I have written about Judge Lynn Hughes a couple of times. See my prior posts here and here. It is unfortunate, but some judges, even U.S. District Judges, just do not understand their duties. He has been overruled again. This time, the suit is a large qui tam lawsuit. In the case of Little v. Shell Exploration, No. 14-20156 (5th Cir. 2.23.2015), the Fifth Circuit had previously ruled that Judge Hughes applied an overly broad definition of public disclosure.The higher court found that in using this over broad analysis,  Judge Hughes improperly ruled that plaintiffs (known as “relators” in qui tam actions) could not claim to have brought to light fraud by Shell. The lower court ruled that the fraud had already become part of the public discourse through prior public disclosures. In qui tam actions, the relators must be the first to expose fraud, waste or abuse.

The higher court ruled in that first appeal that Judge Hughes should re-look that analysis in light of a more narrow definition of public disclocures.

On remand following the first appeal, Judge Hughes essentially sat on Shell’s motion for summary judgment for a year and then issued a brief, five page opinion granting the motion, again. On appeal, for the second appeal, the higher court concludes that Judge Hughes did not follow its guidance in its first opinion regarding the False Claims Act and improperly granted summary judgment in favor of Shell. So, on this the second appeal, the Fifth Circuit re-assignes the matter to another judge. In the world of courts and litigation, that is as substantial a knock on a judge as we will see.

Remarkably, the lower court ignored a legal finding by the higher court. It reached the same result it did the first time and on the same grounds as the first time. The Fifth Circuit expressly found that evidence in two categories was not in the public domain. That is, for purposes of the False Claims Act (FCA), that information was not part of the public discussion and the persons bringing the FCA claim should be recognized for bringing to light unlawful activities by Shell. And, in construing a motion for summary judgment, the lower court should have looked at the facts in the light most favorable to Relators (plaintiffs) Little and Arnold. It should have concluded this information was not part of the public domain. Not only did the district court not observe a legal finding by the higher court, it also disregarded summary judgment law. It is quite unusual for any judge to ignore a clear legal finding from a higher court.

The Fifth Circuit noted that the district court’s summary judgment findings were very brief when compared to the lengthy briefing submitted by both sides. Judge Hughes’ order included few citations to the record or to legal precedent. And, he did not follow the clear legal guidance on how to assess whether information is truly in the public domain or not. So, the higher court took the extraordinary remedy of re-assigning the case to a different district judge. After eight years, the case is still not past the point at which public disclosure is recognized as such, or not. The Fifth Circuit is not happy with Judge Hughes. See the decision here.

I first wrote about this case a couple of years ago. See my prior post about EEOC v. CRST Van Expedited, Inc.  It struck me as a good case, but the court parsed the evidence to make it seem like a weak case. Too, the court rejected the view that certain “lead” drivers could constitute managers. If those lead drivers were not managers, then the employer would not be liable for sexual harassment. In any event, the EEOC lost. In that appeal, the court of appeals did vacate the award of attorney’s fees. The higher court found that the employer did not prevail on any issue. A party must be a “prevailing” party to be entitled to attorney’s fees.

Well, the case apparently got worse for the EEOC, because the district court assessed $4.6 million in attorney’s fees, again. The EEOC did settle one case for one plaintiff for $50,000. But, what had been intended as a class action of some 107 women resulted in just that, one settlement. In this most recent appeal, the Eighth Circuit did find that the EEOC had advanced claims on behalf of more than one plaintiff. The EEOC tried to argue that it had withdrawn such claims. The Eighth Circuit did not accept that argument.

The defendant also claimed that when the district court dismissed claims based on “pattern and practice” of discrimination, then that ruling made the defendant a prevailing party. No, said the higher court. The EEOC did not allege a “pattern or practice” lawsuit. The lower court assumed the EEOC had alleged a pattern or practice lawsuit without making any actual finding.

Regarding 67 claims that were dismissed by the court, the employer claimed those dismissals entitled it to be a prevailing party. The EEOC, however, responded that those claims were dismissed because the EEOC did not satisfy pre-lawsuit requirements. So, those 67 claims do not count as a victory for the defendant. Those dismissals were not a ruling on the merits, said the agency.

Does that failure to conciliate charges constitute a jurisdictional issue or are they an element or part of the claims of the lawsuit? The court found those conciliation requirements constitute non-jurisdictional pre-conditions for a lawsuit. They are not elements of a Title VII claim. So, the dismissal of those 67 claims was not a ruling on the merits. And, the district court’s award of $4.6 million in attorney’s fees is reversed. CRST was not a prevailing party. The appellate court also explained that lower court’s should resist the temptation to believe that if a plaintiff loses, then his claims were always weak or without foundation. The law or facts can change during a lawsuit. That is certainly true in this matter. The legal question regarding whether the conciliation requirement is jurisdictional or not is a novel issue. It was addressed in this very lawsuit. So, yes, the law has indeed changed since this lawsuit was filed.

Seethe  decision here.

In federal court, parties can be ordered to pay sanctions. Mentioning that to clients always attracts interest. If a person or entity “mis-behaves” in court, the judge can sanction them. Sanctions include anything from paying money, paying the opposition attorney’s fees to even outright dismissal. In one recent Fifth Circuit decision, a lawyer was ordered to pay sanctions by a bankruptcy court. The law firm and lawyer were ordered to pay $5,000 to the opposing party for discovery abuse. The lawyer and law firm then filed a frivolous motion for contempt against the opposing party, said the court. So, the bankruptcy judge ordered the lawyer to pay another $20,000 in sanctions. The law firm appealed to the Fifth Circuit and lost. During the appeal, the law firm did not post a supersedeas bond or otherwise pay the sanctions.

The opposition in the bankruptcy, Coventry II DDR then filed a motion for contempt. The bankruptcy court found the lawyer and law firm in contempt and ordered them to pay $100 per day until the sanctions are paid and to pay another $6,000 in expenses for having to enforce the original sanctions award. Six months later, the lawyer,  Mpatanishi Tayari Garrett, filed an emergency motion to stay all orders. She filed with the district court. The district court denied the motion, finding the law firm did not explain why they did not file the motion with the bankruptcy court. After the first Fifth Circuit decision, the district court then finalized the bankruptcy court’s Contempt Order. The law firm then appealed a second time.

But, as before, the Fifth Circuit was not sympathetic. The law firm advanced several arguments, none of which had merit, said the appellate court. The lawyer did mention in her brief that the court did not consider her ability to pay when it issued the additional sanctions. Inability to pay is a defense against civil contempt. But, said the Fifth Circuit, if the lawyer could not pay, she should have presented such evidence at the bankruptcy court level. As the Fifth Circuit noted, Ms. Garrett, now owes $100,000 in sanctions. if she cannot pay that amount, she should have presented such evidence much earlier in the process. See decision here.

As I tell my clients, always produce more than is required in discovery. Always, cooperate more than is required during the discovery process. No one should have to deal with potential sanctions motions. If a party is dealing with sanctions issues, then s/he is not dealing with the lawsuit itself.

Arbitration is more and more with us, all of us. Every consumer signs some arbitration agreement sometime, somewhere. Arbitration is increasingly found in the work place. Many employers require their employers to sign agreements to submit any dispute to arbitration. SCA Promotions paid a $10 million dollar bonus to Lance Armstrong years ago for winning multiple Tours de France. Part of the agreement was a provision requiring any dispute to go to arbitration. In 2005, SCA refused to pay the bonus due to the early allegations of substance abuse. Mr. Armstrong had to file suit to get his payment.

Now, SCA has gone to arbitration to get a refund. In a recent ruling, three arbitrators, in a 2-1 vote, ordered that Lance re-pay the bonus. The one arbitrator voting against the decision was the one arbitrator chosen by Lance. See Huffington Post report.

Observers are saying this is the single largest arbitration award against a individual. Mr. Armstrong plans to fight the award. But, this is arbitration. There are no appeals. There is very little “fight” available to any participant. That is the whole point of arbitration.

Add this to the list of things not to post on social media: “Eww I start this &$#@ *$% job tomorrow” – followed by seven thumbs down. That is what @Cella posted on Twitter the day before she started a new job. Her employer heard about it and fired her – on Twitter. Cella is reported to live in Mansfield, Texas. Her story has gone viral. No word if she will get a new, better job after all this… See San Antonio Express News report.

The workers at Tesoro Refineries and other refineries have gone on strike. The companies were engaged in talks to avoid a strike, but the talks broke down. Is that surprising? Workers today are exposed to and required to commit illegal or simply unethical acts with some frequency. The refinery workers were required to work overtime every week, whether they wanted to or not. Why? Because the employers refused to hire more workers. The unions wanted the companies to hire apprentices to learn the trade, so there would be more skilled workers available. The companies refused. See Houston Chronicle report (account required).

And, as the reporter mentions, many workers in many different trades see and experience the employer lying about a fundamental fact, whether the employee is actually an employee. For perhaps the past 15 years, employers across the country have been trying to reduce costs by claiming workers are actually “independent contractors.” By claiming them to be independent contractors, employers can save expenses regarding fringe benefits. I get that and do not necessarily disagree. But, what corporate climate does an outright lie foster? Most employees have to wonder, if the employer lies about that, what else are they lying about? Distrust breeds strikes and break downs in talks.

No, the refineries are not hurting from the oil slowdown, yet. They made impressive profits, last year. The reporter’s point is that without training, there will always be a shortage of skilled workers. His other point is that changing the status of a worker from employee to independent contractor diminishes that worker. The employer saves a few dollars, but the worker feels less connected or obligated to the company. Group cohesion is necessary for every work force.

Some folks think discrimination is over. They believe there is no more “true” bias among us, these days. Well, that is not true. The Dallas Independent School District has demonstrated that bias among upper management is still with us. The head of the Dallas ISD Human Resources department has resigned, as has one of her assistants in the wake of a scandal involving Instant Messages between the head and her staff. Carmen Darville would, I am sure, like to rescind many of those IM messages. In those messages, she and others poked fun at employees based on race, religion and age. Ms. Darville and her staff disparaged their co-workers and discussed ways of getting rid of them.

The superintendent, Mike Miles, apologized for their comments. Ms. Darville apologized for an “error in judgment.” Yes, I am sure she does, now. She was the head of HR. Not only should she have known better, she was also responsible for developing a work place free of discrimination and bias

Most of the discussions were between Ms. Darville and a HR Senior Executive Director, Tony Munoz. Mr. Munoz talked about pressuring one woman into quitting. Sure enough, a few weeks later, the worker, a 14 year employee, said she would be leaving due to medical reasons caused by stress. How often I have heard a similar story from the worker. See Dallas Morning News report.

The investigation apparently started with the allegations regarding another Executive Assistant who had not disclosed a long ago felony conviction. I cannot determine from the news report if someone saved these IM messages, or if they were produced as part of a forensic exam of someone’s computer. In either event, it is disappointing to see the head of  HR for a major employer flouting the anti-discrimination laws so readily.

This anti-Muslim bias is kind of crazy. Rational people can hold such irrational views. Do we really judge a religion of hundreds of millions of followers by the actions of a few hundred? Well, yes, state Rep. Molly White does. A Muslim group recently held its seventh annual Texas Muslim Capitol Day in Austin. Rep. White would be gone for the weekend, but she told her staff to ask any Muslim entering her office to renounce Islam terrorist groups and swear allegiance to the US and our laws. Did she instruct her staff to ask any Christian entering her office to renounce the KKK?

Rep. White did not expect the hullabaloo that followed her instructions. She says now that she chose her words poorly. But, no, she will not let go of her bias toward all Muslims. See Texas Tribune report. Rep. White said if she could do things differently, then she would make it clear her words were directed toward CAIR, not against all Muslims. On Facebook, she reportedly said we should not trust any Muslim, no matter how peaceful they appear.

Rep. White describes the Council on American-Islamic Relations as a terrorist group. She took a statement made by the executive director of CAIR’s office out of context to assert that CAIR believes it is above the law of the land. What the director actually said was, Muslims do not need Sharia law. If they are practicing Muslims, then they are above the law of the land. So, if Sharia was made the law of the land, that would not affect them – because they should already have the law of Islam in their hearts. The director explained on Monday what he actually meant by that phrase. But, Rep. White chose not to respond. Yes, it is hard to confront one’s own internal bias.

Oral arguments in the case of Nicholas v. SAWS were heard recently. The Defendant appealed the matter to the Texas Supreme Court after losing before the Fourth Court of Appeals. See my prior post about that appeal here and here. In the oral arguments, the defense attorney, Rachel Ekery, said the harassment by the supervisor, Greg Flores, was not true harassment. She argued that simple invitations to lunch did not rise to the level of sexual harassment. See San Antonio Express News report here. (account required).

The attorney for the employee, Jeff Small, counters that no, in context, those invitations were indeed harassment. Just as important is what the employee, Debra Nicholas, believed. Virtually all the cases that address the issue agree that reporting sexual harassment or any harassment must be reasonable and made in good faith. Someone may report outlandish harassment, but if she sincerely believes it is harassment and the harassment satisfies some modest level of reasonableness, then that report will constitute opposition to discriminatory activity. If the action rises to the level of opposing discriminatory conduct, then the employee is protected from retaliation. If someone like Debra Nicholas sincerely believes the lunch invitations amounted to harassment and on review by a court, her belief seems reasonable, then yes, lunch invitations can amount to sexual harassment.

Ms. Nichoals’ case is about the retaliation. She was placed under the supervision of Greg Flores, the person she helped counsel about sexual harassment. Vice-President Flores started writing her up and then eliminated her job. So, one question will be was her opposition to discriminatory conduct sincere and reasonable? Greg Flores invited the two much junior female workers to lunch many times. He commented on their personal appearance many times. They both complained about his interest. One said it was “weird.” He was much senior to both of the junior female workers.

One of the women said she would file a formal complaint if the lunch invitations did not stop. So, yes, it is an uphill climb to argue that when Debra Nicholas and the SAWS CEO counseled Greg Flores about these lunch invitations (and the overall inappropriate attention to the two women), that Ms. Nicholas in particular was not sincere. Indeed, the complaints actually started with the General Counsel for SAWS, Frank Stenger-Castro. He was first approached by one of the women. He then spoke to the CEO, David Chardovayne about Greg Flores’ interest in the two women.  He said this is a problem that should be “nipped in the bud” before it became a much larger problem. The CEO asked Ms. Nicholas to investigate because he did not want HR involved.

So, now SAWS essentially argues that Ms. Nicholas’ opposition (presumably along with the opposition of the CEO and the General Counsel) was not made in good faith or reasonable. I have to say, that is a silly argument. The whole point was to keep this investigation “under the radar” and keep this matter from becoming subject to public scrutiny. Doubtless, the employer simply wanted to deal with it quietly and not have to include this on any briefing chart to the Board of Trustees. This defense sounds like an argument that would have been briefly considered by the trial defense and quickly rejected because it is just too thin. Now, the new appellate lawyers have adopted it.

The plaintiff’s lawyer, Jeff Small says the employer is moving the goal posts. He means that this all started with upper management at SAWS. Yet, now, SAWS wants to argue that the employee (and the CEO and the General Counsel) did not oppose Greg Flores’ discriminatory actions in good faith. SAWS has spent $684,743 fighting this case since its inception. I am sure they could have settled the case for much less much sooner. As then council member Ivey Taylor said earlier when the bill was a mere $492,000, what if anything, was done sooner to settle this matter and avoid these high defense costs?  As I said in 2013, probably not much. Now, all they can offer is a rather weak defense.

But, I have to add, this weak defense theory might be enough. The Texas Supreme Court is very receptive to any defense offered by employers.

The Fourth Court of Appeals opinion was written by a woman, Judge Sandee Bryan Marion. Sometimes, it may require a woman to state clearly that sometimes, a lunch invitation is not really just a lunch invitation.