinion to a recitation of the background. The court’s legal discussion was much more succinct, however: The result was in favor of the trucking company, which now stands to gain more than $4 million in lawyer’s fees after emerging victorious in its protracted legal battle with the federal government.

The case began in 2005 when driver trainee Monika Starke filed an employment discrimination complaint with the U.S. Equal Employment Opportunity Commission (EEOC), alleging she was sexually harassed by two CRST drivers during training.

The EEOC filed suit against CRST not only on Starke’s behalf, but on behalf of more than 270 women claiming to have suffered similar harassment.

That suit was ultimately pared back down to just Starke’s complaint by U.S. District Judge Linda Reade, in the Northern District of Iowa, who ruled that the federal employment commission had taken unwarranted shortcuts to bootstrap one case into a larger class action.

Although CRST resolved Starke’s complaint in a $50,000 settlement, the Cedar Rapids trucking company sought to recover legal fees it had accumulated during the years it had successfully fought to eliminate the other EEOC complaints. Judge Reade agreed and awarded the company more than $4.5 million in legal fees and expenses.

The Court of Appeals for the Eighth Circuit, which has jurisdiction over Iowa and six other Midwest states, reversed Reade’s ruling. The appeals court determined that federal law provides for fee recovery only by the party that wins a federal civil rights case on the legal merits. The appeals court held that the trucking company had prevailed not on the merits but on procedural issues.

The U.S. Supreme Court, in a decision handed down Thursday, disagreed.

Writing for the unanimous court, Justice Anthony Kennedy said “common sense” dictates legal fees be awarded to the prevailing party whether it wins on merits or other grounds. A win is a win.

“There is no indication that Congress intended that defendants should be eligible to recover attorney’s fees only when courts dispose of claims on the merits,” Kennedy wrote. “The congressional policy regarding the exercise of district court discretion in the ultimate decision whether to award fees does not distinguish between merits-based and nonmerits-based judgments.”

Alas, that does not mean the end of this case.

Although Kennedy noted that it has been 10 years since Starke originally filed her complaint, and the case has already produced “protracted and expensive litigation on the fee issue,” a number of questions remain unresolved.

Thus, the justices sent the case back to the Eighth Circuit, once again.

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