Caseflicks

Supreme Court of the United States • 2006

Arbaugh v. Y & H Corp.

546 U.S. 500 | 126 S. Ct. 1235 | 163 L. Ed. 2d 1097 | 2006 U.S. LEXIS 1819 | 19 Fla. L. Weekly Fed. S 110 | 74 U.S.L.W. 4138

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Takeaway

In short, this case establishes that Title VII’s fifteen-employee requirement goes to the merits of a plaintiff’s claim, not the federal court’s power to hear the case, unless Congress clearly says otherwise.

Background

Jenifer Arbaugh, a bartender and waitress at the Moonlight Cafe in New Orleans, sued the restaurant’s owner, Y & H Corporation, under Title VII and Louisiana law. She alleged that one of the owners sexually harassed her and forced her constructive discharge. The parties proceeded through pretrial proceedings without disputing that Y & H was covered by Title VII or that the federal court had jurisdiction.

After a two-day jury trial, Arbaugh won $40,000 in damages. Two weeks after judgment, Y & H moved to dismiss the entire action under Federal Rule of Civil Procedure 12(h)(3). For the first time, it argued that it had fewer than fifteen employees and therefore was not an "employer" under Title VII.

The District Court regarded the belated objection as unfair and wasteful, but believed Fifth Circuit precedent required treating Title VII’s fifteen-employee requirement as a limit on subject-matter jurisdiction. Following post-trial discovery and an employee-count determination, the court vacated Arbaugh’s judgment, dismissed her Title VII claim with prejudice, and dismissed her state-law claims without prejudice. The Fifth Circuit affirmed, and the Supreme Court granted review to resolve a circuit split over whether Title VII’s employee-numerosity requirement is jurisdictional or an element of the claim.

Issues

Issue #1

Whether Title VII’s requirement that an employer have fifteen or more employees limits a federal court’s subject-matter jurisdiction or instead constitutes an element of a plaintiff’s Title VII claim.

Holding

No, the fifteen-employee threshold is not jurisdictional; it is an element of a Title VII claim for relief.

Reasoning

Federal-question jurisdiction ordinarily exists under 28 U.S.C. § 1331 when a plaintiff pleads a colorable claim arising under federal law. Arbaugh’s complaint invoked Title VII, a federal statute, and her claim was not immaterial, frivolous, or asserted merely to manufacture jurisdiction. Thus, the district court had authority to adjudicate the action under § 1331.

Title VII’s own jurisdictional provision gives district courts jurisdiction over actions "brought under" the statute, but it does not make the fifteen-employee threshold a condition of that jurisdiction. The threshold instead appears in Title VII’s separate definitions section, which defines an "employer" as a person with fifteen or more employees for the required period.

The Court stressed the serious procedural consequences of mislabeling a claim element as jurisdictional. Subject-matter jurisdiction cannot be waived or forfeited, courts must examine it on their own initiative, and a jurisdictional defect requires dismissal of the entire action even after trial and judgment. By contrast, a failure-to-state-a-claim defense must be raised no later than trial on the merits under Rule 12(h)(2).

Treating the employee threshold as jurisdictional would also improperly allow a judge to resolve disputed facts that ordinarily belong to the jury when they concern an element of the plaintiff’s claim. It could additionally compel dismissal of related state-law claims despite a completed trial, whereas a court generally retains discretion to exercise supplemental jurisdiction after dismissal of a federal claim on the merits.

Congress may expressly make a statutory threshold jurisdictional, as it has done in statutes that plainly tie jurisdiction to such requirements as an amount in controversy. But Congress did not clearly state that Title VII’s coverage limitation is jurisdictional. The Court therefore adopted a clear rule: when Congress does not rank a statutory limitation on a statute’s coverage as jurisdictional, courts should treat it as nonjurisdictional.