United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 10, 2008 Decided December 5, 2008
No. 07-7173
AMERICAN CENTER FOR INTERNATIONAL LABOR SOLIDARITY,
APPELLANT
v.
FEDERAL INSURANCE COMPANY,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 04cv01523)
Jeremiah A. Collins argued the cause and filed the briefs
for appellant. Robert W. Alexander entered an appearance.
Wallace A. Christensen argued the cause and filed the
brief for appellee.
Before: GINSBURG, TATEL, and BROWN, Circuit Judges.
Opinion for the Court filed by Circuit Judge TATEL.
2
TATEL, Circuit Judge: After completing the obligatory
administrative process and receiving a right-to-sue letter from
the Equal Employment Opportunity Commission, an
employee of appellant American Center for International
Labor Solidarity (ACILS) sued it for discrimination under
Title VII of the Civil Rights Act of 1964, 42 U.S.C § 2000e.
ACILS notified its employment insurer, appellee Federal
Insurance Company, of the pending lawsuit. Federal denied
coverage, asserting that its insurance policy required ACILS
to have informed Federal as soon as it knew charges had been
filed with the Commission, rather than waiting until the start
of litigation. ACILS then settled with the employee, only to
turn around and sue Federal for reimbursement. Agreeing
that notice at the time of suit came too late, the district court
entered summary judgment for Federal. Because we read the
policy the same way, we affirm.
I.
The policy defines a “claim,” in relevant part, as a
“formal administrative or regulatory proceeding commenced
by the filing of a notice of charges, formal investigative order
or similar document.” Def.’s Mot. Summ. J. Ex. A (“Policy”)
¶ 22. The parties agree that if Commission proceedings
qualify as “claims” under this language, then timely notice
was both required and lacking. The parties also agree that
Commission proceedings are “administrative” and
“commenced by the filing of a notice of charges.” They have
thus winnowed the issue on appeal to a narrow one: whether
Commission proceedings are “formal,” and therefore
“claims,” as the district court held. Because it did so on
summary judgment, and because it construed the language of
a contract, our review is de novo. See, e.g., Creekstone
Farms Premium Beef, L.L.C. v. Dep’t of Agric., 539 F.3d 492,
497 (D.C. Cir. 2008) (on summary judgment); Segar v.
3
Mukasey, 508 F.3d 16, 22 (D.C. Cir. 2007) (on contract
interpretation).
Lurking within this dispute is an interesting question
regarding the proper application of a central canon of
construction governing insurance contracts, namely that
“[u]nless the language . . . is unambiguous, doubts are to be
resolved in favor of the insured.” Nationwide Mut. Ins. Co. v.
Richardson, 270 F.3d 948, 954 (D.C. Cir. 2001) (citing
District of Columbia law); see also Pa. Indem. Fire Corp. v.
Aldridge, 117 F.2d 774, 775 (D.C. Cir. 1941) (“[T]he general
rule applicable in the interpretation of an insurance policy is
that, if its language is reasonably open to two constructions,
the one most favorable to the insured will be adopted.”).
ACILS claims that as the “insured” in this case it enjoys the
benefit of the canon. Federal acknowledges this canon but
believes it is more nuanced—that resolution of doubts “in
favor of the insured” requires construing the policy in favor of
insureds generally, rather than merely in favor of the
policyholder in a particular case. According to Federal, it
should get the benefit of the canon because, in general,
insureds would favor its argument that the policy covers
Commission proceedings as claims. And indeed, Federal has
consistently interpreted its policy in this way, honoring over
20,000 claims for coverage of Commission proceedings and
denying none. David L. Keenan Decl. ¶ 3. ACILS counters
that the policy should not be construed in favor of insureds
generally in this way because it needn’t be construed
generally at all, i.e., the policy can be read in conflicting ways
across cases so long as the reading in every case benefits the
policyholder and makes the insurer liable for ambiguities that
were entirely within its power to avoid. See Richardson, 270
F.3d at 954 (“The burden is on the insurer to spell out in terms
understandable to the man in the street any provisions that
would exclude coverage.” (internal quotation marks omitted)).
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Interesting as this issue is, we need not address it because
the canon exists to resolve ambiguities and because, as we
explain below, we see no ambiguity in whether a Commission
investigation qualifies as a “formal administrative or
regulatory proceeding,” Policy ¶ 22. And so here, as always,
we follow the definitive rule that where language is “clear and
unambiguous, [it] will be enforced by the courts as written.”
Hartford Accident & Indem. Co. v. Pro-Football, Inc., 127
F.3d 1111, 1114 (D.C. Cir. 1997) (internal quotation marks
omitted); see also Chase v. State Farm Fire & Cas. Co., 780
A.2d 1123, 1127 (D.C. 2001) (where policy term excluding
coverage “is not ambiguous, the courts must enforce [it] as
written”) (internal quotation marks omitted).
II.
For the principal reason that their form is governed by
extensive regulation, Commission proceedings are surely
formal. Regulations dictate every facet of the Commission’s
work: the submission of information on alleged instances of
discrimination, 29 C.F.R. § 1601.6; the form, content, and
procedure for filing of charges, id. §§ 1601.7-.9, .11-.12; the
service of charges on alleged discriminators, id. § 1601.14;
the Commission’s investigative authority, id. § 1601.15,
subpoena power, id. § 1601.16, and power to compel
witnesses for public hearings, id. § 1601.17; the procedure for
Commission determinations of cause, settlement, and
dismissal of proceedings, id. §§ 1601.18-.21; the
Commission’s power to initiate its own civil actions, id. §
1601.27; and the Commission’s role in empowering
individuals to sue, id. § 1601.28; see also 42 U.S.C. § 2000e-
5(f)(1).
That Commission proceedings are regular and formalized
in this way is hardly surprising given their statutorily
prescribed role as a necessary predicate to filing a Title VII
5
suit. Id. Created by Congress as a kind of national triage
center for discrimination claims, the Commission examines
every charge, begins an investigation, gives an initial
prognosis, attempts to resolve the issue quickly, and commits
resources to the most pressing cases. That role, specified by
statute and structured by regulation, can hardly be considered
informal.
ACILS argues that because the Commission held no
hearing and has no authority to adjudicate liability, its
proceedings must be deemed informal. As to the first point,
even granting ACILS’s contention that the word “formal”
here “refers to a particularly exacting and solemn kind of
proceeding,” Appellant’s Reply Br. 8, we disagree that the
investigation lacked the requisite formality simply because
the Commission held no hearing. The Commission requested
“a statement of [ACILS’s] position with respect to the
allegation(s) contained in th[e] charge,” Def.’s Mot. Summ. J.
Ex. F at 1, which ACILS obviously regarded as important,
responding with a 16-page letter drafted by outside counsel.
See Def.’s Mot. Summ. J. Ex. G. Moreover, this request was
hardly the limit of what the Commission’s investigation might
have involved, as it may hold fact-finding conferences, 29
C.F.R. § 1601.15(c), subpoena documents, id. § 1601.16, and
“demand in writing that a person appear . . . for the purpose of
testifying under oath before the Commission or its
representative,” id. § 1601.17(a). Of course, formality is a
question of what proceedings might involve rather than a
question of what they ultimately end up involving; by the time
the extent of the proceedings is known, any notice will come
too late to actually provide notice at all. That these
proceedings stand as a necessary prelude to any litigation
adds solemnity as well.
6
Nor do we agree with ACILS that these proceedings lack
consequence—and therefore formality—solely because the
Commission has no authority to make a final determination of
monetary liability. To be sure, the Commission employs only
“informal methods of conference, conciliation, and
persuasion,” in attempting to eliminate discriminatory
practices, § 2000e-5(b) (emphasis added), but its investigation
of such practices is not so limited. Commission investigations
are not only governed by the extensive regulations described
above, but they can also have serious consequences for their
targets. In contrast to the period of informal mediation
following an investigation, where “[n]othing said or done . . .
may be made public by the Commission,” id., records from
the investigation, any determination of cause to believe that
discrimination occurred, and position statements submitted by
the charged party may all be admissible as relevant evidence
in subsequent litigation. And if the investigation goes poorly
for the employer, it may find itself litigating against the
superior resources of the Commission or even the Justice
Department. § 2000e-5(f)(1). Moreover, if the case remains
unresolved at this opening stage, and notice can be withheld
until a complaint is filed, the insurer’s only chance for pre-
litigation settlement will have fallen by the wayside. Such
consequences convince us that Commission proceedings must
be regarded as “formal” regardless of the Commission’s
ability to adjudicate monetary liability.
That a contrary construction of “claim” would fail to
properly construe the policy as a whole only reinforces our
reading. See, e.g., Republican Nat’l Comm. v. Taylor, 299
F.3d 887, 894 n.8 (D.C. Cir. 2002) (citing District of
Columbia law on contract interpretation). Federal has a right
under the policy to “defend any claim” in the manner of its
choosing, Policy ¶ 8, and the insured must do “nothing that
may prejudice [Federal’s] position or its potential or actual
7
rights of recovery,” id. Given the important consequences
discussed above, it is clearly during Commission proceedings
that an insured could begin damaging Federal’s right of
defense. Were we to read the policy as excluding these early
but consequential stages of the Title VII process from the
“claims” that Federal has a right to defend, it would afford
Federal little protection from prejudice in the ensuing lawsuits
that it is certainly obligated to cover.
Like the district court, we are unconvinced by cases that
occasionally describe the Commission’s work as informal.
See Am. Ctr. for Int’l Labor Solidarity v. Fed. Ins. Co., 518 F.
Supp. 2d 163, 170-71 (D.D.C. 2007) (collecting cases). In
general these statements represent only passing dicta, and
none amounts to an opinion on the word “formal” as used in
Federal’s policy. Judge Pollak’s considered opinion in
Bensalem Township v. Western World Insurance Co., 609 F.
Supp. 1343, 1347-49 (E.D. Pa. 1985), likewise has nothing to
do with the issue before us: though he excluded Commission
proceedings from coverage as “claims” under a different
insurance policy, id. at 1349, that policy failed to define the
term “claim” at all, id. at 1347-48.
Proceedings whose forms are so carefully structured by
statute and regulation to effect a particularly important
purpose in the process of Title VII litigation are “formal.”
We affirm.
So ordered.