In a unanimous decision dated May 19, 2016, the Supreme Court held in CRST Van Expedited, Inc. v. EEOC that a favorable ruling on the merits is not a necessary predicate to finding that a defendant is a prevailing party for the purposes of attorney’s fees under Title VII’s fee shifting statute.

Petitioner CRST, a trucking company, has two drivers share driving duties for each truck, and requires new drivers complete a training program. The case arose in 2005, when Monika Starke filed a charge with the Equal Employment Opportunity Commission (“EEOC”) alleging that she was sexually harassed by two male employees during her training. Following the procedures dictated by Title VII of the Civil Rights Act of 1964 (specifically 42 USC §2000e-5(b)), the EEOC informed CRST and investigated. In 2007, after attempts at conciliation failed, the EEOC brought suit in its own name against CRST under Title VII. During discovery, EEOC identified a class of 250, however the District Court dismissed all of the claims, including 67 claims barred due to insufficient investigation by the EEOC or a failure to attempt conciliation. The District Court then dismissed the suit, ruled CRST the prevailing party, and awarded the company over $4 million in attorney’s fees. The Eighth Circuit reversed the dismissal of two claims and vacated the award of attorney’s fees without prejudice, and on remand the District Court again awarded over $4 million.  The case returned to the Eighth Circuit, which reversed and remanded on the grounds that a Title VII defendant cannot be a prevailing party unless it obtains a “ruling on the merits.”

Writing for the unanimous court, Justice Kennedy found that a favorable ruling on the merits is not a necessary predicate to find that a defendant is a prevailing party.  He wrote that common sense dictates that a defendant may “prevail” without a ruling on the merits, as the defendant’s goal is to prevent an alteration of the legal relationship between the plaintiff and defendant. That goal was achieved here, and there is no reason to believe Congress, in allowing prevailing defendants to recover whenever the plaintiff’s “claim was frivolous, unreasonable, or groundless” had intended to condition the award of attorney’s fees on a ruling on the merits.  Accordingly, the Court vacated and remanded the Eighth Circuit’s decision.

Notably, the Court declined to rule on whether the defendant must obtain a preclusive judgment in order to prevail, as the EEOC did not raise the issue until the merits stage. Accordingly, the issue was found to be inadequately briefed, and the Supreme Court left it for the Eighth Circuit to address in the first instance on remand.

The full text of the decision can be found here: http://www.supremecourt.gov/opinions/15pdf/14-1375_09m1.pdf