Arbaugh v. Y & H Corp. - Oral Argument

Argument of Jeffrey A. Schwartz

Chief Justice Roberts: We'll hear argument first today in Arbaugh v. Y & H Corporation.

Mr. Joseffer.

Mr. Schwartz: Mr. Schwartz.

Chief Justice Roberts: Mr. Schwartz.

Excuse me.

Mr. Schwartz.

Mr. Schwartz: Mr. Chief Justice, and may it please the Court--

A Federal court has subject matter jurisdiction over a claim brought under title VII regardless of whether an employer has 15 employees.

This is so because when Congress enacted title VII, it included a specific jurisdictional grant and that grant provides that jurisdiction will exist in the Federal courts over all claims brought under the act.

This specific grant of jurisdiction is consistent with the more general grant of jurisdiction contained in 28 U.S.C. 1331 wherein Federal question jurisdiction exists over all claims that arise under a Federal law.

Title VII is a Federal law.

The Fifth Circuit erred when it... when it determined that the employer numerosity issue went to subject matter jurisdiction of the court.

Indeed, when title VII was passed, Congress actually expanded jurisdiction, the Federal question issue of title VII, because at that time 28 U.S.C. 1331 had a $10,000 amount in controversy requirement that Congress did away with because the jurisdictional grant contained within title VII made no mention of the $10,000 requirement.

Justice Ginsburg: So you say... so now it's essentially redundant.

Now that 1331 has no jurisdictional amount, no amount in controversy, the jurisdictional provision in title VII is just going over the same territory.

It doesn't add or detract.

Is that so?

Mr. Schwartz: I would agree with that.

Indeed, the question--

Justice Kennedy: In the first sentence, but not in the venue part.

Mr. Schwartz: --Not in the venue part and... and certainly... because it does apply to which district court a case should be brought.

I would say it... it's redundant to the extent of conferring jurisdiction to a Federal court, but not on the venue provision--

Justice Ginsburg: Which is not subject matter jurisdiction, which is what we're concerned with here.

Mr. Schwartz: --Right.

It's not an issue in this case.

Chief Justice Roberts: What about the argument, though, that when you're talking about a threshold question like coverage, who the statute covers, that it's quite different from the cause of action cases, many of which you rely on in your brief?

Mr. Schwartz: Well, we're talking here about a question of whether or not coverage is subject matter jurisdiction, and it's our position that once you go beyond the text and you start evaluating the various aspects of title VII, Mr. Chief Justice, you are going down a... a slippery slope.

An example would be a case perhaps where a... in fact, a case that I'm currently involved in where a plaintiff is alleging that they were discharged discriminatorily.

And the reality is from the employer's perspective, that that person was never terminated.

They're still an active employee.

That is an essential issue of a cause of action.

The coverage of title VII--

Chief Justice Roberts: It's more a question of... of whether or not the... there's been a violation of title VII.

It seems to me that the number of employee issue is whether you're covered at all, whether you have to conform your conduct to that law.

Your question... your... your case of whether someone has been discharged or not just goes to whether there's been a violation.

Mr. Schwartz: --That's correct, Mr. Chief Justice, but I believe that the analogy applies because it still goes to whether or not you start reading the act beyond the jurisdictional grant.

It's unnecessary to go beyond the jurisdictional grant because--

Chief Justice Roberts: But in City of... in City of Kenosha, of course, the Court went beyond the jurisdictional grant and it said that the definition of the term person in 1983 raised a jurisdictional question.

Mr. Schwartz: --Well, I... I would not necessarily agree that that goes beyond the jurisdictional grant because the jurisdictional grant of... contained in 1334... 1343 requires that... that jurisdiction apply against a person acting under color of State law.

And that's an example which Congress has done many times of putting qualifiers within a jurisdictional grant.

An example of... of that we... we attached 60 such statutes to our appendix in our reply brief, but a specific example, which I think is applicable here, is the Uniformed Service Employee Reemployment Rights Act wherein Congress put in that the act would only apply jurisdictionally, subject matter jurisdictionally, against employers.

And then there's a subsequent definition of employer further on in... in the statute which is missing here because title--

Justice Scalia: What's the practical consequence of the one or the other?

Number one, if you don't raise it below, you can still raise it on appeal if it's jurisdictional.

Right?

Mr. Schwartz: --That's correct.

Justice Scalia: And number two, the... if it's a jurisdictional question, it would be decided by the... by the judge rather than by the jury?

Mr. Schwartz: That's correct as well.

And I would go further that the practical problem is what happened in our case where it wasn't raised in the trial... in... in the case until after a trial on the merits and after the jury returned the verdict, and we wasted a lot of time.

It... it could have been brought up beforehand as a... a substantive motion for summary judgment or a 12(b)(6) motion if the pleadings resolved the issue.

Justice Scalia: But that's always the case.

I mean, why... you know, if those disadvantages... those disadvantages will always exist.

So why would Congress ever make something jurisdictional rather than simply making it an element of the cause of action?

You understand what I'm saying?

I mean, that's always a consequence.

Mr. Schwartz: Well, I... I think the--

Justice Scalia: And yet, you... you felt that some things are jurisdictional.

Mr. Schwartz: --Well, I... I think if I'm... if I'm an attorney representing a plaintiff and I want to make an evaluation of whether or not I have a claim, I want to first evaluate do I pass a jurisdictional threshold.

If a come... a person comes into my office and says, look, this happened to me, I want to bring a cause of action, and I know that they employ less than 15 people, then I'm not going to waste my time.

Justice O'Connor: Well, but what's the rule that you suggest we look to in deciding whether a provision is jurisdictional?

Because, as the Chief Justice pointed out, in 1983 cases where the question is whether the defendant is a person, we've held that is jurisdictional.

So what is the rule in telling us when we should treat something as jurisdictional?

Mr. Schwartz: Well, the rule that has existed for some time now, going back to Bell v. Hood, is a... a fair way to look at this.

If a statute, a Federal law, creates a cause of action, then a cause... a cause of action lies absent Congress expressly limiting or qualifying an... a jurisdictional element within its grant contained within that law, which is... which is missing completely in title VII.

Justice Ginsburg: What would you call this?

Would you call 15 or more employees an element of your claim that you must prove?

Mr. Schwartz: Yes.

Justice Ginsburg: Or there could be an affirmative defense and you're not claiming the latter.

Mr. Schwartz: It could be an affirmative defense.

Justice Ginsburg: But you're... you're accepting that it is your burden rather than the employer's to show that the employer had fewer than 15 employees.

Mr. Schwartz: More than 15, yes, Your Honor.

Justice O'Connor: More than.

Mr. Schwartz: Yes.

That... that's the plaintiff's burden just like it's the plaintiff's burden to prove that they were terminated--

Justice O'Connor: Did you establish that in the course of the proceedings?

Mr. Schwartz: --We did not plead it with particularity.

We pled that the employer sexually harassed the plaintiff, and then thereafter in the pretrial order, it was not raised as a contested issue of fact.

And I believe the law of the case doctrine would control in that instance because the--

Justice Kennedy: I was going to ask what... how does the waiver work?

Suppose the judge pre verdict says, you know, I'm concerned that there are less than 15 employees.

Can the plaintiff say, oh, well, now, Your Honor, you can't get into that?

They waived that.

They didn't raise it.

I mean, how does that work?

Mr. Schwartz: --If it's... if it doesn't go to the subject matter jurisdiction--

Justice Kennedy: Under your theory of the case?

Mr. Schwartz: --then I would say that it is waived, if it's been answered--

Justice O'Connor: Well, but if it's your burden to prove it, how can it be waived by the defendant?

I don't understand your theory.

Justice Kennedy: You mean the judge just has to watch the case sail over the waterfall and--

Mr. Schwartz: --Well, let's talk about two different examples.

If we have pled with particularity that the employer has 15 or more employees and is subject to title VII for liability purposes and the defendant in their answer admits that fact, then that becomes a... a admission--

Justice Kennedy: --Well, in my case nobody mentions it but the judge.

Mr. Schwartz: --All right.

So we have alleged in our lawsuit that the employer terminated or sexually harassed the plaintiff and the... there is not... it's not particularly pled.

Is that the hypothetical, Justice Kennedy?

Justice Kennedy: Yes, and the... and the judge calls it sua sponte to the attention of the parties.

Mr. Schwartz: I would think that if the judge in a... in a Federal cause of action was troubled by any element of the claim, based upon his or her own review of the factual setting, it's conceivable that... that the court then could entertain motions on that particular issue.

Justice Scalia: Well, wait.

You... you pleaded... you pleaded that... that the defendant was... was an employer under the act.

Right?

Mr. Schwartz: Yes.

Justice Scalia: And it's the definition of employer that says he has to have more than... more than 15 employees.

So, in effect, you... in making your complaint, you... you at least implied and maybe said that this person is an employer under the act.

So it seems to me at that point the... the burden shifts to the other side to say... the burden of going forward of saying no, this person isn't an employer under the act, and if they say nothing, then they've accepted what... what your complaint on its face says.

Mr. Schwartz: I agree with you, Justice Scalia.

Justice Scalia: I knew you would.

[Laughter]

Chief Justice Roberts: But... but maybe... but that doesn't sound like a reasonable agreement.

All you... so you file one sentence saying this person violated title VII.

Are you impliedly including all of the allegations of what constitutes a violation of title VII because if you didn't allege every particular element, it wouldn't be a violation of title VII?

That's not how pleading works.

Mr. Schwartz: No.

And... and I can... I can tell you, Mr. Chief Justice, I have probably handled 500 causes of action for discrimination cases, and I've never seen anybody plead the issue of whether or not somebody has 15 employees.

It's just not done.

Justice Souter: In your pleadings, did you say he's an employer?

Mr. Schwartz: Yes.

Justice Souter: Did you use the term employer?

Mr. Schwartz: Yes, Justice Souter.

Justice Souter: Okay.

Mr. Schwartz: And... and it was admitted and then it was never challenged thereafter until after the verdict.

Justice Ginsburg: How does it... you... you told us of your extensive experience.

How does the numerosity requirement usually come up?

You've accepted that it's an element of your claim rather than an affirmative defense the defendant must plead and prove.

So how does it ordinarily come up?

Does it... because defendant answers and asserts that it has fewer than 15 employees?

Mr. Schwartz: I can give you one real world example, Justice Ginsburg.

I represented a defendant in a case that didn't employ 15 people, and when I attempted to convince the plaintiff... plaintiff's lawyer of that fact after the litigation commenced and they weren't willing to... to go ahead and voluntarily dismiss, I simply filed a motion for summary judgment attaching affidavit material, including payroll records.

And then once the plaintiff's attorney reviewed that, they voluntarily gave up and the case was dismissed.

That would be the way it would normally play out, provided it's not held to be an issue of subject matter jurisdiction.

Another reason why this should not be a subject matter jurisdiction goes to the practical elements of the way this would progress in litigation and title VII's admonition, which is a rare admonition in legislation, that title VII cases be heard in an... in an expedited way.

In enacting that particular language, it appears to me that Congress was acknowledging that this is a very important law.

We're trying to remediate a terrible wrong, that is, employment discrimination.

So we don't want these cases to languish.

It's almost as though it's being processed like a Federal Rule of Civil Procedure injunction proceeding, that this is a case that should move very quickly.

And many courts, like the one across the river in Virginia that are known as so called rocket dockets, process these cases on a very fast track.

I know that... that court does it.

Other courts that I practice in do it as well where it is not uncommon that from the pleading that a trial is dead is as quickly as 6 months thereafter.

If this was to be subject matter jurisdiction and we had to initially litigate the question of whether or not the person is an employer and putting aside all other issues in the case, it would invariably result in a dragged out process.

In our case, as we... as we noted--

Chief Justice Roberts: That's true in a lot of areas.

I think of admiralty.

If there's an issue of admiralty jurisdiction that questions whether an injury is caused by a vessel in navigable water, you often have extended litigation over that jurisdictional question.

Mr. Schwartz: --And... and in those cases, the jurisdictional grant in the Jones Act does include elements of jurisdiction.

So it's... it's required.

But I don't... I don't believe that the Jones Act has the same type of language, Mr. Chief Justice, that title VII has, requiring that these cases be heard expeditiously.

So--

Justice Scalia: Does it... does it have to be resolved preliminarily?

Why can't you leave the jurisdictional question to be decided at the conclusion of the trial with all the other questions?

Is there some rule of law that says that a jurisdictional question must be confronted before the trial and before the merits?

Indeed, most jurisdictional questions are reexamined as the trial proceeds.

That is, you know, initially the court will say, yes, there appears to be jurisdiction on the basis of the pleading.

Then if there's a motion to dismiss, yes, there... there appears to be jurisdiction on the basis of the affidavits.

But then if the trial proceeds and it turns out that, in fact, there isn't jurisdiction, the court dismisses.

So why couldn't this jurisdictional question always be handled that way?

Just... just leave it to be resolved during the trial.

It wouldn't slow anything up.

Mr. Schwartz: --There... there's a few problems with that.

One is that it is not uncommon in title VII cases that there are supplemental State claims brought in the cause of action, and so we would have a situation where there would be a lot of wasted effort on the pending claim if, at some point, Justice Scalia, at the end of the day the case was dismissed on subject matter jurisdiction.

That was the situation in our case where we had a pending tort claim for battery, and we also had a pending claim under the ancillary Louisiana discrimination statute.

Justice Scalia: Okay.

So this is a third consequence of the jurisdictional issue.

Mr. Schwartz: Yes.

Justice Scalia: If the issue is jurisdictional, all the pendant State claims don't belong there and they've got to be chucked out; whereas, if it just goes to the merits, the pendant claims are properly before the court.

Mr. Schwartz: That's right, Your Honor.

Justice Scalia: That's an important consequence.

Mr. Schwartz: In addition, the Court's recent opinions addressing subject matter jurisdiction have all gone back, it seems to me, to this question of what does the text say.

The... the issue of not conflating the use of the word jurisdiction, which has been referenced in a number of the Court's opinions, Steel Company, Kontrick, Eberhart, Scarborough, all point to the fact that where the text is clear, as it is in this case, and there is no ambiguity, then subject matter jurisdiction lies if a claim is brought under a Federal act.

If there are no further questions, I'd like to reserve the balance of my time for rebuttal.

Argument of Daryl Joseffer

Chief Justice Roberts: Thank you, Mr. Schwartz.

Now Mr. Joseffer.

Mr. Joseffer: Mr. Chief Justice, and may it please the Court--

Justice O'Connor, we think the rule here, because it's a question of congressional intent, is simply how to best interpret the relevant statutes.

Here, Congress twice unambiguously conferred jurisdiction over all title VII claims, at least twice, first in section 1331 and again in a title VII jurisdictional provision which confers jurisdiction over all claims brought under title VII.

Justice Ginsburg: Mr. Joseffer, maybe you can raise the podium a bit so the microphone works better.

The other way.

Mr. Joseffer: Sorry.

Is that better?

Thank you.

As I was saying, the question is... is... because it's a question of congressional intent, we think normal rules of construction apply.

And, Justice Ginsburg, you asked about whether the title VII subject matter jurisdictional provision is now redundant in light of the reduction of the amount in controversy from section 1331.

Technically we think the answer is yes, but it still has great interpretive value because it shows that when Congress meant to address the jurisdictional question in title VII, it expressly said so and it did so by conferring jurisdiction over all title VII claims.

The definition of employer, which is the relevant issue here, does not itself speak in jurisdictional terms and does not modify in any way title VII's broad jurisdictional provision.

Justice Ginsburg: What... what about the EEOC having typed the question jurisdictional for administrative processing purposes?

Mr. Joseffer: Right.

Well, as the Court has remarked on multiple occasions, the word jurisdiction is a word of many, many meanings, and the EEOC has never said that it's a question of a subject matter jurisdiction in the Federal courts.

It was... until about 5 or 6 years ago, EEOC in an administrative context used the word jurisdiction to refer to the definition of employer, statutes of limitations, and a variety of other matters that are clearly not subject matter jurisdictional.

But after this Court held in Zipes that another provision of title VII is not one of subject matter jurisdiction, EEOC realized that its administrative use of the broad term jurisdiction was confusing.

So 5 or 6 years ago, EEOC amended its compliance manual and no longer refers to any of these questions as jurisdictional.

But I guess the key point is it never said it was on subject matter jurisdiction.

And Mr. Chief Justice, you asked about whether a threshold question of coverage could be considered different than another element of the cause of action.

I think the important thing here is that the place where Congress used the term person is in setting forth what conduct is unlawful.

Title VII says that it shall be an unlawful employment practice for a person to discriminate in various ways.

So the way the definition is irrelevant is in setting forth the scope of unlawful conduct which is a quintessential merits or cause of action inquiry as opposed to a jurisdictional one.

The City of Kenosha is different because, as petitioner's counsel recognized, that interpreted not section 1331 but section 1343 which--

Chief Justice Roberts: Interpreted section... the use of the word person in section 1983.

Mr. Joseffer: --Interpreted the word person in section 1983 not to apply to municipal corporations, but with respect to the jurisdictional inquiry, it said that the... that 1343 did not confer jurisdiction.

In Mt.

Healthy several years later, the Court held that although section 1343 was narrowly limited to actions that are authorized by law, which connoted somewhat of a merits inquiry, section 1331's jurisdictional provision is not so limited and is not limited by the definition of person, which is what the Court held in section 1331.

Chief Justice Roberts: So City of Kenosha was just kind of a silly waste of time.

Mr. Joseffer: Well--

Chief Justice Roberts: 1331 was applicable there as well.

Right?

Mr. Joseffer: --At the time section 1331 had the amount in controversy requirement, and I think that's why now that section 1331 no longer has the amount in controversy requirement, this Court's section 1343 cases have more or less petered out because plaintiffs can now just go under section 1331.

And Justice Scalia, you asked about the... the practical consequences.

I agree there are three practical consequences, and from that perspective, it makes little sense to believe that Congress would have thought that this requirement should be jurisdictional.

The first is whether the issue can be raised at any point in the litigation.

The second is who decides the issue, and the third is whether, after dismissal of the Federal claims, the State law claims must be dismissed for lack of jurisdiction.

And given that this is just one of many facts that arises in determining whether a plaintiff can state a valid title VII claim, it's hard to believe that Congress would have thought that this is the one fact that should be raised at the end of the case instead of at the outset where it can be adjudicated in an orderly manner with all of the other facts.

Also, common law juries have been deciding for centuries whether a worker is an employee or an independent contractor for purposes of agency and tort law.

And since that is the ultimate dispute here, it seems remarkable to think that that's the one fact that Congress would say should not go to a jury.

And similarly--

Chief Justice Roberts: I'm sorry.

What have juries been determining?

Mr. Joseffer: --Well, the question as to whether there are 15 employees here--

Chief Justice Roberts: Right.

Mr. Joseffer: --turns on whether some workers are independent contractors or employees.

And for agency law purposes, which becomes relevant in tort law in terms of vicarious liability, the question whether someone is an employee or an independent contractor is a... is a longstanding jury question.

Justice Ginsburg: The... the question was whether the truck drivers counted as employees because if they did, they'd have enough?

Mr. Joseffer: Right.

If the... if the... if those... if the delivery drivers were workers... were employees, there's no question there were 15 employees.

So the question was whether some workers count as employees and whether a worker is an employee or an independent contractor is... is a longstanding question for a jury when there's a disputed issue of... of fact.

And then the third consequence... I mean, here, there... the jury rendered a verdict on the State law claims, found in favor of respondent on one, petitioner on the other.

And it seems highly unlikely that Congress would think that that jury verdict should be vacated and the case retried in State court because the defendant has 14 instead of 15 employees.

Chief Justice Roberts: But that's the... that's the consequence of a determination that it's jurisdictional in any case.

Right?

Mr. Joseffer: That's correct, and there... there are circumstances--

Chief Justice Roberts: I mean, if you had a case where you didn't dispute that the issue was jurisdictional and there had been a jury trial on the pendant State law claims, we'd still have to throw that out.

Right?

Mr. Joseffer: --Yes, but I think that's one reason that Congress does not ordinarily make jurisdiction turn on those types of facts.

In the admiralty concept... context that you recognized, it's necessary to distinguish between admiralty jurisdiction and general Federal question jurisdiction.

So Congress had to distinguish in some way, and the way it did was by saying, well, is the alleged injury caused by a vessel in navigable waters or elsewhere.

But ordinarily when... a distinction does not have to be drawn like that.

In section 1343, it was the same because Congress didn't want that to be conflated with section 1331 at the time.

When jurisdiction does not necessarily turn on contextual factors, Congress ordinarily just lets the broad jurisdictional ground of section 1331 be a clear, simple threshold inquiry so parties can determine they're in the right court, and then the case can be proceeded... can be litigated on the merits from there.

Justice Kennedy asked whether a court could raise the issue on its own, even assuming that it's a merits issue.

And I think the answer is that although the defendant waived the issue here and therefore has no right to insist that it be raised, most waiver doctrines are discretionary, and therefore, courts retain some inherent discretion to overlook waivers in some circumstances.

That discretion would be greater at the outset of a case where a Federal court decided it should not be deciding a case than it would be once a jury had already decided a case, which is what happened here.

Finally, respondent relies on a number of this Court's title VII decisions for the proposition that this requirement is one of subject matter jurisdiction.

The basic point is that this Court has never opined in dicta or in holding on whether this requirement is one of subject matter jurisdiction of the courts.

The Court's only title VII subject matter jurisdiction case is Zipes which held that a requirement was not jurisdictional because it was not... did not textually modify title VII's broad jurisdictional provision and in light of other relevant canons of construction.

And for precisely the same reasons, the definition of employer does not textually modify the definitional provision and therefore it does not limit the court's subject matter jurisdiction to adjudicate this claim either up or down based on its merits.

If the Court has no further questions, I have nothing further.

Argument of Brett John Prendergast

Chief Justice Roberts: Thank you, Mr. Joseffer.

Mr. Prendergast, we'll now hear from you.

Mr. Prendergast: Mr. Chief Justice, may it please the Court--

I have to start off by disagreeing with my learned colleagues on at least three areas.

First of all, Mr. Schwartz indicated that the plaintiff pled that the defendant Y & H was an employer in this matter.

That is inaccurate.

What the defendant actually pled and which became the subject of the subsequent post trial motions was that the court had jurisdiction, and when the matter of the number of employees was raised, that was the pleading... the allegation in the complaint that the plaintiff raised to say this issue has been waived.

There was no specific pleading in the complaint that said that Y & H qualified for the definition of an employer under title VII.

There was no pleading that Y & H had 15 or more employees for the 20 or more weeks that were necessary.

Justice Ginsburg: There was no... there was no allegation that the plaintiff was employed by your client?

Mr. Prendergast: There was an allegation, Your Honor, that the plaintiff was employed by the company, but there was no allegation that Y & H was an employer as the term is defined in title VII.

Justice O'Connor: Was the--

Justice Souter: Was the word employer used in the pleadings?

Mr. Prendergast: I don't recall, Your Honor, whether or not the word employer was used.

I think it was clearly stated that... and... and there's no doubt Ms. Arbaugh was, in fact, employed by Y & H.

Justice Souter: No.

I'm just asking the really formal question.

Was the word employer used to refer to your client at any point in the pleadings?

Mr. Prendergast: I'm... I'm not sure, Your Honor.

Justice Ginsburg: Do we have the complaint in--

Mr. Prendergast: In the record, yes, Your Honor.

Justice Breyer: Was there an allegation that the company, petitioner, or whatever it was... that they violated the act?

Mr. Prendergast: There was an allegation, Your Honor, that--

Justice Breyer: I... I guess that... they must have thought that there were 15 or more employees because otherwise you wouldn't have.

Mr. Prendergast: --Right.

And... and naturally, though, Your Honor, that was denied.

The... the admission that the plaintiff relied upon in the post trial motions was the allegation that this court has jurisdiction under title VII, under the relevant provision.

Justice Breyer: Was that denied?

Mr. Prendergast: That was admitted.

The jurisdiction was admitted, and... and in the post trial motions, that was the issue that the plaintiff hung their hat on to come back and say this issue is... is established and stipulated.

There was clearly no admission that the--

Justice Breyer: You denied it.

Then they presented evidence, and their evidence was A, B, C, D, E.

And I guess then you presented some contrary evidence, and you didn't present any evidence that he wasn't an employer.

So I guess the odds are he was.

Mr. Prendergast: --Well, there was... but--

Justice Breyer: And if the odds are he was, they win in the absence of any evidence.

Mr. Prendergast: --Justice Breyer, if an employer... and... and I disagree with the position that it's... I... I think it is an element of the merits in addition to being an element of jurisdiction.

But if a plaintiff has that as part of their burden of proof, then the plaintiff naturally has to introduce evidence--

Justice Breyer: Then I guess maybe you could have appealed on that point.

So did you?

Mr. Prendergast: --No, Your Honor, because--

Justice Breyer: Then I guess it's waived unless it's jurisdictional.

So we're back to the jurisdictional question.

Mr. Prendergast: --And which we maintain that it is jurisdictional.

I'm not sure, Your Honor, whether or not there is, in fact, any waiver because--

Justice Breyer: I never heard of a point on the merits that if you... you think you're right.

It's right on the merits, the element of the offense.

You don't think they proved it, but unfortunately, you don't raise that in the appeal.

Mr. Prendergast: --No, Your Honor, we didn't raise it in the appeal, the reason being that while the matter was still pending in the trial court, in addition to the motion to dismiss for jurisdiction, which was granted, there was a motion of renewed judgment as a matter of law, which included the plaintiff's failure to maintain their burden of proof.

Justice Breyer: And did you win or lose on that?

Mr. Prendergast: That was dismissed as moot because of the jurisdictional issue, Your Honor.

So whether or not that is raised or not... I agree with you.

It's not before this Court today, but I don't think it's a matter that can be decided by this Court either.

It's a matter, if this Court should decide that it is a merits issue, that goes back to the trial court on remand.

Chief Justice Roberts: What other aspects of title VII do you think are jurisdictional?

Mr. Prendergast: I think the other aspects... and clearly, this has not been the subject of great research... would be the other ones that designate the scope or the coverage of the act, for example, especially as it relates to employer.

At least three circuit... and in addition to excluding small companies as employers, the act also includes as... excludes as employers private membership clubs, the Government, the United States, agencies of the United States, wholly owned corporations of the United States, and also Indian tribes.

At least three circuit courts have held that Indian tribes and their status is a matter of subject matter jurisdiction.

That's the Fifth Circuit in Thomas v. Choctaw, the Tenth Circuit in Duke v. Absentee Shawnee Tribe, and the Ninth Circuit in--

Justice Stevens: Do they hold that the plaintiff must allege the employer is not an Indian tribe?

I'm over here.

Mr. Prendergast: --I'm sorry.

Justice Stevens: Over here.

[Laughter]

I say in... in those case that you just cited, did they hold that the plaintiff must allege that the employer is not an Indian tribe?

Mr. Prendergast: I don't think they got into that matter, Justice Stevens.

Instead, what they simply decided was whether or not the... the employer was an Indian tribe.

There was a question concerning some of the structures and just the business organizations that the Indian tribes were using and--

Justice Stevens: Do you interpret those cases as, in fact, holding that if there was a trial and a judgment in favor of the plaintiff against what turns out later to be an Indian tribe, that after the case is taken up on appeal, the Indian tribe can have the judgment set aside?

Mr. Prendergast: --Yes, Your Honor, because the... the cases did clearly hold that the matter of... as an Indian tribe was a matter of subject matter jurisdiction.

And as a matter of subject matter jurisdiction, it is completely established law that that may not be waived.

It may be raised at any time.

So--

Justice Ginsburg: --Did it, in fact, come up in that posture in the case?

It has already been mentioned that the word jurisdiction has many, too many uses.

Did it... did the question come up in the Indian tribe cases as it did here after the case was fully tried and after there was a jury verdict for the plaintiff?

Mr. Prendergast: --No, Your Honor.

Those were cases where there were motions to dismiss based upon lack of subject matter jurisdiction.

Justice Ginsburg: When... if... if it's brought up promptly, it really doesn't matter, does it, whether you label it 12(b)(1) jurisdiction or 12(b)(6), failure to state a claim?

It goes out either way.

When it is consequential is when you bring it up, as you did here, after you lose on... at the trial.

Mr. Prendergast: I... I think the effect could be different when you raise it.

I think there can also be a difference in effect in how it will be treated, even if it was promptly raised.

I think, for example, on a 12(b)(1) motion, I don't believe the... the court is obligated to accept all the plaintiff's pleadings.

It's allowed to look outside the pleadings to actually determine the jurisdiction.

Whereas, in a 12(b)(6) motion, if the plaintiff says it's an Indian tribe, it's an Indian tribe.

Justice Scalia: Mr. Prendergast--

Mr. Prendergast: Yes.

Justice Scalia: --my problem with... with your... your contention is that I don't know how it is that you... that you intuit that this one definition is jurisdictional.

I mean, the definition... the... the 15 employee limit is... is part of the definition of employer in section 701.

Mr. Prendergast: Yes, Your Honor.

Justice Scalia: There are 13 other definitions in section 1701.

For example, it defines on the basis of sex.

Now, if... if you contest whether a particular remark or a particular practice of the employer was... fell within that definition, was on the basis of sex or not, would you say that the court had no jurisdiction?

Mr. Prendergast: No, Your Honor.

Justice Scalia: Will you challenge... well, why are you challenging jurisdiction when you're... when you're saying the... the definition of... of employer has not been met, but you are not challenging jurisdiction when you say the definition of on the basis of sex has not been met.

Why... why pick on one rather than the other?

Mr. Prendergast: I think the distinction is similar to an Aldinger/Kenosha type distinction.

And I think the question goes back to it requires an interpretation of whether or not Congress wanted to give the lower Federal courts the type of jurisdiction being discussed.

Justice Scalia: Yes, I... I understand that.

Mr. Prendergast: And... and--

Justice Scalia: That... that's what it comes down to.

Mr. Prendergast: --And... and--

Justice Scalia: But how do you know--

Mr. Prendergast: --Well, how--

Justice Scalia: --If both definitions in section 701--

Mr. Prendergast: --How... how do you know--

Justice Scalia: --why does one of them express one thing and another not express--

Mr. Prendergast: --Justice Scalia, the way you know is because you look at the logical deductions that can be drawn from the congressional statutes, as this Court suggested in Aldinger.

And with respect to the other definitions, I cannot speak categorically with respect to those other definitions because that's not the matter before this Court.

I can't suggest to this Court a wholesale general policy of these definitions are jurisdictional and these definitions are not jurisdictional.

Justice O'Connor: --But the practical consequences of affirming here are severe in terms of handling these cases.

And we've pointed out in some recent cases of ours that we've been a little sloppy in the past in using the word jurisdiction.

So it looks to me like there are many indicators that would point to not treating the 15 employee requirement as one of subject matter jurisdiction.

Mr. Prendergast: Justice O'Connor, I would say the... the consequences of not affirming are even more severe.

Congress, in 1964, made a clear decision that it wanted small businesses not to be burdened with--

Justice O'Connor: Yes, but it's entirely in the hands of the defendant to raise some objection.

Who knows better than the employer how many employees the employer has had?

I mean, it's totally within your capacity to say, wait a minute--

Mr. Prendergast: --But one--

Justice O'Connor: --we didn't have 15.

Mr. Prendergast: --one... one of the... one of the concerns, I believe, that Congress did have with respect to small employers was the fact that in terms of small employers, you are dealing with less sophisticated litigants, less sophisticated litigants with less access to legal resources that bigger companies have.

Justice O'Connor: Were you representing this employer at the time?

Mr. Prendergast: No, Your Honor.

I handled this matter all in post trial.

Chief Justice Roberts: What's... what's wrong with the rule?

We're not dealing with Article III here.

What's wrong with the rule that if Congress doesn't put it in the jurisdictional section, it's not jurisdictional?

Mr. Prendergast: I think--

Chief Justice Roberts: It would make the future cases a lot easier to decide.

Mr. Prendergast: --I think that would be contrary, however, Mr. Chief Justice, to the previous holdings of this Court where they say you do look to the logical deductions--

Chief Justice Roberts: Well, it's--

Mr. Prendergast: --that you look to all the statutes.

For example, petitioner makes note of Zipes, but if... if the jurisdictional statute is going to be the be all and end all of... of the analysis and the discussion, then Zipes would have merely looked and said, oh, well, the statute of limitations is not in the jurisdictional provision.

End of discussion.

But Zipes didn't do that.

Zipes said we need to look at the... the jurisdictional statute, the way it's structured.

We need to look at congressional intent and the legislative history, how they referred to this matter.

We need to look at our prior cases how we referred to this matter.

So I think to say just, okay, let's look at the jurisdictional statute... one, I think there are two problems with it.

One--

Justice Ginsburg: May I go back to Zipes?

In Zipes, the Court was faced with the... the word jurisdictional had been appended to the statute of limitations.

I think that was true of the way the EEOC spoke of the rigid time limit, that it was mandatory and jurisdictional.

And then the Court explained in Zipes that a strict time line doesn't mean that it's jurisdictional.

You can have a rule that's rigid, but it doesn't determine subject matter jurisdiction.

And that's what Zipes tried to explain.

The Court in Zipes was faced with a number of cases that had used that term to describe the time in which you must bring the action, mandatory and jurisdictional.

Mr. Prendergast: --Yes, Justice Ginsburg.

But Zipes also dealt with a legislative history where they referred to it as a statute of limitations period.

Zipes also said, okay, we have other cases where we have used the term jurisdictional, but more often than not, we've referred to this as a limitations period.

Zipes looked at the whole context and said, yes, we're not going to be held by a few random, maybe casual or careless uses of the term jurisdictional, but we are going to look at the whole thing.

Here, the legislative history has traditionally referred to this as a jurisdictional provision.

The '72 amendments, which increase... decrease the number of employees necessary from 25 to 15, referred to it as an expansion of jurisdiction.

This Court has had the matter come up before it always in jurisdictional terms.

This Court has referred to this.

EEOC has referred to it as jurisdictional.

Justice Ginsburg: Yes, but now we know it's... EEOC has changed.

Mr. Prendergast: Seeing the errors of their ways, I guess.

Justice Ginsburg: But why... now that we do have Zipes, why should the number of employees be treated any differently than that rigid time line in... in Zipes?

Mr. Prendergast: Your Honor, I think the reason that the number of employees should be different... treated differently is because we go back to the Aldinger question, and the Aldinger question is this Court has to decide did Congress want to give this type of jurisdiction to the lower Federal courts.

Justice Ginsburg: But that was a pendant jurisdiction case.

Wasn't Aldinger--

Mr. Prendergast: Aldinger dealt with a pendant party issue, yes, Your Honor.

Kenosha, however, dealt with... as the Chief Justice has indicated, Kenosha dealt with a definition that excluded counties from section 1983 and that was found to be implicitly brought into the... the jurisdictional grant for civil rights actions.

So I think the mere fact that something is or is not in the jurisdictional statute cannot be determinative because ultimately you do need to go back to the question of did Congress want to give this type of jurisdiction to the lower Federal courts.

My question would be why would Congress seek to give this type of jurisdiction to the lower Federal courts for a whole category of cases where, in the words of this Court in Hishon, it has granted these businesses complete immunity from title VII?

Justice Ginsburg: --Well, you just used an interesting word because there are litigants who can claim complete immunity from liability, but that immunity, whether it's absolute or qualified, doesn't go to the court's subject matter jurisdiction.

It has to be raised in those cases as a defense.

Mr. Prendergast: True, Justice Ginsburg.

The difference, however, between the immunity in those cases and the type of immunity here that the Court talked about in Hishon... immunity for a police officer in a civil rights case with qualified immunity will depend upon a police officer's particular actions in that particular case.

The police officer, in general, can be sued under section 1983.

The immunity that's present here, with respect to small employers, has no relationship whatsoever to the actions of that employer.

An employer who employs 12 people at most can engage in the most egregious employment discrimination and harassment possible, and the Congress of the United States has said, as a policy matter, on balance we would rather accept that kind of awful conduct because we don't want to impose these burdens on small businesses.

Justice Ginsburg: Or leave it to the States that often do cover smaller shops.

Mr. Prendergast: Yes, Your Honor, or leave it to the States and let the States do it.

But we don't want the Federal Government to be intruding into the operations... into the culture of these small businesses, and that I believe is the difference between the immunity that you mentioned, the qualified or prosecutorial type immunity, which depends upon actions, and this immunity here which depends upon simply the status of the defendant, the whole class--

Justice Souter: Well, that... that argument doesn't apply to absolute immunity cases, and yet in absolute immunity cases, once again, it's clear there's jurisdiction.

There's simply immunity.

The immunity doesn't depend on any particular facts.

Mr. Prendergast: --The absolute immunity, Justice Souter, that I'm most familiar with would be prosecutorial immunity.

I think there can still be exceptions for prosecutorial immunity.

I think a prosecutor, depending upon the type of actions he's engaged in, can still be subject to liability.

Justice Souter: But we have to determine whether he's acting as a prosecutor.

Sure.

We have to determine whether the President was acting in a presidential capacity, but that's not the kind of fact inquiry that you were talking about with respect to the qualified immunity.

Mr. Prendergast: It certainly... yes, Your Honor, I will concede it's a different kind of inquiry.

But I... I do think, though, here the categorical exclusion of small businesses is a clear indication of congressional intent of what Congress wanted to have happen.

Justice Souter: But I... I don't see why the same argument can't be made with respect to prosecutors.

It is clear that if... if an individual is acting in a prosecutorial capacity and enjoys the appointment as a prosecutor, that at least the... the system... we're not necessarily talking about Congress here.

The system says there... there should be, as a categorical matter, an... an immunity from prosecution.

And yet, that does not go to subject matter jurisdiction.

And it seems to me that that is essentially the exact argument that you're making here, and I don't see why it should be any more sound here than it would be in the absolute immunity case.

Mr. Prendergast: Another... well, Your Honor, I'll offer another distinction then.

The other distinction is prosecutorial immunity and qualified immunity, for that matter, are court created entities--

Justice Souter: That's right.

Mr. Prendergast: --court created defenses.

And as this Court is well aware, this Court nor any other court has the power to define subject matter jurisdiction.

That is Congress' purview and power.

Only Congress can limit the court's jurisdiction and define the court's jurisdiction for the lower Federal courts.

Here, Congress has spoken with respect to small businesses.

It's a different matter, I would suggest, with respect to prosecutors, which is an immunity that is... is a product of common law and... and a judicial creation.

I would also want to point out that... another thing.

The Solicitor General indicated that if you look at the structure of the... the liability section, he implied that it just imposes the employer definition into the... all the other causes of action.

In fact, it does not.

It says, it... it shall be unlawful for an employer to, and then it defines what is unlawful.

So I think there again it's indicating a difference between other elements of the cause of action and the employer relationship and the employer existence under title VII.

Ultimately, what this boils down to is whether or not small businesses are going to continue to receive the protection that Congress has indicated that it wanted them to have.

Justice Souter: Well, why can't get they get the protections through summary judgment?

Mr. Prendergast: I think they would be offered some level of protection, Justice Souter, through summary judgment.

The problem is summary judgment offers its own unique hurdles to a defendant.

And again, it's a difference--

Justice Souter: Among other things, you... you've got to do it up front.

Mr. Prendergast: --It's... it's a different standard as well, Your Honor, because under summary judgment, a plaintiff has it within their capability... have to view all the inferences in the light most favorable to the plaintiff, and... and the small business could end up being dragged into the litigation further and further than I think Congress intended.

Justice Souter: Well, if... if we're worried about dragging people into litigation, I presume Congress didn't intend, as a... as a general matter, to allow the... the situation that we've got here.

One party has been dragged through a piece of litigation and, having lost, has decided it wants to take another shot at getting out of the case.

Surely you can't say that was within the contemplation of Congress' intent.

Mr. Prendergast: Your Honor, actually I... I would not have viewed it as outside of Congress' contemplation or intent because Congress... and I think this is an important part of legislative history.

Congress in 1990 enacted the ADA, and they adopted the employer definition from title VII.

And at the time that Congress adopted title VII's employer definition for the ADA, all but one circuit court had decided that this was a matter of subject matter jurisdiction.

And if you decide something is a matter of subject matter jurisdiction, you take with it the unfairness.

And I'm not going to contend that it's not sometimes unfair to parties, some of the consequences of subject matter jurisdiction.

But you take that with it when you decide that it's a matter of subject matter jurisdiction.

And Congress in 1990 adopted for the ADA the title VII definition.

So it's implied that they understood what was going on.

In 1991, they... they had the Civil Rights Act and amended and provided for jury trials in these types of matters.

And again, Congress was aware of the state of the law.

Justice Souter: My... my point--

Mr. Prendergast: And Congress did not--

Justice Souter: --my point is not--

Mr. Prendergast: --seek a change.

Justice Souter: --my point is not that Congress in some specific sense, when it establishes a jurisdictional requirement, does not intend the occasional costs that the system has to bear by virtue of treating that requirement as jurisdictional.

My point simply is that if we are in... in a situation in which it is not clear whether it's jurisdictional or not, the issue can be raised, in effect, up front effectively through summary judgment, and in the alternative, can be treated... and... as... as an ineffective fact element, and in the alternative, can be left, in effect, forever to be raised as a jurisdictional element.

The fact that it can be treated effectively up front is one reason to think that Congress would probably have wanted that fact issue to be regarded not as jurisdictional but as elemental so that it can be gotten out of the way and the parties are not going to go through entire trials only to have the whole thing upset by a belated jurisdictional argument.

That's my only point.

Mr. Prendergast: And... and, Justice Souter, I understand that point.

However, I... I tend to believe that this is, after all, an aberration case.

Petitioner has suggested and the Solicitor General has suggested that businesses may tend to sandbag this issue.

I simply do not believe that that is a realistic danger at all.

In this case, quite frankly, the matter was overlooked, and that's how we ended up here.

But in most cases, these small businesses are not going to be looking to spend a lot of money and go through a whole trial and then say, oh, well, I had my shot at it.

Let me see.

If... if it doesn't work out now, I'll get out as a matter of subject matter jurisdiction.

Most cases, small businesses are going to say, make this case go away from me as fast as you can.

And so I don't think that that's really much of a danger to suggest that this is a pattern that's going to be repeated, especially after a decision from this Court.

If this Court, as we believe that it should, comes down and holds that this is a matter of subject matter jurisdiction, I think parties will raise the matter and get it disposed of.

Justice Scalia: --In other words, it doesn't make a whole lot of difference.

Mr. Prendergast: I think--

Justice Scalia: I'm not sure that helps your case.

[Laughter]

Chief Justice Roberts: --Does it make a difference on the... the... does the categorization make a difference on the relative time of the inquiry for the 15 employees?

You have 16 employees when the discrimination takes place.

By the time the lawsuit is filed, you've only got 14.

Does it matter whether that's called jurisdiction or going to the merits?

Mr. Prendergast: --I... I believe that the... the case law has uniformly held that you look at the time of the discrimination to determine the number of employees.

Chief Justice Roberts: Even... even if it's a question of jurisdiction.

Mr. Prendergast: Even if it's a question of jurisdiction, yes, Your Honor.

And I do think ultimately, though, it does matter because it does become a matter... it doesn't matter for the plaintiff.

It doesn't matter for the plaintiff whether or not it's a matter of subject matter jurisdiction or a matter of the merits because the bottom line is they're going to lose in either event.

Justice Ginsburg: It certainly matters for plaintiffs in this situation.

Mr. Prendergast: In this particular--

Justice Ginsburg: It certainly matters from the defendant's point of view too.

In many of these cases, it's not clear whether the number 15 has been... as in this case, you have delivery drivers.

You have owners whose wives are employed in the business.

Mr. Prendergast: --And, Your Honor, and I would urge that those kind of matters that need to be addressed are best addressed by the court as opposed to by a jury.

I think to the matter of determining whether or not someone is a... is an independent contractor--

Justice Ginsburg: From the... from the point of view of a defendant who thinks I'm going to fight this case on the merits, but if I lose, I still have this ace up my sleeve.

Mr. Prendergast: --I just... Your Honor, I simply do not believe a defendant would generally do that because, as I pointed out in my brief, the problem with that is if I'm representing the defendant, all right, and I'm going to defend my case on the merits and I know I got this 15 employee question here, I go to trial, let's suppose I win.

I win at trial in Federal court.

Subject matter jurisdiction can be raised by the plaintiff.

Now, after I've won at trial, the plaintiff stands up and says, oh, this court didn't have subject matter jurisdiction.

I get a do over.

Justice Ginsburg: That sounds like a good reason why a court should think long and hard about categorizing this as a question of subject matter jurisdiction.

Mr. Prendergast: Your Honor, but again, I... I simply don't believe that that's going to be a problem that's going to come up.

I think the importance of... of categorizing this as subject matter jurisdiction is to avoid... among other things, is adding another complicating factor to a jury trial because, if you make this a matter of the merits now... counsel for petitioner describes in his brief extended hearings to determine the number of employees.

We're now... if you make it part... just a part of the merits, now before you can get to the actual issue of discrimination, a jury is going to have to sit through and try to decide how many employees there were.

Justice Ginsburg: Well, it would be simultaneous.

The jury... the jury would have that question.

Didn't I understand the attorney for the United States to say this is typical of what juries decide, was this person an independent contractor or an employee?

Mr. Prendergast: Your Honor, I... I heard that argument as well.

All I can say is given the number of factors that are laid out under, for example, the Fifth Circuit law to determine whether or not somebody is an independent contractor or an employee, that seems to me to be more like the function of a judge than a jury because it's a matter of balancing of the relevant factors.

Chief Justice Roberts: Thank you, Mr. Prendergast.

Mr. Prendergast: Thank you.

Rebuttal of Jeffrey A. Schwartz

Chief Justice Roberts: Mr. Schwartz, you have 3 minutes remaining.

Mr. Schwartz: If there are no additional questions, I... I have nothing further.

Justice Scalia: Do you think... do you think it's possible that... that Indian tribes could be jurisdictional but an employer couldn't?

I mean, it seems to me the two the questions are quite different.

An Indian tribe is always an Indian tribe.

Right?

And you're... you're excluding... just as a prosecutor is always a prosecutor.

You're excluding a whole category of people.

But you're... you're not excluding a category of employers here, are you?

Because it's a... it's a factual question, whether at the time of the alleged offense, the particular company was employing more than 15 people.

It isn't that this company forever has immunity.

Mr. Schwartz: Yes, I agree with that.

Justice Scalia: So you're... you're not arguing for the Indian tribes here.

Mr. Schwartz: As... well, my... I leave that to other people.

[Laughter]

But the... I could... in answer to that question, I can see an interesting scenario where a plaintiff working for a casino on an Indian tribe, there might be a question of who the actual employer is.

And... and that could come up and that would certainly involve some litigation.

Justice Stevens: May I ask you if the practice of law has returned to normal in New Orleans?

Mr. Schwartz: No.

It's... it's a struggle somewhat for jury pools.

The State court in particular, because it only covers Orleans Parish, is... is really struggling with pulling in jurors.

The Federal courts have a larger number of parishes to draw from.

I'm actually still living in Atlanta.

Chief Justice Roberts: Thank you, counsel.

The case is submitted.