Nos. 14-20410, 20462UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT_________________________________________________

ROBERT R. MCDANIEL,

Appellant,

v.

MOMENTIVE SPECIALTY CHEMICALS, INC., et al.,

Appellees._________________________________________________

Appeal from Order of May 29, 2014 issued by theHonorable Kenneth M. Hoyt, United States District Court,

Southern District of Texas, in Case No. 4:13-cv-1235_________________________________________________

BRIEF OF AMICUS CURIAE AARPSUPPORTING PLAINTIFF-APPELLANT ROBERT MCDANIEL

AND URGING REVERSAL_________________________________________________

DANIEL B. KOHRMAN

LAURIE A. MCCANN

DARA S. SMITH*AARP FOUNDATION LITIGATION

601 E Street, NWWashington, DC 20049202-434-6280 (p); 202-434-6424 (f)dsmith@aarp.org

Counsel for Amicus Curiae AARP*Counsel of Record

C-1

ROBERT MCDANIEL v. MOMENTIVE SPECIALTY CHEMICALS, INC., et al.Nos. 14-20410, 20462

CERTIFICATE OF INTERESTED PERSONS CORPORATE DISCLOSURESTATEMENT OF AARP

Pursuant to FRAP 26.1 and Fifth Circuit Rule 28.2.1, the undersigned

counsel of record verifies that those persons or entities listed below have or may

have an interest in the outcome of this case:

1. Cates, Susan E. – counsel for Appellees

2. Hoyt, The Honorable Kenneth M. – Judge, United States District Court

3. Lee, Stephen Howard – counsel for Appellees

4. McDaniel, Robert – Appellant

5. Momentive Specialty Chemicals, Inc. – Appellee

6. Oilfield Technology Group, Inc. – Appellee

7. Palumbos, Robert M. – counsel for Appellant

8. AARP – Amicus Curiae

9. Smith, Dara – counsel for Amicus Curiae AARP

The Internal Revenue Service has determined that AARP is organized and

operated exclusively for the promotion of social welfare pursuant to Section

501(c)(4) (1993) of the Internal Revenue Code and is exempt from income tax.

C-2

AARP is also organized and operated as a non-profit corporation pursuant to Title

29 of Chapter 6 of the District of Columbia Code 1951.

Other legal entities related to AARP include AARP Foundation, AARP

Services, Inc., Legal Counsel for the Elderly, Experience Corps, d/b/a. AARP

Experience and AARP Financial.

October 7, 2014 Respectfully Submitted

/s/Dara S. SmithDara S. SmithAARP Foundation Litigation

i

TABLE OF CONTENTS

CERTIFICATE OF INTERESTED PERSONS CORPORATEDISCLOSURE STATEMENT OF AARP............................................................C-1

TABLE OF AUTHORITIES................................................................................... iv

STATEMENT OF INTEREST OF AMICUS CURIAE ..........................................1

SUMMARY OF THE ARGUMENT .......................................................................2

ARGUMENT ...........................................................................................................5

I. THE DISTRICT COURT BEGAN ITS ANALYSIS BYMISSTATING THE FUNDAMENTAL PURPOSE OF THEOLDER WORKERS BENEFITS PROTECTIONACT……………………. .......................................................................................5

II. THE SUPREME COURT IN OUBRE UNEQUIVOCALLYHELD THAT AN INDIVIDUAL NEED NOT RETURNCONSIDERATION RECEIVED IN RETURN FOR AWAIVER OF ADEA CLAIMS PRIOR TO CHALLENGINGTHE WAIVER’S VALIDITY UNDER THE OWBPA..................................7

III. THE DISTRICT COURT INCORRECTLY HELD THATMCDANIEL’S RELEASE OF CLAIMS WAS “KNOWINGAND VOLUNTARY” WITHOUT CONSIDERINGMCDANIEL’S ALLEGATION THAT MOMENTIVE USED AMATERIAL MISREPRESENTATION TO INDUCE HIM TOSIGN THE WAIVER…………………………………………………………… .................8

A. Whether an Employer Made a Material Misrepresentationof Fact Relating to the Waiver is Part of the “Totality ofthe Circumstances” Test for Whether a Release of Claimswas “Knowing and Voluntary” Under the OWBPA............................8

ii

B. The District Court Failed to Consider McDaniel’sAllegation that Momentive Tricked Him into Signing theWaiver by Telling Him that His Position was beingEliminated, When it was Actually Filled by a SubstantiallyYounger Employee .............................................................................12

IV. THE DISTRICT COURT IMPROPERLY AWARDEDATTORNEYS’FEES TO DEFENDANTS, IGNORING THEHIGH STANDARD FOR BAD FAITH AND FAILING TOMAKE SUPPORTING FINDINGS OF FACT TO MEETTHAT STANDARD…………………................................................................14

A. In ADEA Cases, a Court Only May Award Attorneys’ Feesto the Defendant if the Plaintiff Acted in Bad FaithBecause the ADEA Itself Does Not Provide for Attorneys’Fees Awards to Defendants ................................................................14

B. The District Court Did Not Recognize or Apply theStringent “Bad Faith” Standard, Nor did it Provide AnyMeaningful Factual Support for its Conclusion thatMcDaniel’s Conduct or Intent Met this Standard .............................17

CONCLUSION .....................................................................................................22

CERTIFICATE OF COMPLIANCE .....................................................................23

CERTIFICATE OF SERVICE AND FILING .......................................................24

iii

TABLE OF AUTHORITIES

Cases

Allen v. City of Texas City, 2014 WL 2547763 (S.D. Texas, 2014) ...........................17

Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (1975) .....................15, 16

Batson v. Neal Spelce Associates, Inc., 805 F.2d 546 (5th Cir. 1986).................... passim

Bennett v. Williams v. Phillips Petroleum Co., 23 F.3d 930 (5th Cir. 1994) ............9, 10

Blakeney v. Lomas Info. Sys., Inc., 65 F.3d 482 (5th Cir. 1995) ...................................6

Chaplin v. Nationscredit Corp., 307 F.3d 368 (5th Cir. 2002) .................................5, 8

Coors Brewing Co., 189 F.3d 1221 (10th Cir. 1999) ..................................................9

Cova v. Coca-Cola Bottling Co. of St. Louis, Inc.,574 F.2d 958 (8th Cir. 1978) .................................................................14, 16

Edwards v. General Motors, 153 F.3d 242 (5th Cir.1998) .........................................17

EEOC v. O & G Spring and Wire Forms Specialty Co.,38 F.3d 872 (7th Cir. 1994) ........................................................................14

Griffin v. Kraft Gen. Foods, Inc., 62 F.3d 368 (11th Cir. 1995).......................9, 10, 13

Griffith v. Novation, LLC, No. 3:04-CV-2059-D,2006 U.S. Dist. LEXIS 30946, (N. D. Tex. 2006) ..................................10, 13

Guevara v. Maritime Overseas Corp., 59 F.3d 1496 (5th Cir.1995) .....................16, 19

Ill. Cent. Gulf R. Co. v. Delta Millwork, Inc.,802 F.2d 156 (5th Cir. 1986) .......................................................................16

Long v. Sears Roebuck & Co., 105 F.3d 1529 (3d Cir. 1997)...................................6, 8

iv

Mizrany v. Tex. Rehab. Comm’n, 522 F. Supp. 611 (S.D. Texas 1981) ......................14

Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400 (1968)....................................15

O’Hare v. Global Nat. Rec., Inc., 898 F.2d 1015 (5th Cir. 1990) ................................9

Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998).......................................2, 3, 7

Richardson v. Alaska Airlines, Inc., 750 F.2d 763 (9th Cir.1984)...............................14

Roadway Exp., Inc. v. Piper, 447 U.S. 752 (1980)................................................16, 19

Tolan v. Cotton, 134 S.Ct. 1861 (2014)…………………………………. ......................13, 14

Wastak v. Lehigh Valley Health Network, 342 F.3d 281 (3d Cir. 2003) .................9, 10

Williams v. Phillips Petroleum Co., 23 F.3d 930 (5th Cir. 1994) ..................................7

Statutes, Rules, and Regulations

Age Discrimination in Employment Act (ADEA),29 U.S.C. § 261(b) .................................................................................14, 1529 U.S.C. §§ 621-34.......................................................................................129 U.S.C. § 626(b) .................................................................................14, 1529 U.S.C. § 626(f)(3)................................................................................8, 13

Fair Labor Standards Act (FLSA),20 U.S.C.A. § 216(b)....................................................................................15

Older Workers Benefit Protection Act (OWBPA),Pub. L. No. 101-433, 104 Stat. 978 (1990).....................................................2

29 C.F.R. § 1622(3) ..........................................................................................11, 13

F.R.A.P. 29(5) ...........................................................................................................1

v

Legislative History

S. Rep. No. 101-79 (1989) ................................................................................10, 11

Miscellaneous

Record on Appeal............................................................................................. passim

1

STATEMENT OF INTEREST OF AMICUS CURIAE1

AARP is a nonpartisan, nonprofit organization with a membership that helps

people turn their dreams into real possibilities, strengthens communities and fights

for issues that matter most to families, such as employment, healthcare, income

security, retirement planning, affordable utilities and protection from financial

abuse. AARP is dedicated to addressing the needs and interests of older workers,

and strives through legal and legislative advocacy to preserve the means to enforce

their rights. About one third of AARP members work or are seeking work, and

thus, are protected by the Age Discrimination in Employment Act (ADEA), 29

U.S.C. §§ 621-34 (2012).

One of AARP’s primary objectives is to achieve dignity and equality in the

work place through positive attitudes, practices, and policies regarding work and

retirement. Through its research, publications, and programs, AARP seeks to

eliminate ageist stereotypes, to encourage employers to hire and to retain older

workers, and to help older workers overcome the obstacles they encounter related to

their age.

1 Pursuant to F.R.A.P. 29(5), Amicus Curiae AARP states that no counsel for anyparty authored this brief in whole or in part and that no party or entity other thanamicus curiae, its members, or counsel made any monetary contribution to thepreparation or submission of this brief.

2

AARP championed the passage of the Older Workers Benefit Protection Act

(OWBPA), Pub. L. No. 101-433, 104 Stat. 978 (1990), and since then has filed

numerous amicus curiae briefs in the federal appellate courts, as well as the U.S.

Supreme Court, regarding the proper interpretation and application of the

OWBPA. Most significantly, AARP participated as amicus curiae in Oubre v. Entergy

Operations, Inc., 522 U.S. 422 (1998), a decision that was dispositive of one of the

issues presented in this case.

SUMMARY OF THE ARGUMENT

From the outset of its analysis, the district court demonstrated that it

misunderstood the OWBPA’s purpose and provisions, stating that the OWBPA was

enacted for the benefit of employers, rather than older workers. However, as the

Supreme Court explained in Oubre v. Entergy Operations, Inc., 522 U.S. 422, 427

(1998), the OWBPA was enacted to protect older workers from unwittingly signing

away their rights in difficult or even coercive circumstances. The Court also

unequivocally held that an individual is not required to return or “tender back”

consideration for a waiver in order to allege a violation of the ADEA. Id. at 427.

Yet, the court below ignored Oubre, concluding that McDaniel “ratified” the release

of claims by keeping the consideration he received directly contradicts this

unambiguous precedent.

3

In addition, the district court gave short shrift to McDaniel’s claim that as a

result of a misrepresentation of material fact – specifically, Momentive’s statement

that McDaniel’s position was being eliminated in a restructuring, which it later

admitted was not the case – the waiver he signed was not “knowing and voluntary.”

The court concluded, with no supporting analysis and no substantive factual

findings, that the “totality of the circumstances” showed that the waiver was

“knowing and voluntary.” The district court erred in omitting any explanation of

how or even whether it had taken the allegations of material misrepresentation into

account.

Precedent, legislative history, and the pertinent regulations lead to the

inexorable conclusion that the “totality of the circumstances” analysis must take into

account not only the statutory requirements for an enforceable waiver of claims, but

also any other relevant circumstances, such as fraud, duress or coercion, that relate

to the waiver. Congress enacted the OWBPA because there was overwhelming

evidence that older workers were being forced or tricked into waiving their rights

under the ADEA without knowing or understanding the facts of their potential

claims. Convincing older workers to waive their claims before they realize they have

any by telling them that their positions were eliminated, when in actuality they were

4

being replaced by younger workers, is exactly the type of behavior the OWBPA was

enacted to combat.

Finally, the court below awarded attorney fees to the defendant, arriving at

the extraordinary conclusion – with nearly no analysis and no meaningful fact-

finding whatsoever – that the plaintiff brought this suit in bad faith. A court finding

“bad faith” on the plaintiff’s part must meet the “stringent” standard of finding that

the plaintiff had an improper motive or acted with reckless disregard for his or her

duty to the court. Batson v. Neal Spelce Associates, Inc., 805 F.2d 546, 549 (5th Cir.

1986). The district court never recognized this standard or suggested that it had

been met in this case. In fact, the district court made no supporting findings of fact

about the specifics of McDaniel’s motives or conduct, simply concluding that he had

taken too many depositions and made too many motions about “irrelevant matters,”

none of which the court identified. This conclusory analysis is insufficient to meet

the high standard required for a finding of bad faith.

The district court’s decision turns the purpose of the statutory attorneys’ fees

regime entirely on its head. The ADEA makes awards of attorneys’ fees to prevailing

plaintiffs automatic, but does not provide for awards of attorneys’ fees to defendants

– an especially strong indication that Congress intended to encourage plaintiffs to

act as private attorneys-general enforcing their own rights. The threat that courts

5

will instead readily require older workers to pay defendants’ attorneys’ fees by

blithely using their inherent authority to find bad faith, as the district court did

here, will significantly discourage discrimination suits, further limiting access to the

courts to those who can afford to risk the prohibitive cost. That chilling effect will

be amplified if failure means an award of attorneys’ fees to the defendant in

circumstances like those in this case, in which an ADEA plaintiff seeks to investigate

the plausible possibility of a pattern and practice of age discrimination by his or her

former employer.

For these reasons, the district court’s decision must be reversed and

remanded.

ARGUMENT

I. THE DISTRICT COURT BEGAN ITS ANALYSIS BY MISSTATINGTHE FUNDAMENTAL PURPOSE OF THE OLDER WORKERSBENEFITS PROTECTION ACT.

“The policy of the OWBPA is . . . clear from its title: It is designed to protect

the rights and benefits of older workers.” Oubre, 522 U.S. at 427 (emphasis added).

As the Supreme Court and this Court have both recognized, the OWBPA was

enacted to prevent employers from unfairly obtaining waivers from employees who

were unaware of their rights under the ADEA and who lacked the knowledge to

ascertain whether they had a potential claim under the ADEA. Chaplin v.

6

Nationscredit Corp., 307 F.3d 368, 375 (5th Cir. 2002) (“Congress adopted the

OWBPA as an amendment to the Age Discrimination in Employment Act . . . to

ensure that workers did not carelessly waive a potential ADEA claim.”); see also Long

v. Sears Roebuck & Co., 105 F.3d 1529, 1543 (3d Cir. 1997) (“The OWBPA was

designed to protect employees negotiating with employers, not to protect employers

from overreaching plaintiffs. Employers are, by far, in a better position to protect

their own interests than are older employees.” ).

Nonetheless, at the outset of its analysis, the district court stated exactly the

opposite. Relying on dicta from case prior to the Supreme Court’s decision in

Oubre, the court described the OWBPA as a statute that “amended the ADEA to

permit employers to enforce waivers of age discrimination claims.” Record On

Appeal (“ROA”) 1594 (citing Blakeney v. Lomas Info. Sys., Inc., 65 F.3d 482, 484 (5th

Cir. 1995)). This characterization is exactly the opposite of the OWBPA’s purpose.

The district court’s inverted view of the OWBPA’s underlying purpose appears to be

a key factor in the court’s flawed analysis in this case.

7

II. THE SUPREME COURT IN OUBRE UNEQUIVOCALLY HELD THATAN INDIVIDUAL NEED NOT RETURN CONSIDERATIONRECEIVED IN RETURN FOR A WAIVER OF ADEA CLAIMS PRIORTO CHALLENGING THE WAIVER’S VALIDITY UNDER THEOWBPA.

The district court overlooked not only the OWBPA’s purpose, but also failed

to apply decisive Supreme Court precedent on the issue of whether waivers of

ADEA rights and claims can be ratified. In Oubre, the Supreme Court emphatically

declared that allowing waivers to be ratified “would frustrate the [OWBPA’s]

practical operation as well as its formal command.” 522 U.S. at 427. The Court

explained:

In many instances a discharged employee likely will havespent the moneys received and will lack the means totender their return. These realities might tempt employersto risk non-compliance with the OWPBA’s waiverprovisions, knowing it will be difficult to repay the moneysand relying on ratification. We ought not to open the door to

an evasion of the statute by this device.

Id. (emphasis added).

Nevertheless, citing pre-Oubre case law, the district court applied the common

law theory of ratification to summarily dismiss McDaniel’s claim that the waiver he

signed was invalid under the ADEA. ROA 1595 (citing Williams v. Phillips Petroleum

Co., 23 F.3d 930, 937 (5th Cir. 1994)). However, as this Court has acknowledged,

Oubre rejected any claim that “the common law defenses of ratification and tender

8

back survived the OWBPA.” Chaplin, 307 F.3d at 375; see also Long, 105 F.3d at

1534 and1539 (“. . . the enactment of the OWBPA changed the legal landscape with

respect to the release of ADEA claims [and] . . . in enacting the OWBPA, Congress

intended to occupy the area of ADEA releases and in doing so, to supplant the

common law. . . .”). Oubre and the OWBPA make it unequivocally clear that

waivers of ADEA rights and claims may not be ratified, and the district court erred

in ruling that McDaniel ratified the waiver he signed by retaining the consideration

he received for it.

III. THE DISTRICT COURT INCORRECTLY HELD THAT MCDANIEL’SRELEASE OF CLAIMS WAS “KNOWING AND VOLUNTARY”WITHOUT CONSIDERING MCDANIEL’S ALLEGATION THATMOMENTIVE USED A MATERIAL MISREPRESENTATION TOINDUCE HIM TO SIGN THE WAIVER.

A. Whether an Employer Made a Material Misrepresentation of FactRelating to the Waiver is Part of the “Totality of the Circumstances”Test for Whether a Release of Claims Was “Knowing and Voluntary”Under the OWBPA.

Under the OWBPA, to show that a waiver of ADEA claims is valid and

enforceable, an employer must prove that the waiver was “knowing and voluntary.”

29 U.S.C. § 626(f)(3). The OWBPA sets out eight prerequisites that, “at a

minimum,” must be fulfilled to establish that a waiver is valid, including, inter alia,

“a specific mention of the ADEA and encouragement to consult a lawyer.” Chaplin,

307 F.3d at 375. These requirements are not an exclusive list; they are a “floor,

9

rather than ceiling, for defining knowing and voluntary.” Wastak v. Lehigh Valley

Health Network, 342 F.3d 281, 294 n.8 (3d Cir. 2003) (internal citations omitted); see

also Bennett v. Coors Brewing Co., 189 F.3d 1221, 1228 (10th Cir. 1999) (holding that

statutory prerequisites “are not exclusive and other circumstances . . . may impact

whether a waiver under the OWBPA is knowing and voluntary.”); Griffin v. Kraft

Gen. Foods, Inc., 62 F.3d 368, 373-74 (11th Cir. 1995) (per curiam) (“We hold that

nonstatutory circumstances, such as fraud, duress, or coercion in connection with

the execution of the waiver, may render an ADEA waiver not ‘knowing and

voluntary.’”).

Before the enactment of the OWBPA, this Court used a “totality of the

circumstances” approach to assess whether a waiver of an ADEA claim was knowing

and voluntary. O’Hare v. Global Nat. Rec., Inc., 898 F.2d 1015, 1017 (5th Cir. 1990).

Now, in light of the OWBPA’s requirements, the “totality of the circumstances” test

involves consideration of both the statutory prerequisites and any other relevant

circumstances, such as the plaintiff’s sophistication and whether the employer

coerced the employee to sign the waiver of claims. See, e.g., Wastak, 342 F.3d at 294

n.8; Bennett, 189 F.3d at 1228-29; Griffin, 62 F.3d at 373.2

2 The totality of the circumstances test was originally a federal common lawapproach created by the courts prior to the enactment of the OWBPA. O’Hare, 898F.2d at 1017; Wastak, 342 F.3d at 294 n.8; Bennett, 189 F.3d at 1228-29; Griffin, 62

10

When an employer misrepresents a material fact relating to the waiver, that is

plainly a factor that warrants consideration under the totality of the circumstances

test. Griffith, 2006 U.S. Dist. LEXIS 30946 at *12-13 (considering whether employer

made a misrepresentation of fact about why employee’s job was eliminated as part of

the totality of the circumstances test); cf. also Griffin, 62 F.3d at 373-74 (considering

fraud in connection with the execution of the waiver as a factor in the totality of the

circumstances test). Indeed, Congress enacted the OWBPA to protect older workers

in exactly this type of situation, in which employers tricked or manipulated workers

into signing away their potential claims without full knowledge of the facts and

circumstances surrounding their terminations. See S. Rep. No. 101-79 (1989)

(Report of the Senate Committee on Labor and Human Resources regarding S. 54,

which was enacted as the OWBPA). The relevant Senate Report explains that older

workers needed this protection because “[t]he pre-emptive waiver of rights occurs . . .

before an employee is even aware of any potential or actual pattern of

F.3d at 373. Although this Court has not yet addressed whether the “totality of thecircumstances” test still applies, other courts that had adopted this test prior to theOWBPA continue to use it now, incorporating both statutory and non-statutoryfactors. Wastak, 342 F.3d at 294 n.8; Bennett, 189 F.3d at 1228-29; Griffin, 62 F.3d at373; Griffith v. Novation, LLC, No. 3:04-CV-2059-D, 2006 U.S. Dist. LEXIS 30946,*9-14 (N. D. Tex. 2006) (unpublished) (discussing the Fifth Circuit’s “totality of thecircumstances” test as it interacts with the OWBPA).

11

discrimination,” and a waiver “also may preclude the employee from asserting claims

that arise out of subsequent discriminatory conduct, e.g., hiring younger workers to

replace the terminated older workers.” Id. at 9.

Congress was particularly troubled by voluminous evidence that older workers

were being forced to choose between waiving potential claims, about which they

might not even be aware at the time, and facing a layoff without compensation and

the prospect of extended unemployment. See id. at 9-12. This need to ensure that

older workers are not being manipulated or coerced into signing away their rights is

even more evident where an employer goes a step further than taking advantage of

the workers’ incomplete knowledge by affirmatively deceiving employees into

believing that their positions are being eliminated, when those positions are actually

filled by younger workers.

Accordingly, the Senate Committee Report states that among the criteria for a

valid waiver, an employee “must have acted in the absence of duress, coercion, or

mistake of material fact.” Id. at 20. And, the pertinent regulations list “a material

mistake, omission, or misstatement in the information furnished by the employer to

an employee in connection with the waiver” as one of the “[o]ther facts and

circumstances” that relate to an assessment of whether the waiver was knowing and

voluntary. 29 C.F.R. § 1622(3). Consequently, the “totality of the circumstances”

12

approach must take any allegations of material misrepresentations of fact into

account.

B. The District Court Failed to Consider McDaniel’s Allegation thatMomentive Tricked Him into Signing the Waiver by Telling Himthat His Position was being Eliminated, When it was Actually Filledby a Substantially Younger Employee.

In this case, McDaniel alleged precisely the sort of facts that concerned

Congress prior to the OWBPA’s enactment: he averred that he signed the release of

ADEA (and other) claims after he “was told that his position was being eliminated

due to restructuring,” but that later, he “was informed that his position at the

company was not eliminated because of restructuring, and was being held by an

individual almost twenty years younger than himself.” ROA 1591-92. Nevertheless,

the district court tersely concluded, “after evaluating the facts, in the light most

favorable to the plaintiff, under a ‘totality of the circumstances’ approach,” that

McDaniel knowingly and voluntarily agreed to waive his potential ADEA claims. Id.

at 1594-95 & n.1.

These conclusory statements wholly fail to address McDaniel’s allegations that

Momentive misrepresented the reason for his termination, and that this

misrepresentation led him to sign the waiver under false pretenses. In the absence

of any explanation, it is impossible to determine whether the court took the alleged

material misrepresentation into account at all, as it was required to do in applying

13

the “totality of the circumstances” test. See 29 C.F.R. § 1622(3); Griffin, 62 F.3d at

373-74 (stating that fraud, duress, or coercion must be considered); Griffith, 2006

U.S. Dist. LEXIS 30946, at *12-13 (taking material misrepresentation into account,

but finding that the employee’s position had in fact been eliminated).3 Indeed, the

court was silent as to whether Momentive actually made a material

misrepresentation in telling McDaniel that his position was being eliminated due to

restructuring. The decision does not suggest that Momentive ever disputed

McDaniel’s contentions that his position was not eliminated, that no restructuring

actually had taken place, and that his former position was filled by a much younger

worker – but the court inexplicably failed even to mention these allegations in its

“knowing and voluntary” analysis. See ROA 1592 (“In April 2012, McDaniel was

informed that his position at the company was not eliminated because of

restructuring, and was being held by an individual almost twenty years younger than

himself.”), 1594-95 & n.1 (concluding that waiver was “knowing and voluntary”).

The Supreme Court has recently underscored the importance of making all

factual inferences in favor of the non-movant at summary judgment. Tolan v. Cotton,

134 S.Ct. 1861, 1866 (2014) (criticizing the court of appeals for “failing to credit

3 Furthermore, the court did not appear to recognize that the employer bears theburden to show that the employee knowingly and voluntarily agreed to release hisclaims. See 29 U.S.C. § 626(f)(3).

14

evidence that contradicted some of its key factual conclusions”). Yet, despite the

court’s recitation that it viewed the facts “in the light most favorable to plaintiff,” its

cursory assessment gave no indication that it had taken McDaniel’s allegations into

account at all, let alone that it had actually presumed their truth in considering

whether the waiver was “knowing and voluntary.” See id.

IV. THE DISTRICT COURT IMPROPERLY AWARDED ATTORNEYS’FEES TO DEFENDANTS, IGNORING THE HIGH STANDARD FORBAD FAITH AND FAILING TO MAKE SUPPORTING FINDINGS OFFACT TO MEET THAT STANDARD.

A. In ADEA Cases, a Court Only May Award Attorneys’ Fees to theDefendant if the Plaintiff Acted in Bad Faith Because the ADEAItself Does Not Provide for Attorneys’ Fees Awards to Defendants.

The ADEA is unique among civil rights statutes in that plaintiffs who prevail

on a substantial issue in ADEA cases are always entitled to attorney’s fees, but under

the statute prevailing defendants are not entitled to attorneys’ fees . See 29 U.S.C.

§§ 626(b), 261(b); EEOC v. O & G Spring and Wire Forms Specialty Co., 38 F.3d 872,

882-83 (7th Cir. 1994) (prevailing defendants may not recover fees under ADEA);

Richardson v. Alaska Airlines, Inc., 750 F.2d 763, 767 (9th Cir.1984) (same); Cova v.

Coca-Cola Bottling Co. of St. Louis, Inc., 574 F.2d 958, 962 (8th Cir. 1978(same);

Mizrany v. Tex. Rehab. Comm’n, 522 F. Supp. 611, 618 (S.D. Texas 1981) (same).

Congress incorporated into the ADEA the procedural provisions of section 216(b)

of the Fair Labor Standards Act (“FLSA”), which state that “[t]he court in such [an]

15

action shall . . . allow a reasonable attorney's fee to be paid by the defendant.” 29

U.S.C. § 626(b) (ADEA); 20 U.S.C.A. § 216(b) (emphasis added). Thus, the FLSA,

and consequently the ADEA, do not provide for awards of attorneys’ fees to

prevailing defendants.

In general, fee-shifting regimes in civil rights statutes reflect Congress’ intent

“to rely heavily on private enforcement to implement public policy and . . . allow

counsel fees so as to encourage private litigation.” Alyeska Pipeline Serv. Co. v.

Wilderness Soc’y, 421 U.S. 240, 263 (1975) (superseded by statute on other grounds)

(discussing attorneys’ fees awards to plaintiffs in Title II of the Civil Rights Act of

1964); Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 401-2 (1968) (same).

Indeed, in civil rights cases, as the Supreme Court explained, “If successful plaintiffs

were routinely forced to bear their own attorneys’ fees, few aggrieved parties would

be in a position to advance the public interest by invoking the injunctive powers of

the federal courts. Congress therefore enacted the provision for counsel fees . . . to

encourage individuals injured by racial discrimination to seek judicial relief” under

the statute. Newman, 390 U.S. at 401-2. In the ADEA and FLSA, where fee awards

to prevailing plaintiffs are mandatory, and the statute does not provide for fee

awards to prevailing defendants, there is an even stronger indication that Congress

16

intended to encourage plaintiffs to enforce their rights without the deterrent threat

of being forced to pay defendants’ fees.

Because there is no statutory route to attorneys’ fees for a prevailing ADEA

defendant, a court only may award those fees pursuant to its inherent powers. Cova,

574 F.2d at 962. Federal courts have traditionally had the equitable power to

contravene the “American rule,” whereby litigants pay their own attorneys’ fees,

“when the losing party has ‘acted in bad faith, vexatiously, wantonly, or for

oppressive reasons.’” Ill. Cent. Gulf R. Co. v. Delta Millwork, Inc., 802 F.2d 156, 158

(5th Cir. 1986) (quoting Alyeska Pipeline Serv. Co., 421 U.S. at 247-59). This Court

has held that, “[i]n this class of cases, the underlying rationale of “fee shifting” is

punitive.” Batson v. Neal Spelce Associates, Inc., 805 F.2d 546, 549 (5th Cir. 1986); see

also Guevara v. Maritime Overseas Corp., 59 F.3d 1496, 1503 (5th Cir.1995) (“The

bad-faith exception to the American rule . . . punishes abuses of the litigation

process.”). Therefore, the “bad faith” exception only applies when a party’s case is

wholly without legal foundation, or when the party’s litigation tactics warrant

punishment. Ill. Cent. Gulf R. Co, 802 F.2d at 158; see also Roadway Exp., Inc. v. Piper,

447 U.S. 752, 757 (1980).

Treading lightly outside the bounds of statutory authority, courts do not

readily award attorneys’ fees under a bad faith analysis; “[t]he standards for bad faith

17

are necessarily stringent.” Batson, 805 F.2d at 549. As such, a defendant seeking to

show that a plaintiff acted in bad faith carries the heavy burden of showing that the

plaintiff had an improper motive or reckless disregard for the duties owed to the

court. Id.; see also Allen v. City of Texas City, 2014 WL 2547763, 9 (S.D. Texas, 2014);

see also generally Edwards v. General Motors, 153 F.3d 242, 246 (5th Cir.1998).

B. The District Court Did Not Recognize or Apply The Stringent “BadFaith” Standard, Nor did it Provide Any Meaningful Factual Supportfor its Conclusion that McDaniel’s Conduct or Intent Met thisStandard.

The district court’s conclusion that McDaniel brought this case in bad faith is

fatally flawed. The district court did not acknowledge, let alone adhere to, the

exceptionally high standard for a “bad faith” finding. As a preliminary matter, the

court did not conclude that McDaniel had an improper motive or that he had

“reckless disregard for the duties owed to the court.” Batson, 805 F.2d at 549. For

this reason alone, the decision cannot stand.

In any event, the decision is wholly unsupported by any meaningful findings

of fact. The court concluded that McDaniel had acted in bad faith solely because he

“admitted that the release that he executed complies with the requirements of the

Older Workers Benefit Protection Act (OWBPA),” and because of “numerous

depositions and motions filed concerning irrelevant matters.” ROA 2115. This

analysis is neither accurate nor sufficient.

18

First, for the reasons discussed above, McDaniel did not concede that he

complied with the OWBPA’s requirements; rather, he argued that notwithstanding

compliance with statutory requirements, Momentive’s material misrepresentation

about the reason for his termination prevented him from knowingly and voluntarily

signing the release of claims. See above, section III. Moreover, as also discussed

above, McDaniel did not and cannot “ratify” the release (see above, section II);

therefore, whether or not he ultimately prevails, he has at least raised a viable claim

that warrants the court’s consideration. Therefore, the first prong of the district

court’s analysis fails.

The second and final sentence of the district court’s analysis – that McDaniel

took depositions and made motions about “irrelevant matters” – fares no better than

the first, as it lacks any concrete factual analysis or findings. This Court’s decision in

Batson v. Neal Spelce Associates, Inc., 805 F.2d 546, 549 (5th Cir. 1986), which dealt

with attorneys’ fees awarded for discovery misconduct pursuant to Federal Rule of

Civil Procedure 37, exemplifies the rare case in which a court has upheld an award

of attorneys’ fees to a defendant under the “bad faith” standard. In Batson, the

Court emphasized the “extensive findings of fact” made by the district court,

explaining exactly what Batson had done that constituted bad faith. Id. The district

court in that case had explicitly mentioned in its findings Batson’s failure to produce

19

evidence as to her post termination income, refusal to cooperate during depositions,

misuse of claims of privilege, deception of opposing counsel, and refusal to respond

to court ordered discovery. Id. Those findings soundly supported the district court’s

ultimate conclusion that Batson had engaged in “dilatory tactics” that amounted to

conducting litigation in bad faith. Id. at 551.

In stark contrast to Batson, the court below engaged in no factual analysis.

The court merely alluded to “numerous depositions and motions filed concerning

irrelevant matters” and peremptorily concluded that McDaniel had litigated in bad

faith. ROA 2115. The court did not identify the depositions and motions to which

it was referring, what matters these depositions and motions pertained to, how this

subject matter was irrelevant to the present litigation, or how exactly their

purportedly off-topic nature or their numerousness rose to the level of an “abuse of

the litigation process” that the “bad-faith” exception was designed to combat. See

Guevara, 59 F.3d at 1503.

This is entirely insufficient to support a “bad faith” finding, especially where

the power exercised by the Court is one which the Supreme Court has stated “must

be exercised with restraint.” Roadway Exp., 447 U.S. at 766. That restraint is

especially essential in the ADEA context, where Congress sought to encourage

plaintiffs to bring suit and enforce their rights. The district court’s decision

20

frustrates Congress’ intent by lowering the bar for awarding defendants attorneys’

fees to a cursory, unsupported “bad faith” finding based on virtually no analysis.

Moreover, the modest number of motions and depositions McDaniel pursued

in this case appear to have been anything but irrelevant. As McDaniel’s Motion for

Leave to File First Amended Complaint explains, he was seeking to add a pattern

and/or practice claim to his initial individual claim, based on facts he discovered

after filing the original complaint. ROA 777-80. The depositions that were the

subject of a comparatively mild discovery dispute below explored both McDaniel’s

individual claim and facts regarding the treatment of other older employees and

Defendant’s regular practices, which McDaniel alleged demonstrated a pattern and

practice of age discrimination in violation of the ADEA. ROA 781-90 (detailing

deposition testimony of employees who believed they had been victims of age

discrimination).

That the district court ultimately denied the motion to amend and did not

allow McDaniel to conduct all the discovery he sought does not remotely support a

finding of bad faith. Neither the orders denying McDaniel’s motions nor the

protective orders granted to Defendants contain any suggestion that McDaniel was

acting with a bad motive or engaging in abusive litigation tactics. In fact, other than

indicating the dispositions of those motions, the district court’s orders say nothing

21

at all, with the exception of one order denying McDaniel’s motion to compel a

deposition, which indicates that the motion is denied because it “it fails to

distinguish personal knowledge facts from attorney client privileged facts.” ROA

1117; see also ROA 1083, 1117, 1119.

Far from suggesting an improper motive or dilatory tactics on McDaniel’s

part, this record documents an ordinary discovery dispute – primarily based on fact-

finding related to a proposed amended complaint – that was simply not resolved in

McDaniel’s favor. Surely Congress intended individual ADEA plaintiffs to be

permitted to learn in discovery whether their own experiences were part of a larger

pattern of age discrimination, especially when substantial, concrete evidence to that

effect already exists. Congress cannot have intended that such older workers be

forced to proceed in fear that failure in pursuing evidence of systemic discrimination

will result in a punitive award of attorney fees to their opponents, even in the

absence of any indication from the court that they have done anything untoward. In

that event, ADEA plaintiffs will be reluctant indeed to take on the active

enforcement role that Congress envisioned for them.

22

CONCLUSION

For the foregoing reasons, the Court should reverse the district court’s

decision and remand for further proceedings.

Respectfully submitted,

/s/ Dara S. SmithDARA S. SMITH*DANIEL B. KOHRMAN

LAURIE A. MCCANN

AARP FOUNDATION LITIGATION

601 E Street, NWWashington, DC 20049202-434-6280 (p)202-434-6424 (f)dsmith@aarp.org

Counsel for Amicus Curiae AARP*Counsel of Record

October 7, 2014

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CERTIFICATE OF COMPLIANCE

1. This brief complies with the type-volume limitation of Fed. R. App. P.

28.1(e)(2) or 32(a)(7)(B) because this brief contains 4,841 words, excluding the parts

of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of Fed. R. App. P.

32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief

has been prepared in a proportionally spaced 14-point typeface using Microsoft

Word 2010.

Dated: October 7, 2014 /s/ Dara S. SmithDara S. SmithCounsel for Amicus Curiae AARP

24

CERTIFICATE OF SERVICE AND FILING

I hereby certify that on October 7, 2014, the foregoing Brief of Amicus

Curiae AARP Supporting Plaintiff-Appellant Robert McDaniel was electronically

filed with the Clerk of the Court for the United States Court of Appeals of the Fifth

Circuit using the appellate CM/ECF system which will send notice of such filing to

the following registered CM/ECF users:

Robert M. PalumbosDUANE MORRIS, LLP30 S. 17th Street, United PlazaPhiladelphia, PA 19103rmpalumbos@duanemorris.com215-979-1111 (p); 215-689-4940 (f)

Attorney for Appellant Robert R. McDaniel

Stephen Howard Lee713-226-6686 (p); 713-226-6286 (f)Susan E. Cates713-226-6709 (P); 713-226-6309 (F)PORTER & HEDGES, LLP36th Floor1000 Main StreetHouston, TX 77002slee@porterhedges.comscates@porterhedges.com

Attorneys for Momentive Specialty Chemicals, Inc. et al.

Dated: October 7, 2014 /s/ Dara S. SmithDara S. SmithCounsel for Amicus Curiae AARP