Jones Day lawyers, representing CVS Pharmacy Corp., are raising alarms that a federal appeals court decision that erased a fee award misapplied legal standards and will invite “protracted” litigation over compensation in future cases.

The U.S. Court of Appeals for the Seventh Circuit in June overturned a $307,000 fee award for the law firm, which had successfully challenged U.S. Equal Opportunity Commission claims that a CVS severance agreement unlawfully interfered with protected workplace rights.

The appeals court, finding the EEOC's case against CVS wasn't fruitless, vacated the legal fees awarded to Jones Day. The applicable fee statute, the court said, “does not punish a civil rights litigant for pursuing a novel, even ambitious theory.” The law firm on Monday asked the court to reconsider the decision stripping fees.

Jones Day's Eric Dreiband, leading the team for CVS, took issue with how the appeals panel resolved the fee dispute. The Seventh Circuit, according to lawyers for CVS, should not have granted “fresh” review but instead should have approached the dispute using a standard that gives greater deference to the trial court.

“Although this particular fee award may not be of great importance, the standard of review for all fee awards assuredly is,” Dreiband wrote in court papers. “The panel opinion gets it wrong and, worse, invites protracted fee litigation by promising de novo appellate review.”

Citing an earlier Seventh Circuit case, Dreiband, who is the Trump administration's nominee to lead the U.S. Justice Department's civil rights division, said it would be “'wasteful' for appellate courts to 'redo' a lower court's analysis of 'how far from the correct legal position' a party strayed.”

Neither Dreiband nor the EEOC responded to requests for comment. The EEOC will have a chance to respond to Jones Day's request for a rehearing.

The lawyers for CVS also are urging the Seventh Circuit to correct an alleged “legal misstatement” that could lead other courts astray. The Jones Day lawyers, including partner Yaakov Roth, argue the panel decision incorrectly stated the EEOC can litigate certain types of employment cases without an underlying charge.

The attorneys also contend the appeals court strayed in saying it was “questionable” whether legal fees can ever be awarded in scenarios where the EEOC violated a duty to try to resolve disputes before any lawsuit is filed.

The case is rooted in a 2014 lawsuit filed by the EEOC 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 employees. The agency lost 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, according to court papers in the case. Dreiband earlier served as general counsel to the EEOC from 2003 to 2005. Roth, a former clerk to the late Justice Antonin Scalia, billed at $475 per hour in 2016, and Nikki McArthur at $275 per hour, according to court records.

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