Friday, September 28, 2018

Sixth Circuit Affirms §1927 Sanctions on Plaintiff’s Attorney for Maintaining Untimely ADA Lawsuit Where Plaintiff Failed to Notify EEOC of Changed Address


Yesterday, the Sixth Circuit affirmed sanctions against a plaintiff’s attorney under §1927 in the amount of $25,995.32 for pursuing an ADA lawsuit that was not filed until more than nine months after the EEOC mailed his client its right-to-sue letter.  Carter v. Hickory Healthcare, Inc. No. 17-4199 (6th Cir. 9-27-18).  The plaintiff had notified the OCRC of her change of address, but had failed to similarly notify the EEOC. Thus, when the EEOC finally mailed her RTS letter, it was sent to her former address and her attorney did not discover this mistake for months.  The Court rejected a tolling argument based on the EEOC’s failure to mail a copy to her attorney (whose address had not changed). “It thus is not true that “a failure by the EEOC to copy counsel on a right-to-sue letter prevents the ninety-day period from running.”  Ball v. Abbott Advert., Inc., 864 F.2d 419, 421 (6th Cir. 1988).”

According to the Court’s opinion, the plaintiff had filed her Charge of Discrimination six years earlier in 2007 with the Ohio Civil Rights Commission and it was dual filed with the EEOC.  The OCRC ultimately found in 2013 that she had been subject to unlawful discrimination when she was terminated for refusing to monitor client smoking breaks that aggravated her asthma after previously notifying the defendant employer of her medical condition, which it had accommodated until she was assigned a new supervisor.   While the OCRC processed her dual-filed charge, the plaintiff had moved, had notified the OCRC of her change of address, but failed to similarly notify the EEOC.  Although her attorney requested that the EEOC issue her a RTS letter, he apparently similarly failed to notify the EEOC of her new address.  The EEOC mailed the RTS letter to her former address and this was not discovered by her attorney for approximately six months, even though the statute of limitations to file an ADA action is 90 days after the RTS letter has been issued.  The 90 days begins to run on the fifth day after the EEOC mails the RTS.  

[A] judge may impose sanctions under § 1927 when a lawyer objectively “falls short of the obligations owed by a member of the bar to the court.”  Red Carpet Studios Div. of Source Advantage, Ltd. v. Sater, 465 F.3d 642, 646 (6th Cir. 2006) (quotation omitted).  The lawyer need not have “subjective bad faith” but must act with “something more than negligence or incompetence.”  Id.  A court may impose the sanction if an attorney “abuses the judicial process or knowingly disregards the risk” that he will needlessly multiply the proceedings.  Id.  Maintaining a clearly time-barred lawsuit constitutes a classic example of conduct that warrants a sanction.  See, e.g., Davis v. Bowron, 30 F. App’x 373, 376 (6th Cir. 2002).

The Court rejected the argument that the employer defendant failed to mitigate its expenses by waiting to file a summary judgment motion instead of a motion to dismiss soon after the Complaint was filed.  The defendant employer’s attorneys had notified the plaintiff’s attorney in writing that the lawsuit was clearly untimely and so the attorney’s liability began upon the receipt of that letter.   Interestingly, the district court denied the employer’s Motion for Rule 11 sanctions and that decision was not appealed.

The Court similarly rejected the plaintiff’s argument that her notification to the OCRC of her new address should have been sufficient after the OCRC informed her that it would share information with the EEOC because the EEOC rules clearly provide that it must be provided with separate notice. 29 C.F.R. § 1601.7(b).  While her mistake was understandable, it was not excusable.  She could have, for instance, inquired much earlier about why she had not received the RTS notice.

The Court also rejected the attorney’s argument that he thought that equitable tolling would apply to suspend the 90 days due to the mistaken address and the EEOC’s failure to also send him a copy of the RTS letter when it was mailed to his client’s former address.

But these arguments were leaky at best, frivolous at worst.  That a regulation required the Commission to send some types of attorneys a copy of the right-to-sue letter does not justify equitable tolling.  The regulation applies only to public sector claims, not private sector ones like Carter’s.  See 29 C.F.R. §§ 1614.103(b), 1614.605(d).  It thus is not true that “a failure by the EEOC to copy counsel on a right-to-sue letter prevents the ninety-day period from running.”  Ball v. Abbott Advert., Inc., 864 F.2d 419, 421 (6th Cir. 1988).

Much of the opinion discusses the appropriate standard of review of a Magistrate recommendation and appellate jurisdiction.  Neither party raised this on appeal.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney