May 8, 2013

The EEOC continues to take a beating in the Kaplan case

By Joshua P. Thompson Senior Attorney

A few months back I reported on the case of Equal Employment Opportunity Commission (EEOC) v. Kaplan Higher Education Corporation (Kaplan).  This is the case where Kaplan instituted a policy of running credit checks for applicants to certain positions that have “financial stress.”  Kaplan had never inquired into the race of the applicants for these positions — race was an insignificant criterion for Kaplan — so there was no basis for knowing if its credit check policy had a “disparate impact” on individuals of a given race.  This race-neutral policy wasn’t good enough for the EEOC, so it hired economists “experts” to judge the race of these applicants by looking at their DMV photos.  In a scathing decision rejecting the EEOC’s “expert” testimony, the district court ruled that this policy did not satisfy the rules of evidence and dismissed the EEOC’s complaint.

This apparently did not sit well with the EEOC, and it filed a motion for reconsideration with the Court.  To put it mildly, the Court wasn’t pleased.  [The Court’s May 6 order can be read here.] The Court began by deriding the timeliness of the EEOC’s motion:

In response, plaintiff argues that the Court entered judgment on January 28, 2013 and “twenty-eight days later, on February 26, 2013, [plaintiff] filed its motion for reconsideration pursuant to Rule 59(e).” Of course, even a simple calculation demonstrates that plaintiff’s motion was not filed within 28 days of the Court’s entry of judgment. Rather, the time period between January 28, 2013 and February 26, 2013 is twenty nine days. Even after defendants pointed out the untimeliness of plaintiff’s motion, plaintiff continued to erroneously assert to this Court that the motion was timely filed. Although miscalculations of time may occur, one would assume that before persisting in its representation of timeliness, plaintiff would have double-checked its efforts.

The Court went on to strongly reject each of the EEOC’s offered reasons for reconsideration.  The EEOC argued that the Court improperly excluded an affidavit by their “expert” race-rater.  The Court disagreed:

Plaintiff disingenuously attempts to argue that this is not a “new analysis, but rather a reanalysis.” On its face, Dr. Murphy’s opinion was created in response to a motion filed by defendants and constitutes a different analysis, which was not timely disclosed to defendants. Plaintiff argues that Sixth Circuit law prevents this Court from striking portions of an affidavit that contradict deposition testimony. This, however, is not what the Court did. Regardless, although plaintiff devotes a significant amount of briefing to this issue, plaintiff wholly fails to address the fact that the Court did go on to consider this opinion and reject it. Plaintiff simply offers no grounds for reconsideration on this point.

The EEOC then argued that the Court should have considered [non-binding] EEOC guidelines that ask employers to maintain race records of employee applicants.  Again, the Court was not pleased:

[P]laintiff simply pointed out that defendants did not maintain data and that there was no evidence in the record indicating as such. Plaintiff asked for no relief and did not argue the legal ramifications of any alleged failure. Now, in a motion for reconsideration, plaintiff asks for (1) an inference of spoliation; (2) an inference of adverse impact; (3) a finding of estoppel and/or unclean hands. Because defendants [sic] never sought this relief or made any of these arguments in the multiple motions filed in this matter, the Court will not consider these arguments now.

Next, the EEOC argued that the Court misapplied Daubert.  The Court did not buy it:

Upon review, the Court finds that plaintiff fails to establish that it is entitled to reconsideration. All of the arguments raised by plaintiff are re-arguments of issues previously addressed and resolved by the Court. Moreover, the Court will not consider the newly filed affidavit submitted by Dr. Murphy. Plaintiff offers no explanation or reason as to why the information was not submitted in connection with the original briefing. Nor does plaintiff establish that the information constitutes new evidence that could not have been discovered in sufficient time to move under Rule 59(e).

The EEOC’s final arguments for reconsideration involved a hodgepodge of “hypothetical challenges.”  The Court rejected each of them for various reasons.  The Court rejected the EEOC’s request that the Court search the record for “evidence supporting its argument.”  The Court rejected arguments that the EEOC “did not make … in the initial briefing.”  Most interesting, however, was the EEOC’s argument that laymen can determine the race of individuals, and that they did not even have to rely on the “expert” testimony.  That is, the EEOC tried to argue that anyone walking down the street can determine the race of someone just by looking at them!  Or, put differently, perceived skin color is all that matters.  [It should be noted that this is precisely the opposite of the idea advanced in Fisher, where the University of Texas lawyers argued that perceived race is irrelevant, and only “self-identification” matters.]  The Court rejected this argument with extreme prejudice:

Upon review, the Court finds that plaintiff fails to present any grounds justifying reconsideration of this Court’s previous Order. In this case, plaintiff’s expert asked the “race-raters” to identify a person’s race from among five race categories, including one labeled “other.” Plaintiff offers no evidence that a layperson can determine whether for example, a medium-skinned individual identifies with the Caucasian race or whether the individual is bi-racial and, thus would belong in the “other” category. As plaintiff points out, this Court is the trier of fact in this case. This Court or any trier of fact would not be able to place each photograph into one of five “race categories” without committing some errors. Without knowing the percentage of errors the Court would surely commit, the evidence would not be admissible. Accordingly, plaintiff’s argument is not well-taken.

After this beat-down, one would hope that the EEOC would stop trying to pigeonhole individuals into racial categories because of how they “look” on their DMV photos.  Unfortunately, however, the EEOC has already appealed.  I will keep you apprised of the case — including potential PLF involvement — as it goes forward.

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