THEODORE J. LOEFFLER, PETITIONER V. PRESTON R. TISCH, POSTMASTER
GENERAL OF THE UNITED STATES

   No. 86-1431

   In the Supreme Court of the United States

   October Term, 1986

   On Petition for a Writ of Certiorari to the United States Court of
Appeals for the Eighth Circuit

   Memorandum for the Respondent

   Petitioner seeks review of a holding that prejudgment interest may
not be awarded against the United States Postal Service (USPS) in
employment discrimination cases arising under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. 2000e et seq.

   1. After a bench trial in the United States District Court for the
Eastern District of Missouri, petitioner, a male employee of USPS,
prevailed in his claim that he had been discharged as a result of
gender discrimination.  The district court accordingly ordered
petitioner reinstated with backpay (Pet. App. A26-A34).  But the court
held that the United States' sovereign immunity foreclosed an award of
prejudgment interest on this backpay award (id. at A21).

   On appeal, a panel of the Eighth Circuit, relying on the panel
opinion in Cross v. United States Postal Service, 733 F.2d 1327, aff'd
en banc by an equally divided court, 733 F.2d 1332 (1984), cert.
denied, 470 U.S. 1051 (1985), affirmed the denial of prejudgment
interest against USPS, holding it barred by sovereign immunity (Pet.
App. A19-A20).  The panel's ruling was in turn affirmed by a
six-to-five vote of the en banc Eighth Circuit (id. at A1-A11).

   The majority adopted the reasoning of the Cross panel, adding that
its "conclusion is strongly reinforced by the recent decision of the
Supreme Court in Library of Congress v. Shaw, (No. 85-54 (July 1,
1986)), holding that Congress, in enacting Title VII, did not waive
the government's immunity from interest" (Pet. App. A2).  The court of
appeals found it irrelevant in this case that Congress has permitted
USPS to "sue and he sued in its official name" (39 U.S.C. 401(1));
the court noted that petitioner's action "was not brought under the
sue and be sued clause of the Postal Reorganization Act.  Instead it
was brought under Title VII as amended in 1972." Pet. App. A4.  And
the court explained that "Congress explicitly treated the Postal
Service as a federal agency when it amended Title VII in 1972 to make
the Postal Service and other federal agencies amenable to suit under
Title VII" (id. at A7).  The court therefore expressly declined to
follow the Eleventh Circuit's decision in Nagy v. United States Postal
Service, 773 F.2d 1190 (1985), which held USPS liable for interest on
Title VII backpay awards.

   Judge Arnold, joined by four other judges, dissented.  He noted
that the en banc court's holding "creates a square conflict" with Nagy
v. United States Postal Service, supra (Pet. App. A9).  And while he
observed that "there are respects, and important ones, in which the
Postal Service is unlike a private employer," Judge Arnold doubted
"that sovereign immunity with regard to an ordinary incident of relief
in a civil action is one of those differences" (id. at A10).

   2. We believe that the court of appeals applied the proper analysis
and reached the correct result in this case.  As both the majority and
the dissent noted, however, the holding below squarely conflicts with
the Eleventh Circuit's decision in Nagy v. United States Postal
Service, supra, which looked to the "sue and be sued" clause of 39
U.S.C. 401(1) in holding prejudgment interest available against USPS.
/1/ Given the volume of Title VII and related litigation in which USPS
is involved nationwide, /2/ this conflict is of practical importance.
While USPS prevails in the vast majority of these cases, the
availability of prejudgment interest inevitably will result in
significant added liability.  Equally important, the split in the
circuits has created a disparity in the remedies available to USPS
employees in different locations.  For these reasons, review by this
Court is warranted.

   It is therefore respectfully submitted that the petition for a writ
of certiorari should be granted.

   CHARLES FRIED

      Solicitor General

   JUNE 1987

   /1/ The decision below is also in tension with Hall v. Bolger, 768
F.2d 1148 (9th Cir. 1985), which permitted interest on an award of
attorneys' fees against USPS under Section 505 of the Rehabilitation
Act of 1973, 29 U.S.C. (& Supp. III) 794a, which incorporates by
reference the remedial provisions of Title VII.

   /2/ USPS advises us that there currently are 337 employment
discrimination cases pending against it in the district courts and
courts of appeals.