Author Archive

Court Quashes Suit Under ADA Regulation

Can you be sued based on an obscure regulation drafted by bureaucrats that expands the reach of an already broad statute? The First Circuit Court of Appeals thought not in its ruling yesterday in Iverson v. City of Boston. Disagreeing with the Tenth Circuit, it held that lawsuits can’t be brought under Justice Department regulations expanding the reach of the Americans with Disabilities Act (ADA) by requiring self-evaluation and transition plans, since having such plans is not always necessary to comply with the ADA’s statutory requirement that the disabled receive reasonable accommodations.

It chided the Tenth Circuit for failing to follow the Supreme Court’s 2001 decision in Alexander v. Sandoval, which held that regulations expanding the reach of Title VI’s statutory ban on intentional racial discrimination to include unintentional discriminatory effects on minority groups were not enforceable through lawsuits, and thus rejected a challenge to Alabama’s English-language requirement for drivers’ licenses, which allegedly had the unintended effect of discriminating against Hispanics.

Like other circuits, the First Circuit also held that court complaints alleging disabilities-discrimination cannot simply make a “conclusory contention” of discrimination, but rather must contain some supporting allegations, such as that the plaintiff is a “qualified” person with a disability. This matters because the longer a meritless lawsuit stays in court, the more it costs. A suit that costs $250,000 to defeat at trial may cost only $75,000 if tossed out earlier on summary judgment after discovery, and may cost only $25,000 if tossed out prior to discovery on a motion to dismiss the complaint.

In its 2002 decision in Swierkiewicz v. Sorema, an age and national-origin discrimination case, the Supreme Court made it much harder to toss out meritless discrimination suits at an early stage, ruling that a typical discrimination case can survive a motion to dismiss and proceed to discovery even if the plaintiff does not allege specific facts supporting his discrimination claim, such as that he was qualified for the job. The plaintiff need only allege that he was denied a job because of his age, national-origin, etc., without giving his underlying reasons for believing he was the victim of discrimination.

However, the ADA is very different from the typical antidiscrimination statute. It is both broader (since it requires not simply that the disabled be treated as well as non-disabled workers, but also that they be given preferential “reasonable accommodations”) and narrower (it expressly protects only “qualified” disabled people, unlike race, sex, and age discrimination statutes, which require that unqualified blacks, women, and elderly people be treated as well as their unqualified white, male, and younger colleagues), containing additional statutory elements that a plaintiff must satisfy.

Since the ADA, unlike other antidiscrimination statutes, requires more than a simple showing of discrimination, the First Circuit was right to require ADA plaintiffs to make more than a simple contention of discrimination in their complaint. As the Supreme Court observed in its Swierkiewicz decision, while a plaintiff’s complaint need not provide unnecessary evidentiary details, it nevertheless must “give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.”

Ignoring Limits on Harassment Liability

Back in 1999, in Davis v. Monroe County Board of Education, the Supreme Court laid down a test for when sexual harassment rises to the level of “discrimination” for purposes of Title IX, the federal law banning sex discrimination in schools. Recognizing the fact that students frequently insult and tease one another in ways that would be intolerable in the workplace, the court set the bar higher for plaintiffs suing schools rather than employers. Instead of having to show just that harassment was “severe or pervasive” enough to create a “hostile or offensive environment,” as employees do, students have to show that harassment was severe and pervasive enough to interfere with access to an education.

Oddly, this protection against lawsuits has been overlooked not just by some lower court judges, but also by the very schools that benefit from it. In Jennings v. University of North Carolina, the Fourth Circuit Court of Appeals is rehearing en banc a recent panel decision which ruled 2-to-1 against a harassment claim based on inappropriate sexual discussions between a male coach and female athletes, which the plaintiff witnessed.

The panel majority argued that the conduct was not “severe or pervasive” enough to create a “hostile environment,” since the discussions were seldom aimed at the plaintiff. (Courts have typically given little weight to such “second-hand harassment”). The dissent argued that the conduct was severe or pervasive enough to create a hostile environment. The University seems not to have disputed that the “severe or pervasive” standard applied, or that the plaintiff could prevail merely by showing the existence of a “hostile environment,” even though other courts have recognized that harassment of students by school employees must be both severe and pervasive enough to interfere with access to an education.

But the standard for harassment claims against schools is more exacting, by design. In the higher education context, there are additional reasons for a more demanding standard. As Justice Kennedy observed in his dissent in the Davis case, the lower courts have repeatedly invalidated college harassment codes on First Amendment grounds. Most of the cases Justice Kennedy cited involved codes that banned speech that creates a hostile environment, much like workplace harassment law.

While a single offensive utterance doesn’t create a hostile work environment all by itself, a complainant can allege a hostile environment based on the offensive utterances of many different speakers, even if none of them individually make many offensive statements or intend to create a hostile environment. That effectively forces many employers to adopt “zero tolerance” policies banning racist or sexist speech.

By contrast, the Fourth Circuit’s own ruling in Iota Xi Chapter of Sigma Chi Fraternity v. George Mason University, 993 F.2d 386 (4th Cir. 1993), prevented a university from prohibiting racist and sexist student speech that allegedly created a “hostile and distracting learning environment.”

Moreover, students routinely have R-rated discussions in college dorm rooms that might give rise to a sexual harassment claim under the PG-rated standards of the workplace. As the Eleventh Circuit observed in Sparks v. Pilot Freight Carriers, 830 F.2d 1554, 1561 n.13 (11th Cir. 1987), “most complaints of sexual harassment are based on actions which, although they may be permissible in some settings, are inappropriate in the workplace.”

By relying on workplace standards, the university may well lose a case it would otherwise win. As a result, colleges in the Fourth Circuit may end up having to police private sexual conversations among students in ways that are difficult to enforce, especially if the full Fourth Circuit rejects the panel’s reasoning and treats comments overheard by a plaintiff, but not aimed at her, as harassment.

Sarbanes-Oxley Challenged in Court

In 2002, Congress passed the Sarbanes-Oxley Act in response to the Enron scandal, greatly expanding regulation of American business. It sharply increased criminal penalties for securities law violations, and created an extremely broad new cause of action for employees seeking to sue over alleged retaliation. It also set up the Public Company Accounting Oversight Board (PCAOB) to regulate the accounting firms that audit America’s public companies. The PCAOB has generated endless red tape. Its rules micromanaging companies’ internal controls, which require auditors to examine such minute details as which employee has access to which computer password, cost the American economy billions of dollars, contributing to an overall price tag for Sarbanes-Oxley of at least $35 billion a year.

A small accounting firm, assisted by the Competitive Enterprise Institute, recently filed a lawsuit challenging the PCAOB as a violation of the Constitution’s Appointments Clause. The lawsuit points out that PCAOB’s board is neither appointed by the President with the consent of the Senate, as the Appointments Clause requires for the nation’s principal officers, nor is it picked by the head of an executive branch department, as the Clause requires for “inferior” officers. Yet the board exercises significant authority under federal law, including the power to investigate accounting firms and fine them up to $2 million for inadvertent violations of PCAOB rules. One of Sarbanes-Oxley’s sponsors candidly admitted that the PCAOB would effectively wield “massive, unchecked powers.” PCAOB board members are accountable only to the SEC, whose five commissioners, acting as a group, pick them to serve for a period of five years.

The PCAOB has moved to dismiss the lawsuit on procedural grounds, alleging that the constitutional arguments should have been presented first to the SEC rather than the courts, and that the accounting firm and its co-plaintiff, the Free Enterprise Fund, lack standing to challenge the manner in which the PCAOB’s board is appointed. Today, a federal district judge in Washington, D.C., will hear arguments on the PCAOB’s motion to dismiss.

A Limit to Special Treatment

A divided Massachusetts Supreme Court has held that disabled employees can be fired for misconduct regardless of whether it results from their disability. Mammone v. Harvard College involved a bi-polar receptionist for a Harvard museum, who was disciplined for misconduct that occurred while in a manic state. He handed out flyers attacking his employer’s wages and spent time on his personal computer rather than working, ignoring pleas from his supervisor to perform his assigned duties.

The court held that state handicap discrimination statutes only protect qualified handicapped people, and that a “disabled individual cannot be a qualified handicapped person ‘if he commits misconduct which would disqualify an individual who did not fall under the protection of the statute.’”

In dissent, Justice Greaney argued that employers should have to put up with “occasional displays of inappropriate, and sometimes bizarre, workplace behavior” resulting from an employee’s disability and give such employees a “measure of special treatment.”

The U.S. Supreme Court has yet to address this issue. The Americans with Disabilities Act distinguishes between alcoholics, whom it expressly recognizes can be disciplined for disability-related misconduct, and other disabilities, about which it is silent on the question of disability-related misconduct.

The Massachusetts courts are usually more pro-plaintiff than the federal courts. For example, they have rejected the U.S. Supreme Court’s conclusion that a correctable condition is not a protected disability.

Protection Against Unanticipated Lawsuits

On Monday, in Arlington Central School District v. Murphy, the Supreme Court limited the court costs recoverable under the Individuals with Disabilities Education Act (IDEA), holding such costs did not include the cost of expert witnesses hired by the plaintiffs. This is an important ruling because IDEA suits are the most common variety of student lawsuit in federal court. Suits under the IDEA dwarf the number of lawsuits brought by students under the Constitution. They also have far more effect on school discipline, since the IDEA makes it very difficult to suspend students with behavioral, emotional, or other disabilities from school for misconduct, even when their misconduct is severe and unrelated to their disability.

The Supreme Court reasoned that the IDEA is a spending clause statute, which only binds school districts that accept federal funds, and that lawsuits against recipients of federal funds should not be allowed unless they have “clear notice” in the statute of their potential liability when they accept federal funds.

This “clear notice” principle, if applied to other laws, could help stem a flood of unanticipated lawsuits and administrative charges against school districts and hospitals. For example, Title VI of the Civil Rights Act forbids racial discrimination by recipients of federal funds. In practice, the Education Department has turned this simple ban on discrimination into an affirmative mandate imposed on schools to provide “oral and written translation services” to non-English speakers in a host of foreign languages free of charge. It interprets the statute as requiring that any parents who do not speak English be given written or oral translations of school information, even if the parents’ language is obscure and spoken by few students at their child’s school.

This duty is not clearly expressed in the Title VI statute, which Alexander v. Sandoval, 532 U.S. 275 (2001) ruled only reaches intentional racial discrimination. Nor is the duty even clear from the Education Department’s codified Title VI regulations, which prohibit not only intentional discrimination but also unintentional, “disparate impact” discrimination. A “disparate impact” discrimination claim requires a lot of affected students or employees, with big gaps between different races, not just language groups, much less a failure to accommodate rarely spoken Third World languages. (Moreover, even banning “disparate impact” may be beyond the Department’s authority under the Supreme Court’s Alexander v. Sandoval decision.)

(Federal agencies’ bilingual education mandates are not easy to satisfy. While working in the Education Department’s Office for Civil Rights, I learned that school districts investigated over their accommodation of non-English speakers are uniformly and invariably found by OCR to be in violation of Title VI).

The Supreme Court’s decision should prompt federal civil rights agencies to revisit their expansive interpretations of federal spending clause statutes like Title VI, Title IX, and the Rehabilitation Act.

The High Cost of Petitioning

A radical pro-affirmative action group, By Any Means Necessary (BAMN), joined by Detroit’s mayor, Kwame Kilpatrick, have filed a Voting Rights Act lawsuit against the sponsors of the Michigan Civil Rights Initiative (MCRI) in federal court. MCRI is a ballot initiative would ban racial and gender set-asides and preferences in state contracting, employment, and public education. It is modeled on an earlier measure passed by California voters and upheld by the federal courts. BAMN argues that black voters who signed the petition to put MCRI on the ballot did so only because they did not realize it would restrict affirmative action, because they were confused by MCRI’s title, text, or misleading statements by MCRI signature gatherers. That, it claims, amounts to fraud.

BAMN’s lawsuit is factually groundless. Its fraud claims were considered and rejected by the Michigan Court of Appeals, which ordered MCRI placed on the ballot. MCRI’s text, which was presented to all petition signers, expressly prohibits racial preferences, eliminating any confusion about its effect on affirmative action. Moreover, the Voting Rights Act generally applies to the acts of state election officials, not private parties, and cases such as Delgado v. Smith, 861 F.2d 1489 (11th Cir. 1988), hold that the Voting Rights Act does not apply to initiative petitions.

BAMN’s lawsuit appears to be part of a pattern of intimidation. One BAMN official is accused of threatening MCRI executive director Jennifer Gratz with a knife.

BAMN’s suit is another example of how civil rights lawsuits are increasingly misused as political weapons or tools of censorship. For example, in Affordable Housing Development Corporation v. Fresno, 433 F.3d 1182 (9th Cir. 2006), a developer used the Fair Housing Act to sue citizens who publicly opposed a housing development, arguing that their petitioning of city officials resulted in the city not funding the project. That, the developer argued, had an unlawful “disparate impact” on minority groups destined to live in the development. The trial court initially accepted this argument, holding that the Fair Housing Act overrode the citizens’ right of free speech. Years later, the Ninth Circuit Court of Appeals rejected the lawsuit, holding that the citizens’ opposition to the project was protected by the First Amendment and the Noerr-Pennington doctrine. (The Noerr-Pennington doctrine protects citizens from antitrust and civil rights claims based on their speech and petitioning activity). It ordered the developer to pay the citizens’ crippling legal bills, which had risen to hundreds of thousands of dollars.

BAMN’s lawsuit would raise First Amendment problems even if it were true that voters misunderstood MCRI’s purpose, and even if MCRI’s sponsors knew of any erroneous statements about MCRI by signature gatherers. The courts have generally held that the First Amendment bars liability for speech in ballot initiatives and other political campaigns, even if the speech is knowingly false.

A Lawsuit Everyone Can Bring

Can you sue over something that you claim will affect everyone in the planet in the distant future, even if that means that everyone on Earth can file a similar lawsuit now? The Supreme Court may address a similar question soon. The Supreme Court agreed today to consider whether the Bush administration must regulate carbon dioxide to combat potential global warming, in Massachusetts v. EPA.

Twelve states had sued the EPA to force it to regulate carbon dioxide emissions from automobiles. Although carbon dioxide is an integral component of the atmosphere, and does not contaminate or cause cancer, the states argued it constitutes air pollution covered by the Clean Air Act, because it may cause global warming over the long run.

A splintered three-judge panel of the D.C. Circuit Court of Appeals voted 2-to-1 to reject the lawsuit, but the judges in the majority didn’t agree on why. Judge Sentelle would have rejected the suit for not complying with the Constitution’s requirement of standing, under which a plaintiff must allege particularized injuries, not a “generalized grievance” shared by much of the public at large (much less the entire planet). Judge Randolph, by contrast, was unsure of whether the plaintiffs had standing, but concluded that even if they did, and the EPA had jurisdiction to regulate carbon dioxide, the lawsuit should still be dismissed. He pointed out that regulating carbon dioxide on a state-by-state basis, as the Clean Air Act would do, made no sense, since global warming is a planet-wide concern. Thus, the EPA’s decision not to regulate carbon dioxide was sensible. By contrast, Judge Tatel’s dissent argued that the plaintiffs did have standing, since although everyone might be affected by global warming, they might be affected by it in different ways, with a coastal state being flooded while an arid state might become more arid.

In another lawsuit, attorney generals from seven states have sued out-of-state utilities under state nuisance laws, alleging that power plants, by generating carbon dioxide, are causing global warming. New York federal judge Loretta Preska dismissed their lawsuit in Connecticut v. American Electric Power Co. She, too, held that the plaintiffs lacked standing, since they complained of a generalized injury that would be better handled by the political process than by the courts.

If state attorney generals can sue power plants in distant states, that may lead to an explosion of interregional litigation, regional conflict, and judicial micromanagement of out-of-state utilities.

A License To Complain

Last Thursday, the Supreme Court ruled that a worker alleging retaliation for complaining about discrimination may sue even if she has not suffered a tangible loss, like a firing or denial of a promotion. In its decision in Burlington Northern v. White, the Supreme Court ruled that under Title VII of the Civil Rights Act, “retaliation” includes any act that “well might have dissuaded a reasonable worker” worker from complaining. The court upheld a $43,500 judgment in favor of an employee who was reassigned to different tasks and then suspended for a month before being reinstated with full backpay.

The court’s low bar for what constitutes retaliation turns many mistaken complaints of discrimination into future lawsuits. Under federal court rulings, even groundless complaints are often protected against retaliation. Complaints to an employer are protected as long as the complainant reasonably believes that discrimination or harassment occurred, even if it didn’t. And complaints to the EEOC are protected even if they are plainly unreasonable, intemperate, and false. So an employee who has never been discriminated against can sue over deteriorating relationships with co-workers whom the employee has falsely accused of discrimination, claiming that the bad relationships constitute a “hostile environment” in retaliation for claiming discrimination.

In an attempt to forestall some such suits, the Supreme Court added a caveat to its test. It declared that “snubbing by supervisors or co-workers” or “petty slights” in response to a claim of discrimination do not rise to the level of retaliation, since they would not be sufficiently “materially adverse” to dissuade someone from complaining of discrimination. Whether or not that caveat is consistent with the court’s general test, it is welcome from a First Amendment perspective. As Judge Kozinski observed in Brooks v. City of San Mateo, 229 F.3d 917 (9th Cir. 2000), banning all criticism or ostracism in response to a discrimination charge may well violate the First Amendment freedoms of speech and association.

But the Supreme Court’s caveat may not be enough to protect First Amendment rights. For example, in Bain v. City of Springfield, 678 N.E.2d 155 (Mass. 1997), a mayor publicly denounced as unfounded a sexual harassment complaint against him. It is easy to see how such a public denial might dissuade a publicity-shy complainant from bringing an accusation. But as the Massachusetts Supreme Court observed, defining his speech as unlawful retaliation would clash with the First Amendment. Retaliation prohibitions are “subject to constitutional guarantees of freedom of speech. The interest in remedying discrimination is weighty but not so weighty as to justify what amounts to a restriction on core political speech.” Since the Supreme Court has set the bar so low, the courts may need to exempt speech about the merits of discrimination claims to prevent censorship.

But some judges will probably refuse to do so. Judge Myron Thompson held an employer liable for retaliation for publicly criticizing a discrimination complaint, rejecting a First Amendment defense on the ground that since sexual harassment law supposedly trumps the First Amendment, so do laws against retaliation.