Factual Reasonableness Was Conceded By Defense, And Legal Issue Was Novel Such That Fee Recovery Was Unwarranted.
Although we generally post on California cases, readers will notice that we do post on non-California federal cases of interest. Here is one of these cases emanating from the Seventh Circuit Court of Appeals (a federal appellate court).
In Equal Employment Opportunity Commission (EEOC) v. CVS Pharmacy, Inc., No. 17-1828 (7th Cir. June 8, 2018) (published), EEOC lost a summary judgment—affirmed on the merits in an earlier appeal—on a case alleging that CVS was using a severance agreement to chill its employees’ exercise of Civil Rights Act rights. To say the least, even the defense said during the litigation that novel issues were involved. The district judge found the factual basis for the suit was righteous, although awarding CVS $307,902.30 in fees against EEOC on the basis there was a lack of legitimate legal foundation for the suit.
The Seventh Circuit reversed. No one disputed that a prevailing party under 42 U.S.C. § 2000e-5(k) was entitled to an award of fees although fees to prevailing defendants (like CVS) are only awarded in exceptional cases. The principal reason for reversal was that the case was novel, of first impression, and not squarely adjudicated based on unambiguous precedent—in a word, it was not legally frivolous in nature. Also, the defense spent a lot of resources on the case and admitted the issues were indeed novel and involved a “deep understanding” of the Civil Rights Act. Based on the totality of the record, this one was reversed, although we understand that the defense is seeking a rehearing.