7th Circuit Strips Jones Day's $307K Legal-Fee Award in EEOC Case
"The EEOC's theory was not that fruitless. Precedent may not have favored it, but the fee statute does not punish a civil rights litigant for pursuing a novel, even if ambitious, theory," Seventh Circuit Chief Justice Diane Wood wrote Friday. Jones Day's Eric Dreiband was chief counsel for CVS in the litigation.
June 08, 2018 at 06:09 PM
4 minute read
The original version of this story was published on National Law Journal
Jones Day offices in Washington. Photo: Diego M. Radzinschi/ALM
A federal appeals court on Friday reversed a $307,0000 attorney fee award that was granted to CVS Pharmacy Inc.'s lawyers at Jones Day in a dispute the company won against the U.S. Equal Employment Opportunity Commission.
The U.S. Court of Appeals for the Seventh Circuit, ruling unanimously, said the trial court judge should not have awarded fees to CVS even though the company prevailed against the EEOC. The agency claimed in its lawsuit that CVS was using a severance agreement that interfered with employees' workplace rights under federal law.
Jones Day, represented by partner Eric Dreiband, said attorney fees were justified for the EEOC's “baseless” lawsuit and that regulators had unfairly targeted the company for alleged employment abuses. A trial court determined the agency ran afoul of internal regulations and was barred from bringing the “pattern or practice” enforcement action. The appeals court, at an earlier stage in the case, upheld the dismissal of the EEOC's suit.
Chief Justice Diane Wood of the Seventh Circuit said Friday that the EEOC's litigation position was not so far afield as to warrant an award of attorney fees to CVS's attorneys.
“The EEOC's theory was not that fruitless. Precedent may not have favored it, but the fee statute does not punish a civil rights litigant for pursuing a novel, even if ambitious, theory,” Wood wrote.
The EEOC sued CVS in 2014 over a severance agreement the agency said limited the rights of employees to file complaints. The EEOC called the severance agreement “overly broad” and argued it was part of a CVS “pattern or practice of resistance” to restrict the civil rights of the company's employees. The agency lost its case in the U.S. District Court for the Northern District of Illinois.
Dreiband, formerly the head of Jones Day's labor and employment group, in 2016 identified his hourly rate at $560. He is now awaiting confirmation as the Trump administration's pick to lead the U.S. Department of Justice 's Civil Rights Division. Ninth-year associate Yaakov Roth, a former clerk to the late U.S. Supreme Court Justice Antonin Scalia, billed at $475 per hour in 2016, and Nikki McArthur at $275 per hour, according to court records. Dreiband was not immediately reached for comment Friday.
“EEOC violated both Title VII and its own regulations when it refused CVS's pleas to try to resolve the matter in conciliation and spurned CVS's offers to clarify its agreement's terms,” Dreiband wrote in a court filing. “EEOC instead rushed to file a baseless lawsuit, and blasted CVS with an inflammatory press release falsely accusing the company of interfering with Title VII rights.”
CVS's lawyers said the trial judge “acted well within his discretion when he ordered EEOC to reimburse a portion of the attorneys' fees incurred by CVS in defending against a baseless but expensive suit that should never have been filed in the first place.”
The EEOC did not immediately comment about the appeals court ruling.
The Seventh Circuit's decision is posted below:
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