Tomorrow’s Argument in Arbaugh v. Y & H Corporation

The Court will hear argument in Arbaugh v. Y & H Corporation, No. 04-944, on Wednesday morning. The question presented is whether § 701(b) of the Civil Rights Act, which limits the applicability of Title VII to employers with at least fifteen employees, restricts the subject-matter jurisdiction of federal courts or merely goes to the merits of a claim.

Petitioner Jenifer Arbaugh brought this Title VII action against her former employer, respondent Y & H Corporation, in November 2001. Alleging that one of Y & H’s owners had sexually harassed her, assaulted her, and created a hostile work environment leading to her constructive discharge, Arbaugh filed suit in federal court alleging violations of Title VII and Louisiana’s anti-discrimination and tort laws.

At trial, Y & H did not contest subject-matter jurisdiction, but neither party addressed whether the respondent qualified as an “employer” under § 701(b). After an adverse jury verdict and judgment on Arbaugh’s Title VII and state anti-discrimination claims, Y & H moved to dismiss the entire suit, alleging that because it had fewer than fifteen employees it was exempt from Title VII under § 701(b). Although such a defense on the merits would necessarily fail if raised for the first time after trial, Y & H instead framed the issue as a matter of subject-matter jurisdiction.

Following Fifth Circuit precedent that the fifteen-employee requirement of § 701(b) is jurisdictional, the court requested discovery from both parties to determine if respondent had employed a sufficient number of employees to retain jurisdiction. Finding that Y & H failed the fifteen-employee requirement, the court vacated the jury verdict and dismissed Arbaugh’s claims. On appeal, the panel—which, like the district court, relied on what it regarded as binding circuit precedent—held that § 701(b)’s fifteen-employee requirement was jurisdictional and affirmed the court below. After the court of appeals denied rehearing en banc, the Supreme Court granted certiorari.

Counsel of Record Jeffrey A. Schwartz of Watkins, Ludlum, Winter, & Stennis, P.A. has been allotted twenty minutes to speak on behalf of petitioner. Daryl Joseffer, Assistant to the Solicitor General, will speak for ten minutes on behalf of the United States, an Amicus Curiae supporting the petitioner. Counsel of Record Brett J. Prendergast of New Orleans, Louisiana has been allotted thirty minutes to respond.

The nation’s courts of appeals are no stranger to the question of whether § 701(b)’s fifteen-employee requirement is jurisdictional or a defense on the merits. The Fourth, Sixth, Eighth, Ninth, Tenth, and Eleventh Circuits have all joined the Fifth in finding the fifteen-employee requirement a jurisdictional question, only to be confronted by disagreement in the Second, Third, Seventh, and District of Columbia Circuits. And the issue in Arbaugh extends beyond Title VII: the lower courts have struggled and clashed over how to classify particular statutory provisions in the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Family and Medical Leave Act. The Court’s reasoning in Arbaugh may therefore presage a revisitation of circuit precedent construing a host of federal statutes.

Arbaugh contends that a jurisdictional interpretation of the fifteen-employee requirement belies the plain text of Title VII. Section 701(b) purports only to be definitional, not jurisdictional, and any subtle suggestion that § 701(b) is jurisdictional should be disfavored given the explicit, broad grant of jurisdiction found in § 706(f)(3). As to case law, she notes that the Court rejected an argument that a similarly phrased provision limited the subject-matter jurisdiction of the federal courts in Steel Co. v. Citizens for a Better Environment. Also, Title VII contains a number of restrictions on its provisions’ applicability, including other restrictions on what constitutes an “employer,” who may qualify as an “employee,” and the need to file a timely claim with the EEOC before filing a Title VII action in court. Indeed, in Zipes v. TWA, the Court rejected the contention that § 706(e)’s requirement of a timely filing with the EEOC was a jurisdictional limit on federal courts. Congress provided no basis to distinguish between these myriad requirements for jurisdictional purposes, Arbaugh asserts.

Furthermore, a holding that the fifteen-employee requirement constitutes a jurisdictional limit would hamper the effective administration of Title VII. Arbaugh argues that judges would need to conduct a complex, fact-bound, and discovery-intensive inquiry into whether the fifteen-employee requirement had been met before turning to other, more easily resolved issues. Such an inquiry would be required even if both parties agreed that the fifteen-employee requirement was met. And defendants’ ability to raise the issue post-trial would unduly penalize plaintiffs who might need to relitigate state law claims brought with the Title VII claim in federal court.

Y & H responds that the six circuits which deem § 701(b) jurisdictional have merely followed the hints of the Supreme Court, which had “consistently addressed the numerosity requirement of § 701(b) in jurisdictional terms.” It points to three cases in which the Court has referred to Congress’s decision to exempt certain businesses from the purview of Title VII entirely, suggesting that the title’s limited applicability corresponds to limited jurisdiction within the federal courts. Moreover, in EEOC v. Commercial Office Products Co., the Court noted that the EEOC has no “jurisdiction” under Title VII to enforce the Act against employers failing the fifteen-employee requirement. Holding that the federal courts had jurisdiction when the EEOC did not would be unusual, to say the least.

Y & H further contests Arbaugh’s characterization of both Supreme Court precedent and any obstacles that affirmance would cause for Title VII’s effective administration. For example, Y & H argues that Steel Co. is distinct from the present case in that the provision there limited the validity of the defendant’s actions, not whether the statutory demands even applied to the defendant. Similarly, it argues that the various statutory requirements of Title VII can easily be distinguished by their legislative history: Congress expressly considered the fifteen-employee requirement jurisdictional but not the timely filing requirement of Zipes. As to policy, Y & H notes that numerosity questions involve primarily complex legal questions—questions better suited to determination by a judge, not a jury. And while the defendant in the instant trial raised the issue post-trial, both plaintiffs and defendants would likely litigate the issue ahead of trial since both could equally dismiss an adverse verdict by raising the issue post-trial. Finally, the contention that such a holding would hamper Title VII’s administration is belied by the fact that three circuits—including the populous Fifth and Ninth—have treated the fifteen-employee requirement as jurisdictional for more than twenty years without any administrative problems.

In her reply, Arbaugh reiterates the importance of adhering to the text of Title VII but primarily focused on rebutting Y & H’s contention that Supreme Court precedent mandated a finding that § 701(b) imposed a jurisdictional limit. The cited cases all presumed jurisdiction and none squarely confronted the issue presented in the instant case; as the Court itself noted in Steel Co., “drive-by jurisdictional rulings of this sort … have no precendential effect.”

As an Amicus Curiae supporting the petitioner, the United States emphasizes, among other arguments, that neither Y & H nor the circuit courts holding the fifteen-employee requirement to be jurisdictional had provided a persuasive reason for why § 701(b) should be thought to limit the jurisdiction of the federal courts. The United States critiques each of the four arguments offered for such a holding, including the Third Circuit’s argument under the canon of avoidance (notably, even the Third Circuit rejected this argument after outlining it).

Perhaps responding to the United States’s challenge, three amici curiae briefs have been filed on behalf of respondent, each outlining why the fifteen-employee requirement should be jurisdictional. The Amici Curiae supporting the respondent include the International Municipal Lawyers’ Association, the U.S. Chamber of Commerce, the National Federation of Independent Business Legal Foundation, the Society for Human Resource Management, and the States of Alabama, Colorado, Delaware, Florida, Hawai’i, Kansas, Ohio, Oregon, Utah, and Wyoming.

Petitioner’s Brief
Respondent’s Brief
Petitioner’s Reply Brief

Brief for Amicus Curiae, United States, in Support of Petitioner
Brief for Amici Curiae, Chamber of Commerce of the United States of America, the National Federation of Independent Business Legal Foundation, and the Society for Human Resource Management, in Support of Respondent