Court Opinion

ID: 8946553
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:25:46.121574+00
Date Added: 2024-06-11T17:09:51.817498
License: Public Domain

ARNOLD, Circuit Judge,
with whom LAY, Chief Judge, HEANEY, McMILLI-AN, and JOHN R. GIBSON, Circuit Judges join, dissenting.
Today the Court holds that prejudgment interest can never be awarded to prevailing plaintiffs in Title VII actions against the United States Postal Service. It thus creates a square conflict with Nagy v. United States Postal Service, 773 F.2d 1190 (11th Cir.1985), the only other appellate opinion directly in point.
For the reasons given in my dissenting opinion in Cross, supra, 733 F.2d at 1330,1 respectfully dissent. I add a few words to address briefly certain post-Cross develop*822ments that fortify the conclusion I reached there.
The Eleventh Circuit has now held that the barrier of sovereign immunity was “deliberately lifted by Congress when it created the Postal Service,” and that prejudgment interest on back-pay awards is therefore available. Nagy v. United States Postal Service, supra. Cf. Hall v. Bolger, 768 F.2d 1148 (9th Cir.1985) (post-judgment interest on award of attorneys’ fees against Postal Service under 29 U.S.C. § 791, forbidding discrimination by reason of handicap, not barred by sovereign immunity). But cf. Frazier v. United States Postal Service, 790 F.2d 873 (Fed.Cir.1986) (per curiam) (Merit Systems Protection Board has no authority to award interest on back-pay award). Moreover, a recent decision of the Supreme Court explicitly states “we must presume that the [Postal] Service’s liability is the same as that of any other business.” Franchise Tax Board of Cal. v. United States Postal Service, 467 U.S. 512, 104 S.Ct. 2549, 2553, 81 L.Ed.2d 446 (1984) (sovereign immunity no bar to state agency’s order commanding Postal Service to withhold delinquent taxes from employees’ wages).
Library of Congress v. Shaw, — U.S. -, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986), a case decided after the oral argument in this case, is emphasized in Judge Bowman’s well-argued opinion for the Court en banc. Shaw holds that sovereign immunity bars an award of prejudgment interest in Title VII cases against agencies of the federal government. If the Postal Service were an agency of the federal government in the same sense as the Library of Congress, Shaw would be in point, and I would be constrained to adopt the view taken by the Court. But the Postal Service is not a federal agency in this simple, unqualified sense. Since 1970 it has had' a special status. “Congress ... indicated [in the Postal Reorganization Act of 1970] that it wished the Postal Service to be run more like a business than had its predecessor, the Post Office Department.” Franchise Tax Board of Cal. v. United States Postal Service, supra, 104 S.Ct. at 2553-54 (footnote omitted).
As the Court recognizes, ante p. 7, the Shaw opinion contains a qualification. It states that “[t]he no-interest rule is ... inapplicable where the Government has cast off the cloak of sovereignty and assumed the status of a private commercial enterprise.” 106 S.Ct. at 2963 n. 5. Has the Postal Service assumed the status of the sort of “private commercial enterprise” the Supreme Court had in mind? Obviously there are respects, and important ones, in which the Postal Service is unlike a private employer. But I do not believe that sovereign immunity with regard to an ordinary incident of relief in a civil action is one of those differences. The Supreme Court in Franchise Tax Board, a unanimous opinion decided just two years before Shaw, and not referred to at all by the Shaw court, specifically stated that sue- and-be-sued clauses are to be liberally construed and that “we must presume that the [Postal] Service’s liability is the same as that of any other business.” 104 S.Ct. at 2554. It seems, then, that the Court considers the Postal Service to be like a private commercial enterprise for purposes of sovereign immunity.
Our Court’s position comes down to this: when the Postal Reorganization Act was passed in 1970, creating the Postal Service and subjecting it to a sue-and-be-sued clause, sovereign immunity was waived, but not so far as Title VII was concerned, because at that time Title VII did not apply to any federal instrumentality, including the Postal Service. Later, when Title VII did come into the federal-government-employment picture, nothing was said in so many words about interest. Therefore immunity remains in effect to bar interest awards. I cannot claim that the Supreme Court’s Franchise Tax Board opinion conclusively rejects that position. But I do think that the opinion is more naturally read to support my view. In addition to the arguments already advanced, I call attention especially to another statement in Franchise Tax Board. After stating that “[t]he nearly universal conclusion of the *823lower federal courts has been that the Postal Beorganization Act constitutes a waiver of sovereign immunity,” 104 S.Ct. at 2553 n. 12, the Court cites a number of opinions with approval. One of them, see id. at 2554 n. 12, is Milner v. Bolger, 546 F.Supp. 375 (E.D.Cal.1982). Milner squarely holds that the general no-interest rule applicable to federal agencies sued under Title VII does not apply to the Postal Service. The inclusion of Milner in a string citation in a footnote is of course not the equivalent of an unequivocal Supreme Court pronouncement. But it does lend additional support to my position.
For these reasons, I would hold that an award of prejudgment interest against the Postal Service under Title VII is not barred by sovereign immunity.