1. This high-profile case was initiated under the EEOC’s Systemic Class Action Program, with an EEOC commissioner publicly commenting on the EEOC’s suit against Peoplemark. Review the facts to see how the EEOC used administrative subpoenas to obtain more than 18,000 pages of documents in 2006 and 2007 from Peoplemark, and then filed a complaint in the federal court on May 29, 2008. Where did the EEOC go wrong in this litigation?
2. State the rule applicable in this case that allows a prevailing defendant to pursue reasonable attorney fees, expert witness fees, and certain other costs.

[On March 29, 2010, the parties submitted a joint motion to dismiss in which the parties agreed that the defendant, Peoplemark, is a prevailing party for the purpose of determining Peoplemark's entitlement to costs and attorney fees. The parties dispute certain fees.]
BRENNEMAN, J. …
I. Background
… "This is a large, multi-state disparate impact case," initiated pursuant to Title VII of the Civil Rights Act of 1964… . Defendant is Peoplemark, Inc. (Peoplemark), a temporary staffing company which hires people to perform in light industrial, clerical and receptionist positions.

Following a three-year investigation of Peoplemark, during which it utilized administrative subpoenas in 2006 and 2007 to obtain over 18,000 pages of documents from defendant, the EEOC filed a complaint in this court on May 29, 2008, in which it alleged that Peoplemark maintained a policy "which denied the hiring or employment of any person with a criminal record," … and that this policy adversely affected African-Americans in violation of Title VII. Plaintiff sought relief on behalf of Sherri Scott, a two-time felon with convictions for housebreaking and larceny, and similarly situated but unidentified African-Americans. In the JSR, plaintiff reiterated its position that "[d]efendant maintains a policy which categorically denies hire to any individual with a criminal record." … EEOC Commissioner Ishimaru also took the opportunity to highlight this case at the Commissioner's public meeting on November 20, 2008, stating that, "Just this past September, the Commission unanimously approved the filing of a case in the Western District of Michigan against Peoplemark, alleging that a class of African Americans were discriminated against due to its policy that denies the hiring or employment of any person with a criminal record." Plaintiff never amended its complaint to change its allegation that Peoplemark had such a blanket policy.

The EEOC has always known this case would be an expensive statistical one 'rising or falling' on its expert testimony. … First, the EEOC saw this case from the beginning as one which would "involve protracted discovery, complex and special issues of proof, which will rely upon data collection and organization, establishment of databases, and expert analysis." "The Commission will need to inquire about and seek production of voluminous records from defendant, … [which] will therefore require many hours of lay and expert manpower to organize, analyze and generate expert reports."

Second, the Commission also clearly knew this case would carry a major price tag for both sides. Having made no secret that it was undertaking major litigation against the defendant company, the EEOC would have had to expect that defendant would incur considerable costs in defending. The EEOC would have had to have known defendant's costs would include substantial expert fees.

After months of tumultuous litigation, Peoplemark filed a motion for summary judgment on February 25, 2010, seeking denial of the complaint with prejudice and fees and expenses as a sanction.
The EEOC was, by its own admission, not in a position to respond, "having no statistical expert to rebut defendant's expert." On March 29, 2010, the parties submitted a joint motion to dismiss in which the parties agreed that "Peoplemark is a prevailing party for purposes of determining Peoplemark's entitlement to costs and attorney fees[.]"
The court entered an Order of Dismissal on March 29, 2010.
II.A. Peoplemark is entitled to fees as a prevailing defendant
Both parties rely upon the unanimous decision of the Supreme Court in Christiansburg Garment Co. v EEOC, 434 U.S. 412 (1978) as the standard for determining a prevailing defendant's Title VII attorney fees, if any. Title VII provides in pertinent part that

"the court, in its discretion, may allow the prevailing party, other than the Commissioner 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 the same as a private person."

42 U.S.C. § 2000e-5(k). Where prevailing defendants are concerned, the court provided this guidance: "In sum, a district court may in its discretion award attorney's fees to a prevailing defendant in a Title VII case upon a finding that the plaintiff's action was frivolous, unreasonable or without foundation even though not brought in subjective bad faith." Christiansburg Garment Co., 434 U.S. at 421. Noting the sparse legislative history on this provision, the court stated that, "if anything can be gleaned from these fragments of legislative history, it is that while Congress wanted to clear the way for suits to be brought under the Act, it also wanted to protect defendants from burdensome litigation having no legal or factual basis." Id. at 420. "Hence, a plaintiff should not be assessed his opponent's attorney's fees unless a court finds that his claim was frivolous, unreasonable or groundless, or that the plaintiff continued to litigate after it clearly became so." Id. at 422.
This is one of those cases where the complaint turned out to be without foundation from the beginning.

Once the EEOC became aware that its assertion that Peoplemark categorically refused to hire any person with a criminal record was not true, or once the EEOC should have known that, it was unreasonable for the EEOC to continue to litigate on the basis of that claim, thereby driving up defendant's costs, because it knew it would not be able to prove its case. "[C]ourts have awarded attorneys fees to prevailing defendants where no evidence supports the plaintiff's position where the defects in the suit are of such magnitude that the plaintiff's ultimate failure is clearly apparent from the beginning or at some significant point in the proceedings after which the plaintiff continues to litigate." Smith v. Smythe Kramer Co., 754 F.2d 180, 183 (6th Cir. 1985).