Marek v Chesny Brief Amicus Curiae
Public Court Documents
January 1, 1983
72 pages
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Brief Collection, LDF Court Filings. Marek v Chesny Brief Amicus Curiae, 1983. 1a7f5447-bc9a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/0362a67d-4b46-4948-a21e-6df4323f8ec7/marek-v-chesny-brief-amicus-curiae. Accessed April 19, 2025.
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No. 83-1437
I k the
Gkmrt rtf % InttrJt # tntm
October T erm, 1983
Jeffrey Marek, T homas W adycki
and L awrence R hode,
vs.
A lfred W. Chesny,
Petitioners,
Respondent.
ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SEVENTH CIRCUIT
BRIEF OF THE NAACP LEGAL DEFENSE AND
EDUCATIONAL FUND, INC., AS AMICUS CURIAE
Barry L. Goldstein
Suite 940
806 15th Street, N.W.
Washington, D.C. 20005
(202) 638-3278
Julius L eV onne Chambers
Charles Stephen R alston*
99 Hudson Street
16th Floor
New York, New York 10013
(212) 219-1900
Attorneys for Amicus Curiae
* Counsel of Record
X
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES . . . . . . . . . . . . ____ _ i v
INTEREST OF AMICUS ................................ .. 1
SUMMARY OF ARGUMENT ...... ............................. 3
ARGUMENT
I . PETITIONER'S CONSTRUCTION
OF RULE 68 NEITHER PROPERLY
INTERPRETS THE LANGUAGE OF
THE RULE NOR SERVES THE
POLICIES UNDERLYING THE
RULE .............................................. 5
A. The Language o f Rule
68 Does Not Permit
the Equation o f
"Costs" Under the
Rule with "Costs" as
Used in F e e - S h i f t i n g
S ta tu tes ................. .. 7
B. P e t i t i o n e r s ' Con
s t ru c t i o n o f Rule 68
Would Not Promote
Increased Set t l ements 15
I I . PETITIONERS' CONSTRUCTION
OF RULE 68 WOULD UNDERMINE
THE CLEAR CONGRESSIONAL
POLICIES EMBODIED IN FEE-
SHIFTING PROVISIONS IN
CIVIL RIGHTS CASES____ . . . . 19
Page
General " in the
Enforcement o f the
o f the C i v i l Rights
- 1 1 -
Laws ................................ 41
3. P e t i t i o n e r s ' I n t e r
p r e t a t i o n o f Rule
68 Is In cons i s t en t
with the Rules
Enabl ing Act . . . . . . . 45
I I I . PETITIONERS' INTERPRETATION
OF RULE 68 CONFLICTS WITH THE
POLICIES CONCERNING CLASS
ACTIONS EMBODIED IN RULE 23 . . . 4 8
A. P e t i t i o n e r s ' Construc
t i on o f Rule 68 W i l l
Create C o n f l i c t s o f
I n t e r e s t Between Repre
s e n t a t i v e s and Class
Members ................. ................ 5 0
B. The A p p l i c a t i o n o f Rule
6 8 , as In t e rp r e t ed by
P e t i t i o n e r s , to Class
Act i ons Would Be In
cons i s t en t with the
Requirements o f
Rule 23(e) 53
IV. PETITIONERS' CONSTRUCTION
OF RULE 68 WOULD SIGNIFICANT
LY IMPAIR THE ATTORNEY-
CLIENT RELATIONSHIP ................. 57
CONCLUSION ....................................................... 62
The Current Standard
f o r Awarding Counsel
Fees in C i v i l Rights
Cases Be t t e r Serves the
Purposes o f § 1988 . . .
1. P e t i t i o n e r s '
Standard Would
Improper l y Deny
the D i s t r i c t
Court D i s c r e t i o n
in Awarding Fees
2. P e t i t i o n e r s '
Construct i on o f
Rule 68 Would
Result in
Increased
L i t i g a t i o n Over
A t t o r n e y ' s Fees . .
The Proposed Standard
Undermines the Substan
t i v e Goals o f the C i v i l
Rights Laws ....................
1. P e t i t i o n e r s '
Reading o f Rule
68 W i l l Deter
P l a i n t i f f s from
Pursuing
Mer i t o r i ous
Claims ........... ..
P e t i t i o n e r s '
Reading o f Rule
68 C o n f l i c t s wi th
the Centra l Role o f
" P r i v a t e A t to rneys
2
IV
TABLE OF AUTHORITIES
Cases Page
Albemarle Paper Co. v . Moody, 422
U.S. 405 ( 197 5 ) ....................................
Alyeska P i p e l i n e S erv i c e Co. v . W i l d e r
ness S o c i e t y , 421 U.S. 240 ( 1 9 7 5 ) . . . 1 1 ,
Brown v . Board o f Educat ion, 347 U.S.
483 ( 195 4 ) ...............................................
Carey v . Piphus, 435 U.S. 247
( 1978) ....................................................... 32,
Chesny v . Marek, 720 F.2d 474
(7th C i r . 1983) .............*7/16, 46,47,60,
Chri s t iansburg Garment Co. v . EEOC
434 U.S. 41 2 ( 1978) ...........20,21,25,26,
Copeland v . Marshal l , 641 F.2d 880
(D.C. C i r . 1980) ..........................
De l ta A i r L ines v . August, 450
U.S. 346 ( 1981 ) ............................ 5,24,55,
Dennis v . Chang, 611 F .2d 1303
( 9th C i r . 1980) ..............................
East Texas Motor Fr e i gh t System v.
Rodriguez, 4312 U.S. 395
( 1 977 ) .................................................
Faraci v. Hickey-Freeman C o r . , 607
F .2d 1 025 (2d C i r . 1979) ...........
2
19
2
39
62
41
22
58
1 7
49
25
V
Gay v. W a i t e r s ' & Dairy Lunchmen' s
Union, Local No. 39, 76 F.R.D.
500 (N.D. Cal . 1 9 8 0 ) . . . . . ......... 51
General Telephone Co. v . Falcon,
457 U.S. 1 57 ( 1982) ...................... 48
Griggs v . Duke Power Co. , 401 U.S.
424 ( 1971 ) ....................... ................ 2
Hanna v . Plumer, 380 U.S. 450
( 1965) ....................................................... 46
Hensley v . Eckerhart , __ U.S. __ ,
76 L .Ed.2d 40 ( 1983)......... 1 0, 1 6,20,2 1,22
27,31,32,33,38,41
Hooks v . Genera l F inance C o r p . ,
652 F . 2d 651 (6th C i r . 1981) . . 52
McCann v. Coughl in, 698 F.2d 112
(2d C i r . 1 983 ) ................ 33
Mendoza v . United S ta tes , 623 F.2d
1338 (9th C i r . ( 1 9 8 0 ) __________ 61
M i l l s v . E l e c t r i c Au to -L i t e Co. ,
396 U.Ss. 375 ( 1 970 ) ........................ 43
Moreland v. Rucker Pharmacal Co. ,
63 F.R.D. 611 (W.D. La. 1974). 53
Nesenof f v . Muten, 67 F.R.D. 500
(E.D.N.Y. 1 974 ) ............................... 53
Pag e
VI
Newman v. Piggie Park Enterprises,
390 U.S. 400 ( 1 9 6 8 ) . . . . . .......... 20,34,41
New York Gasl ight Club, Inc. v.
Carey, 477 U.S. 54 (1980) ........ 19,46
Prandini v. National Tea Co., 557
F.2d 1015 (3rd Ci r . 1977)........ 60,61,62
Page
Regalado v. Johnson, 79 F.R.D.
447 (N.D. 111. 1 978).................. 59
Roadway Express, Inc. v. Piper,
447 U.S. 752 ( 1 980).................. 7, 1 1 , 14, 1 9
Scher i f f v. Beck, 452 F. Supp.
1254 (D. Colo. 1978).................. 54,58
Staffend v. Lake Central A i r l in e s ,
47 F.R.D. 218 (N.D. Ohio 1969). . 55
Statutes and Rules
Act of Sept. 12, 1980, Pub. L.
No. 96-349........................................ 1 1
Equal Pay Act o f 1 963........................ 9
Fed. R. Civ. P. Rule 1 .................... 5
Fed. R. Civ . P. Rule 2 3 . . . . . . . . . 4,48,49,50
52,53,54,55,56
Fed. R. Ci8v. P. Rule 68 ........ passim
Fed. R. Civ . P. Rule 3 7 ( b ) . . . . . . . . 11
Freedom o f Info rmat ion Act , 5
U.S.C. § 5 2 2 ( a ) ( 4 ) ( E ) ( 1 9 8 2 ) . . . . . . 13
28 U.S.C. § 1927 (1976; c o d i f i e d
as amended, 1 982 ) ............. .............. 8 , 1 1
28 U.S.C. § 1 920 ( 1982) . .................... 5,1 3
28 U.S.C. § 2072 ( 1 982 ) ...........
29 U.S.C. § 206(d) ( 1 9 8 2 ) . . . . . . . . . 9
29 U.S.C. § 216(b) ( 1 9 8 2 ) . . ____ . . . 9
43 U.S.C. § 1988 ............... .. passim
42 U.S.C. § 2000e-5( k ) ____ . . . . . . . . 8,9,13
S. Rep. No. 1011, 94th Cong. , 2d
Sess. ( 1 9 7 6 ) . . . 19 ,20,32,35,36,39
Other A u th o r i t i e s
F i s s , Aga inst Set t l ement , 93 Ya le
L .J . 1073 ( 198 4 ) _ 45
Manual f o r Complex L i t i g a t i o n , Part
I , § 1 . 46 at 75 ( 1 982) . . . . . . . . . 62
- vi i -
Page
1
No. 83-1437
IN THE SUPREME COURT OF THE UNITED STATES
October Terra, 1983
JEFFREY MAREK, THOMAS WADYCKI
and LAWRENCE RHODE,
P e t i t i o n e r s ,
v s .
ALFRED W. CHESNY,
Respondent.
On Wri t o f C e r t i o r a r i
to the United States Court o f Appeals
f o r the Seventh C i r c u i t
BRIEF OF THE NAACP LEGAL DEFENSE AND
EDUCATIONAL FUND, INC., AS AMICUS CURIAE
I n t e r e s t o f Amicus*
The NAACP Legal Defense and Educat ional
Fund, I n c . , i s a nonpro f i t co rpora t i on whose
Le t t e rs , o f consent to the f i l ing o f t h i s
B r i e f have been l o dged w i th the C le rk o f
Cour t .
2
p r i n c i p a l purpose i s to secure c i v i l and
c o n t i t u t i o n r i g h t s o f b la ck peop le . For
more than f o r t y y ea r s , i t s a t to rneys have
represented p a r t i e s in thousands o f c i v i l
r igh ts a c t i ons , inc lud ing many s i gn i f ic ant
cases b e f o r e th i s Court. S ee , e . g . ,
Albemar le Paper Co. v. Moody, 422 U.S. 405
(1975) ; G r i ggs v. Duke Power Co . , 401 U.S.
424 (1971) ; Brown v. Board o f Education,
347 U.S. 483 (1954).
A s u b s t a n t i a l percentage o f LDF's
current docket cons i st s o f cases invo lv ing
employment d i s c r im i n a t i o n , vot ing r i gh t s ,
and va r i ous c o n s t i t u t i o n a l and s t a tu to ry
c la ims. In these a re a s , preva i l ing p l a in
t i f f s normal ly are e n t i t l e d to rea sonab le
a t t o r n e y ' s f e es pursuant to various s tatu
tory f e e - sh i f t i ng provisions.
3
LDF thus b e l i e v e s that the Co ur t ' s
dec i s io n in the case at bar may s i g n i f i
cant ly a f f e c t both i t s own a b i l i t y to
represent c l i e n t s in f u tu re cases and the
a b i l i t y o f v ic t ims o f d i s c r im in a t i o n in
general to vindicate their r igh ts .
Summary o f Argument
1. Def in ing the word "costs" in Rule
68 to inc lude a t t o r n e y ' s fe es in cases
invo lv ing f e e - s h i f t i n g is inconsistent with
the purpose o f the Rule and would not
promote j u s t and speedy se t t l ements . In
addition, adopting p e t i t i o n e r ' s read ing o f
" c o s t s " would simply red is t r i bu te the gains
of settlement in favor of defendants.
2. P e t i t i o n e r ' s construction of Rule
68 would s i g n i f i c a n t l y undermine Congress '
intent in enact ing f e e - s h i f t i n g s t a tu tes .
Congress and this Court have made clear that
p r e v a i l i n g p l a i n t i f f s in c i v i l r i g h t s
4
ac t ions are e n t i t l e d to r ea so nab l e a t t o r
ney ' s fe es unless there are s p e c i a l c i r
cumstances which would render an award of
a t t o r n e y ' s f ees u n j u s t . A p l a i n t i f f ' s
good-fa i th re fusa l of a defendant ' s o f f e r of
judgment s imply i s not such a s p e c i a l
circumstance.
3. Inc lud ing a t t o r n e y ' s fees within
the d e f i n i t i o n o f cost s would pose t r e
mendous problems in c l a s s a c t i o n s . The
intent of the d ra f te r s of Rule 68 to prevent
the court from becoming invo lved in the
o f f e r o f judgment c o n f l i c t s with the
su pe rv i so ry r e s p o n s i b i l i t i e s o f the court
under Rule 23. P e t i t i o n e r s ' i n t e r p r e t a t i o n
would dr ive a wedge between the interests of
the named p l a i n t i f f and those of the c la ss ,
4. P e t i t i o n e r s ' construction of Rule
68 would c r e a t e , at the very l e a s t , an
apparent c on f l i c t of interest between p l a in
5
t i f f s and t h e i r a t t o r n e y s . I t would c rea te
an i n c e n t i v e f o r l a w y e r s to co unse l t h e i r
c l i e n t s to s e t t l e cases in o r d e r t o guar-
antee t h e i r own f e e s ra ther than because the
s e t t l e m e n t i s in f a c t f a v o r a b l e t o the
c l i e n t .
Argument
I . PETITIONERS8 CONSTRUCTION OF ROLE 68
NEITHER PROPERLY INTERPRETS THE
LANGUAGE OP THE ROLE NOR SERVES THE
POLICIES UNDERLYING THE ROLE.
"The purpose o f Rule 68 i s to encourage
the s e t t l e m e n t o f l i t i g a t i o n , " D e l t a A i r
L i n e s v . A u g u s t , 450 0 . S. 346, 352 (1981) ,
and thus to co nt r i bu te to " the j u s t , speedy,
and i n e x p e n s i v e d e t e r m i n a t i o n o f e v e r y
a c t i o n . " Fed. R. Ci v . P. 1. I n t e r p r e t i n g the
word " c o s t s " to i n c lu d e a t t o r n e y ' s f e e s as
we l l as the costs l i s t e d in 28 U.S.C. § 1920
6
(1982) in cases invo lv ing statutory a t to r
n e y ' s f e e - s h i f t i n g p r o v i s i o n s would not
serve that g o a l .
Rule 68 uses the word " c o s t s " in two
contexts d i r e c t l y relevant to the incentives
i t provides for settlement. The Rule appl ies
to o f f e r s , " with costs then accrued." Fed.
R. Civ . P. 68 (emphasis added ) . The Rule
f u r t h e r p rov ides that " [ i ] f the judgment
f i n a l l y obtained by the o f f e ree is not more
favorable than the o f f e r , the o f f e r e e must
pay the cos ts incurred a f t e r the making of
the o f f e r ." I d . (emphasis added).
P e t i t i o n e r s argue that courts should
look to any de f in i t ion of costs prov ided by
a su b s t an t iv e statute involved in the case.
Because 42 U .S .C . § 1988 (Supp. V 1981)
s t a t e s that " in any action or proceeding to
enforce a provision of Sections 1977, 1978,
1979, 1980, and 1981 o f the Revised
7
S ta tu te s , , T i t l e IX o f Publ i c Law 92-318, or
T i t l e VI o f the C i v i l R i g h t s Act o f 1965,
the c o u r t , in i t s d i s c r e t i o n , may a l l ow the
p r e v a i l i n g p a r t y , o t h e r than the Un i t ed
S t a t e s , a r easonab le a t t o r n e y ' s f e e as part
o f the c o s t s , " p e t i t i o n e r s would i n c l u d e a
p r e v a i l i n g p l a i n t i f f ' s p o s t - o f f e r a t t o r n e y ' s
f ees w i th in the c o s t s which the p l a i n t i f f
must bear i f the d e f e n d a n t ' s o f f e r exceeds
h i s u l t i m a t e r e c o v e r y a t t r i a l . As the
Court o f Appea ls noted in t h i s case , such a
conc lus ion " r e s t s on [a ] r a t h e r mechan i ca l
l i n k in g up" o f the two p r o v i s i o n s . Chesny v .
Marek, 720 F . 2d 474, 478 (7th C i r . 1983).
A. The Language o f Rule 68 Does Not
*PermTt the Equa t ion o f ** Co s t s *
Under the Rule w i th “ Costs** as
u5^r'Xir^Fei-^liTfTTng""l?Fi"tjiTe*sT“'"
In Roadway Express, Inc , v . P i p e r , 447
U.S. 752 ( 1980 ) , t h i s Court h e ld t h a t the
a t t o r n e y ' s f e e s p r o v i s i o n s in § § 1 98 8 and
8
2 0 0 0 e - 5 (k ) should not be incorpora ted in to
28 U.S.C. § 1927 (1976; c o d i f i e d as amended,
1982) , which p e r m i t s a c o u r t t o tax the
e x c e s s c o s t s o f a p r o c e e d i n g a g a i n s t a
l a w y e r who m u l t i p l i e s the p r o c e e d i n g s
u n r ea so na b l y and v e x a t i o u s l y . The Court
r e s t e d i t s r e j e c t i o n o f the " s u p e r f i c i a l l y
a p p e a l i n g argument" t h a t the n o n - d e f i n e d
" c o s t s " ment ioned in § 1927 could be g iven
meaning by r e f e r e n c e to §§ 1988 and
2 0 0 0 e - 5 ( k ) , 447 U.S. at 758, on a number o f
c o n s i d e r a t i o n s a p p l i c a b l e t o the case at
b a r .
To p a ra phra s e P i p e r , p e t i t i o n e r ' s
c o n s t r u c t i o n o f Rule 68 and § 1988 "could
i n t r o d u c e i n t o the [Ru le ] d i s t i n c t i o n s
u n r e l a t e d to i t s g o a l . . . and could r e s u l t
in v i r t u a l l y random a p p l i c a t i o n o f [Rule 6 8 ]
on the b a s i s o f o t h e r laws t h a t do not
address the problem o f c o n t r o l l i n g abuses o f
- 9
j u d i c i a l p r o c e s s e s . " 447 U.S. at 761-762. I t
would make l i t t l e sense to i n t e r p r e t Rule 68
in a way t h a t g i v e s s i g n i f i c a n t w e i gh t to
those i n s i g n i f i c a n t v a r i a t i o n s .
For examp le , many employment d i s
c r im inat i on cases a l l e g i n g b ias on the bas is
o f gende r a re brought under both T i t l e V I I
o f the C i v i l Rights Act o f 1964, 42 U.S.C. §
2Q00e (1976) , and the Equal Pay Act o f 1963,
29 U.S.C. § 206(d) ( 1 9 8 2 ) . The a t t o r n e y ' s
f e e s p r o v i s i o n o f T i t l e V I I a l l o w s p r e
v a i l i n g p l a i n t i f f s to r ecover f e e s "as p a r t
o f the c o s t s " o f s u i t . 42 U .S .C . §
2000-5(k ) . The p r ov i s i on o f the F a i r Labor
S tandards Ac t a p p l i c a b l e t o Equal Pay Act
c la ims, however, d i r e c t s the c o u r t t o award
"a r e a s o n a b l e a t t o r n e y ' s f e e to be paid by
the d e f e n d a n t , and costs o f the a c t i o n . " 29
U.S.C. § 216(b) (1982) (emphasis added) . I t
would be absurd to argue t h a t a p r e v a i l i n g
10
p l a i n t i f f shou ld not r e c o v e r t h a t p a r t o f
h is p o s t - o f f e r f ee s expended on a T i t l e V I I
c l a im w h i l e he should r e c o v e r t h a t p a r t
invo l ved in an Equal Pay Act c la im.
Such an approach would f l y in the face
o f t h i s C o u r t ' s r e c o g n i t i o n in Hens ley v .
Eck erha r t , _____ U.S. _____ , 7 6 L.Ed.2d 40, 51
( 1 9 8 3 ) , t h a t many c i v i l r i g h t s ca se s
" i n v o l v e a common c o r e o f f a c t s o r w i l l be
based on r e l a t e d l e g a l t h e o r i e s " which make
i t in app ropr i a t e f o r a court to apport ion an
a t t o r n e y ' s f e e s request among var ious c laims
on a mechanical bas i s . Rule 68 s imply cannot
be read to t o l l the d e f e n d a n t ' s l i a b i l i t y
f o r f ee s f o r the Equal Pay Act c l a i m , s i n c e
they a re not " c o s t s . " Thus, a d e f endan t ' s
c la im th a t a p r e v a i l i n g p l a i n t i f f ' s f e e s
should somehow be reduced would embroi l the
judge in a p a r s i n g e x e r c i s e based on f i n e
l i n g u i s t i c v a r i a t i o n s which P e t i t i o n e r s '
argument in t h i s case t r a n s f o r m s i n t o
a r t i f i c i a l b r i g h t - l i n e d i s t i n c t i o n s . Sure l y ,
t h e r e i s no l o g i c a l r eason to suppose that
the j u d i c i a l system should be more e a g e r t o
induce s e t t l e m e n t o f T i t l e V I I s e x - d i s
c r i m i n a t i o n c l a im s t h a t o f v i r t u a l l y
i d e n t i c a l Equal Pay Act causes o f a c t i on .
Furthermore, t h i s C o u r t ' s d e c i s i o n in
Roadway E x p r e s s , l i k e i t s d e c i s i o n in
A l y e s k a P i p e l i n e S e r v i c e Co. v . Wi lderness
S o c i e t y , 421 U.S. 240 ( 1 975) , r eserved f o r
Congress the d e l i c a t e du ty o f d e t e rm in ing
how p r e v a i l i n g p l a i n t i f f s ' a t t o r n e y ' s f e e s
should be a f f e c t e d by g e n e r a l , p r oc edu ra l
p r o v i s i o n s . See Act o f Sept . 12, 1980, Pub.
L. No. 96-349, § 3, 94 S ta t . 1156 ( c o d i f i e d
at 28 U.S.C. S1 927 ( 1982) ) , (amending § 1927
to i n c l u d e " a t t o r n e y ' s f e e s r e a s o n a b l y
incurred" as we l l as " c o s t s " ) . In a d d i t i o n ,
unl ike Rule 6 8 , Fed. R. Civ P. 3 7 (b ) , which
- 11 -
co ncern s sanc t i ons f o r a p a r t y ' s f a i l u r e to
comply w i th d i s c o v e r y o r d e r s , e x p l i c i t l y
p r o v i d e s t h a t the c o u r t s h a l l n o r m a l l y
assess " the r e asonab le e x p e n s e s , i n c l u d i n g
a t t o r n e y ' s f e e s , caused by the f a i l u r e [ to
co mp ly ] ."
The r e c e n t p r o p o s a l by the A d v i s o r y
Committee on C i v i l Rules to amend Rule 68 to
i n c l u d e a t t o r n e y ' s f e e s in a l l c a se s adds
support to the in f e r ence that the Rule does
not c u r r e n t l y v i e w f e e s as c o s t s . The
proposed amendment prov ides tha t an o f f e r e e
who r e c o v e r s l e s s than the o f f e r "must pay
the c o s t s and expenses inc lud ing reasonable
a t t o r n e y 1s f e e s , i n c u r r e d by the o f f e r o r
a f t e r the making o f the o f f e r . . . . " P r e
l im ina ry Dra f t o f Proposed Amendments to the
F e d e ra l Ru les o f C i v i l P r o c e d u r e , Rule 68
O f f e r o f S e t t l e m e n t , 98 F . R .D . 337, 362
(1983) [ h e r e i n a f t e r c i t e d as Proposed Rule
13
6 81 (new m a t e r i a l in i t a l i c s ) . I f the term
" c o s t s " n e c e s s a r i l y i n c lu d e d a t t o r n e y ' s
f e e s , then the a d d i t i o n o f the ' phrase "and
expenses inc lud ing . . . f e e s " would have been
unnec es sa ry . The d r a f t e r s ’ i n c l u s i o n o f
"and expenses inc luding . . . f e e s " t h e r e f o r e
supports the i n f e r e n c e t h a t " c o s t s ” as i t
now s tands r e f e r s s o l e l y to the t r a d i t i o n a l
costs de f ined in 28 U .S .C. § 1920. Thus,
" c o s t s " under Rule 68 has r e t a i n e d i t s
" t e c h n i c a l " meaning, whi l e " c o s t s " under §§
1988 and 2 0 0 0 e -5 ( k ) has been broadened to
include the actual expenses o f l i t i g a t i n g a
c a s e . C f . Freedom o f I n f o r m a t i o n A c t , 5
U .S .C . § 522 (a ) ( 4 ) (E) (1982) ( p r o v i d i n g
fo r award o f " reasonable a t t o r n e y ' s f e e s
and o ther l i t i g a t i o n cos ts reasonably
in cu rred " ) .
The proposed amendment a l s o would
e l i m i n a t e the r e q u i r e m e n t t h a t a Rule 68
o f f e r inc lude co s t s . The Adv i sory Committee
Note exp la ins t h i s d e l e t i o n by r e f e r r i n g to
the c o n f u s i o n which the i n c l u s i o n o f the
r e qu i r e m e n t would cause i f r ead in c o n
j u n c t i o n w i th f e e - s h i f t i n g s t a t u t e s '
d e f i n i t i o n s o f " c o s t s . " Proposed Rule 6 8 , 98
F .R .D . at 364. Th is c o n f u s i o n would a l s o
a r i s e i f p e t i t i o n e r s ' erroneous cons t ruc t i on
o f the Rule i s adop t ed . I f a t t o r n e y ' s f ee s
are not viewed as part o f the cos ts to which
Rule 68 a p p l i e s , then the re i s no problem.
As th i s Court noted in Roadway Express , from
the v e r y o u t s e t Congress has sought " t o
s t a n d a r d i z e the t r e a t m e n t o f c o s t s in
f e d e r a l cour t s , to 'make them uniform — make
the law e x p l i c i t and d e f i n i t e . ' " 447 U.S.
a t 761 ( q u o t in g H.R. Rep. No. 50, 32d Cong.
1st Sess. 6 ( 1 8 5 2 ) ) . The aim o f u n i f o r m i t y
- 14 -
15
embodied in Congress' intent and the Federal
Rules o f C i v i l Procedures would best be
served by d e f i n in g costs in Rule 68 p ro
ceedings ident i ca l ly in a l l cases.
B. P e t i t i o n e r s ' Construction o f Rule
I T ” Would" Not Promote Increased
Settlement.
P e t i t i o n e r s ' argument assumes that the
a l lowance or d i sa l l owance o f p o s t - o f f e r
counsel fees w i l l only a f f e c t p l a i n t i f f s '
dec i s ions whether to accept sett lement
o f f e r s or continue to t r i a l . This exclusive
concentrat ion on the way in which Rule 68
in f l uences p l a i n t i f f s ' incentives to accept
an o f f e r ignores the de t e r r e n t e f f e c t
p e t i t i o n e r s ' proposa l w i l l have on de
f endants ' d ec i s io ns to make sett lement
o f f e r s .
Through an o f f e r o f s e t t l ement , the
defendant can f ix his l i a b i l i t y at a certain
sum and, he hopes, pay less than he would be
16
found l i a b l e f o r at t r i a l . T h u s , a key f a c t o r
in a p a r t y ' s d e c i s i o n about s e t t l e m e n t i s
h i s assessment o f h i s p rospec ts should the
case go to t r i a l . Under the ru l e e n u n c ia t e d
by the Seventh C i r c u i t in Chesny, th i s would
be the sum o f the present expected value o f
the p l a i n t i f f ' s r e c o v e r y on the m e r i t s and
the p r e s e n t e x p e c t e d v a l u e o f the
p l a i n t i f f ' s r e a s o n a b l e a t t o r n e y ' s f e e s
(d i scounted , o f course, by the l i k e l i h o o d o f
the p l a i n t i f f ' s p r e v a i l i n g ) . The d e f e n d a n t
has a s t r o n g i n c e n t i v e t o s e t t l e the case
f o r any amount l e s s than t h i s sum plus h i s
c o s t s o f g o i n g to t r i a l , an amount he w i l l
s u b j e c t i v e l y d e t e rmine . The c o s t - s h i f t i n g
scheme embodied in § 1988 cont r i bu tes to the
p r e s s u r e on d e f e n d a n t s to s e t t l e . See
Hens l ey v . E c k e r h a r t , _____ U.S. _____ , 76
L .Ed .2d 40, n .2 (1983) (Brennan, J . ,
concurring in par t and d i s s e n t in g in p a r t ) ;
17
Dennis v. Chang, 611 F . 2d 1303, 1307 (9th
Cir. 1980). In negotiations, the p l a i n t i f f ,
who does not know the defendant 's subjective
assessment, w i l l t ry to d r i v e the
d e f en dan t ' s maximum o f f e r up u n t i l i t
exceeds the p l a i n t i f f 1s s u b j e c t i v e
assessment.
The e f f e c t o f p e t i t i o n e r s ' proposa l
would simply be to s h i f t the " p r i c e range"
within which sett lement n e g o t i a t i o n s take
place. A defendant w i l l make a lower o f f e r
to a p l a i n t i f f , since the expected value of
his l i a b i l i t y to the p l a i n t i f f w i l l decrease
by the amount o f the p l a i n t i f f ' s po st -o f f e r
attorney 's fees should the p l a i n t i f f recover
l e s s at t r i a l . A p l a i n t i f f ' s demands also
wi l l decrease, since the cost o f proceeding
to t r i a l w i l l now also include that part of
his attorney ' s fees which he cannot recover
i f the o f f e r exceeds the judgment he obtains
18
a f t e r t r i a l . That such a s h i f t o c c u r s ,
however , says a b s o l u t e l y n o th in g about
whether the gap between a p l a i n t i f f ' s
minimum demand and a d e f e n d a n t ' s maximum
o f f e r - -w h i c h determines whether there w i l l
be a s e t t l e m e n t - - w i l l become w ider o r
nar rower .
Thus, the pr imary e f f e c t o f
P e t i t i o n e r ' s c o n s t r u c t i o n would be
d i s t r i b u t i v e : s ince the p r i c e o f set t lement
o f f e r s w i l l dec rease , defendants w i l l r e t a i n
more and p l a i n t i f f s w i l l r e c e i v e l e s s . There
i s abso lu te l y nothing in Rule 68 to suggest ,
howeve r , t h a t i t o r the r u l e s o f c i v i l
p r oc edu re in g e n e r a l a re in tended t o
d i s t r i b u t e the amount at issue in a l awsui t
in the de f end an t ' s f a vo r . Indeed, the o n l y
ca se s which p e t i t i o n e r ' s cons t ruc t i on would
a f f e c t are p r e c i s e l y those in which there i s
a c l e a r l y a r t i c u l a t e d Congress iona l p o l i c y
19
f a v o r i n g p l a i n t i f f s . See i n f r a Sect ion I I .
Thus, because p e t i t i o n e r s ' i n t e r p r e t a t i o n o f
Rule 68 i s " i n d i f f e r e n t to the e q u i t i e s o f a
d i s p u t e and to the v a l u e s advanced by the
s u b s t a n t i v e l a w , " Roadway Express, Inc , v .
P i p e r , 447 U.S. at 762, i t must be r e j e c t e d .
I I . PETITIONERS1 CONSTROCTION OF RULE 68
WOULD UNDERMINE THE CLEAR CONGRESSIONAL
POLICIES EMBODIED IN FEE-SHIFTING
PROVISIONS IN CIVIL RIGHTS CASES.
In dec id ing to e n ac t § 1988 f o l l o w i n g
the d e c i s i o n in Alyeska P i p e l i n e S er v i c e Co,
v . W i l d e r n e s s S o c i e t y , 421 U.S. 240 (1975) ,
Congress c l e a r l y s t a t e d i t s b e l i e f t h a t
a t t o r n e y ' s f e e s to p r e v a i l i n g p a r t i e s p lay a
c r i t i c a l r o l e in c i v i l r i g h t s c a s e s : "One
a s p e c t o f co mpl e te r e l i e f i s an award o f
a t t o r n e y ' s f e e s which Congress co ns ide red
n e c e s s a r y f o r the f u l f i l l m e n t o f f e d e r a l
g o a l s . " New York G a s l i g h t C lub, I n c , v .
Carey, 477 U.S. 54, 67-68 (1980) ; see S. Rep
20
No. 1011, 94th Cong . , 2d Se s s . 5 ( 1 9 7 6 ) .
There are three p r i n c i p l e s which must inform
the award o f f e e s . F i r s t , a p r e v a i l i n g
p l a i n t i f f " shou ld o r d i n a r i l y r e c o v e r an
a t t o r n e y ' s f e e unless sp e c i a l circumstances
would r e nd e r such an award un ju s t . " Hensley
v . E c k e r h a r t , 7 6 L. Ed . 2d a t 49; see
Chri s t iansburg Garment Co. v . EEOC, 434 U.S.
412 ( 1 9 7 8 ) ; Newman v . P i g g i e Park
E n t e r p r i s e s , 390 U.S. 400, 402 ( 1 968) (per
c u r i a m ) ; S. Rep. No. 1011, 94th Cong. , 2d
Sess . 2-3 ( 1 9 7 6 ) . Second, a p r e v a i l i n g
p l a i n t i f f ' s f e e must be r easonable . Hens l ey ,
76 L .Ed .2d at 50. T h i r d , a d e f e n d a n t i s
e n t i t l e d to r e c o v e r h i s f e e s from a
p l a i n t i f f under § 1 988 on ly "where the su i t
was v e x a t i o u s , f r i v o l o u s , o r b rought to
harass o r embarrass the de f end an t . " Hensley
v . Eckerhart , 76 L.Ed.2d at 48, n.2.
21
As t h i s Court noted in Chr is t i ansburg
Garment Co . , even "a moment 's r e f l e c t i o n "
e x p l a i n s t h i s d i f f e r e n t i a l t r e a t m e n t o f
p r e v a i l i n g p l a i n t i f f s and d e f e n d a n t s :
" F i r s t , . . . the p l a i n t i f f i s the chosen
ins t rument o f Congress to v i n d i c a t e 'a
p o l i c y t h a t Congress c o n s i d e r e d o f the
h ighest p r i o r i t y . ' Second, when a d i s t r i c t
c o u r t awards counse l f e e s t o a p r e v a i l i n g
p l a i n t i f f , i t i s awarding them a g a i n s t a
v i o l a t o r o f f e d e r a l l aw . " 434 U.S. at 418.
P e t i t i o n e r ' s arguments as to how Rule 68
should opera te in c i v i l r i g h t s cases ignores
these concerns.
A. The Current Standard for Awarding
Counsel Fees in C iv i l Rights Cases
B et te r Serves the Purposes o’? §
T 9 W .------------- ---- -------
R e c e n t l y in Hensley v . Eckerhar t ,
t h i s Court c l a r i f i e d the proper r e l a t i o n s h i p
o f the r e s u l t s obtained to an award o f
a t t o r n e y ' s f e e s . P e t i t i o n e r ' s cons t ruct i on
22
Of Rule 6 8 ' s r e l a t i o n s h i p t o § 1 988 i s
i n c o n s i s t e n t w i th the c o n s i d e r a t i o n s
enunciated in Hens ley .
H en s l e y s e t out the process by which a
t r i a l c o u r t should a s s e s s a p r e v a i l i n g
p l a i n t i f f ' s reques t f o r counsel f e e s . "The
most use ful s t a r t i n g po int . . . i s the number
o f hours r easonably expended m u l t i p l i e d by a
reasonable hour ly r a t e . " 76 L.Ed. 2d at 50.
In d e t e r m i n i n g the number o f hours r e a
so na b ly expended, the d i s t r i c t court should
exclude " e x c e s s i v e , redundant, o r o t h e r w i s e
unnecessary" hours. _Id. at 51; see Copeland
v . M a r s h a l l , 641 F .2d 880 (D.C. C i r . 1980)
( en banc) .
The d i s t r i c t c o u r t may a d j u s t t h i s
" l o d e s t a r f i g u r e to r e f l e c t the d e g r e e o f a
p l a i n t i f f ' s s u c c e s s . 76 L . E d . 2d at 52.
23
Th is Court made c l e a r , however, that such a
r e d u c t i o n should not be based on any
mechanical formula. I d . at 52, n. 11.
The Court " reemphasi z e [ d ] t h a t the
d i s t r i c t court has d i s c r e t i o n in determining
the amount o f the f e e award. Th is i s
appropr iate in v iew o f the d i s t r i c t c o u r t ' s
s u p e r i o r under s t and ing o f the l i t i g a t i o n , "
i d . at 53 and s t ressed the u n d e s i r a b i l i t y o f
hav ing the r eques t f o r counsel f ee s " r e s u l t
in a second major l i t i g a t i o n , " id .
1. P e t i t i o n e r s ' Standard Would
Improper ly Deny the Dis t r ic t
Court D iscre t ion in Awarding
Fees
Hensl ey f o c u s e s on the reasonableness
o f a p r e v a i l i n g p l a i n t i f f ' s r eques t , g iven
a l l the c i r c u m s t a n c e s . In c o n t r a s t ,
24
p e t i t i o n e r s ' approach t o t a l l y i g n o r e s the
i n d i v i d u a l c i r c u m s ta n c e s o f p a r t i c u l a r
c a s e s .
A d i s t r i c t c o u r t ' s e v a l u a t i o n o f a
reasonable a t t o r n e y ' s f ee i s made wi th in the
c o n t e x t o f the C o n g r e s s i o n a l purpose that
c o u r t s award f e e s adequate to i n su re the
competent r e p r e s e n t a t i o n o f c i v i l r i g h t s
p l a i n t i f f s . P e t i t i o n e r in t h i s case would
scrap th i s f a c t - and pol icy-bound inqu i ry in
f avor o f a mechanical r u l e t h a t would ho ld
a l l p o s t - o f f e r e x p e n d i t u r e s o f t ime by a
p l a i n t i f f t o be i r r e b u t t a b l y unreasonable.
Unl ike § 1988, o r , f o r that mat te r , Rule 54,
Ra le 68 r e q u i r e s a l e s s - s u c c e s s f u l o f f e r e e
to pay c o s t s i n c u r r e d a f t e r the o f f e r ; i t
a f f o rd s no d i s c r e t i o n to the t r i a l judge. As
t h i s Court noted in D e l t a A i r L i n e s ,
25
h o w e v e r , such d i s c r e t i o n i s c r i t i c a l to the
e n t i r e c o s t - a l l o c a t i o n scheme. 450 U.S. a t
353-55.
Th is Court d e c i s i v e l y r e j e c t e d such an
i r r e b u t t a b l e p resumpt ion in Chr is t iansburg
Garment Co . , 434 U . . S . a t 422. Such a
presumpt ion should a l s o be r e j e c t e d here .
I f , under C h r i s t i a n s b u r g Garment Co. , a
l o s i n g p l a i n t i f f cannot be f o r c e d to bear
h i s o p p o n e n t ' s c o s t s s imp ly because he has
l o s t , the case a g a i n s t r e q u i r i n g a winning
p l a i n t i f f to pay what would o therwise be the
d e f e n d a n t ' s o b i i g a t ion s imp ly because he
made an e r r o neo u s guess about h i s r ecovery
at t r i a l i s a l l the more c o m p e l l i n g .
Moreover , p e t i t i o n e r s ' cons truct i on o f
Rule 6 8 would impa ir the ac cu ra cy o f a
p l a i n t i f f ' s assessment o f a d e f e n d a n t ' s
o f f e r by encouraging a def endant to make a
v e r y e a r l y o f f e r . I f the o f f e r i s made
26 -
b e f o r e the p l a i n t i f f has comp le ted d i s
co ve r y , i t both r e q u i r e s the p l a i n t i f f t o
e v a l u a t e the m e r i t o f the o f f e r w i th o u t
adequate in fo rmat ion and p l a c e s the p l a i n
t i f f at r i s k o f being l i a b l e f o r a l l h i s own
f ee s i f d i s c o v e r y shows that he i s u n l i k e l y
to be more success fu l at t r i a l .
F i n a l l y , in a manner c o n t r a r y to the
p r i n c i p l e s o f the f e e - s h i f t i n g s t a t u t e ,
P e t i t i o n e r ' s p roposed mechan ica l s tandard
would work u n f a i r l y in many c i v i l r i g h t s
a c t i o n s . As C h r i s t i a n s b u r g Garment Co . ,
n o t e s , the law in many a reas o f
an t i d i s c r im in a t i on may change s u b s t a n t i a l l y
between the t ime a s u i t i s f i l e d and i t s
u l t imate d e t e rm in a t i on . Thus, a t the t ime
the o f f e r was made, the p l a i n t i f f might have
been e n t i t l e d to a l l the r e l i e f he was
s e e k i n g , g i v e n the f a c t s adduced at t r i a l .
By the t ime o f t r i a l , however, standards may
- 27
have changed in a way that den ies p l a i n t i f f
some o f t ha t r e l i e f . Even though the
r e s u l t s p l a i n t i f f has achieved under the new
s tandard a re " e x c e l l e n t , " H e n s l e y , 76
L . Ed.2d at 52, and worth the expendi ture o f
hours s p e n t , the y may not be equal t o the
d e f e n d a n t ' s e a r l i e r o f f e r . I f the f e e s
in cu r r e d a re consonant w i th the r e s u l t
a c h i e v e d , i t would be unreasonable to deny
those f ee s merely because p l a i n t i f f s cou ld
have done b e t t e r than the l aw a l l o w s .
A d d i t i o n a l l y , the 1946 amendments to Rule 68
make c l e a r t h a t a d e f e n d a n t whose f i r s t
o f f e r was not accep ted may make a d d i t i o n a l
o f f e r s : " I n the case o f s u c c e s s i v e o f f e r s
not accepted, the o f f e r o r i s saved the cos ts
incurred a f t e r the making o f the o f f e r which
was equal t o o r g r e a t e r than the judgment
u l t i m a t e l y o b t a i n e d . " A d v i s o r y Committee
N o t e , Fe d . R. C i v . P. 6 8 . I f , h o w e v e r , a
28 -
p l a i n t i f f ' s a t t o r n e y a d v i s e s him to r e j e c t
an o f f e r , the p l a i n t i f f f o l l o w s t h a t a d v i c e
and the defendant makes a new, h igher o f f e r ,
then the p l a i n t i f f ' s i n i t i a l r e f u s a l was
c l e a r l y r e a s o n a b l e , whatever the mer i t s o f
h is a d d i t i o na l r e f u s a l s . Thus, t o d i s a l l o w
the a t t o r n e y ' s f e e s i n v o l v e d in at tempt ing
to e x t r a c t a b e t t e r se t t l ement o f f e r from a
d e f e n d a n t who o f f e r s an u n a c c e p t a b l y low
amount the f i r s t t ime around would compel
p l a i n t i f f s t o s e t t l e f o r l e s s than t h e i r
c laims are r e a l l y worth.
O v e r a l l , t he n , by i g n o r i n g the
reasonableness o f the p a r t i e s ' a c t i o n s and
f o r b i d d i n g the p r op e r e x e r i s e o f j u d i c i a l
d i s c r e t i o n under § 1988, P e t i t i o n e r s '
i n t e r p r e t a t i o n undermines t h i s C o u r t ' s
l o n g s t a n d i n g approach to the award o f
a t t o r n e y ' s f e e s .
29
2. P e t i t i o n e r s ' Const ruct ion o f Rule
~1>~§ " Would Resul t in Increased
L i t i g a t i o n Over A t t o rn e y ' s Fees,
There a re two re as on s why a d o p t in g
p e t i t i o n e r ' s i n t e r p r e t a t i o n o f Rule 68 would
i n c r e a s e s the a l ready subs tan t i a l amount o f
f e e - a w a rd l i t i g a t i o n now o ccu p y in g the
c o u r t s . P e t i t i o n e r s * i n t e r p r e t a t i o n
p ro v id e s d e f e n d a n t s ' w i th an i n c e n t i v e t o
l i t i g a t e such q u e s t i o n s , and i t i n v o l v e s
a p p l i c a t i o n o f an e x t r a o r d i n a r i l y complex
s t and ar ds which w i l l encourage appeals from
t r i a l c o u r t ' s f i n d in gs .
I f p e t i t i o n e r s ' r e a d i n g o f the Rule
were adopted, a defendant would have to be a
f o o l not t o make some o f f e r in eve ry case
i n v o l v i n g f e e - s h i f t i n g , s i n c e th a t o f f e r ,
know m a t t e r how low , would a u t o m a t i c a l l y
t o l l the accumulat ion o f a t t o r n e y ' s f ee s i f
- 30
the p l a i n t i f f was l e s s success fu l at t r i a l .
increase the a l r ea d y s u b s t a n t i a l amount o f
f e e - a w a r d l i t i g a t i o n now o ccu p y in g the
cour ts . P e t i t i o n e r s ' i n t e r p r e t a t i o n prov ides
d e f e n d a n t s w i th an i n c e n t i v e t o l i t i g a t e
such ques t i on s , and i t i n v o l v e s a p p l i c a t i o n
o f an e x t r a o r d i n a r i l y complex standard which
w i l l en co urage ap p ea l s from t r i a l c o u r t ' s
f ind i n g s .
I f p e t i t i o n e r s ' r e a d i n g o f the Rule
were adopted, a defendant would have to be a
f o o l not t o make some o f f e r in e v e r y case
in vo l v ing f e e - s h i f t i n g , s ince that o f f e r , no
matter how low, would au to ma t i ca l l y t o l l the
a ccu mu la t i on o f a t t o r n e y ' s f e e s i f the
p l a i n t i f f was l e s s s u c c e s s f u l at t r i a l .
Thus, in e v e r y case in which the p l a i n t i f f
i s not w h o l l y s u c c e s s f u l in p r e v a i l i n g on
a l l h i s c l a i m s , a d e f e n d a n t may c l a im
r e l e a se from p o s t - o f f e r f e e s . Th is t ype o f
31
c la im w i l l be p a r t i c u l a r l y p r e v a l e n t
whenever the cost o f l i t i g a t i n g t h i s i s s u e
i s l i k e l y t o be l e s s than the c o s t s o f
paying the a d d i t i o n a l a t t o r n e y ' s f e e s the
p l a i n t i f f c l a im s .
Th is t e m p t a t i o n to l i t i g a t e w i l l be
exacerbated by the complex i t y o f many c i v i l
r i g h t s c a s e s . Rule 68 may be we l l designed
f o r cases i n v o l v i n g pure l y monetary c l a i m s .
I t i s ea sy t o see t h a t an o f f e r o f $50,000
plus cos ts i s more f avo rab le to the o f f e r e e
than an u l t i m a t e r e c o v e r y o f $25,000 plus
c o s t s . As t h i s Court no ted in H e n s l e y ,
h ow eve r , i t i s f a r more d i f f i c u l t to assess
the r e l a t i v e mer i ts o f var ious "packages" o f
r e l i e f which in vo l v e non-pecuniary r e cov e r y .
The Senate Report accompanying the enactment
o f § 1988 makes c r y s t a l c l e a r tha t
a t t o r n e y ' s f ee s in c i v i l r i g h t s cases should
not be a f f e c t e d by the non-pecuniary nature
32
o f the r i g h t s i n v o l v e d . S . Rep. No. 1011,
94th Co ng . , 2d Sess . 6 ( 1 9 7 6 ) . Thus, t o
e l a b o r a t e upon the C o u r t ' s example in
Hens ley , 76 L.Ed.2d at 52 n.11, suppose that
a p l a i n t i f f sued f o r $1 0 , 0 0 0 in damages and
an i n j u n c t i o n s t o p p i n g c e r t a i n a l l e g e d l y
u n c o n s t i t u t i o n a l p r i s o n p r a c t i c e s . I f the
de f endant o f f e r e d the p l a i n t i f f $5,000 in
damages, but re fused to agree e i t h e r that i t
had v i o l a t e d h i s c o n s t i t u t i o n a l r i g h t s o r
that i t would d i scont inue the p r a c t i c e s , the
p l a i n t i f f might w e l l r e f u s e the o f f e r .
Suppose at t r i a l the p l a i n t i f f i s unable to
p r o v e a c t u a l damages and t h e r e f o r e i s
e n t i t l e d o n l y to nominal damages o f $ 1 , see
Carey v . P i p h u s , 435 U.S. 247, 266 (1978) ,
33
biJt he succeeds in p r o v i n g the
u n c o n s t i t u t i o n a l i t y o f the p r a c t i c e and in
o b t a i n ing an in j unc t i on . I t i s undoubtedly
c l e a r t h a t the p l a i n t i f f i s a p r e v a i l i n g
p a r t y withi in the meaning o f § 1988. See
Hens le I ' 76 L . Ed. 2d at 50; McCann v .
Coughl i n , 69 8 F . 2d 112 ( 2d C i r . 1983)
(upholding award o f f e es in a s i m i l a r c a s e ) .
I t i s f a r l e s s c l e a r , h ow eve r , t h a t e v e r y
d i s t r i c t c o u r t would ho ld t h a t such a
p l a i n t i f f was more success fu l a t t r i a l than
he would have been had he a c c e p t e d the
d e f e n d a n t ' s o f f e r . Thus, even though the
d e f e n d a n t knows t h a t the p l a i n t i f f w i l l be
e n t i t l e d to some f e e award, he has an
i n c e n t i v e t o c h a l l e n g e p o s t - o f f e r f e e
r e ques ts on the ground t h a t the p l a i n t i f f
did not p r e v a i l by enough.
34
B. The Proposed S tandard Undermines
tBe Substant ive Goals o f the C i v i l
R ights Laws.
For n e a r l y twenty years t h i s Court has
r e c o g n i z e d t h a t e n fo r c em en t o f the c i v i l
r i g h t s laws depends on p r i v a t e l i t i g a t i o n
and t h a t when a c i v i l r i g h t s p l a i n t i f f
p r e v a i l s , "he does not do so f o r h i m s e l f
a l one but a l s o as a ' p r i v a t e a t t o r n e y
g e n e r a l , ' v i n d i c a t i n g a p o l i c y tha t Congress
considered o f the h ighest p r i o r i t y . " Newman
v . P i g g i e Park E n t e rp r i s e s , 390 U.S. at 402.
The Senate Repor t accompanying the passage
o f § 1988 put the matter b l u n t l y :
A l l o f the se c i v i l r i g h t s laws
depend h e a v i l y upon p r i v a t e
e n f o r c e m e n t , and f e e awards have
proved an e s s e n t i a l remedy i f
p r i v a t e c i t i z e n s a re to have a
me an ing fu l o p p o r t u n i t y t o
v i n d i c a t e the impor tan t
Congress ional p o l i c i e s which these
laws c o n t a i n ......... "No t to award
co unse l f e e s . . . would be
tantamount to r e p ea l in g the [ c i v i l
r i g h t s ] laws [ t h e m s e l v e s ] by
35
f r u s t r a t i n g t h e i r b a s i c
p u r p o s e . . . . " Without counse l f e e s
the g r a n t o f Federal j u r i s d i c t i o n
i s but an empty ge s tur e .
S. Rep. No. 1011, 94th Cong. , 2d Sess. 2, 3
(1976) ( c i t a t i o n s o m i t t ed ) .
P e t i t i o n e r s ’ c o n s t r u c t i o n o f Rule 68
would undermine th i s e x p l i c i t C o n g r e s s i o n a l
concern in two ways: F i r s t , i t w i l l d e t e r
p l a i n t i f f s f rom v i g o r o u s l y pursu ing v i n
d i c a t i o n o f t h e i r p e r s o n a l i n t e r e s t s in
nondiscr iminatory t reatment , such as backpay
o r r e i n s t a t e m e n t . Second, i t w i l l c r ea te a
dangerous i n c e n t i v e f o r an i n d i v i d u a l
p l a i n t i f f t o compromise the w id e r p u b l i c
i n t e r e s t s invo l ved in h i s p a r t i c u l a r c a s e .
Because o f t h e s e ad v e r s e e f f e c t s on the
s u b s t a n t i v e ends o f c i v i l r i g h t s l aw ,
P e t i t i o n e r s ' i n t e r p r e t a t i o n o f Rule 68 runs
a foul o f the Rules Enabling Act .
- 36
1. P e t i t i o n e r s ' Read ing o f Rule
68 w i l l Deter P l a i n t i f f s from
Pursuing Mer i to r i ous ' C laims.
As the Second C i r c u i t n o t e d , " [ t j h e
standard by which [ cour ts ] a l l o c a t e co unse l
f e e s between a v i c t o r i o u s l i t i g a n t and his
opponent can have a s u b s t a n t i a l e f f e c t on
s e t t l e m e n t n e g o t i a t i o n s , and, indeed, on a
p r o s p e c t i v e p l a i n t i f f ' s v e r y d e c i s i o n to
b r i n g s u i t . " Faraci v . Hickey-Freeman Co. ,
607 F .2d 1025, 1027 (2d C i r . 1979) . The
l e g i s l a t i v e h i s t o r y o f § 1988 c l e a r l y
r e c o g n i z e d tha t i n d i v i d u a l s who a l l e ge d the
v i o l a t i o n o f t h e i r c i v i l r i g h t s "must have
the o p p o r t u n i t y t o r e c o v e r what i t c o s t s
them to v i n d i c a t e these r i g h t s in c o u r t . . . .
I f the c o s t o f p r i v a t e enforcement becomes
too g r e a t t h e r e w i l l be no p r i v a t e
enforcement . " S. Rep. No. 1011, 94th Cong.,
2d Sess. 2 , 6 ( 1 9 7 6 ) .
37 -
P e t i t i o n e r s ' p o s i t i o n would r a i s e these
cos ts because i t pen a l i z es p l a i n t i f f s t w i c e
f o r r e j e c t i n g a s e t t l e m e n t o f f e r . The
p l a i n t i f f has a l r e a d y l o s t the d i f f e r e n c e
between the va lue o f the o f f e r and h i s l e s s
va luable r e co ver y a t t r i a l . The danger o f
such a r e s u l t a l ready prov ides an i n c en t i v e
f o r p l a i n t i f f s to s e t t l e . I t i s impor tan t
t o n o t e , howeve r , t h a t the danger o f a
l e s s e r r e c o v e r y on the m e r i t s i s d i r e c t l y
t i e d to the m e r i t s o f a p l a i n t i f f ' s c la im.
Thus, f o r c i n g the p l a i n t i f f t o bear t h i s
r i s k s e r v e s the C o n s t i t u t i o n a l and
C o n g r e s s i o n a l purposes embodied in
a n t i d i s c r im in a t in laws.
By c o n t r a s t , f o r c i n g a p r e v a i l i n g
p l a i n t i f f t o bear h i s own p o s t - o f f e r
a t t o r n e y ’ s f e e s in the mechan i ca l f ash ion
P e t i t i o n e r s propose imposes a p e n a l t y on
p l a i n t i f f s which may be t o t a l l y unrelated to
38
the m e r i t s o f t h e i r c a s e s . Many c i v i l
r i g h t s p l a i n t i f f s are p e r sons o f e x t r e m e l y
modest means who could not p o s s i b l y a f f o r d
the c o s t s o f l i t i g a t i n g t h e i r c l a i m s . In
normal c o n t i n g e n t - f e e l i t i g a t i o n , where
s o l e l y monetary damages a re c o nc e rn e d , a
p l a i n t i f f ' s impecuniousness does not pose an
insuperable b a r r i e r ; a p l a i n t i f f can execute
an agreement d i v i d i n g h i s r e co ver y between
h imse l f and h i s lawyer . The l awye r who has
been approached to r e p r e s e n t the p l a i n t i f f
dec ides to take the case and what percentage
o f the r e c o v e r y to demand by assess ing the
p r o b a b i l i t i e s o f var i ous outcomes.
In c o n t r a s t to the p r e s e n t c a s e , in
many c i v i l r i g h t s cases monetary damages are
e i t h e r i n s i g n i f i c a n t o r u n a v a i l a b l e . See
H en s l ey v . Ecke rhar t , 76 L.Ed.2d 58 at n.5
(Brennan, M a r s h a l l , Blackmun, & S t e v e n s ,
JJ. , c o n c u r r i n g in p a r t and d i s s e n t i n g in
39
p a r t ) ; Carey v . P i p h u s , 435 U. S . at 266 ;
Newman v . P i g g i e Park E n t e r p r i s e s , 390 U.S.
a t 402. In such c a s e s , a c o n t i n g e n c y f e e
could never prove adequate to induce lawyers
to under take r e p r e s e n t a t i o n o f p l a i n t i f f s ,
s i n c e the b e n e f i t o f any i n j u n c t i o n o r
d e c l a r a t i o n o f c o n s t i t u t i o n a l p r i n c i p l e are
not mon etar y , and t h e r e f o r e cannot be
a p p o r t i o n e d between the a t t o r n e y and h i s
c l i e n t . The l e g i s l a t i v e h i s t o r y o f § 1988
c l e a r l y s t a t e s that the nonpecuniary nature
o f r i g h t s i n v o l v e d should not a f f e c t a
p l a i n t i f f ' s a b i l i t y t o r e c o v e r a t t o r n e y ' s
f e e s , S. Rep. No. 1011, 94th Cong. , 2d Sess.
6 (1976) , and, by im p l i c a t i o n , a p l a i n t i f f ' s
a b i l i t y t o pursue h i s c a s e . P e t i t i o n e r ' s
c o n s t r u c t i o n o f § 1988 would impair a c i v i l
r i g h t s p l a i n t i f f ' s e f f e c t i v e v i n d i c a t i o n o f
h i s r i g h t s p r e c i s e l y because those r i g h t s
a re n onpec un ia ry . Such a p l a i n t i f f s imply
40
cannot o b t a i n r e p r e s e n t a t i o n by s p l i t t i n g
h is r ecovery with h i s a t t o rn ey : h i s r ecov er y
i s n o n d i v i s i b l e and n o n t r a n s f e r a b l e .
M o reo ve r , in o r d e r t o compensate f o r
the p o s s i b i l i t y tha t , al though they p r e v a i l ,
t h e i r c l i e n t s w i l l not r e co ver any monetary
damages, a t t o r n e y s a re l i k e l y t o demand a
higher pr opo r t i on o f a p l a i n t i f f ' s p o t e n t i a l
r e c o v e r y as t h e i r c o n t i n g e n t f e e . Even in
cases where p l a i n t i f f s f u l l y r e c o v e r , they
w i l l r e t a i n l e s s o f t h e i r award. P e t i
t i o n e r s ' c o n s t r u c t i o n thus w i l l both
a d v e r s e l y a f f e c t p r e v a i l i n g p l a i n t i f f s who
do not f a l l w i t h i n Rule 6 8 ' s o r b i t and
r e a l l o c a t e the p o t e n t i a l g a i n s o f a case
away from p l a i n t i f f s and toward a t t o r n e y s .
Both these r e s u l t s " s u b s t a n t i a l l y add to the
r i s k s " i n h e r i n g in c i v i l r i g h t s cases and
thus "unde rc u t the e f f o r t s o f Congress' to
41
p r o v i d e p l a i n t i f f s w i th a means o f f u l l y
r e a l i z i n g t h e i r c o n s t i t u t i o n a l r i g h t s .
Chr is t i ansburg Garment Co. , 434 U.S. at 422.
2. P e t i t i o n e r s 1 Reading o f Rule
68 C o n f l i c t s w i t h the Cent ra l
R o l e o f wP r i v a t e A t t o r n e y s
G e n e ra l " in the Enforcement
o f the C i v i l R ights Laws.
D e t e r r i n g an ind iv idua l p l a i n t i f f from
pursuing h i s case not on ly prevents him from
v in d i c a t i n g h is own r i g h t s ; i t a l so prevents
him from v i n d i c a t i n g w id e r i n t e r e s t s in
n o n d i s c r i m i n a t i o n , both th o s e o f t h i r d
p a r t i e s who w i l l be b e n e f i t e d by wha t e v e r
d e c l a r a t o r y or i n jun c t i v e r e l i e f i s obtained
and those o f the n a t i o n a t l a r g e in the
v i g o r o u s en fo r c em en t o f the c i v i l r i g h t s
laws ( see Newman v . P i g g i e En te rp r i s es , Inc ,
supra) . P e t i t i o n e r s ' cons t ruc t i on o f Rule 68
g i v e s r i s e t o two dangers: f i r s t , i t f o rc e s
ind i v i du a l p l a i n t i f f s to bear the t o t a l r i s k
42
o f cont in u ing to l i t i g a t e a f t e r a Rule 68
o f f e r even though they w i l l not r e t a i n the
f u l l b e n e f i t o f such a d e c i s i o n ; second, i t
c r e a t e s an i n c e n t i v e f o r p l a i n t i f f s t o
a c c e p t s e t t l e m e n t s which b e n e f i t them but
compromise the wider i n t e r e s t s i n vo l v ed .
J u s t i c e Br ennan ' s o p i n i o n in Hens le y
p o i n t e d out t h a t " [ c j i v i l r i g h t s remedies
o f t e n b e n e f i t a l a r g e number o f p e r s o n s ,
many o f them not invo l ved in the l i t i g a t i o n ,
making i t d i f f i c u l t both to e v a l u a t e what a
p a r t i c u l a r l awsu i t i s r e a l l y worth to those
who stand to gain from i t and to spread the
c o s t s o f o b t a i n i n g r e l i e f among them." 76
L .Ed .2d a t 58 n .5 . In the c o n t e x t o f
p e t i t i o n e r s ' argument on Rule 6 8 , t h i s means
that i t w i l l o f t e n be d i f f i c u l t to put an
actual va lue on e i t h e r the de f endan t ' s o f f e r
or the p l a i n t i f f ' s u l t imate r e cov e ry -— both
e s s e n t i a l measures f o r employing the Rule —
43
and tha t an i n d i v i d u a l p l a i n t i f f w i l l be
unable t o r ecoup the a t t o r n e y ' s f e e s
p e t i t i o n e r s ’ p o s i t i o n would f o r c e him to
bear , a l t hough o t h e r p a r t i e s w i l l b e n e f i t
f rom wha t e v e r s y s t e m i c r e l i e f i s ob ta ined
and would have b e n e f i t e d f rom w ha t e v e r
s y s t e m i c r e l i e f i s ob t a in ed and would have
b e n e f i t e d even more from the p l a i n t i f f ' s
gamble had i t paid o f f . "To a l l ow the o thers
to obta in f u l l b e n e f i t from the p l a i n t i f f ' s
e f f o r t s w i thout co nt r ibu t ing equ a l l y to the
l i t i g a t i o n expenses would be to e n r i c h [ o r
f a i l to c h a r g e ] the o t h e r s un jus t l y at the
p l a i n t i f f ' s e x p e n s e . " M i l l s v . E l e c t r i c
Au to -L i t e Co. , 396 U.S. 375, 392 (1970) .
Under p e t i t i o n e r s ' cons t ruc t i on o f the
Rule, a p l a i n t i f f presented with an o f f e r i s
f a c ed w i th not only the r i s k o f cont inuing
to l i t i g a t e , but a l s o the r i s k o f how a
judge w i l l e va lua te his assessment o f those
44
r i s k s o f l i t i g a t i o n . This enhanced r i s k to
p l a i n t i f f s p resents them w i th an i n c e n t i v e
to accept a d e f endan t ' s o f f e r which prov ides
them with some p e r sona l r e l i e f even though
i t c o m p l e t e l y i g n o r e s the i n t e r e s t s o f the
pu b l i c . Because the p l a i n t i f f cannot r e co ver
h i s p o s t - o f f e r f e e s , e i t h e r from the th i rd
p a r t i e s who would have shared h i s g a in o r
from the l o s i n g d e f e n d a n t , he w i l l be
e s p e c i a l l y r e l u c t a n t to i n c u r th e s e e x
penses.
P e t i t i o n e r s ' i n t e r p r e t a t i o n thus
enhances a d e f e n d a n t ' s o p p o r t u n i t y t o "buy
o f f " a p r i v a t e a t t o r n e y g e n e r a l and f r u s
t r a t e s the wider purposes o f a n t i d i s c r i m i n
a t i o n l aw . A d e f e n d a n t ' s o f f e r t o a
p l a i n t i f f o f $10 , 000 may l ea ve the p l a i n t i f f
b e t t e r o f f , but i f i t l e a d s the p l a i n t i f f
not t o l i t i g a t e a case which would have
awarded the p l a i n t i f f $5,000 and an in junc
45
t i o n a g a i n s t u n c o n s t i t u t i o n a l d i s c r i m i n a
tion,. i t may be an i n f e r i o r outcome both f o r
the p l a i n t i f f and f o r the p u b l i c . Moreover,
because Rule 68 c o n t e m p la t e s no j u d i c i a l
i n v o l v e m e n t in the s e t t l e m e n t p r o c e s s ,
" except in a proceeding to determine c o s t s , "
t h e r e i s no o p p o r t u n i t y f o r an independent
judge to safeguard the pub l i c i n t e r e s t s that
prompted f e e - s h i f t i n g l e g i s l a t i o n in the
f i r s t p l a c e . See P i s s , Against Se t t l emen t ,
93 Ya l e L .J . 1073 ( 1 9 8 4 ) . 1
3. P e t i t i o n e r s ' I n t e r p r e t a t i o n
o f Rule 68 I s I n c o n s i s t e n t
with the R u l e s E na b l in g A c t .~
The Ru les Enabl ing A c t , 28 U .S .C . §
2072 ( 1 9 8 2 ) , p r o v i d e s t h a t r u l e s o f
p r o c e d u re " s h a l l not a b r i d g e , e n l a r g e or
1
P e t i t i o n e r s ' i n t e r p r e t a t i o n o f Rule 68
would c r ea te even g r e a t e r dangers in c la ss
act i ons brought under Fed. R. Ci v . P. 23 See
i n f r a Sect i on I I I .
46
modi fy any subs tant i ve r i g h t . . . . " Whi le " the
l i n e between ' s u b s t a n c e ' and ' p r o c e d u r e '
s h i f t s as the l e g a l contex t changes, " Hanna
v . P lumer, 380 U.S. 460, 471 ( 1 9 6 5 ) ,
P e t i t i o n e r s ' cons t ruc t i on o f Rule 68 poses a
su bs tan t ia l danger o f abr idg ing p l a i n t i f f s '
s u b s t a n t i v e c o n s t i t u t i o n a l and s t a t u t o r y
r i g h t s .
A t t o r n e y ' s f e e s a re a component o f
co mpl e te r e l i e f to which p r e v a i l i n g
p l a i n t i f f s a re e n t i t l e d . See New York
G a s l i g h t C lub , I n c , v . Ca r ey , 447 U.S. 54,
67-68 ( 1 9 8 0 ) . By chang ing the s tandard
under which such f e e s a re awarded,
p e t i t i o n e r s ' i n t e r p r e t a t i o n would both
" abr idg e " and "m od i f y " p l a i n t i f f s ' r i g h t s ,
as the l o w e r c o u r t noted in t h i s c a s e .
Chesny v . Marek, 720 F .2d at 479-80.
47
I n d ee d , the way in which even c o u r t s
which have adopted p e t i t i o n e r s ' approach
l i m i t the Rule in o r d e r t o e x c lu d e a
d e f e n d a n t 8 s a t t o r n e y ' s f e e s f rom " c o s t s "
i m p l i c i t l y concedes the substant i ve nature
o f an a t t o r n e y ' s f e e s award. In Chesny
i t s e l f , the D i s t r i c t Court held that "a 'no '
answer i s r e a d i l y r e ac hed " t o the q u e s t i o n
whether a d e f e n d a n t ' s f e e s f a l l wi th in the
R u l e * Chesny v . Marek , 547 F. Supp. 542,
547 (N.D. 111. 1 982 ) . The court expla ined
i t s de c i s i o n by c la iming that defendants who
have l o s t are not p r e v a i l i n g p a r t i e s under §
1988. _Id. This reading i s dis ingenuous. I t
i s o n l y by v i e w i n g the de f endant as having
" p r e v a i l e d " in the p o s t - o f f e r s t a g e o f the
l i t i g a t i o n , and the p l a i n t i f f as hav ing
" l o s t , " t h a t the de f end an t i s e n t i t l e d to
p lace on p l a i n t i f f a burden — the payment o f
a p r e v a i l i n g p l a i n t i f f ' s f e e s - - h e would
48
o t h e r w i s e have to b e a r . However, there is
no p r in c i p l e d d i s t i n c t i o n between the " s u b
s t a n t i v e " s h i f t i n g o f d e f en d an ts ' f e e s and
the a l l e g e d l y " p r o c e d u r a l " d e v i c e
p e t i t i o n e r s support .
Th is Court should i n t e r p r e t Rule 68 to
a vo id the s u b s t a n t i v e impai rment
P e t i t i o n e r s ' c o n s t r u c t i o n would engender .
Excluding f e e s from "c o s t s " cove red by Rule
68 would b e s t s e r v e the c l e a r l y enunciated
c o n g r e s s i o n a l g o a l s o f a n t i d i s c r i m i n a t i o n
1 aw.
I I I . PETITIONERS' INTERPRETATION OF ROLE 68
CONFLICTS WITH THE POLICIES CONCERNING
CLASS ACTIONS EMBODIED IN ROLE 23.
Th is Court has r e p e a t e d l y r e c o g n i z e d
t h a t " s u i t s a l l e g i n g r a c i a l or e t h n i c
d i s c r i m i n a t i o n are o f t e n by t h e i r v e r y
na tu re c l a s s s u i t s , i n v o l v i n g c l a s s w i d e
w ro n g s . " E. g . , Genera l Te l ephone Co. v .
- 49
Fa lcon , 457 U.S. 145, 157 (1982) ; East Texas
Motor F r e i g h t System v. Rodr i guez , 431 U.S.
395, 405 ( 1 9 7 7 ) . The c l a s s a c t i on lawsu i t
i s a l o g i c a l e x t e n s i o n o f the concept o f
p r i v a t e a t t o r n e y s g e n e r a l in c i v i l r i g h t s
cases. Class act i ons o f t e n a f f o r d p l a i n t i f f s
who would not o t h e r w i s e be a b l e t o ob ta in
re p re s en ta t i o n a chance to have t h e i r c laims
p r e s e n t e d . P e t i t i o n e r s ' i n t e r p r e t a t i o n o f
Rule 6 8 , h ow eve r , c o n f l i c t s w i th both the
broad purposes o f c l a ss a c t i on c i v i l r i g h t s
l i t i g a t i o n and the nar row p r o c e d u r a l
r e q u i r e m e n t s o f Rule 23. In p a r t i c u l a r ,
p e t i t i o n e r s ' i n t e r p r e t a t i o n w i l l undermine
Rule 2 3 (a ) ( 4 ) ' s r e q u i r e m e n t t h a t " t h e
r e p r e s e n t a t i v e p a r t i e s . . . f a i r l y and
a d e q u a t e l y p r o t e c t the i n t e r e s t s o f the
c l a s s " and c r e a t e s prob lems w i th Rule
50
2 3 ( e ) ' s p r o v i s i o n that "a c l a s s a c t i on sha l l
not be d ismissed or compromised w i th o u t the
approval o f the c o u r t . . . . "
A. P e t i t i o n e r s ' Const ruct i on o f Rule
68 w i l l C r e a t e C o n f l i c t s o f
I n t e r e s t s Be tween Representa t i ves
and Class Members.
As c u r r e n t l y w r i t t e n , Rule 68 makes no
d i s t i n c t i o n between i n d i v i d u a l and c l a s s
a c t i o n s . In p r o p o s in g t h a t the Rule be
amended to i n c l u d e a t t o r n e y ' s f e e s the
A d v i s o r y Committee s p e c i f i c a l l y exempted
Rule 23 and 23.1 act i ons from i t s o r b i t . The
Committee e x p l a i n e d i t s recommendat ion by
po in t ing out that " [ an ] o f f e r e e ' s r e j e c t i o n
would burden a named r e p r e s e n t a t i v e - o f f e r e e
with the r i s k o f exposure to heavy l i a b i l i t y
f o r c o s t s and expenses t h a t cou ld not be
recouped from unnamed c l a s s m e m b e r s . . . .
[ T h i s ] could lead to a c o n f l i c t o f i n t e r e s t
between the named r e p r e s e n t a t i v e and o t h e r
- 51
members o f the c l a s s . " Proposed Rule 6 8 , 98
F.R.D. at 367. The on ly court to d iscuss the
i n t e r a c t i o n between Rule 23 and Rule 68
e x p l a i n e d i t s d ec i s i on not to apply Rule 68
in s im i la r terms. Rule 68 i s in tended to be
c o e r c i v e , t h a t i s , t o push p l a i n t i f f s t o
a c c ep t s e t t l e m e n t o f f e r s but " t h e same
c o e r s i v e n e s s t h a t , when d i r e c t e d aga inst a
par ty su ing in h i s own b e h a l f , s e r v e s the
purpose o f j u d i c i a l economy by r a i s i n g the
ante has an added e f f e c t in a c l a s s a c t i o n :
i t i n t r o d u c e s a p o t e n t i a l c o n f l i c t between
the named p a r t y ' s s e l f - i n t e r e s t and h i s
f i d u c i a r y du ty to the c l a s s . " Gay v .
W a i t e r s ' & D a i r y Lunchmen's Union, Local
No. 30, 86 F.R.D. 500, 502 (N.D. Cal . 1980).
The named p l a i n t i f f can avoid any exposure
f o r the c l a s s ' a t t o r n e y ' s f ee s by a c c e p t i n g
a s e t t l e m e n t ; he f aces overwhelming o b l i g a
t i ons i f he r e fuses the o f f e r and the c l a s s
52
re covers l e s s at t r i a l , o b l i g a t i o n s which he
cannot f o rc e the c la ss members to share. The
named p l a i n t i f f thus f a c e s a p o w e r f u l
i n c e n t i v e t o n e g o t i a t e f o r and a c c e p t a
s e t t l e m e n t which a f f o r d s him the maximum
i n d i v i d u a l r e l i e f p o s s i b l e , r e g a r d l e s s o f
whether the se t t l ement s a c r i f i c e s the c l a s s '
i n t e r e s t s . A named p l a i n t i f f who pursues
h is i n t e r e s t s in t h i s f a s h i o n cannot meet
the adequate r e p r e s e n t a t i o n requirement o f
Rule 23(a) ( 4 ) . See Hooks v . General Finance
C o r p . , 652 F .2d 651, 652 ( 6 th C i r . 1981)
( per cur iam) .
In most c a se s in which a p a r t i c u l a r
proposed r e p r e s e n t a t i v e i s r e j e c t e d because
o f a p o t e n t i a l or a c t u a l c o n f l i c t with the
unnamed c la ss members, another member o f the
c l a s s can a d e q u a t e l y r e p r e s e n t the common
i n t e r e s t s i n v o l v e d . P e t i t i o n e r s ' i n t e r p r e
t a t i o n in t h i s case i s p a r t i c u l a r l y
53
p e r n i c i o u s because e v e r y p o t e n t i a l
r e p r e s e n t a t i v e f a c e s t h i s c o n f l i c t o f
i n t e r e s t . The Court should t h e r e f o r e r e j e c t
a c o n s t r u c t i o n o f Rule 68 which need l e s s l y
e x a c e r b a t e s the t e n s i o n s between c l a s s
r e p r e s e n t a t i v e s and t h e i r members.
B. The A p p l i c a t i o n o f Rule 68, as
THT¥rpreEeT~~Ey~~Pe t i t io r ie r s~7~~~to
c T a s s " Action1§ ~~~"Wo~uTcr ' ~~Be
Inrons is tent w itKTFie Requirements
o f Rule~2TTSy7
Rule 2 3 ( e ) , which r equ i r es the c o u r t ' s
approva l b e f o r e a c l a s s a c t i o n i s compro
mised , i s d e s i g n e d " t o p r o t e c t n o n - p a r t y
members o f a c lass . . . from unjust or un fa i r
s e t t l e m e n t s a f f e c t i n g t h e i r r i g h t s by
r e p r e s e n t a t i v e s who l o s e i n t e r e s t o r a re
a b l e t o s e c ure s a t i s f a c t i o n o f t h e i r
i n d i v i d u a l c la im s by compromise. " Moreland
v . Rucker Pharmacal Co. , 63 F.R.D. 611, 615
(W.D. L a . 1 974) ; see Ne s e n o f f v. Muten, 67
54
P .R .D . 500, 502 (E . D . N . Y . 1974). In shor t ,
Rule 23(e ) i s designed to guard a g a i n s t the
dangers to which P e t i t i o n e r ' s i n t e r p r e t a t i o n
o f Rule 68 would g i v e r i s e .
The s p e c i f i c r e q u i r e m e n t s o f Rule 6 8 ,
however, cannot be smoothly i n t e g r a t e d i n t o
the f ramework o f j u d i c i a l o v e r s i g h t e s
t a b l i s h e d by Rule 23. F i r s t , Rule 68
e x p l i c i t l y contemplates no j u d i c i a l i n v o l v e
ment in the s e t t l e m e n t a c c e p ta n c e p r o c e s s .
See S c h e r i f f v . Beck, 452 F. Supp. 1254 (D.
C o l o . 1 9 7 8 ) . I f a p l a i n t i f f a c c e p t s the
d e f e n d a n t ' s o f f e r , then e i t h e r p a r t y may
f i l e the o f f e r "and thereupon the c l e r k
s h a l l e n t e r ju d gm e n t . " Fed. R. C i v . P. 68
( emphasis a d d e d ) . Thus, t h e r e i s no me
chanism under Rule 68 f o r s a f e g u a r d i n g the
r i g h t s o f c l a s s members. Rule 68 would
t h e r e f o r e have to be a b r o g a t e d in some
r e s p e c t s in o r d e r to s a t i s f y Rule 2 3 ( e ) .
55
E s s e n t i a l l y , Rule 23(e ) r e qu i r es a j u d i c i a l
hearing to cons ider the reasonableness o f an
o f f e r and a p l a i n t i f f ' s a c c e p t a n c e . But
Rule 68 does not r e q u i r e any showing o f
r e a s o n a b l e n e s s by a p a r t y . See D e l t a A i r
L i n e s v . A u g u s t , 450 U.S. a t 349-50. I f
r e a s o n a b l e n e s s i s a c r i t e r i o n , however, i t
should be as r e l e v a n t to the r e f u s a l o f an
o f f e r as i t i s to i t s acceptance. Import ing
a r e a s o n a b l e n e s s s tandard i n t o Rule 68
d e t e r m i n a t i o n s would r e nd e r the r u l e
super f luous. See supra Sect i on I I . A .
Second, Rule 68 s e t s an e x p l i c i t
t e n - d a y l i m i t on how lo ng an o f f e r may
remain open. See S t a f f e n d v . Lake Cent ra l
A i r l i n e s , 47 F .R .D . 218 (N.D. Ohio 1969).
There i s no way t h a t a p l a i n t i f f can
cons c i e n t i o u s l y determine whether o r not t o
a c c ep t a s e t t l e m e n t o f f e r in a case
in vo l v ing complex claims o f r e l i e f and many
56
c l a i m a n t s in so l i m i t e d a p e r i o d o f t ime.
Nor i s ten days s u f f i c i e n t t ime in which to
g i v e n o t i c e t o c l a s s members o f a pending
s e t t l e m e n t o r f o r them to r e spond . A g a in ,
some a l l o w a n c e f o r Rule 23 's concerns must
be made.
F i n a l l y , i f a named p l a i n t i f f i s
w i l l i n g to s e t t l e a c a s e , wha t ev e r the
t e rm s , i t cannot be the law tha t i f a judge
r e j e c t s the se t t l ement pursuant to his power
under Rule 2 3 ( e ) , the named p l a i n t i f f i s
s t i l l r e s p o n s i b l e f o r f e e s i n c u r r e d a f t e r
the o f f e r . To i n t e r p r e t Rule 68 as s t i l l
r e q u i r i n g the p l a i n t i f f t o bear the c o s t s
does no th ing to f u r t h e r the Ru l e ' s goal o f
encouraging se t t l emen t , s ince the p l a i n t i f f
cannot s e t t l e the case w i th o u t o t h e r
p a r t i e s ' c o n s e n t . Such an i n t e r p r e t a t i o n
would d e t e r c l a s s a c t i o n l i t i g a t i o n and
57
would r e s u l t in mu l t ip l e l aw su i t s , i n c r eas
ing the cos ts to p l a i n t i f f s , de f endants, and
the courts a l i k e .
Making e x c e p t i o n s to Rule 68 f o r c l ass
a c t i o n s would , howeve r , encourage some
p l a i n t i f f s u n n e c e s s a r i l y t o couch t h e i r
ca ses as c l a s s a c t i o n s . Th is t o o would
r e s u l t in added l i t i g a t i o n co s ts s ince the
procedural r equi rements f o r c e r t i f i c a t i o n ,
t o name one example , add time and expense.
Thus, Rule 68 should be in t e rp r e t e d to avoid
these dangers.
IV. PETITIONERS' CONSTRUCTION OF RULE 68
WOULD SIGNIFICANTLY IMPAIR THE
ATTORNEY-CLIENT RELATIONSHIP.
P e t i t i o n e r s ' i n t e r p r e t a t i o n o f Rule 68
c r e a t e s a dangerous p o t e n t i a l f o r apparent
c o n f l i c t s o f i n t e r e s t . I f the R u l e ' s
d e f i n i t i o n o f " c o s t s " i n c l u d e s a t t o r n e y ' s
f e e s , then a v a l i d s e t t l e m e n t o f f e r must
58
i n c l u d e some p r o v i s i o n f o r such expenses .
See D e l t a A i r L in e s v . August , 450 U.S. at
365 ( P o w e l l , J . , c o n c u r r i n g ) ; Scher i f f v ,
Beck , 452 F. Supp. at 1 260 . An a t t o r n e y
whose c l i e n t i s g i v e n an o f f e r o f judgment
under the Rule t h e r e f o r e i s f a c ed w i th a
c h o i c e : i f h i s c l i e n t a c c e p t s the d e f e n
da n t ' s o f f e r , then he w i l l be gu a ra n t eed a
reasonable a t t o r n e y ' s f e e , but i f h i s c l i e n t
r e j e c t s the o f f e r , he may be unable t o
r e c o v e r any o f h i s p o s t - o f f e r f e e s , r e ga rd
l e ss o f the r e as onab l eness o f the c l i e n t ' s
d e c i s i o n to turn down the o f f e r o r how
success fu l he i s at t r i a l .
Th is poses two dangers. F i r s t , when a
l a w ye r c o u n s e l s h i s c l i e n t t o a c c e p t an
o f f e r , i t may appear t h a t h i s adv i ce stems
more from a d e s i r e to ensure t h a t h i s f e e
w i l l be pa id than from a b e l i e f t h a t the
s e t t l e m e n t i s in h i s c l i e n t ' s b e s t
59
i n t e r e s t s . Th is appearance o f impropr i e ty ,
and a p l a i n t i f f ' s awareness o f the p o t e n t i a l
compromise o f h i s i n t e r e s t s , may we l l impede
the s e t t l e m e n t p r o c e s s , s i n c e c l i e n t s may
r e f u s e even r e a s o n a b l e o f f e r s because they
mist rust t h e i r a t t o rn e y s ' adv i ce .
Second, i t encourage s a p l a i n t i f f ' s
lawyer to t r e a t h i s compensat i on as one o f
the i n i t i a l s u b j e c t s o f n e g o t i a t i o n .
A l though a t t o r n e y ' s f e e s a re f o r m a l l y
awarded to the p r e v a i l i n g p a r t y , they are in
r e a l i t y granted to the counse l . A cco rd ing ly ,
i t has been ruled " improper f o r a lawyer in
a c i v i l r i g h t s s u i t to i n j e c t the q u e s t i o n
o f a t t o r n e y ' s f e e s i n t o the b a l anc e o f
s e t t l e m e n t d i s c u s s i o n s . " Rega l ado v .
Johnson , 79 F .R .D . 447, 451 (N.D. 111.
1 978) .
60
In r u n - o f - t h e - m i l l , i n d i v i d u a l
c o n t in g e n t - f e e l i t i g a t i o n , these dange rs do
no t loom so l a r g e . A p l a i n t i f f can t i e his
l a w y e r ' s r e c o v e r y d i r e c t l y t o h i s own
su cce ss and thus avoid a s h i f t o f resources
w i t h i n the r e c o v e r y p o o l . C_f. Chesny v .
Marek, 720 F.2d at 477-78.
In both nonpecuniary damages cases and
c lass a c t i on s , however , t h e r e i s no s i m p l e
way to guard aga inst a l a w y e r ' s se rv ing his
s e l f - i n t e r e s t f i r s t . £ f . P r a n d i n i v .
N a t i o n a l Tea Co . , 557 F.2d 1015, 1020 (3d
C i r . 1977) . In cases in v o l v i n g non-monetary
c la ims, the c l i e n t cannot t i e h i s a t t o r n e y ' s
payment to the amount o f h i s r e c o v e r y . I t
w i l l o f t e n be u nc l e a r t o him whether h i s
a t t o r n e y has t r aded o f f some o f h i s
i n jun c t i v e or d e c l a r a t o r y r e l i e f in r e t u r n
for a higher fee. See Mendoza v. United
States, 623 F. 2d 1 338, 1 352-53 ( 9th Cir.
1980).
This problem is exacerbated in class
actions. A defendant who is interested in
settling the total claim against him will be
indifferent to the allocation of the total
pool between the class and its attorney.
Prand ini, 557 F. 2d at 1 020, There is a
tremendous danger that both sides will agree
to a "sweetheart” arrangement under the
defendant will pay the named plaintiff and
his lawyer enough to satisfy them, and they
will sell out the interests of the rest of
the class. I d. at 1021.
Both the Third and the Ninth Circuits
have held that it is a plaintiff's
attorney's ethical duty to resolve the
plaintiff's substantive claims before
negotiating his fees. See Mendoza, 623 F.2d
- 61 -
62
at 1 3 53 ; Prand i n i , 557 F.2d at 1021; C f .
Manual f o r Complex L i t i g a t i o n , p a r t I , §
1.46, a t 75 ( 1 9 8 2 ) . An i n t e r p r e t a t i o n o f
Rule 68 which compels defendants to include
counsel f e e s in the n e g o t i a t i o n s in order to
b e n e f i t f rom the R u l e ' s c o e r c i v e power and
which does n o th ing to p r o t e c t p l a i n t i f f s
from sweetheart dea ls should be r e j e c t e d .
As the Court o f Appea ls r e c o g n i z e d
b e l o w , the p o t e n t i a l f o r c o n f l i c t s o f
i n t e r e s t e x i s t s whenever a l a w y e r ' s f e e i s
c o n t i n g e n t . Chesny v . Ma rek , 720 F .2d at
447. There i s no j u s t i f i c a t i o n , however ,
f o r e x a c e r b a t i n g tha t t e n s i o n in o r d e r t o
induce p l a i n t i f f s t o s e t t l e . The justness
o f a se t t l ement i s as important as the speed
with which i t i s achieved.
CONCLDSION
The d e c i s i o n o f the Seventh C i r c u i t
63
s h o u ld be a f f i r m e d .
R e s p e c t f u l l y submi tt ed ,
BARRY L. GOLDSTEIN
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(202) 638-3278
JULIUS LeVONNE CHAMBERS
CHARLES STEPHEN RALSTON *
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Attorneys for Amicus
Curiae
* Counsel of Record
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