COMMONWEALTH OIL REFINING COMPANY, INC., Plaintiff-Appellant, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant-Appellee

720 F.2d 1383, 1983 U.S. App. LEXIS 14584, 33 Empl. Prac. Dec. (CCH) 33,975, 33 Fair Empl. Prac. Cas. (BNA) 766

• Court: Court of Appeals for the Fifth Circuit
• Decided: December 12, 1983
• Docket: 82-1581
• Status: Published

Opinions

GEE, Circuit Judge:

Following entry of a consent decree between the Equal Employment Opportunity Commission (EEOC) and Commonwealth Oil Refining Company, Inc. (Commonwealth) (settling EEOC charges of hiring and promotion discrimination against women and Puerto Ricans at Commonwealth’s Peneulas, Puerto Rico, facilities), Commonwealth filed suit in federal district court for attorney’s fees under § 706(k) of Title VII, 42 U.S.C. § 2000e-5(k) (1976), asserting that it was the prevailing party and that the EEOC’s suit was brought in bad faith. The district court determined that there was no genuine issue of material fact and granted the EEOC’s motion for summary judgment, Fed.R.Civ.P. 56(c). We find that the district court erred in granting summary judgment without holding a full hearing to resolve the issues presented by Commonwealth’s claim: whether the defendant Commonwealth “prevailed” and if so, whether the EEOC acted in bad faith and/or pressed frivolous claims. Therefore we remand for an evidentiary hearing and findings in accordance with this opinion.

I. Background

In February 1975, an EEOC charge was filed against Commonwealth alleging that the company was violating Title VII, 42 U.S.C. § 2000e et seq., by discriminating against women and Puerto Ricans with respect to hiring, promotion and compensation at its Peneulas, Puerto Rico, petrochemical complex. An investigation followed and in February 1977 the EEOC issued a decision finding reasonable cause to believe specific portions of the charge true. Ensuing conciliation efforts, though complicated by Commonwealth’s intervening insolvency and Chapter XI reorganization proceeding,¹ ultimately led to a conciliation agreement. A consent decree was entered by the parties and approved by the bankruptcy court in January 1981.

The consent decree set out procedures whereby Commonwealth was to publicize equal employment policies and programs, and provided for monitoring its compliance. Commonwealth agreed to increase the representation of Puerto Ricans and women in entry level positions in six different operational departments, and to contact local Puerto Rican colleges and referral agencies in its future recruitment efforts. The decree also instituted procedures to identify, and even counsel and train, current female employees for promotion into certain “target area jobs.” Commonwealth agreed to budget $50,000 a year to fund these efforts. In addition, the consent decree provided relief for all identifiable women and Puerto Ricans against whom Commonwealth had discriminated in hiring or promotion between February 1973 and the date of the decree. The decree provided that a Special Master, empowered to award back wages and preferential seniority and order preferential hiring or promotion, would hear all cases that the parties could not resolve through informal conciliation efforts. A fund of one million dollars was established to satisfy any potential liability on these past claims.

Commonwealth’s reorganization efforts proved successful, and in June 1981 a plan of arrangement was approved by the bankruptcy court. Subsequently, the company brought this action in federal district court seeking attorney’s fees against the EEOC pursuant to § 706(k) of Title VII alleging that (a) it had prevailed against the EEOC in the proceedings initiated by the 1975 charge, and (b) that the EEOC had proceeded “in bad faith and with no reasonable belief in the merits of the factual and legal positions it espoused.”

Commonwealth’s Amended Complaint asserted three separate “claims for relief” on which it purportedly prevailed. The first advanced two theories to conclude that Commonwealth had been the prevailing party under the consent decree: (a) that the decree contained “no remedy or relief for many of the more substantial discriminatory practices [that had been originally] alleged in the [EEOC’s original charge and subsequent determination]”; and (b) that the decree ultimately entered by the parties afforded less relief than had been offered by Commonwealth to the EEOC in earlier conciliation negotiations. The second asserted that Commonwealth was a prevailing party in its successful effort (before entry of the consent decree) to defeat the EEOC’s attempt to evade Chapter XI’s automatic stay provision, Bkrptcy. R. ll-44(a), which barred the EEOC from commencing a Title VII suit in district court. The third asserted that Commonwealth had been a prevailing party because 77 of the 109 names initially identified as likely victims of past discrimination under the provisions of the consent decree were ultimately withdrawn.

Commonwealth sought $525,000 in fees plus the costs and fees incurred in bringing the fee action itself. The EEOC filed a motion to dismiss, or in the alternative for summary judgment, and Commonwealth filed a cross motion for summary judgment. The district court concluded that no genuine issues of material fact existed, denied Commonwealth’s motion, and granted that of the EEOC. This appeal followed.

On appeal, Commonwealth asserts that it prevailed against the EEOC on claims advanced by the EEOC which were either frivolous or undertaken in bad faith and is therefore entitled to an award of attorney’s fees pursuant to 706(k) of Title VII.

II. The “Prevailing Party” Test Applied to Defendants

Section 706(k) of Title VII provides:

In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney’s fee as part of the costs, and the Commission and the United States shall be liable for costs as a private person.

(Emphasis added). As is well known, Supreme Court decisions, most notably Chris-tiansburg Garment Co. v. Equal Employment Opportunity Commission, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978), have grafted onto the “permissive and discretionary language of the statute,” Chris-tiansburg, 434 U.S. at 418, 98 S.Ct. at 699, further requirements for the recovery of attorney’s fees which differ radically depending on whether the party deemed “prevailing” is plaintiff or defendant. Prevailing civil rights plaintiffs are to recover fees “in all but special circumstances,” 434 U.S. at 417, 98 S.Ct. at 698, citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). . Prevailing defendants may recover only upon a finding that the plaintiff’s claim is frivolous, unreasonable, groundless, made in bad faith, or persisted in after its character as one of these has become clear. 434 U.S. at 421, 98 S.Ct. at 700.

Both decisional authority and the unequivocal language of § 706(k) itself, however, require a plaintiff, equally with a defendant, to demonstrate that he is the “prevailing party” as a threshold for recovery of attorney’s fees. Our Court’s test of status as “prevailing party” in civil rights cases, laid down early and reaffirmed in case after case, declares: “The proper focus is whether the plaintiff has been successful on the central issue ... as exhibited by the fact that he has acquired the primary relief sought.” Iranian Students Ass’n v. Edwards, 604 F.2d 352, 353 (5th Cir.1979) (Goldberg, J.) (emphasis added). See also Taylor v. Sterrett, 640 F.2d 663, 669 (5th Cir.1981) (identical language, citing Edwards); Coen v. Harrison County School Bd., 638 F.2d 24, 26 (5th Cir.1981) (identical language, citing Edwards and other cases).² We have applied this' test of “prevailing party” status equally to both plaintiffs and defendants. See EEOC v. Kimbrough Investment Co., 703 F.2d 98, 103 (5th Cir.1983) (awarding costs to employer as prevailing party but denying attorney’s fees under Christiansburg; United States v. Allegheny-Ludlum Industries, 558 F.2d 742, 743 (5th Cir.1977) (withdrawn in part, 568 F.2d 1073, 1074 (5th Cir.1978)).

While it may not easily lend itself to further articulation, this single test provides a commonsense, practical yardstick of success. In many if not most lawsuits, whether tried or settled,³ it is possible to compare the allegations made with the results obtained and pick out a winner: a plaintiff who carried the day on his major claim, a defendant who defeated the major thrust of the suit. In other cases it may be that neither party could fairly be said to have carried the day, and in such event there should be no fee award to either.

Thus, the district court below was required by Section 706(k) and case precedent to weigh the claims for relief advanced by the EEOC against the results obtained by it to determine whether Commonwealth was the prevailing party as the initial step in determining whether Commonwealth was entitled to a fee award. As the next step, it was required to determine whether the claims advanced by the EEOC were frivolous, vexatious or brought to harass Commonwealth.⁴ However, the order issued by the trial court granting summary judgment for the EEOC sets forth no grounds for its decision, nor were any opinion, findings, or conclusions of law separately filed. This leaves both this Court and the parties in limbo. Indeed, on appeal Commonwealth argues that the trial court’s decision was based on the notion that the res judicata effects of the consent decree barred Commonwealth’s claim. Both the undeveloped state of the record and our restricted role as an appellate court prevent us from divining the several grounds on which the district court may have based its ruling.

Because of the lack of clarity in the district court’s order, and because of the lack of express findings on whether Commonwealth prevailed or whether it is entitled to attorney’s fees under Christiansburg, we remand for an evidentiary hearing on these issues. See Neidhardt v. D.H. Holmes Co. Ltd., 701 F.2d 553 (5th Cir.1983) (remanding for determination of defendant’s entitlement to attorney’s fees under § 706(k) where basis for denial unclear). The judgment of the district court is

REVERSED and the cause REMANDED.

1 . 11 U.S.C. § 1101 et seq.

2 . As the Supreme Court indicated in passing in a recent decision reversing an award of attorney’s fees because the district court did not properly consider the relationship between the extent of plaintiffs success and the amount of the fee award, the test applied in this Circuit differs from the “generous formulation” applied in the First, Seventh and Ninth Circuits under which “plaintiffs may be considered ‘prevailing parties’ for attorney’s fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” See Hensley v. Eckerhart, — U.S. —, 103 S.Ct. 1933, 1939 and n. 8, 76 L.Ed.2d 40 (1983).

3 . Our cases hold that attorney’s fees may be awarded absent a grant of formal judicial relief as long as the moving party has achieved the primary relief he sought, Iranian Students Ass’n. v. Sawyer, 639 F.2d 1160, 1163 (5th Cir.1981); Robinson v. Kimbrough, 652 F.2d 458, 466 (5th Cir.1981).

4 . As the Supreme Court indicated in Eckerhart, 103 S.Ct. at 1940, the district court should conduct a separate factual inquiry with regard to each “unrelated claim” advanced by the plaintiff. Indeed, “if [any unrelated] claim is frivolous, the defendant may recover attorney’s fees incurred in responding to it....” Id n. 10.