Opinion ID: 48288
Heading Depth: 2
Heading Rank: 2

Heading: Representation of interests

Text: 16 Under Texas law, the touchstone of the representation-of-interests inquiry is whether the parties share an identity of interests in the basic legal right that is the subject of litigation. To determine whether a prior and later lawsuit involve the same basic subject matter, we focus on the factual basis of the complaint. Amstadt, 919 S.W.2d at 653 (internal citation omitted). The interests, however, need not mirror one another. See id. 17 Jefferson Dental argues that the EEOC and the charging parties have sufficiently shared interests in the outcome of the litigation to amount to privity under Texas law. Jefferson Dental relies on Grimm v. Rizk, 640 S.W.2d 711, 715 (Tex. App.1982), and Dennis v. First State Bank of Texas, 989 S.W.2d 22, 27-28 (Tex.App. 1998). In Grimm, a trustee brought a suit on behalf of various individuals but lost, and the court found that the individuals were barred by res judicata from bringing an action on their own relating to the same subject matter. 640 S.W.2d at 715. In essence, Jefferson Dental argues that the EEOC is trying to do the same thing—relitigating from the same factual basis after the charging parties have lost. See Dennis, 989 S.W.2d at 25, 27-28 (holding it was not an abuse of discretion to find that co-owners of a company who were also co-developers of a technology at issue in the case were in privity). 18 The EEOC emphasizes that, because it is pursuing its statutory prerogative to enforce laws protecting against workplace discrimination, it lacks privity with the charging parties. In essence, the EEOC's argument hinges on the notion that it has different interests in the litigation than the charging parties did in the prior suit because of this goal of reducing discrimination. See Gen. Tel. Co. of the Nw. v. EEOC, 446 U.S. 318, 331, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980) (noting that the interests of the EEOC and the charging parties are not always the same). 19 In EEOC v. Waffle House, the Supreme Court held that the EEOC was not bound by an arbitration agreement signed by the charging party and the defendant employer. 534 U.S. 279, 282-83, 298, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002). After experiencing alleged discrimination based on a disability, 2 the individual filed a charge with the EEOC. Id. at 283, 122 S.Ct. 754. He did not file an individual action or seek arbitration of his individual claim. Id. The EEOC filed an action against the employer, seeking injunctive relief, back pay, reinstatement, compensatory damages, and punitive damages. Id. at 283-84, 122 S.Ct. 754. The employer sought to compel arbitration or have the action dismissed based on the arbitration agreement, but the district court denied the motion. Id. at 284, 122 S.Ct. 754. 20 On interlocutory appeal, the Court of Appeals for the Fourth Circuit held that the EEOC was barred from pursuing an action for victim-specific relief but that the arbitration agreement between the charging party and the defendant did not foreclose injunctive relief. Id. at 284-85, 122 S.Ct. 754. The court of appeals based this distinction on the theory that the public interest served by the EEOC is minimal when it seeks victim-specific relief, whereas when the EEOC is pursuing large-scale injunctive relief, the balance tips in favor of EEOC enforcement efforts in federal court because the public interest dominates the EEOC's action. Id. (internal quotation omitted). 21 The Supreme Court rejected this distinction, however, and held that [a]bsent textual support for a contrary view, it is the public agency's province—not that of the court—to determine whether public resources should be committed to the recovery of victim-specific relief. And if the agency makes that determination, the statutory text unambiguously authorizes it to proceed in a judicial forum. Id. at 291-92, 122 S.Ct. 754. The Court narrowed its holding, however, stating that [i]t is an open question whether a settlement or arbitration judgment would affect the validity of the EEOC's claim or the character of relief the EEOC may seek. The only issue before this Court is whether the fact that [the individual] has signed a mandatory arbitration agreement limits the remedies available to the EEOC. Id. at 297, 122 S.Ct. 754. 22 Jefferson Dental encourages this court to read Waffle House narrowly, as a case about whether an arbitration agreement between a charging party and an employer bars an action by the EEOC against the employer. The Supreme Court stated that [i]f, for example, [an individual] had failed to mitigate his damages or had accepted a monetary settlement, any recovery by the EEOC would be limited accordingly. Id. at 296, 122 S.Ct. 754. Jefferson Dental asks the court to extrapolate from this statement the principle that once the charging parties have had an opportunity to litigate their case, the EEOC's ability to recover relief should be limited accordingly by not permitting a second action at all under res judicata. 23 The EEOC, on the other hand, argues that under Waffle House the EEOC's interest in eradicating workplace discrimination is unique and incompatible with a finding that the EEOC's authority to bring and maintain an enforcement action can be extinguished by a judgment in a private suit to which it was not a party. This court agrees with the EEOC's position. 24 The parties discuss two Fifth Circuit cases that, while not directly on point, generally support our position and merit discussion. In United States v. Mississippi Department of Public Safety, this court considered whether or not state sovereign immunity prevented the United States from suing a Mississippi agency for violating the ADA by refusing to make reasonable accommodations for a particular individual, seeking both injunctive and monetary relief. 321 F.3d 495, 497 (5th Cir.2003). The agency argued that Eleventh Amendment state sovereign immunity should bar the action because the federal government [had sought] to circumvent the safeguards of the Eleventh Amendment and obtain personal relief for private individuals. Id. at 498. Citing Waffle House, the court stated: 25 [T]he federal government has the responsibility to determine when it is in the public interest to sue to vindicate federal law via victim-specific relief. . . . The fact that [the individual] could not sue the [state agency] for the alleged violation of the law in no way diminishes the United States' interest in the action or the authority of the United States to bring suit against the [state agency] for the benefit of the public generally and for [the individual's] benefit specifically. Nor does it transform the United States into a mere proxy for [the individual]. 26 Id. at 499 (internal citation omitted). In the state sovereign immunity context, therefore, this court has been willing to permit an action by the EEOC that would not have been permitted by a private party. 27 On the other hand, in Vines v. University of La. at Monroe, the Fifth Circuit, in a dispute under the ADEA rather than the ADA, applying federal res judicata principles, held that the individual plaintiffs and the EEOC were in privity because [w]hen the EEOC seeks private benefits for individuals under the ADEA, it takes on representative responsibilities that places it in privity with those individuals. 398 F.3d 700, 707 (5th Cir.2005); see also Jones v. Bell Helicopter Co., 614 F.2d 1389, 1391 (5th Cir.1980) (upholding dismissal of charging party's suit following EEOC suit based on federal res judicata principles even though the party did not deserve to be penalized by the E.E.O.C.'s failure to provide decent governmental process), abrogated on other grounds by United States v. Popovich, 820 F.2d 134 (5th Cir. 1987). 28 The Vines court, however, acknowledged that the EEOC's role differs when it seeks to enjoin discrimination against an entire class or attempts to protect a broader interest than simply that of the individual plaintiff. 398 F.3d at 707. In such situations, there is a clear divergence of interests between the EEOC and the aggrieved individual. Id. The Vines court noted that the EEOC was not seeking to further such an independent interest, see id., unlike the EEOC is doing here. 29 Furthermore, the Supreme Court in Waffle House cited approvingly to EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1542 (9th Cir.1987). 534 U.S. at 311, 122 S.Ct. 754. In Goodyear Aerospace, the Ninth Circuit drew a distinction between the EEOC's actions for an injunction and back pay in a res judicata case involving the preclusive effect of a settlement reached by the charging party and the defendant. 813 F.2d at 1543. The court refused to moot the EEOC's claims for injunctive relief to protect employees as a class but mooted the back pay claim on the basis that the public interest in a back pay award is minimal. Id. 30 The Waffle House majority would likely have permitted the EEOC to bring a claim for injunctive relief, had this issue been before the Court. 3 See 534 U.S. at 291, 122 S.Ct. 754 (The statute clearly makes the EEOC the master of its own case and confers on the agency the authority to evaluate the strength of the public interest at stake.). In his dissent, Justice Thomas also stated that to the extent the EEOC seeks broad-based declaratory and equitable relief in court, the Commission undoubtedly acts both as a representative of a specific employee and to vindicate the public interest in preventing employment discrimination. Id. at 306, 122 S.Ct. 754 (internal quotation omitted). Given the divergence of interests between the charging parties and the EEOC when it seeks injunctive relief, this court will permit the injunctive relief claims by the EEOC. 31 In the context of make-whole relief, however, the interests of the EEOC stack up poorly against the principle of res judicata. The reasoning in Justice Thomas's Waffle House dissent is persuasive in the res judicata context. [W]hen the EEOC is seeking [victim-specific] remedies, it is only serving the public interest to the extent that an employee seeking the same relief for himself through litigation or arbitration would also be serving the public interest. 534 U.S. at 307 n. 10, 122 S.Ct. 754. Justice Thomas noted the curious situation, relevant here, that the majority's reasoning suggests that the EEOC could pursue victim-specific relief after the charging party had reached a settlement, which would contradict this Court's [prior] suggestion . . . that employment discrimination disputes can be settled without any EEOC involvement. Id. at 312, 122 S.Ct. 754 (internal quotation omitted); see also Truvillion v. King's Daughters Hosp., 614 F.2d 520, 525 (5th Cir.1980) ([T]he E.E.O.C. may not bring a second suit based on the transactions that were the subject of a prior suit by a private plaintiff, unless the E.E.O.C. seeks relief different from that sought by the individual.) (citing EEOC v. Huttig Sash & Door Co., 511 F.2d 453, 455 (5th Cir.1975)). 32 The EEOC's public interest does not justify giving the plaintiffs two chances to receive make-whole relief. The Supreme Court in Waffle House stated that if the individual plaintiff had accepted a monetary settlement, any recovery by the EEOC would be limited accordingly, and it goes without saying that the courts can and should preclude double recovery by an individual. 534 U.S. at 296-97, 122 S.Ct. 754 (internal quotation omitted). In addition, the EEOC's claims arise out of the same subject matter as the state court case. The three elements of res judicata are therefore satisfied with respect to the claims for make-whole relief, and these claims are barred by the doctrine of res judicata.