Loeffler v. Frank,
486 U.S. 549 (1988)

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U.S. Supreme Court

Loeffler v. Frank, 486 U.S. 549 (1988)

Loeffler v. Frank

No. 86-1431

Argued January 11, 1988

Decided June 13, 1988

486 U.S. 549


Petitioner was discharged from his position with the United States Postal Service. Contending that his discharge resulted from sex discrimination, petitioner brought this suit against the Postmaster General in Federal District Court pursuant to § 717 of Title VII of the Civil Rights Act of 1964. The court found for petitioner and ordered his reinstatement with backpay, but refused to award prejudgment interest. The Court of Appeals affirmed the denial of prejudgment interest. Relying in part on Library of Congress v. Shaw, 478 U. S. 310, which held that sovereign immunity barred the payment of interest on attorney's fees awarded against the Library of Congress under Title VII, the court concluded that Congress had not waived the Postal Service's sovereign immunity as to prejudgment interest in a Title VII suit, even though Congress had provided in the 1970 Postal Reorganization Act, 39 U.S.C. § 401(1), that the Postal Service may "sue and be sued."

Held: Prejudgment interest may be awarded in a suit against the Postal Service brought under Title VII. Pp. 486 U. S. 554-565.

(a) By launching the Service into the commercial world and including a sue-and-be-sued clause in the Postal Reorganization Act, Congress removed the Service's cloak of sovereignty and gave it the status of a private commercial enterprise. The clause must be liberally construed, and the Service's liability must be presumed to be the same as that of any other business. Thus, Congress is presumed to have waived any otherwise existing immunity of the Service from interest awards. None of the exceptions to the liberal construction rule operate to overcome this presumption. Franchise Tax Board of California v. USPS, 467 U. S. 512. Pp. 486 U. S. 554-557.

(b) Since Title VII authorizes interest awards as a normal incident of suits against private parties, and since Congress, by enacting the sue-and-be-sued clause in the Postal Reorganization Act, has waived the Service's immunity from such awards, respondent may be subjected to an interest award in this case. Pp. 486 U. S. 557-558.

(c) There is no merit to respondent's contention that the waiver of sovereign immunity effected by the sue-and-be-sued clause has no force in this case. The history of the Postal Reorganization Act, with its emphasis

Page 486 U. S. 550

on the availability of strong remedies for discrimination in the federal employment context, makes clear that Congress' failure to extend Title VII protections to Postal Service employees did not reflect an intent to circumscribe the waiver of sovereign immunity effected by the sue-and-be-sued clause, but, rather, was a determination that a Title VII cause of action was unnecessary in light of such alternative remedies. Nor is the sue-and-be-sued clause irrelevant merely because, when Congress extended a Title VII cause of action to federal employees in 1972, it included special procedures and limitations applicable only in actions against federal defendants. Neither the language of § 717 nor its legislative history indicates that the waiver of sovereign immunity it effected was intended to narrow the waiver of sovereign immunity of entities subject to sue-and-be-sued clauses. Pp. 486 U. S. 560-562.

(d) Nor is there merit to respondent's contention that the statute that provides petitioner with his cause of action, § 717 of Title VII, does not authorize interest awards. Congress expressly incorporated in § 717 provisions of Title VII that allow an interest award, and a § 717 suit, once commenced, is delineated by the same provisions as a suit against a private employer, who is liable for prejudgment interest in a Title VII suit. Library of Congress v. Shaw, supra, is not to the contrary. That case started from the rule that, absent express consent by Congress, the Government is immune from interest awards, and found that Title VII did not waive the Library of Congress' immunity from interest. However, the Library of Congress, unlike the Postal Service, was not a sue-and-be-sued agency that Congress had launched into the commercial world, and thereby broadly waived the agency's sovereign immunity. Pp. 486 U. S. 563-565.

806 F.2d 817, reversed and remanded.

BLACKMUN, J., delivered the opinion of the Court, in which BRENNAN, MARSHALL, STEVENS, and SCALIA, JJ., joined. WHITE, J., filed a dissenting opinion, in which REHNQUIST, C.J., and O'CONNOR, J., joined, post, p. 486 U. S. 566. KENNEDY, J., took no part in the consideration or decision of the case.

Page 486 U. S. 551

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