Court Opinion

ID: 8917882
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:50:59.364441+00
Date Added: 2024-06-11T17:09:09.760274
License: Public Domain

J. BLAINE ANDERSON, Circuit Judge:
The Equal Employment Opportunity Commission (“EEOC” or “Commission”) seeks enforcement of subpoenas issued to aid its investigation of Children’s Hospital Medical Center (“CHMC” or “Hospital”). The district court refused enforcement, finding that its prior consent decree stripped the EEOC of its jurisdiction to investigate. We reverse.
I. BACKGROUND
In 1974, a private class action was instituted against CHMC, alleging race discrimination in violation of Title VII, 42 U.S.C. § 2000e et seq. The class was certified under Fed.R.Civ.P. 23(b)(2) as past, present and future black employees and applicants for employment. The EEOC was not a party to any proceedings in the lawsuit.
In late 1976, prior to trial, the parties proposed and the court approved a consent decree. The decree enjoins discrimination against class members, establishes affirmative action goals, and creates an internal grievance procedure to resolve any alleged violations of the decree. The decree is effective until 1984.
In August and September of 1979, three black employees filed charges with the EEOC alleging racial discrimination in suspensions, layoffs, promotions and other terms of employment. As part of its investigation of the charges, the EEOC requested information on the charging parties from the Hospital. The Hospital refused, claiming that the EEOC lacked jurisdiction because the charging parties were limited to the grievance remedy provided by the consent decree.
In November of 1979, the EEOC district director issued three subpoenas to secure this and other information. Both the district director and the full Commission denied CHMC’s petitions to revoke the subpoenas. The Hospital continued to refuse compliance and the EEOC sought enforcement in the district court. On September 26,1980, Judge Orrick, who had entered the consent decree and was supervising its enforcement, refused to enforce the subpoenas, finding the EEOC lacked jurisdiction over the charges because the charging parties and their claims were subject to the decree.
II. ANALYSIS
On appeal, the parties have focused primarily on the res judicata effect of the consent decree on claims arising after entry of the decree. To be sure, that presents an important, and, we admit, difficult question which is worthy of serious consideration. That time is not yet upon us, however, for there is a preliminary question concerning the EEOC’s authority to investigate which is dispositive of this appeal. The sound policies dictating against advisory opinions require us to leave the res judicata question *1428for later, when it is fully developed and ready for judicial determination. See EEOC v. Chrysler Corp., 567 F.2d 754, 755 (8th Cir.1977); see also United States v. Fruehauf, 365 U.S. 146, 157, 81 S.Ct. 547, 553-554, 5 L.Ed.2d 476, 483 (1961); Babbitt v. United Farm Workers, 442 U.S. 289, 304-305, 99 S.Ct. 2301, 2311-2312, 60 L.Ed.2d 895, 910-911 (1979).
Our refusal to address the res judicata question is grounded in the scope of the EEOC’s authority to investigate charges of discrimination and compelling Supreme Court authority. The district court held that the consent decree stripped the EEOC of its jurisdiction to investigate charges of discrimination at the Hospital. The law governing agency investigations mandates a contrary conclusion. The EEOC clearly has the authority to investigate. If, after conducting its investigation, the Commission brings an action or issues a right-to-sue letter to the charging parties which they pursue, then the question of the preclusive effect of the consent decree can be properly asserted and decided.
The scope of the judicial inquiry in an EEOC or any other agency subpoena enforcement proceeding is quite narrow. The critical questions are: (1) whether Congress has granted the authority to investigate; (2) whether procedural requirements have been followed; and (3) whether the evidence is relevant and material to the investigation. See Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 508-509, 63 S.Ct. 339, 343, 87 L.Ed. 424, 429 (1943); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 216, 66 S.Ct. 494, 509, 90 L.Ed. 614, 633 (1946); United States v. Morton Salt Co., 338 U.S. 632, 652-653, 70 S.Ct. 357, 368-369, 94 L.Ed. 401, 416 (1950); United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 254-255, 13 L.Ed.2d 112, 119 (1964); Pacific Maritime Association v. Quinn, 491 F.2d 1294, 1296 (9th Cir.1974); Federal Maritime Commission v. Port of Seattle, 521 F.2d 431, 434 (9th Cir.1975); Casey v. FTC, 578 F.2d 793, 799 (9th Cir.1978); EEOC v. Dean Witter Co., 643 F.2d 1334, 1338 (9th Cir.1980); see also B. Schlei and P. Gross-man, Employment Discrimination Law 956-959 (2d ed. 1983); 1 K. Davis, Administrative Law Treatise §§ 4:6, 4:15 (2d ed. 1978); 3 B. Mezines, J. Stein and J. Gruff, Administrative Law § 19.02 (1983). If these factors are shown by the agency, the subpoena should be enforced unless the party being investigated proves the inquiry is unreasonable because it is overbroad or unduly burdensome. Oklahoma Press, 327 U.S. at 217, 66 S.Ct. at 510, 90 L.Ed. at 634; Morton Salt Co., 338 U.S. at 653, 70 S.Ct. at 369, 94 L.Ed. at 416; General Insurance Co. of America v. EEOC, 491 F.2d 133, 136 (9th Cir.1974).
There is no question and CHMC does not dispute that the subpoenas at issue here fall within these restrictions. Congress not only has authorized but requires the Commission to investigate charges of discrimination. 42 U.S.C. § 2000e-5(b)1. To carry out its investigatory duty, the EEOC has access to “evidence of any person being investigated or proceeded against that relates to unlawful employment practices ... and is relevant to the charge under investigation.” 42 U.S.C. § 2000e-8(a). The evidence sought here — the charging parties’ personnel files and job descriptions, and lists of other individuals subject to similar disciplinary action by the Hospital — is clearly relevant and material to the charges being investigated. The method used tó gather the information by the EEOC — subpoenas — is authorized by 42 U.S.C. § 2000e-9 which gives the EEOC the same *1429investigative powers as those provided the National Labor Relations Board in 29 U.S.C. § 161.
CHMC argues, and the district court found, that the EEOC lost its “jurisdiction” to investigate because of the res judicata effect of the 1976 consent decree. But agency jurisdiction is not abrogated because the party being investigated may have a valid defense to a subsequent suit by the agency.2 In Endicott Johnson Corp., the Supreme Court began to lay the foundation of the law governing agency investigations. In response to the argument that the Secretary of Labor’s subpoena was beyond her jurisdiction, the Court found that the question of jurisdiction is, in the first instance, for the agency and not the courts; questions of the coverage of the statute in question and the possible defenses available were to be left for judicial review of whatever administrative action the Secretary ultimately brought. 317 U.S. at 509, 63 S.Ct. at 343, 87 L.Ed. at 429; accord, Oklahoma Press Publishing Co., 327 U.S. at 214, 66 S.Ct. at 508, 90 L.Ed. at 632. When, in the words of the Court, “[t]he evidence sought by the subpoena was not plainly incompetent or irrelevant to any lawful purpose” it should have been enforced. Endicott Johnson Corp., 317 U.S. at 509, 63 S.Ct. at 343, 87 L.Ed. at 429.
In another important case in this area, Morton Salt Co., the Supreme Court was presented with a claim very similar to the one here. A Federal Trade Commission cease and desist order was enforced by and under the supervision of the Court of Appeals. The order required the filing of compliance reports by Morton Salt. Morton Salt claimed that the FTC could not require additional reporting without proceeding through the court. The Court rejected that argument, placing great emphasis on agency power of “original inquiry.”
It has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function. It is more analogous to the Grand Jury, which does not depend on a case or controversy for power to get evidence but can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it, too, may take steps to inform itself as to whether there is probable violation of the law.
338 U.S. at 642-643, 70 S.Ct. at 364, 94 L.Ed. at 411. The Court went on to note that Congress had authorized the FTC to investigate compliance with court decrees. Id. Congress has provided the EEOC with the same authority: “In any case in which an employer, employment agency, or labor organization fails to comply with an order of a court issued in a civil action brought under this section, the Commission may commence proceedings to compel compliance with such order.” 42 U.S.C. § 2000e-5(i); see EEOC v. First Alabama Bank of Montgomery, 595 F.2d 1050, 1054 (5th Cir. 1979). If we were to say the consent decree divested the Commission of its power to investigate, this provision of Title VII would lack any substance. How else but through investigation could the EEOC determine compliance with a court decree?
Morton Salt and § 2000e-5(i) ought to be dispositive of this appeal. One may argue, however, that the EEOC’s purpose in issuing these subpoenas was not to seek compliance with the consent decree but to compel compliance with its own view of the law. Even if the EEOC’s subjective purpose behind the investigation is somehow relevant, the law remains clear that raising the preclusive effect of the consent decree as a defense to the subpoenas is premature.
As noted, a party may not defeat agency authority to investigate with a claim that could be a defense if the agency subsequently decides to bring an action against it. This court has held that it is premature to allow a party being investigated to raise a statute of limitations defense to an EEOC demand for documents; even assuming that the timeliness of a complaint is jurisdiction*1430al, we noted that the agency should be allowed to investigate to make the determination whether the violation is continuing in nature, thereby providing it with jurisdiction. Pacific Maritime Association, 491 F.2d at 1296-97; see EEOC v. St. Regis Paper Co., 717 F.2d 1302, at 1303-1304 (9th Cir.1983) (discovery may be obtained only in exceptional cases and counterclaims need not be considered at all). Pacific Maritime has been followed in similar contexts by other courts. EEOC v. South Carolina National Bank, 562 F.2d 329, 332 (4th Cir.1977) (claim that charge was untimely could not be raised as a defense to EEOC investigation); EEOC v. Chrysler Corp., 567 F.2d at 755 (claim that EEOC lacked jurisdiction and counterclaims raised by Chrysler were premature in subpoena enforcement proceeding); EEOC v. Bay Shipbuilding Corp., 668 F.2d 304, 309 (7th Cir.1981) (counterclaims could not be raised in enforcement proceeding, they must await the trial on the underlying charges); see EEOC v. K-Mart Corp., 694 F.2d 1055, 1066-67 (6th Cir.1982) (there is no absolute right to discovery by the party being investigated in a subpoena enforcement proceeding); but cf. New Orleans Steamship Ass’n v. EEOC, 680 F.2d 23, 25-26 (5th Cir.1982) (the court assumed that a prior consent decree that bound private plaintiffs might prevent the EEOC from enforcing a subpoena to investigate charges on behalf of those plaintiffs, but found that private plaintiffs were not bound or estopped). Cases discussing the National Labor Relations Board’s power of investigation under 29 U.S.C. § 161, which is made expressly applicable to EEOC investigations by 42 U.S.C. § 2000e-9, also preclude raising “defenses” in subpoena enforcement proceedings. Cudahy Packing Co. v. NLRB, 117 F.2d 692, 694 (10th Cir. 1941); Hamilton v. NLRB, 177 F.2d 676, 677 (9th Cir.1949); NLRB v. Daniel Construction Co., 418 F.2d 790, 791 (4th Cir. 1969), cert. denied, 397 U.S. 1039, 90 S.Ct. 1358, 25 L.Ed.2d 649 (1970); NLRB v. Frederick Cowan and Company, 522 F.2d 26, 28 (2d Cir.1975); NLRB v. Dutch Boy, Inc., Glow Lite Division, 606 F.2d 929, 933 (10th Cir.1979); NLRB v. Interstate Dress Carriers, Inc., 610 F.2d 99, 112 (3d Cir.1979); see NLRB v. International Medication Systems, Ltd., 640 F.2d 1110, 1114 & n. 2 (9th Cir. 1981), cert. denied, 455 U.S. 1017, 102 S.Ct. 1712, 72 L.Ed.2d 134 (1982).
CHMC’s argument that the EEOC lacks the jurisdiction to investigate plainly falls within the prohibition against raising what normally would be a defense to an action by the agency. The Hospital’s claim is premised on the preclusive or res judicata effect of the consent decree. But res judicata is an affirmative defense under the rules of civil procedure. Fed.R.Civ.P. 8(c). It is not a jurisdictional doctrine.
Even assuming that the consent decree could somehow present a jurisdictional bar to investigation, this court has emphasized the “strictly limited” role of the district court when an agency subpoena is attacked for lack of jurisdiction. Casey v. FTC, 578 F.2d 793, 799 (9th Cir.1978). As long as the evidence sought is relevant, material and there is some “plausible” ground for jurisdiction, id., or, to phrase it another way, unless jurisdiction is “plainly lacking,” Marshall v. Burlington Northern, Inc., 595 F.2d 511, 513 (9th Cir.1979), the court should enforce the subpoena. In an area of the law as unsettled as that involving the preclusive effect of class actions on future class claims, we cannot by any means say jurisdiction is plainly lacking.
The Hospital does not argue that the evidence sought here is incompetent, irrelevant or sought outside proper agency procedure. The subpoenas must therefore be enforced. After gathering the evidence, the Commission may decide the charges lack reasonable basis and the matter will end if the charging parties do not wish to pursue it. If the Commission finds the charges substantiated, it may be able to secure voluntary compliance with the law by the Hospital. And compliance may merely entail the same course of conduct prescribed by the consent decree. An alternative scenario is a suit by the Commission or the charging parties. If timely raised, the courts will then be properly presented with the question of the preclusive effect of the consent decree.
*1431As a matter of policy it may be argued that permitting the EEOC to investigate notwithstanding the consent decree will deter parties in future class actions from settling their cases. Such an argument is unfounded for two reasons. First, if the parties arrive at a sound settlement, the minimal inconvenience of an EEOC investigation of future complaints is unlikely to deter the settlement. Second, if problems arise with the settlement, either in its content or its implementation, the benefit of the EEOC’s independent input may advance the purposes of the antidiscrimination laws at little or no cost to the parties.
Accordingly, the judgment of the district court is REVERSED and the cause REMANDED to enforce the subpoenas.

. 42 U.S.C. § 2000e-5(b) provides in relevant part:
Whenever a charge is filed by or on behalf of a person claiming to be aggrieved, or by a member of the Commission, alleging that an employer, employment agency, labor organization, or joint labor-management committee controlling apprenticeship or other training or retraining, including on-the-job training programs, has engaged in an unlawful employment practice, the Commission shall serve a notice of the charge (including the date, place and circumstances of the alleged unlawful employment practice) on such employer, employment agency, labor organization, or joint labor-management committee (hereinafter referred to as the “respondent”) within ten days, and shall make an investigation thereof.

. We intimate no views on the question whether the consent decree precludes an action brought by either the EEOC or the charging parties.