Gloria J. McCaskill v. Sci Management Corporation, Sci Illinois Services Incorporated, Doing Business as Evergreen Cemetery, Sam Smith

ILANA DIAMOND ROVNER, Circuit Judge,

concurring in the judgment.

Without any majority, the court today reverses and remands the district court's order compelling arbitration. I would reverse and remand for the reasons stated in McCaskill v. SCI Management Corp., 285 F.3d 623 (7th Cir.2002), reh. granted and op. vacated by McCaskill v. SCI Management Corp., 294 F.3d 879 (7th Cir.2002), in which Judge Bauer originally joined, and I reproduce some of that opinion below. I cannot join in Judge Bauer's separate opinion on this rehearing, 1 which would *681 reverse a district court’s decision without ever ascertaining whether that decision was correct — through an unprecedented expansion of the doctrine of judicial admissions. In its zeal to circumnavigate the difficult issue presented to it, Judge Bauer’s opinion has seized on a solitary comment by the appellee, SCI, during oral argument and transformed it from a candid assessment of the merits of SCI’s position,’ into.an edict binding this court from deciding an issue squarely raised by the appellant and argued in the briefs. That holding is simply stunning.

All of the briefs submitted in this case addressed whether the arbitration agreement, if interpreted to preclude attorney’s fees, was unenforceable. In addition, SCI further argued that the arbitration agreement should not be interpreted as barring the award of attorney’s fees. At oral argument, SCI emphasized the latter argument, at one point acknowledging in response to a question that if the court interpreted the agreement as barring attorney’s fees, then the agreement was “inconsistent” with Title VII. That statement was an accurate assessment of the weakness of SCI’s position in light of the law. Judge Bauer’s opinion, however, has seized upon that statement at oral argument, declared that it is a binding “judicial admission,” and based solely on that “admission,” has determined that the arbitration agreement is unenforceable. The problems with that holding are myriad.

First, SCI’s assessment of the law as an appellee cannot constitute a judicial admission, because it was not a concession as to a fact in issue, but rather a statement of legal opinion. “The scope of a judicial admission by counsel is restricted to unequivocal statements as to matters of fact which otherwise would require evidentiary proof; it does not extend to counsel’s statements of his conception of the legal theory of a case.” Michael H. Graham, 30B FedPrac. & Proc.Evxd. (Interim ed.) § 7026 (2002). That understanding of the scope of judicial admissions is a longstanding one. For instance, in New Amsterdam Casualty Co. v. Waller, 323 F.2d 20, 24 (4th Cir.1963), the court defined judicial admissions as follows:

A judicial admission is usually treáted as absolutely binding, but such admissions go to matters of fact which, otherwise, would require evidentiary proof. They serve a highly useful purpose in dispensing with proof of formal matters and of facts about which there is no real dispute .... The doctrine of judicial admissions has never been applied to counsel’s statement of his conception of the legal theory of the case. When counsel speaks of legal principles, as he conceives them and which he thinks applicable, he makes no judicial admission and sets up no estoppel which would prevent the court from applying to the facts disclosed by the proof, the proper legal principles as the Court understands them.

That conception of judicial admissions has persisted throughout the cases leading up to this decision. See, e.g., New York State Organization for Women v. Terry, 159 F.3d 86 , 97 n. 7 (2d Cir.1998) (“This argument relies on a misunderstanding of the nature of judicial admissions, which are statements of fact rather than legal arguments made to a court.”); Solon v. Gary Community School Corp., 180 F.3d 844, *682 858 (7th Cir.1999) and Keller v. United States, 58 F.3d 1194 , 1198-99 n. 8 (7th Cir.1995) (quoting Fed.Prac. & Proc., and stating that judicial admissions “ ‘have the effect of withdrawing a fact from contention.’ ”); MacDonald v. General Motors Corp., 110 F.3d 337, 341 (6th Cir.1997) (holding that counsel’s statement on an issue of negligence was not a judicial admission because it constituted a legal opinion or conclusion rather than a matter of fact); Guidry v. Sheet Metal Workers International Association, Local No. 9, 10 F.3d 700, 716 (10th Cir.1993) modified on other grounds, 39 F.3d 1078 , 1081 n. 3 (10th Cir.1994) (rehearing en banc) (“Judicial admissions are formal admissions ... which have the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of the fact, [citations omitted] Because the matter Mr. Guidry claims was admitted is a proposition of law, the doctrine of judicial admission is not applicable.”) The statement at oral argument in this case was similarly a statement of legal opinion, not a stipulation of fact. As such, it is not a judicial admission binding on the appellee, and certainly is not binding on this court.

In fact, even if the statement had been one of fact, and therefore fell within the doctrine of judicial admission, it would not be binding on this court. The alleged “admission” was nothing more than a one sentence response to a hypothetical question at oral argument in which the court asked the appellee to assume that the arbitration agreement was construed as preventing an award of attorney’s fees to the plaintiff, and then asked if the arbitration clause would be unenforceable because it deprived the plaintiff of the opportunity to seek her Title VII remedies. The appellee responded affirmatively that such a scenario would be inconsistent with Title VII, but emphasized that the court should not construe the agreement in that manner. That brief response to the court’s question is not the sort of deliberate, clear, and unambiguous statement evincing an intentional waiver that has been held sufficient to constitute a judicial - admission. See Crowe v. Coleman, 113 F.3d 1536, 1542 (11th Cir.1997) (“waivers and concessions made in appellate oral argument need to be unambiguous before they are allowed to change the outcome of an appeal from a reversal to an affirmance.”); see also Martinez v. Bally’s Louisiana, Inc., 244 F.3d 474, 476 (5th Cir.2001) (“A statement made by counsel during the course of trial may be considered a judicial admission if it was made intentionally as a waiver, releasing the opponent from proof of fact.”); MacDonald, 110 F.3d at 340 (declaring that “[i]n order to qualify as judicial admissions, an attorney’s statements must be deliberate, clear, and unambiguous” and must constitute a deliberate voluntary waiver.); Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 170 , 92 S.Ct. 1965 , 32 L.Ed.2d 627 (1972) (“[W]e are loath to attach conclusive weight to the relatively spontaneous responses of counsel to equally spontaneous questioning from the Court during oral argument”). In fact, SCI never repudiated the arguments in its brief, in which it contested the proposition that the agreement was unenforceable. Even if judicial admissions extended to legal opinions, which is clearly false, the statement at issue here cannot be characterized as an unambiguous, intentional waiver of the arguments made in its brief.

Finally, even if the statement satisfied all of the above criteria, it would not bind this court because the court has the discretion to consider the issue despite the judicial admission. See Solon, 180 F.3d at 858 (recognizing that court may allow party to withdraw a judicial admission); Martinez, 244 F.3d at 477 (same); New Amsterdam Casualty Co., 323 F.2d at 24 (“a court, *683 unquestionably, has the right to relieve a party of his judicial admission if it appears that the admitted fact is clearly untrue and that the party was laboring under a mistake when he made the admission.”). Here, it is unimaginable that if we believed that the district court decision was correct on the law, we would nevertheless reverse that decision because the appellee thought we would. The court would undoubtedly in that scenario exercise its discretion and decide the issue. In fact, we have repeatedly held that on review of summary judgment, we may affirm the decision of the district court on any ground apparent in the record. Vargas-Harrison v. Racine Unified School Dist., 272 F.3d 964, 974 (7th Cir.2001). Of course, all of this discussion is hypothetical in nature, because for good reason the doctrine of judicial admissions does not apply to legal opinions of the parties.

The contrary position offered by Judge Bauer would mean that one party’s characterization of the law would necessarily bind this court and dictate the outcome of the appeal. I have been unable to find any other case in which a statement at oral argument was used in this manner, and the cases cited by his opinion all involve issues of fact, not law. The repercussions of such a holding would be widespread if the court actually followed this approach in all cases. For example, imagine the scenario in which a district court grants summary judgment to an employer in a discrimination case. The plaintiff then appeals, and the issues identified by the plaintiff on appeal are fully briefed. At oral argument, however, the employer opines that it believes it will lose on one of those issues. Under Judge Bauer’s approach today, we would be bound by that “judicial admission” and would be required to remand the district court’s correct decision for a trial on the merits. Or consider the scenario, not uncommon, in which an appellee wrongly declares that a controlling Supreme Court case is inapplicable, and argues instead based on other cases. Would we as a court then ignore the controlling Supreme Court case because of that “judicial admission?” That is unlikely to happen in this court, nor should it, and it should not happen in this case either. These examples illustrate the folly of expanding the judicial admission doctrine beyond its application to facts, to control aspects of law. Judge Bauer’s opinion represents an unfortunate expansion of the judicial admission doctrine that was designed to streamline the judicial process. By allowing the reversal of even a proper district court decision, the expanded judicial admission approach betrays that purpose and sacrifices judicial efficiency and clarity in the law, for no gain.

The enforceability of the arbitration agreement was raised by the appellant in this case and briefed by both parties. The court has the responsibility to decide that issue, rather than reversing because the appellee thinks it is going to lose. SCI should lose, for the reasons stated in the opinion originally issued by this court, but the district court deserves better than to see its decision remanded based on a party’s, rather than the court’s, assessment of the law. For the convenience of the reader, I reproduce the relevant part of the prior opinion in this case addressing the merits of the enforcement issue, followed by some closing comments:

The arbitration agreement at issue here provides for the arbitration of a number of employment-related disputes, including those based on harassment or discrimination. It excludes other types of claims likely to be brought by SCI, such as disputes related to noncompetition or confidentiality agreements, and “any claim by the Company against the Employee which is based upon fraud, theft or other dishon *684 est conduct of employee.” Agreement ¶ 2. The arbitration agreement further specifies as follows:

Each party may retain legal counsel and shall pay its own costs and attorneys’ fees, regardless of the outcome of the arbitration. Each party shall pay one-half of the compensation to be paid to the arbitrator(s), as well as one-half of any other costs relating to the administration of the arbitration proceeding (e.g., room rental, court reporter, etc.).

Agreement, ¶ 4. Some courts have refused to enforce arbitration agreements which mandate that the parties each pay half the costs of arbitration, while others have considered whether the cost-shifting provision renders the arbitration proceedings inaccessible for that individual. See, e.g., Green Tree Financial Corp. -Alabama v. Randolph, 531 U.S. 79 , 121 S.Ct. 513 , 148 L.Ed.2d 373 (2000); Brown v. Wheat First Securities, Inc. 257 F.3d 821 (D.C.Cir. 2001); Bradford v. Rockwell Semiconductor Systems, Inc., 238 F.3d 549 (4th Cir.2001); Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, 170 F.3d 1 (1st Cir.1999); Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361 (7th Cir.1999); Shankle v. BG Maintenance Management of Colorado, Inc., 163 F.3d 1230 (10th Cir.1999); Cole v. Burns International Security Services, Inc., 105 F.3d 1465 (D.C.Cir.1997). We need not address the issue here, however, because the attorney’s fees provision renders the agreement unenforceable.

In Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 , 111 S.Ct. 1647 , 114 L.Ed.2d 26 (1991), the Supreme Court held that claims under federal statutes may be appropriate for arbitration as long as the litigant may effectively vindicate her statutory cause of action in the arbitral forum, and the statute will continue to serve its remedial and deterrent purposes. Williams v. Cigna Financial Advisors Inc., 197 F.3d 752, 763 (5th Cir.1999). See also Equal Employment Opportunity Commission v. Waffle House, 534 U.S. 279 , 122 S.Ct. 754, 761 , 151 L.Ed.2d 755 (2002) (narrowly construing impact of arbitration agreement to hold that the existence of an arbitration agreement between private parties does not affect the EEOC’s right to seek all remedies). One of the remedies provided by Title VII is that attorney’s fees may be awarded to a prevailing plaintiff, 42 U.S.C. § 2000e-5(k), and we noted in Dunning v. Simmons Airlines, Inc., 62 F.3d 863, 872 (7th Cir. 1995), that a prevailing party should ordinarily recover attorney’s fees absent special circumstances rendering such an award unjust. In Dunning , we emphasized the importance of the fees provision to the purposes of Title VII:

Attorney’s fees in Title VII litigation are not limited to a proportion of the monetary damages assessed in the case because, as Congress has recognized, a plaintiff in any civil rights suit acts “not for himself alone but also as a ‘private attorney general,’ vindicating a policy that Congress considered of the highest importance.” [citations omitted] ... A rule of proportionality would make it difficult, if not impossible, for individuals with meritorious civil rights claims but relatively small potential damages to obtain redress from the courts. This is totally inconsistent with Congress’ purpose in enacting § 1988. Congress recognized that private-sector fee arrangements were inadequate to ensure sufficiently vigorous enforcement of civil rights. In order to ensure that lawyers would be willing to represent persons with legitimate civil rights grievances, Congress determined that it would be necessary to compensate lawyers for all time reasonably expended on a case.

Id. at 873 n. 13. The right to attorney’s fees therefore is integral to the purposes *685 of the statute, and often is central to the ability of persons to seek redress from violations of Title VII. In recognition of the importance of the attorney’s fees provisions to the remedial and deterrent effect of Title VII, counsel for SCI conceded at oral argument that if we construe the arbitration agreement as not allowing the arbitrator to award attorney’s fees, then the agreement deprives the plaintiff of remedies under Title VII and is unenforceable.

The attorney’s fees provision in the arbitration agreement quite plainly does just that. It mandates that each party shall pay its own attorney’s fees regardless of the outcome of the arbitration. SCI attempts to avoid that plain language with a novel interpretation. According to SCI, the provision regulates only what McCas-kill is responsible for paying, not what she may be awarded, and thus it is possible for an arbitrator to award her attorneys’ fees consistent with the arbitration agreement, as long as she uses that award to pay her attorneys. That defies the plain meaning of the words. SCI has identified no other context in which a court would hold that a provision requiring a person to pay her own attorney’s fees actually means the opposing party may be required to pay the fees to her, and then she must pay her own attorney. The provision obviously means that neither party can be required to pay the attorney’s fees of the other party, either directly or through the straw man approach advocated by SCI.

In fact, the Ninth Circuit reached that conclusion regarding a similar clause in Graham Oil Co. v. ARCO Products Co., a Div. of Atlantic Richfield Co., 43 F.3d 1244 (9th Cir.1994). The arbitration agreement in Graham Oil was part of a distributor agreement with a franchisee, and provided that each party would bear its own attorney’s fees. Id. at 1247 . The court recognized that franchisees may agree to an arbitral forum for resolving statutory disputes, but stated that they may not be forced “to surrender the statutorily-mandated rights and benefits that Congress intended them to possess.” Id. The court held that the attorney’s fees clause purported to forfeit the statutorily-mandated right to recover attorney’s fees provided under the Petroleum Marketing Practices Act (PMPA). Id. It further noted that the right to attorney’s fees was important to the effectuation of the PMPA’s policies, specifically the purpose of deterring a franchiser from improperly contesting meritorious claims, and accordingly held that the clause contravened the PMPA. Id. at 1248 . The court then held that the attorney’s fees clause, as well as two other contravening clauses, were not severable from the arbitration agreement as a whole — a claim not even raised in this case and therefore not before us here.

Similar to Graham Oil, the clause here purports to forfeit McCaskill’s statutory right to attorney’s fees, a remedy that we have already recognized is essential to fulfill the remedial and deterrent functions of Title VII. Because the provision prevents her from effectively vindicating her rights in the arbitral forum by preemptively denying her remedies authorized by Title VII, the arbitration agreement is unenforceable.

I note that this position has recently been challenged in dicta in Metro East Center for Conditioning and Health v. Qwest Communications Intern., Inc., 294 F.3d 924 (7th Cir.2002). Metro East relies on the Supreme Court’s decision in Evans v. Jeff D., 475 U.S. 717 , 106 S.Ct. 1531 , 89 L.Ed.2d 747 (1986), stating that Evans , “a case the McCaskill court did not mention, holds that plaintiffs may forego attorney’s fees under 42 U.S.C. § 1988 ,” and arguing from that proposition that employees can *686 contract away their remedies. Id. at 928 . Evans went unmentioned in the initial McCaskill opinion because it is unrelated to the arbitration issue decided in McCas-kill. In Evans , the Court addressed whether it could enforce a consent decree that waived attorney’s fees in exchange for relief on the merits greater than could reasonably be expected at trial. The Court held that Congress did not intend to ban “all fee waivers offered in connection with substantial relief on the merits.” 475 U.S. at 730 , 106 S.Ct. 1531 . Instead, the Court held that Congress enacted the fee-shifting provision as “ ‘an integral part of the remedies necessary to obtain’ compliance with civil rights laws [citation omitted] to further the same general purpose— promotion of respect for civil rights — that led it to provide damages and injunctive relief,” and that the exchange of fees for other relief to which he indisputably is not entitled is no more objectionable than a concession on damages to secure broader injunctive relief. Id. at 731-32 , 106 S.Ct. 1531 . Thus, the Court recognized that attorney’s fees were an integral part of the arsenal of remedies, and that they could be subject to the negotiations concerning those remedies. That is a far cry from a blanket waiver in an arbitration agreement required as a condition of employment. In fact, the Court explicitly distinguished the case before it from one involving a policy of demanding a fee waiver. Id. at 740 , 106 S.Ct. 1531 . The Evans Court recognized the importance of the fees provision among the remedies available to a litigant and therefore supports the holding that an arbitration agreement eliminating that right fails to provide the litigant with a forum in which she can effectively vindicate her statutory rights.

For the reasons set forth in this opinion, I believe that the district court’s order compelling arbitration should be reversed and remanded and accordingly I concur in the judgment.

. The dissent remains consistent from that earlier opinion, and I will not further address it here. I remain convinced that we possess jurisdiction because the intent of the court is ascertainable from the order and is consistent with the parties' own understanding. The parties' stipulations should be given deference by the court to the extent that they are factual *681 rather than legal in nature, as our decision in ITOFCA, Inc. v. MegaTrans Logistics, Inc., 235 F.3d 360, 363 (7th Cir.2000) recognizes. Judge Bauer's opinion gives preclusive effect to a legal rather than factual statement, and the dissent gives no weight to the parties' stipulations to a factual issue.