United States: Supreme Court: District Court EEOC Subpoena Enforcement Decisions Subject To Abuse Of Discretion

Linda Auerbach Allderdice is a Partner and John Haney and Juan Rodriguez are Associates in the Los Angeles office

HIGHLIGHTS:

  • In McLane Co., Inc. v. Equal Employment Opportunity Commission, the Supreme Court of the United States held that a district court's decision to enforce or quash a U.S. Equal Employment Opportunity Commission (EEOC) subpoena must be reviewed for abuse of discretion, not de novo review.
  • Given the deferential nature of the abuse of discretion standard, this decision will raise the stakes associated with district court EEOC subpoena enforcement proceedings in the Ninth Circuit, the only Circuit that previously applied a de novo standard of review for such proceedings on appeal.
  • Going forward, employers served with an EEOC subpoena should pay special attention to asserting comprehensive objections to the subpoena where appropriate, and to raising all available defenses in any district court enforcement proceedings in the Ninth Circuit, given that it will now be more difficult to prevail on an appeal of an adverse district court enforcement decision.

The Supreme Court of the United States issued its decision on April 3, 2017, in McLane Co., Inc. v. Equal Employment Opportunity Commission, a case which presented the question of what the appropriate standard of appellate review is for a district court's decision to enforce or quash a U.S. Equal Employment Opportunity Commission (EEOC) subpoena. In a 7-1 decision, the Supreme Court held that a district court's decision whether to enforce or quash an EEOC subpoena must be reviewed for abuse of discretion, not de novo review as was previously applied by the U.S. Court of Appeals for the Ninth Circuit, the only circuit that used such a standard.

EEOC Launched Investigation into McLane Co. After Charge of Discrimination Filed

McLane Co. Inc. (McLane Co.) is a supply chain services company and employs cigarette selectors to work in its distribution centers. Cigarette selectors are required to lift, pack and move large bins containing products. As this job is physically demanding, McLane Co. requires new employees, and employees returning from medical leave, to take a physical evaluation that tests an employee's range of motion, resistance and speed. The evaluation is designed and administered by a third party.

Damiana Ochoa (Ochoa) was a cigarette selector for McLane Co. In 2007, Ochoa took three months of maternity leave and, upon her return to work, McLane Co. asked her to take a physical evaluation. Ochoa took and failed the evaluation three times. Subsequently, McLane Co. terminated her employment.

Ochoa filed a charge of discrimination, alleging that she had been fired on the basis of her gender. The EEOC began an investigation and requested that McLane Co. provide the EEOC with basic information about the evaluation and a list of employees that McLane Co. had asked to take the evaluation. The EEOC also sought what the parties called "pedigree information" – names, Social Security numbers, last-known addresses and telephone numbers of the employees who had been asked to take the evaluation.

EEOC Sought to Enforce Subpoenas After McLane Co.'s Noncompliance

McLane Co. provided the EEOC with a list which included each employee's gender, role at the company, evaluation score, as well as the reason each employee had been asked to take the evaluation. McLane Co. refused, however, to provide the "pedigree information."

After the EEOC discovered that McLane Co. used the evaluation nationwide, the EEOC expanded its investigation geographically to focus on McLane Co.'s nationwide operations and, substantively, to investigate whether McLane Co.'s employees had been subjected to age discrimination.

Because the EEOC was unable to obtain all the information it sought, the EEOC issued two subpoenas pursuant to 42 U.S.C. §2000e-9 requesting, inter alia, the "pedigree information," one relating to Ochoa's charge and the other relating to the EEOC's investigation of possible age discrimination. When McLane Co. did not comply with the subpoenas, the EEOC filed two actions in a federal district court seeking enforcement of its subpoenas.

District Court Quashed Subpoenas to Extent They Sought Personal Information, and Ninth Circuit Reversed after De Novo Review

A district court judge, presiding over both enforcement actions, declined to enforce the subpoenas to the extent that they sought the "pedigree information," finding that such information was not relevant to the charges.1 The district court judge found that the personal information was not relevant at that time because the information could not assist in determining whether the evaluation was a tool of discrimination.

The Ninth Circuit Court of Appeals reversed as to the subpoena relating to Ochoa's charge,2 finding that McLane Co. had to disclose the personal employee information requested in the EEOC's subpoena.3 The Ninth Circuit noted that it had to follow circuit precedent, but questioned why de novo review applied for district court EEOC subpoena enforcement proceedings when every other circuit "appear[ed] to review issues related to enforcement of administrative subpoenas for abuse of discretion."4

The Supreme Court granted certiorari limited to the question of whether a district court's decision to quash or enforce an EEOC subpoena should be reviewed de novo or should be reviewed under the more deferential de novo standard.

Supreme Court Vacated Ninth Circuit Judgment, Adopted Abuse of Discretion Standard for District Court EEOC Subpoena Enforcement Decisions and Remanded for Further Proceedings

The Supreme Court held that the appropriate standard in reviewing a district court's decision to enforce or quash an EEOC subpoena is abuse of discretion, not de novo. The Court relied on two factors: 1) whether "the history of appellate practice yields an answer," and 2) where there is neither a clear statutory prescription nor a historical tradition that exists, whether "one judicial actor is better positioned than another to decide the issue in question."

Regarding the first factor, the Court noted that it is the longstanding practice of the U.S. Courts of Appeals in reviewing district courts' decisions to enforce or quash an administrative subpoena to use the abuse of discretion standard. The Court noted that this practice even predated Title VII. Furthermore, in the time period between the enactment of the National Labor Relations Act (NLRA) and the incorporation of its subpoena-enforcement provisions into Title VII, every Circuit to consider this issue held that a district court's decision on whether to enforce a National Labor Relations Board (NLRB) subpoena was subject to the abuse of discretion standard.

As to the second factor, the Supreme Court noted that a district court's decision on whether to enforce a subpoena will turn on whether the evidence sought is relevant, or whether the subpoena is unduly burdensome. In the Supreme Court's opinion, both tasks are well-suited to a district judge's expertise. Moreover, since these decisions are fact-intensive, they are better suited to be resolved by district courts rather than by the Courts of Appeals. The Supreme Court also noted that district court judges have an institutional advantage because they regularly make similar decisions such as applying Federal Rules of Evidence, Rule 401 (whether evidence is relevant), and applying Federal Rules of Criminal Procedure, Rule 16(c)(2) (whether pretrial criminal subpoenas are unreasonable in scope).5

The Supreme Court vacated the judgment of the Ninth Circuit and remanded so that the Ninth Circuit could review the district court's EEOC subpoena enforcement decision under the appropriate abuse of discretion standard.

Practical Ramifications

The Supreme Court has made it clear that a district court's decision to enforce or quash an EEOC subpoena must be reviewed for abuse of discretion. Given the deferential nature of the abuse of discretion standard, this decision will raise the stakes associated with district court EEOC subpoena enforcement proceedings in the Ninth Circuit, the only Circuit that previously applied a de novo standard of review for such proceedings on appeal.

Going forward, employers served with an EEOC subpoena should pay special attention to asserting comprehensive objections to the subpoena where appropriate and to raising all available defenses in any district court enforcement proceedings in the Ninth Circuit, given that it will now be more difficult to prevail on an appeal of an adverse district court enforcement decision.

Footnotes

1 EEOC v. McLane Co., 2012 WL 1132758, *5 (D Ariz., Apr. 4, 2012) (age discrimination charge); Civ.No. 12–2469 (D Ariz., Nov. 19, 2012), App. to Pet. for Cert. 28–30 (Title VII charge).

2 The EEOC ultimately dropped its attempt to enforce the subpoena relating to the EEOC's investigation of possible age discrimination.

3 EEOC v. McLane Co., 804 F.3d 1051 (9th Cir. 2015).

4 Id. at 1056 and n.3.

5 In reaching its holding, the Supreme Court also rejected the following Amicus arguments: 1) whether a subpoena should be enforced does not require the exercise of discretion because the court's primary role is to test the legal sufficiency of the subpoena, not whether it should be enforced as a substantive matter; 2) affording deferential review to a district court's decision would clash with Courts of Appeals decisions instructing district courts to defer themselves to the EEOC's determination that evidence is relevant to the charge at issue; and 3) a subpoena is a constructive search that has Fourth Amendment implications, requiring that a subpoena not be "too indefinite" and requiring a searching review.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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