Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-07-07173/USCOURTS-caDC-07-07173-0/pdf.json

Parties Involved:
American Center for International Labor Solidarity
Appellant
Federal Insurance Company
Appellee

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 10, 2008 Decided December 5, 2008 

No. 07-7173 

AMERICAN CENTER FOR INTERNATIONAL LABOR SOLIDARITY, 

APPELLANT

v. 

FEDERAL INSURANCE COMPANY, 

APPELLEE

Appeal from the United States District Court 

for the District of Columbia 

(No. 04cv01523) 

Jeremiah A. Collins argued the cause and filed the briefs 

for appellant. Robert W. Alexander entered an appearance. 

Wallace A. Christensen argued the cause and filed the 

brief for appellee. 

Before: GINSBURG, TATEL, and BROWN, Circuit Judges. 

 Opinion for the Court filed by Circuit Judge TATEL. 

USCA Case #07-7173 Document #1152668 Filed: 12/05/2008 Page 1 of 7
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 TATEL, Circuit Judge: After completing the obligatory 

administrative process and receiving a right-to-sue letter from 

the Equal Employment Opportunity Commission, an 

employee of appellant American Center for International 

Labor Solidarity (ACILS) sued it for discrimination under 

Title VII of the Civil Rights Act of 1964, 42 U.S.C § 2000e. 

ACILS notified its employment insurer, appellee Federal 

Insurance Company, of the pending lawsuit. Federal denied 

coverage, asserting that its insurance policy required ACILS 

to have informed Federal as soon as it knew charges had been 

filed with the Commission, rather than waiting until the start 

of litigation. ACILS then settled with the employee, only to 

turn around and sue Federal for reimbursement. Agreeing 

that notice at the time of suit came too late, the district court 

entered summary judgment for Federal. Because we read the 

policy the same way, we affirm. 

I. 

 The policy defines a “claim,” in relevant part, as a 

“formal administrative or regulatory proceeding commenced 

by the filing of a notice of charges, formal investigative order 

or similar document.” Def.’s Mot. Summ. J. Ex. A (“Policy”) 

¶ 22. The parties agree that if Commission proceedings 

qualify as “claims” under this language, then timely notice 

was both required and lacking. The parties also agree that 

Commission proceedings are “administrative” and 

“commenced by the filing of a notice of charges.” They have 

thus winnowed the issue on appeal to a narrow one: whether 

Commission proceedings are “formal,” and therefore 

“claims,” as the district court held. Because it did so on 

summary judgment, and because it construed the language of 

a contract, our review is de novo. See, e.g., Creekstone 

Farms Premium Beef, L.L.C. v. Dep’t of Agric., 539 F.3d 492, 

497 (D.C. Cir. 2008) (on summary judgment); Segar v. 

USCA Case #07-7173 Document #1152668 Filed: 12/05/2008 Page 2 of 7
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Mukasey, 508 F.3d 16, 22 (D.C. Cir. 2007) (on contract 

interpretation). 

 Lurking within this dispute is an interesting question 

regarding the proper application of a central canon of 

construction governing insurance contracts, namely that 

“[u]nless the language . . . is unambiguous, doubts are to be 

resolved in favor of the insured.” Nationwide Mut. Ins. Co. v. 

Richardson, 270 F.3d 948, 954 (D.C. Cir. 2001) (citing 

District of Columbia law); see also Pa. Indem. Fire Corp. v. 

Aldridge, 117 F.2d 774, 775 (D.C. Cir. 1941) (“[T]he general 

rule applicable in the interpretation of an insurance policy is 

that, if its language is reasonably open to two constructions, 

the one most favorable to the insured will be adopted.”). 

ACILS claims that as the “insured” in this case it enjoys the 

benefit of the canon. Federal acknowledges this canon but 

believes it is more nuanced—that resolution of doubts “in 

favor of the insured” requires construing the policy in favor of 

insureds generally, rather than merely in favor of the 

policyholder in a particular case. According to Federal, it 

should get the benefit of the canon because, in general, 

insureds would favor its argument that the policy covers 

Commission proceedings as claims. And indeed, Federal has 

consistently interpreted its policy in this way, honoring over 

20,000 claims for coverage of Commission proceedings and 

denying none. David L. Keenan Decl. ¶ 3. ACILS counters 

that the policy should not be construed in favor of insureds 

generally in this way because it needn’t be construed 

generally at all, i.e., the policy can be read in conflicting ways 

across cases so long as the reading in every case benefits the 

policyholder and makes the insurer liable for ambiguities that 

were entirely within its power to avoid. See Richardson, 270 

F.3d at 954 (“The burden is on the insurer to spell out in terms 

understandable to the man in the street any provisions that 

would exclude coverage.” (internal quotation marks omitted)). 

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 Interesting as this issue is, we need not address it because 

the canon exists to resolve ambiguities and because, as we 

explain below, we see no ambiguity in whether a Commission 

investigation qualifies as a “formal administrative or 

regulatory proceeding,” Policy ¶ 22. And so here, as always, 

we follow the definitive rule that where language is “clear and 

unambiguous, [it] will be enforced by the courts as written.” 

Hartford Accident & Indem. Co. v. Pro-Football, Inc., 127 

F.3d 1111, 1114 (D.C. Cir. 1997) (internal quotation marks 

omitted); see also Chase v. State Farm Fire & Cas. Co., 780 

A.2d 1123, 1127 (D.C. 2001) (where policy term excluding 

coverage “is not ambiguous, the courts must enforce [it] as 

written”) (internal quotation marks omitted). 

 

II. 

 For the principal reason that their form is governed by 

extensive regulation, Commission proceedings are surely 

formal. Regulations dictate every facet of the Commission’s 

work: the submission of information on alleged instances of 

discrimination, 29 C.F.R. § 1601.6; the form, content, and 

procedure for filing of charges, id. §§ 1601.7-.9, .11-.12; the 

service of charges on alleged discriminators, id. § 1601.14; 

the Commission’s investigative authority, id. § 1601.15, 

subpoena power, id. § 1601.16, and power to compel 

witnesses for public hearings, id. § 1601.17; the procedure for 

Commission determinations of cause, settlement, and 

dismissal of proceedings, id. §§ 1601.18-.21; the 

Commission’s power to initiate its own civil actions, id. § 

1601.27; and the Commission’s role in empowering 

individuals to sue, id. § 1601.28; see also 42 U.S.C. § 2000e5(f)(1). 

 That Commission proceedings are regular and formalized 

in this way is hardly surprising given their statutorily 

prescribed role as a necessary predicate to filing a Title VII 

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suit. Id. Created by Congress as a kind of national triage 

center for discrimination claims, the Commission examines 

every charge, begins an investigation, gives an initial 

prognosis, attempts to resolve the issue quickly, and commits 

resources to the most pressing cases. That role, specified by 

statute and structured by regulation, can hardly be considered 

informal. 

 ACILS argues that because the Commission held no 

hearing and has no authority to adjudicate liability, its 

proceedings must be deemed informal. As to the first point, 

even granting ACILS’s contention that the word “formal” 

here “refers to a particularly exacting and solemn kind of 

proceeding,” Appellant’s Reply Br. 8, we disagree that the 

investigation lacked the requisite formality simply because 

the Commission held no hearing. The Commission requested 

“a statement of [ACILS’s] position with respect to the 

allegation(s) contained in th[e] charge,” Def.’s Mot. Summ. J. 

Ex. F at 1, which ACILS obviously regarded as important, 

responding with a 16-page letter drafted by outside counsel. 

See Def.’s Mot. Summ. J. Ex. G. Moreover, this request was 

hardly the limit of what the Commission’s investigation might 

have involved, as it may hold fact-finding conferences, 29 

C.F.R. § 1601.15(c), subpoena documents, id. § 1601.16, and 

“demand in writing that a person appear . . . for the purpose of 

testifying under oath before the Commission or its 

representative,” id. § 1601.17(a). Of course, formality is a 

question of what proceedings might involve rather than a 

question of what they ultimately end up involving; by the time 

the extent of the proceedings is known, any notice will come 

too late to actually provide notice at all. That these 

proceedings stand as a necessary prelude to any litigation 

adds solemnity as well. 

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 Nor do we agree with ACILS that these proceedings lack 

consequence—and therefore formality—solely because the 

Commission has no authority to make a final determination of 

monetary liability. To be sure, the Commission employs only 

“informal methods of conference, conciliation, and 

persuasion,” in attempting to eliminate discriminatory 

practices, § 2000e-5(b) (emphasis added), but its investigation 

of such practices is not so limited. Commission investigations 

are not only governed by the extensive regulations described 

above, but they can also have serious consequences for their 

targets. In contrast to the period of informal mediation 

following an investigation, where “[n]othing said or done . . . 

may be made public by the Commission,” id., records from 

the investigation, any determination of cause to believe that 

discrimination occurred, and position statements submitted by 

the charged party may all be admissible as relevant evidence 

in subsequent litigation. And if the investigation goes poorly 

for the employer, it may find itself litigating against the 

superior resources of the Commission or even the Justice 

Department. § 2000e-5(f)(1). Moreover, if the case remains 

unresolved at this opening stage, and notice can be withheld 

until a complaint is filed, the insurer’s only chance for prelitigation settlement will have fallen by the wayside. Such 

consequences convince us that Commission proceedings must 

be regarded as “formal” regardless of the Commission’s 

ability to adjudicate monetary liability. 

 That a contrary construction of “claim” would fail to 

properly construe the policy as a whole only reinforces our 

reading. See, e.g., Republican Nat’l Comm. v. Taylor, 299 

F.3d 887, 894 n.8 (D.C. Cir. 2002) (citing District of 

Columbia law on contract interpretation). Federal has a right 

under the policy to “defend any claim” in the manner of its 

choosing, Policy ¶ 8, and the insured must do “nothing that 

may prejudice [Federal’s] position or its potential or actual 

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rights of recovery,” id. Given the important consequences 

discussed above, it is clearly during Commission proceedings 

that an insured could begin damaging Federal’s right of 

defense. Were we to read the policy as excluding these early 

but consequential stages of the Title VII process from the 

“claims” that Federal has a right to defend, it would afford 

Federal little protection from prejudice in the ensuing lawsuits 

that it is certainly obligated to cover. 

 Like the district court, we are unconvinced by cases that 

occasionally describe the Commission’s work as informal. 

See Am. Ctr. for Int’l Labor Solidarity v. Fed. Ins. Co., 518 F. 

Supp. 2d 163, 170-71 (D.D.C. 2007) (collecting cases). In 

general these statements represent only passing dicta, and 

none amounts to an opinion on the word “formal” as used in 

Federal’s policy. Judge Pollak’s considered opinion in 

Bensalem Township v. Western World Insurance Co., 609 F. 

Supp. 1343, 1347-49 (E.D. Pa. 1985), likewise has nothing to 

do with the issue before us: though he excluded Commission 

proceedings from coverage as “claims” under a different 

insurance policy, id. at 1349, that policy failed to define the 

term “claim” at all, id. at 1347-48. 

 Proceedings whose forms are so carefully structured by 

statute and regulation to effect a particularly important 

purpose in the process of Title VII litigation are “formal.” 

We affirm. 

So ordered.

 

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