Petition — First National Bank of Jackson v. Equal Employment Opportunity Commission

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Supreme Court, U.S.

| “Fee

DEC 10 1980

80-935

No.

MICHAEL RODAK, JR., CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

FIRST NATIONAL BANK OF JACKSON,

Petitioner

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FIFTH CIRCUIT

MILES CURTISS MCKEE

DALTON MCBEE, JR.

FUSELIER, OTT, MCKEE

& MOELLER, P.A.

2100 Deposit Guaranty Plaza

Jackson, Mississippi 39201

(601) 948-2226

Counsel for Petitioner

QUESTION PRESENTED

Whether an employer may defend a § 706 Title VII

action by the Equal Employment Opportunity Commission

by showing that the jurisdictional prerequisites to suit

were obtained by fraud?

TABLE OF CONTENTS

Page

Table of Cases and Authorities ....................... ee iii

RELL AOL ATE TIE 1

SE ATCT VEE OT A RU IRON DRE ORR RTE PUR OL AOE 2

2 cl ats acs ad eas RS eee 2

RIG oe SRR DRA ee Pet De Ns 2

Reasons for Granting the Writ..............0.....000..0 5

SIRS aati Sey ut eas ee 10

Appendix A (Opinion of the Court of Appeals)......... la

Appendix B (Judgment of the District Court).......... 9a

Appendix C (Order denying Petition for Rehear-

ing and Rehearing En Banc) .............................0... 15a

Appendix D (Petitioner’s Answer, Affirmative De-

fenses and Counterclaim) ................0..0...ccccccesceeseeee 17a

lil

TABLE OF CASES AND AUTHORITIES

Albermarle Paper Company v. Moody, 422 U.S. 405

etic ore ae ee TL tne.

American Propeller and Mfg. Co. v. United States,

eu i Lt EIR pa emt Rene aS

Bull v. United States, 295 U.S. 247 (1985) ..... ........

Christiansburg Garment Co. v. EEOC, 432 US.

Pe re ee ar ne oe oy

Conley v. Gibson, 355 U.S. 41 (1957) oo0ooon..

DuShane v. Benedict, 120 U.S. 630 (1887) ...............

EEOC v. Brookhaven Bank & Trust Co., 614 F.2d

gE ae) a mea ee

ahi v. United States, 386 F.2d 481 (5th Cir.

ME Spe kh cee mh

General Telephone Co. v. EEOC, 100 S. Ct. 1698

|} __CRTE AeCAalale Wei et na a ane a

Hickman v. Taylor, 329 U.S. 495 (1947) .00000........

Lacy v. United States, 216 F.2d 233 (5th Cir.

_____t RRREE REE CEAD soa Sekai OOF on aNCER DIR Nth es MeN

Luckenbach SS Co. v. The Thekla. 266 U.S. 328

DI Ao aes fea ee tee el vena

National Hockey League v. Metropolitan Hockey

League, 427 U.S. 639 (1976) ooo. cccccccccccceeceee

Occidental Life Insurance Co. v. EEOC, 432 U.S.

DM eh ieee ee es ae

Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340

RISA RNa alana: Sper cae Ud ab ee none See eee

Pennsylvania RR Co. v. Miller, 124 F.2d 160, 162

RUMI: FIED svc seco rh cco cco tcvienc ce ce,

Page

Roadway Express, Inc. v. Piper, 100 S. Ct. 2455

Sc SNE RTCA ME SESS RG OR ES GS

Rothensies v. Electric Storage Batteries, 329 U.S.

UI es cee

Smith v. Sperling, 354 U.S. 91 (1957)...

Stone v. White, 301 U.S. 532 (1987) 0.

The Steamer “Siren” and Cargo v. United States,

4405. (7 Wall.) 162 (000)....................

United States v. Bramblett, 348 U.S. 503 (1955) .....

United States v. Detroit Timber and Lumber Co.,

woe UD. Sal (1908) ........... cco.

United States v. First National City Bank, 379

TD cs ee Sean ee

United States v. Industrial Crane & Mfg. Corp.,

492 F.2d 772 (5th Cir. 1974) ............................

United States v. McDaniel, 32 U:S. (7 Pet.) 1

SERS cel pes, SECTS ie glee OER a ia

a v. Paddock, 187 F.2d 271 (5th Cir.

ted A REY Dien te RR ieee a

United States v. Ringgold, 33 US. (8 Pet.) 150

oo ccay eA RR EELS Ae ie paar aie il

United States v. Shaw, 309 U.S. 495 $e

United States v. State National Bank, 96 U.S. 30

REE elect ns come ae sn

Virginian R. Co. v. System Federation, 300 U:S.

eon ch gt fae eNOS rk = Ne ea Ce ae

STATUTES

OTHER AUTHORITY

PU ED ce ko

Page

—

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

No.

FIRST NATIONAL BANK OF JACKSON,

Petitioner

Vv.

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Respondent

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

First National Bank of Jackson petitions for a writ of

certiorari to review the judgment of the United States

Court of Appeals for the Fifth Circuit in this case.

OPINIONS BELOW

The opinion of the Court of Appeals (Appendix A,

infra) is reported at 614 F.2d 1004 (5th Cir. 1980). The

opinion and judgment of the district court (Appendix B,

infra) are reported at 22 Fair Empl. Prac. Cas. 694 (S.D.

Miss. 1977).

JURISDICTION

The judgment of the Court of Appeals was entered on

April 2, 1980. <A timely Petition for Rehearing and

Rehearing En Banc was denied on September 12, 1980

(Appendix C, infra).

The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1).

STATUTES INVOLVED

Section 706 of Title VII of the Civil Rights Act of

1964, 42 U.S.C. § 2000e-5 provides in part:

(b) Whenever a charge is filed ... , the Commis-

sion ... shall make an investigation thereof. ...

If the Commission determines after such in-

vestigation that there is reasonable cause to

believe that the charge is true, the Commission

shall endeavor to eliminate any such alleged

unlawful employment practice by informal

methods of conference, conciliation and per-

suasion.

(f)(1) If ... the Commission has been unable to

secure from the respondent a conciliation agree-

ment acceptable to the Commission, the Commis-

sion may bring a civil action against any re-

spondent ... named in the charge.

STATEMENT

A. Facts

In response to EEOC’s § 706 complaint, the petitioner

pled, inter alia, that the suit and the underlying charge

had been fraudulently filed and processed pursuant to a

conspiracy among the EEOC, certain EEOC employees and

the charging party, George Brister. The bank, in

formulating its affirmative defenses and counterclaim

(Appendix D), relied on evidence that Brister: (1) had

filed at least 45 EEOC charges against various employers

within the jurisdiction of the Jackson office of the EEOC;

(2) had recovered in excess of $12,000 as a result of such

charges; (3) had no bona fide interest in employment with

the employers so charged; (4) had, within a nine months

period, filed at least five private lawsuits in the United

States District Court before three separate judges; (5)

was assisted in the filing of such suits by a lawyer

employed by the local office of*the EEOC; (6) invoked the

Fifth Amendment privilege against self-incrimination in

one of these suits when asked by a district judge, on

hearing on a motion to appoint counsel for Brister, how

many charges he (Brister) had filed; and (7) had failed to

appear for trial.

In the proceedings sub judice, Brister, whose depo-

sition was being taken at the instance of the EEOC,

answered EEOC’s questions, but, after only a few ques-

tions, refused to answer further questions by the bank’s

counsel and walked out of the deposition. The EEOC has

never denied the truth of any of these facts.

The bank attempted discovery on the merits of the

action, its affirmative defenses and counterclaim. The

EEOC refused any discovery on the subject matter of the

affirmative defenses or counterclaim. It made three

unsuccessful attempts to have the counterclaim dismissed;

never attacking the affirmative defense. Finally, the

district court, through a United States Magistrate, or-

dered’ full discovery on the allegations of the complaint,

'The Magistrate’s order provided in pertinent part:

“In prior proceedings Plaintiff EEOC moved the Dis-

trict Court to dismiss the Counterclaim which Motion

was denied. Consequently, the Counterclaim and

(footnote continues)

the affirmative defenses and counterclaim. The EEOC did

not appeal the magistrate’s order to the district judge as

required by local rules.

The EEOC refused to allow the discovery ordered by

the court.

B. The Decision Of The District Court

The district court, considering the defenses of the

bank as matters in recoupment, and finding that the

EEOC had been guilty of “recalcitrant action” and had

“persistently neglected” to permit discovery of “relevant

information”, dismissed the cause. (Appendix B, p. 10a-

lla).

C. The Decision Of The Court Of Appeals

The Fifth Circuit reversed and remanded, holding

that the bank could not counterclaim or defend in equi-

table recoupment by a showing that the jurisdictional

prerequisites to the suit of the EEOC were obtained

maliciously, fraudulently and as a part of an unlawful

conspiracy. The Court of Appeals, admitting that the

bank’s defenses had “some connection” to the EEOC suit,

deemed that connection as being “too tenuous and in-

direct to warrant the innovation of the doctrine of

recoupment.” (App. A, p. 5a.)

(footnote continued )

Affirmative Defenses asserted by the Defendant

stand as viable pleadings and the Defendant is en-

titled to full discovery upon these issues ....

The Defendant is entitled to liberal discovery in

connection with the allegations of the Complaint,

Defendant’s Answer, Affirmative Defenses and

Counterclaim, and, to that end, it is the opinion of

this Court that the Plaintiff's Motion for a Protective

Order should be overruled and the Defendant’s Mo-

tion to Compel Discovery sustained.”

—

REASONS FOR GRANTING THE WRIT

A. The Decision Below Conflicts With The Decisions Of

The Supreme Court.

Confronted with a fraudulently conceived and main-

tained action, the bank pled facts in its possession and

sought relief in equity. The decision of the Court of

Appeals prohibits the bank from pleading, discovering,

and proving these facts. Egregious agency conduct, thus,

is beyond the reach of the trial court’s equity powers. Such

conduct, in the Court of Appeals’ view, could not serve as

the foundation for any equitable relief because it did not

“relate to the primary issue in this Title VII ac-

tion—whether the bank unlawfully discriminated ... .”

(App. A, p. 6a).

Whether brought by the EEOC or a private plaintiff,

Title VII actions are equitable in nature. Occidental Life

Insurance Co. v. EEOC, 432 U.S. 355 (1977); Albermarle

Paper Co. v. Moody, 422 U.S. 405 (1975). The Court of

Appeals’ decision in this cause conflicts with Occidental

Life’s holding that a trial court may restrict or deny

backpay relief because of the EEOC’s “unexcused conduct

of a particular case.” 432 U.S. at 373.

The doctrine of equitable recoupment has long been

acknowledged and accepted by this court. American

Propeller & Manufacturing Co. v. United States, 300 U.S.

475 (1937); Luckenbach SS Co. v. The Thekla, 266 U.S. 328

(1924); United States v. McDaniel, 32 USS. (7 Pet.) 1

(1833). Equitable recoupment may be pled as a defense to

a claim by the United States. The Steamer “Siren” and

Cargo v. United States, 74 U.S. (7 Wall.) 152, 154 (1869);

United States v. Ringgold, 383 U.S. (8 Pet.) 150, 163 (1834).

This court has consistently adhered to the principle that,

“when the United States comes into court to assert a

claim, it so far takes the position of a private suitor as to

agree by implication that justice may be done with regard

to the subject matter.” The Thekla, 266 U.S. at 339-340.

The sovereign’s “absence of legal liability ...does not

destroy the justice of a claim against it.” Jd. The fraud of

an agent of the United States provides a proper basis for

equitable recoupment. United States v. State National

Bank, 96 U.S. 30, 36 (1878).

That the EEOC sues in the “public interest’” increas-

es, rather than diminishes, the measure of equity available

to gauge the bona fides ot agency action. United States v.

First National City Bank, 379 U.S. 378, 383 (1965); Virgi-

nian R. Co. v. System Federation, 300 U.S. 515, 552 (1987).

Moreover, equity exists independently of, and anterior to,

all congressional legislation. United States v. Detroit

Timber & Lumber Co. 200 U.S. 321, 339 (1906).

The Court of Appeals’ narrow view of the bank’s

pleadings and equitable defenses, with the resultant re-

striction of discovery, is inimical not only to the bank but

to the “public interest” as well. The bank’s defense should

not have been limited to the precise confines of the EEOC’s

claim, so long as the defense arose out of “some feature of

the transaction” upon which the EEOC’s action was

grounded. Bull v. United States, 295 U.S. 247, 262 (1935).

A transaction which is the subject of a suit by the EEOC

should be examined in all of its aspects and judgment

rendered that does justice in view of the entire transac-

tion as a whole. Rothensies v. Electric Storage Batteries,

329 U.S. 296, 299 (1946).

The bank should have been permitted to avail itself of

any evidence tending to show that the claim of the EEOC

was founded on a deliberately fradulent scheme and was

worth less than it was asserted to be. DuShane v. Benedict,

120 U.S. 630, 648 (1887). Since the EEOC’s claims are

measured by equitable standards, it is open to the bank to

show, by equitable standards, any fact which would deny

* E.g., General Telephone Co. v. EEOC, 100 S.Ct. 1698, 1704

(1980).

those claims. Stone v. White, 301 U.S. 582, 535 (1937). In

recoupment, where the equities of the defendant outweigh

those in favor of the government, the remedy is the

dismissal of the government’s claim. United States v.

Shaw, 309 U.S. 495, 504 (1940). If laches’ and “prejudicial

trial conduct” are within the bounds of “unexcused con-

duct” sufficient to defeat or diminish a Title VII claim, the

collusive creation of federal court jurisdiction’ is, a fortiori,

available as an equitable defense.

Though the bank’s claims might have failed on the

merits, their rejection by the appellate court on the basis

of a restrictive construction of bare pleadings, with dis-

covery incomplete, and without any facts to support its

finding that the defense was “too tenuous”, is antagonis-

tic to the basic precepts of modern pleading. E.g., Conley

v. Gibson, 355 U.S. 41 (1957); Fed.R.Civ.P. 8(f). In any

event, pleadings do not delimit discovery. Oppenheimer

Fund, Inc. v. Sanders, 437 U.S. 340 (1978); Hickman v.

Taylor, 329 U.S. 495, 500-501 (1947). The Court of

Appeals’ holding effectively forecloses a full development

of the “variety of fact-oriented issues,” which are likely to

occur during this litigation, whether those issues are

* Occidental Life Insurance Co. v. EEOC, 432 U.S. 355, 373

(1977).

‘ Albermarle Paper Co. v. Moody, 422 U.S. 405, 424-425

(1975).

*In a statutory, rather than equitable context, this Court

has held that collusion to create federal jurisdiction may always

be shown. Smith v. Sperling, 354 U.S. 91 (1957).

related to the merits,® or not.’ Oppenheimer, 437 US. at

351. Such an intrusion into a trial court’s broad discretion

in discovery matters is impermissible. National Hockey

League v. Metropolitan Hockey League, 427 U.S. 639 (1976).

The Court of Appeals’ decision, if allowed to stand,

would insulate malevolent agency action from detection

and deterrence by precluding an equitable inquiry into

the mala fides of such action. The decision stands for the

proposition that the allegations of the bank’s defenses,

even if completely proven, are totally devoid of legal

consequence. Such a result does not comport with the

spirit of equity or the wishes of Congress." Given the

immunity of the sovereign, equity is the only mechanism

available to citizens to protect themselves from covert,

corrupt, conspiratorial and malignant governmental ac-

tion.

*The facts contained in Brister’s EEOC files, sought by

petitioner, would clearly be relevant to the merits of other

affirmative defenses interposed by the bank, including the

bank’s allegations that there was no reasonable investigation of

the charge and no good-faith conciliation. See General Tele-

phone Co. v. EEOC, 100 S.Ct. 1698, 1706, 1708 (1980); Occidental

Life Insurance Co. v. EEOC, 432 U.S. 355, 368 (1977); EEOC rv.

Brookhaven Bank & Trust Co., 614 F.2d 1022, 1026 (5th Cir.

1980) (Reavley, J., dissenting).

"There can be no doubt that the EEOC’s course of dealing

with Brister would be pertinent to the court’s determination of

whether the suit was brought in good faith and an award of

attorneys’ fees against the EEOC is warranted. Roadway

Express, Inc. v. Piper, 100 S.Ct. 2455 (1980); Christiansburg

Garment Co. v. EEOC, 432 U.S. 412 (1978). In addition, the 45

investigative files may contain impeachment matter should

Brister and EEOC investigative officials testify at trial, or

should EEOC documents be offered in evidence.

*18 U.S.C. § 1001 renders elements of the conduct described

by the defenses, if true, criminal. See also United States rv.

Bramblett, 348 U.S. 503 (1955).

B. The Decision Below Conflicts With Prior Decisions Of

The Court of Appeals.

The instant decision conflicts with prior cases of the

Fifth Circuit Court of Appeals: Pennsylvania R.R. Co. v.

Miller, 124 F.2d 160, 162 (5th Cir. 1941) (“recoupment

goes to the foundation of the plaintiff’s claim; it is avail-

able as a defense. ...”); United States v. Paddock, 187 F.2d

271, 277 (5th Cir. 1951) (“when a sovereign comes into

court as a litigant, it is governed by the same principles of

law that are applicable to ordinary persons ....”); Lacy v.

United States, 216 F.2d 223, 225 (5th Cir. 1954) (“The

government when applying for relief in a court of equity,

is as much bound to do equity as is a private litigant’);

Frederick v. United States, 386 F.2d 481, 488 (5th Cir.

1967) (“ when the sovereign sues it waives immunity as to

claims of the defendant which assert matters in recoup-

ment ...”); and, United States v. Industrial Crane & Mfg.

Corp., 492 F.2d 772, 774 (5th Cir. 1974) ("... appellant’s

claim sounded in recoupment, .... and by filing suit the

government waived immunity to the extent of defeating

its claim.”).

CONCLUSION

Therefore, petitioner respectfully requests that this

Court grant this petition for a writ of certiorari to review

the judgment of the United States Court of Appeals for

the Fifth Circuit.

Respectfully submitted,

MILES CURTISS MCKEE

DALTON MCBEE, JR.

FUSELIER, OTT, MCKEE &

MOELLER, P.A.

2100 Deposit Guaranty Plaza

Jackson, Mississippi 39201

(601) 948-2226

Counsel for Petitioner

Appendices

Appendix A

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Plaintiff- Appellant,

Vv.

FIRST NATIONAL BANK OF JACKSON, Defendant- Appellee.

No. 78-1357.

United States Court of Appeals,

Fifth Circuit.

April 2, 1980.

Mary Helen Mautner, Lutz Alexander Prager, Susan

Buckingham Reilly, Attys., Washington, D. C., for

plaintiff- appellant.

Fuselier, Ott, McKee & Flowers, M. Curtiss McKee,

Armin J. Moeller, Jr., Jackson, Miss., for defendant-

appellee.

Appeal from the United States District Court for the

Southern District of Mississippi.

Before MORGAN, REAVLEY and HATCHETT, Circuit

Judges.

HATCHETT, Circuit Judge:

This appeal raises the question of whether an employ-

er charged with discrimination in a Title VII action may

counterclaim or present affirmative defenses sounding in

tort. We reverse, holding that such an employer may not

counterclaim or defend based on tort claims.

Appellant, Equal Employment Opportunity Commis-

sion, brought this suit in 1975 after its investigation of a

charge of discrimination filed by George Brister, a black

man. The EEOC determined that there was reasonable

» a

cause to believe that the bank had discriminated against

blacks and black males, but not against Brister individ-

ually. The EEOC brought suit under §706(b) of Title VII.

Appellee, First National Bank of Jackson, filed an answer,

including affirmative defenses and a counterclaim. The

bank asserted that the suit was maliciously brought, in

conspiracy with Brister, whom the district court described

as a “chronic complainer.”' In connection with the respon-

sive pleadings, the bank sought discovery regarding in-

formation about Brister, which is allegedly contained in

approximately 45 different investigative files of the Jack-

son District Office of the EEOC concerning approximately

45 charges brought by Brister against other employers.

When EEOC failed to comply with this discovery request,

in contravention of an order by a United States Magis-

trate, the district court dismissed the action with pre-

judice and awarded attorney’s fees and costs to the bank.

The district court held that the bank’s counterclaim,

which was in the nature of a charge of malicious prose-

cution, was authorized pursuant to the Federal Tort

Claims Act. The district court ruled that the Federal Tort

Claims Act constituted a waiver of sovereign immunity.

The trial court also stated that the claims were actually

recoupments, and were compulsory under the Federal

Rules of Civil Procedure.

[1] The primary issue in this case is whether the trial

court abused its discretion in dismissing the appellant’s

suit as a discovery sanction.

Rule 37 of the Federal Rules of Civil Procedure pro-

vides trial courts with the means and power to enforce

'The defendant has not asserted its right to private con-

ciliation. Our decision in EEOC v. Brookhaven, 5 Cir. 1979, 614

F.2d 1022 is controlling.

compliance with the rules of discovery through a broad

choice of remedies and penalties.’

In Emerick v. Fenick Industries, 589 F.2d 1379, 1381

(5th Cir. 1976), this court stated:

The discretion of the district court to order sanctions

under Rule 37(b)(2) is broad but not unlimited. The

due process clause of the fifth amendment limits the

power of courts to dismiss an action without affording

a party the opportunity for a hearing on the merits of

his cause. Societe Internationale v. Rogers, 357 U.S. 197,

78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958). When the dis-

obedient party is a plaintiff, dismissal with prejudice

is a sanction of last resort, applicable only in extreme

circumstances. Thomas v. United States, 531 F.2d 746,

749 (5th Cir. 1976); Bon Air Hotel, Inc. v. Time, Inc.,

376 F.2d 118 (5th Cir. 1967). When the disobedient

party shows that his recalcitrance was based on fac-

tors beyond his control or on the exercise of con-

stitutional privilege, a reviewing court is justified in

terming the dismissal an abuse of discretion. See

Thomas v. United States, supra; Dorsey v. Academy

Moving & Storage, 423 F.2d 858, 861 (5th Cir. 1970).

(footnote omitted )

539 F.2d at 1381.

In reviewing the trial court’s actions, we are mindful that

if the disputed information was not properly discoverable,

* Fed.R.Civ.P. 37(b)(2) provides in pertinent part:

If a party ... fails to obey an order to provide or permit

discovery . . . the court in which the action is pending may

make such orders in regard to the failure as are just, and among

others the following:

(b)(2)(c) An order striking out pleadings or parts thereof,

or staying further proceedings until the order is obeyed, or

dismissing the action or proceeding or any part thereof, or

rendering a judgment by default against the disobedient

party; ...

it follows that the district court should not have imposed a

Rule 37 sanction upon appellant for refusing to reveal the

information. Dunbar v. United States, 502 F.2d 506 (5th

Cir. 1974).

The district court’s compelling discovery was founded

on the premise that the counterclaim was viable. We do

not agree. The district court’s view that the bank’s count-

erclaim was authorized by the Federal Tort Claims Act is

erroneous. That the bank’s counterclaim sounded in ma-

licious prosecution was not contested by either of the

parties.’ The bank charged that the purpose of the EEOC’s

lawsuit was to “defraud, vex, and harass” the bank and

other employers “maliciously and for ulterior purposes” by

means of “unlawfully conceived, groundless, vexatious,

and fraudulent charges.”

[2,3] The United States cannot be sued unless it

specifically consents to be sued, either by specific statutory

consent, United States v. Shaw, 309 U.S. 495, 60 S.Ct. 659,

84 L.Ed. 888 (1940), or by instituting a suit as to which a

defendant may plead matters in recoupment. Frederick v.

United States, 386 F.2d 481 (5th Cir. 1967). While the

Federal Tort Claims Act waives immunity as to certain

types of tort claims against the United States, the bank’s

claims fall squarely within the Act’s express exceptions.

By its own terms, the Federal Tort Claims Act does not

apply to “[a]ny claim arising out of . . . false imprison-

ment, false arrest, malicious prosecution [or] abuse of

process. .. .” 28 U.S.C. § 2680(h).

[4] The bank’s assertion that the proviso in § 2680(h)

which deletes the exception for investigative or law

* A malicious prosecution is defined as “one that is begun in

malice, without probable cause to believe it can succeed, and that

finally ends in failure .... The gist vi the action is the putting

of legal process in force regularly for the mere purpose of

vexation or injury.” 52 Am.Jur.2d § 2 at 187.

enforcement officers is applicable to the EEOC is without

merit. Investigative or law enforcement officers are de-

fined in § 2680(h) as “any officer of the United States who

is empowered by law to execute searches, to seize evidence,

or to make arrests for violation of Federal law.” Under

§ 709(e) of Title VII, the EEOC’s agents are given the

power to: “at all reasonable times have access to, for the

purpose of examination, and the right to copy any evi-

dence of any person being investigated or proceeded

against that relates to unlawful employment practices

covered by [the Act].” They are not, however, given

authority to execute searches, seize evidence, or make

arrests for violation of federal law. The bank has not cited

any authoritative interpretation of the meaning of “in-

vestigative or law enforcement officers” which would

cause this court to reject the plain meaning given to these

terms by the statutory definition itself. See Caruth v.

United States, 566 F.2d 901 (5th Cir. 1978).

[5-7] The district court’s ruling that the counterclaim

was maintainable in recoupment is also erroneous. To state

a claim in recoupment, a counterclaim must assert a claim

arising out of the same transaction or occurrence which is

the subject matter of the government’s suit and seek

relief only to the extent of diminishing or defeating the

government’s recovery. Frederick v. United States, 386

F.2d 481 (5 Cir. 1967). “A defendant’s claim arising out of

the same transaction or occurrence as that on which the

plaintiff seeks recovery may be recouped, but there can be

no recoupment if the damages claimed by the defendant

arise from the breach of an independent contract or from

an independent wrong unconnected with the plaintiff’s

cause of action. . .” 20 Am.Jur.2d § 69. Although the

bank’s counterclaim has some connection to the EEOC’s

suit, we deem that connection as being too tenuous and

indirect to warrant the innovation of the doctrine of

recoupment. Indeed, it is only where the plaintiff has no

valid claim that a defendant may maintain a suit for

malicious prosecution. 52 Am.Jur. § 29.

[8-11] The bank’s charge of harassment by appellant

cannot be considered an affirmative defense. Assuming

that the bank’s allegations of malicious prosecution are

meritorious, they could not constitute an affirmative de-

fense to alleged Title VII violations. An affirmative de-

fense is not valid if it appears to a certainty that the

plaintiff would succeed despite any set of facts which could

be proved in support of the defense. 2A Moore’s Federal

Practice 4 8.27(3], at 8251 (2d Ed. 1979). The so-called

affirmative defense of malicious prosecution and harass-

ment did not relate to the primary issue in this Title VII

action—whether the bank unlawfully discriminated

against blacks and black males. What constitutes an

insufficient defense depends upon the nature of the claim

for relief and the defense in question. Federal Practice

and Procedure, Wright and Miller, Vol. 5, Section 1381, p.

791. We hold that the bank’s affirmative defense of ma-

licious prosecution is insufficient as a matter of law and,

therefore, must be stricken. Rule 12(f), Fed.R.Civ.P.

[12,13] Because we hold that the district court should

not have dismissed this cause, we must necessarily reverse

the award of attorney’s fees and costs. A district court

may only award attorney’s fees and costs to a prevailing

Title VII defendant, pursuant to § 706(k) of the Act. 42

U.S.C. § 2000e-5(k); see also, Christianburg Garment Co. v.

EEOC, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978).

[14] We hold that because the counterclaim was not

properly maintainable against the EEOC, the district

court abused its discretion in dismissing the suit as a

discovery sanction. Further, the matters asserted in the

counterclaim were not in the nature of an affirmative

defense to the charge filed by the EEOC.

Accordingly, this case is REVERSED and REMANDED.

REAVLEY, Circuit Judge, concurring:

I agree that the judgment of the district court must

be reversed because the discovery sanction was improper. I

do not join in the dictum in the first footnote of the

majority opinion.

The first footnote portends a departure from the

statutory language of section 706 of Title VII. The major-

ity indicates that EEOC v. Brookhaven Bank and Trust

Co., 614 F.2d 1022 (5th Cir. April 2, 1980), precludes the

employer from asserting, on remand, that the failure of

the EEOC to attempt informai methods of resolution must

abate the present suit. I do not understand that case to

stand for the asserted proposition. Rather, the issue in

Brookhaven Bank is whether the EEOC can institute suit

on alleged unlawful employment practices discovered in

the course of investigating a charge that does not result in

a reasonable cause finding. The right to conciliation was

not raised. However, one of the policies the majority in

Brookhaven Bank found to support its holding was that

“employers should have the opportunity to settle with the

EEOC and all aggrieved parties before court action is

initiated.” Brookhaven Bank & Trust Co., 614 F.2d at 1025.

Somehow, the employer now loses that right.

It cannot be argued that the employer has waived his

right to assert the failure to attempt conciliation as an

abatement to this suit. As the majority points out, the

action was dismissed as a discovery sanction in its

embryonic stage. The employer may well have wished to

amend his answer when discovery is completed.

Subsection (f)(1), 42 U.S.C. § 2000e-5(f)(1) (1976),

makes it unmistakably clear that a failure of conciliation

efforts is an absolute prerequisite to suit by the EEOC. The

first footnote in the majority opinion ignores this lan-

guage. Congress clearly intended for the EEOC to attempt

informal methods of resolution before bringing the griev-

ance before the federal courts. The duty should not be

lightly cast aside. Moreover, when the suggestion in the

first footnote is juxtaposed with the majority’s holding in

Brookhaven Bank, much of the statutory paradigm of

section 706 is emasculated. The two can be read in concert

to mean that the EEOC can file suit on alleged unlawful

employment practices despite the lack of any reasonable

cause finding and despite the fact that the EEOC makes

no attempt at conciliation. I cannot agree.

Appendix B

EEOC v. FIRST NATL. BANK OF JACKSON

US. District Court,

Southern District of Mississippi

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. FIRST

NATIONAL BANK OF JACKSON; SAME v. BROOKHAVEN BANK

TRUST COMPANY, Nos. J75-278(C) and J76-275(C).

November 29, 1977; Final Judgment of Dismissal Decem-

ber 7, 1977

CIVIL RIGHTS ACT OF 1964

Discovery against EEOC—Sanctions

108.8155

EEOC’s failure to answer bank’s interrogatories con-

cerning the approximately 45 charges filed by certain

individual requires dismissal of EEOC’s action against

bank.

Action under Title VII of Civil Rights Act of 1964 by

EEOC against employer, which moved for dismissal or, in

the alternative, for summary judgment. Action dis-

missed.