Supreme Court Rules that a Deferential Standard Applies to Appellate Review of a District Court’s Decision on the Enforceability of EEOC Subpoenas

Paula Lopez, April 11, 2017.

Last week, in McLane Co. Inc. v. Equal Employment Opportunity Commission, the U.S. Supreme Court ruled 7-1 to vacate a U.S. Court of Appeals for the Ninth Circuit’s decision that overturned a district court’s decision to quash subpoenas served by the Equal Employment Opportunity Commission (“EEOC”) in the course of investigating a sex discrimination charge filed by a terminated employee. The Court held that the Ninth Circuit had erred in applying “de novo” review, a more searching form of review, instead of the more deferential “abuse of discretion” standard of review followed by all other circuits, in overturning the District Court’s decision not to enforce the subpoenas.

McLane involved an EEOC investigation into a charge filed by Damiana Ochoa with the agency, claiming sex discrimination based on her termination after returning from maternity leave because she was subjected to a mandatory physical evaluation, which she failed three times.  McLane defended its decision to terminate Ochoa on the basis that the position requires her to lift, pack and move large product bins, and a physical evaluation testing range of motion, resistance and speed is required of all new employees and those returning from medical leave in such positions.

As part of the EEOC’s initial investigation into Ochoa’s claim, McLane provided the EEOC with information about the physical evaluation test and the employees who had been required to take the test.  Specifically, McLane provided a list of anonymous employees, their gender, role in the company, reason they had been asked to take the test, and their evaluation scores.  However, the employer refused to provide the “pedigree information” requested by the EEOC, consisting of the individuals’ names, social security numbers, last known addresses, and telephone numbers.

The EEOC then expanded the scope of its investigation when it learned that McLane used the physical evaluation nationwide and not just in Arizona, where Ochoa worked.  EEOC’s new investigation covered McLane’s nationwide operations and also sought information into possible age discrimination by the company.  The EEOC issued subpoenas seeking “pedigree information” for its broadened investigation, with which McLane refused to comply.  The EEOC sought to enforce the subpoenas in court.

The U.S. District Court in Arizona quashed the subpoenas (refused to enforce them), holding that the information they sought was not relevant to Ochoa’s individual claim, and “an individual’s name, or even an interview he or she could provide if contacted, simply could not shed light on whether the [evaluation] represents a tool of …discrimination.”

The EEOC appealed the District Court’s decision to the Ninth Circuit Court of Appeals.  The Ninth Circuit followed circuit precedent in reviewing the lower court’s decision de novo, and after doing so, held that the District Court erred in finding that the pedigree information was irrelevant.   The Ninth Circuit questioned the appropriateness of applying de novo review to issues related to the enforcement of subpoenas, when the other circuits applied the more deferential abuse of discretion standard.

The U.S. Supreme Court agreed to hear the appeal and ruled that a district court’s decision whether to enforce or quash an EEOC subpoena should be reviewed for abuse of discretion and not de novo. The Court based its decision on longstanding appellate practice to review district court decisions related to the enforcement of subpoenas for abuse of discretion.  The Court did not rely only on cases involving subpoenas under Title VII but also administrative subpoenas issued under the NLRA, which predated Title VII’s subpoena enforcement powers by thirty years and was the predicate for amending Title VII to authorize the EEOC to issue subpoenas.

The Court also found that “basic principles of institutional capacity” favor the more deferential abuse of discretion standard of review because the district court must conduct a case-specific inquiry in deciding whether to enforce or quash subpoenas.  The district court must look at whether the evidence sought by the subpoena is relevant to the specific charge or whether the subpoena is unduly burdensome under the circumstances.  Such an analysis is often “fact-intensive” and does not turn on a “neat set of legal rules” that would warrant de novo review. The Supreme Court also supported its decision to apply the abuse of discretion standard by noting that district courts, as opposed to appellate courts, have the experience in making similar relevancy decisions, such as deciding whether evidence is relevant for admissibility at trial or the reasonableness of pre-trial criminal subpoenas.  The deferential review would streamline the appellate process by not having the court of appeals re-weigh evidence and re-consider facts already reviewed and considered by the district court.

Justice Ginsburg, while agreeing that the abuse of discretion standard should normally apply in such cases, nevertheless dissented with the decision to vacate the Ninth Circuit’s ruling, because she found the District Court’s decision erroneous as a matter of law because it called on the EEOC to show more than relevance in support of enforcing the subpoenas.

In reaching its decision, the Supreme Court rejected arguments that the district court should defer to the EEOC’s determination on whether information sought through the subpoena is relevant, finding that the district court can make its own relevancy determination while remaining “cognizant of the agency’s broad authority to seek and obtain evidence.” The Court’s ruling brings the Ninth Circuit in line with its sister circuits.  The case will return to the Ninth Circuit so it can review the District Court’s decision under the more deferential abuse of discretion standard. The practical impact of the Court’s decision to McLane and similar cases is that the losing party in a proceeding to enforce or quash an EEOC subpoena will find it very difficult to have the decision reversed on appeal.



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