Marek v. Chesny Brief Amicus Curiae
Public Court Documents
January 1, 1983
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Brief Collection, LDF Court Filings. Marek v. Chesny Brief Amicus Curiae, 1983. 257ed42f-b19a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/5d9647b5-b6b4-41a9-b6e2-2f95f4c88fab/marek-v-chesny-brief-amicus-curiae. Accessed July 04, 2025.
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I n TH E
Bnprmt tour! ni tf?T Itti&fr
October T erm . 1983
Jeffrey Markk. T homas W adycki
and L awrence R hode,
vs.
Petitioners,
A lfred W. Chesny ,
Respondent.
OH 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
B arry L . Goldstein
Suite 940
806 loth Street, N.W.
Washington, D.C. 20005
(202) 638-3278
J ulius 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
1
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 Fe e -Sh i f t in g
Statutes ....................... .. 7
B. P e t i t i o n e r s ' Con
s t ruc t i on o f Rule 68
Would Not Promote
Increased Set t lements 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
- 11
General" in the
Enforcement o f the
o f the C i v i l Rights
Laws ................................ 41
3. P e t i t i o n e r s ' I n t e r
p r e ta t i on o f Rule
68 Is Incons i s t en t
with the Rules
Enabling 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
In t e r e s t Between Repre
sen ta t i v es and Class
Members ................................. 5 0
B. The Appl i ca t i on o f Rule
68, as In te rpreted by
P e t i t i o n e r s , to Class
Act ions Would Be In
cons i s t ent 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
- i i i -
A. The Current Standard
f o r Awarding Counsel
Fees in C i v i l Rights
Cases Be t t er Serves the
Purposes o f § 1988 . . . 21
1. P e t i t i o n e r s '
Standard Would
Improper ly Deny
the D i s t r i c t
Court D isc re t i on
in Awarding Fees 23
2. P e t i t i o n e r s '
Construct ion o f
Rule 68 Would
Result in
Increased
L i t i g a t i o n Over
A t to rn ey ' s Fees . . 29
B. The Proposed Standard
Undermines the Substan
t i v e Goals o f the C i v i l
Rights Laws ................... 34
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 tor ious
Claims . . . . . . . . . 36
2. P e t i t i o n e r s '
Reading o f Rule
68 Con f l i c t s with
the Central Role o f
" P r i v a t e At torneys
Page
IV
TABLE OF AUTHORITIES
Cases Page
A l b e m a r l e Paper Co. v . Moody, 422
U.S. 405 ( 1 975 ) ...... ............................
^Alyeska P i p e l i n e Serv i ce Co. v . Wi lde r
ness Soc i e ty , 421 U.S. 240 ( 1 9 7 5 ) . . . 1 1 ,
'"Brown v. Board o f Education, 34 7 U.S.
483 ( 1 954 ) ..............................................
Carey v . Piphus, 435 U.S. 247
( 1 978) ...................................................... 32,
Chesny v . Marek, 720 F.2d 474
(7th C i r . 1983) ............... 7, 1 6, 46,47,60,
— Christ 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) .........................
^ Del ta A i r Lines v . August, 450
U.S. 346 ( 1981 ) ........................... 5,24,55,
Dennis v. Chang, 611 F .2d 1303
(9th C ir . 1980) .............................
.-East Texas Motor Fre i ght System v.
Rodriguez, 4312 U.S. 395
( 1 977 ) ................................. ..
Faraci v. Hickey-Freeman C o r . , 607
F . 2d 1 025 (2d C ir . 1 979 ) ...........
2
19
2
39
62
41
22
58
1 7
49
25
V
Page
Gay v. Wai t e rs ' & Dairy Lunchmen's
Union, Local No. 39, 7 6 F.R.D.
{ 500 (N.D. Cal . 1980)................... 51
XT'-
^General Telephone Co. v . Falcon,
457 U.S. 1 57 ( 1982) ............... .. 48
-Gr iggs v . Duke Power Co., 401 U.S.
424 ( 1971 ) ........................................ 2
Hanna v, Plumer, 380 U.S. 450
( 1965)............................................... 46
OSensley v . Eckerhart , __ U.S. __ ,
76 L.Ed.2d 40 (1983) ......... 10,16,20,21,22
27,31,32,33,38,41
Hooks v . Genera l F inance Co rp . ,
652 F .2d 651 (6th C ir . 1981) . . 52
McCann v. Coughlin, 698 F.2d 112
(2d C i r . 1983) ...............................
Mendoza v. United States , 623 F .2d
1 338 (9th C i r . ( 1980) ................. 61
M i l l s v. E l e c t r i c Auto -L i t e Co. ,
396 U.Ss. 375 ( 1 970 ) ................. • 4J
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. 1974) ............................. 53
VI -
Newman v. P i g g i e Park Ente rpr i ses ,
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. Nat ional Tea Co. , 557
F .2d 1015 (3rd C i r . 1977) ......... 60,61,62
Regalado v . Johnson, 79 F.R.D.
447 (N.D. 111. 1 978 ) ................... 59
.-Roadway Express, Inc. v . P iper ,
447 U.S. 752 ( 1 980) ............ . . . 7 , 1 1 , 14, 1 9
S c h e r i f f v . Beck, 452 F. Supp.
1254 (D. Colo. 1 9 7 8 ) . . . . ........... 54,58
Staf fend v. Lake Central A i r l i n e s ,
47 F.R.D. 218 (N.D. Ohio 1969) . . 55
Statutes and Rules
Act o f Sept. 12, 1980, Pub. L.
No. 96-349......................................... 1 1
Equal Pay Act o f 1963......................... 9
Fed. R. Civ. P. Rule 1 ..................... 5
Page
VI 1
Fed. P. Civ. P. Rule 2 3 . . ........ . . 4 ,48,49,50
52,53,54,55,56
Fed. R. C i8v . P. Rule 68 . . . . . . . . . passi fB.
Fed. R. Civ. P. Rule 3 7 ( b ) . . . . . . . . 11
Freedom o f Informat ion Act , 5
U.S.C. § 522(a) ( 4 ) (E) ( 1 982 ) ........... 1 3
28 U.S.C. § 1927 (1976; c o d i f i e d
as amended, 1 9 8 2 ) . . . ..................... 8, 1 1
28 U.S.C. § 1 920 ( 1 9 8 2 ) . ............. 5,1 3
28 U.S.C. § 2072 ( 1 982) ...........
29 U.S.C. § 206(d) (1982) .......... 9
29 U.S.C. § 216(b) ( 1 982 ) .......... 9
43 U.S.C. § 1 988 .................................. 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 Au tho r i t i es
F iss , Aga ins t Se t t l ement , 93 Yale
L . J. 1073 ( 1 9 8 4 ) . . 7 7 7 . . . . . . . . . . 45
Manual f o r Complex L i t i g a t i o n , Part
I , § 1.46 at 75 ( 1 9 8 2 ) . . . . . . . . . 62
Page
1
No. 83-1437
IN THE SUPREME COURT OP THE UNITED STATES
October Term, 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.
_ _ _ _ _ _ _ . = = = = = = = = = = =:r:=: = = =: = =: = = = =: = = = = = = = = = := = :=—=
On Writ 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 cu i t
_____ = _ =: = = = = = i====: = = = = = ==== = = = = = = = = = = = = = = = = =:=
BRIEF OF THE NAACP LEGAL DEFENSE AND
EDUCATIONAL FUND, INC., AS AMICUS CURIAE
In t e r e s t o f Amicus*
The NAACP Legal Defense and Educational
Fund, I n c . , i s a nonpro f i t co rpora t i on whose
* L e t t e r s o f consent to the f i l i n g o f th i s
B r i e f have been l odged wi th the C le rk o f
Court .
2
p r i n c i p a l purpose i s t o se cu re 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 l a c k p e o p l e . For
more than f o r t y y e a r s , i t s a t t o r n e y s have
rep res en ted p a r t i e s in thousands o f c i v i l
r i g h t s a c t i o n s , i n c l u d i n g many s i g n i f i c a n t
case s b e f o r e t h i s Cour t . S e e , e , g , ,
A lb em ar l e Paper Co. v . Moody, 422 U.S. 405
( 19 7 5 ) ; G r i g g s v . Duke Power Co. , 401 U.S.
424 (1971) ; Brown v . Board o f Educat i on ,
347 U.S. 483 (1954) .
A s u b s t a n t i a l p e r c e n t a g e o f LDF' s
current docket c o n s i s t s o f cases i n v o l v i n g
employment d i s c r i m i n a t i o n , v o t i n g r i g h t s ,
and v a r i o u s c o n s t i t u t i o n a l and s t a t u t o r y
c l a i m s . In these a r e a s , p r e v a i l i n g p l a i n
t i f f s no rm a l l y are e n t i t l e d to r e a s o n a b l e
a t t o r n e y ’ s f e e s pursuant to var i ous s t a tu
tory f e e - s h i f t i n g p r ov i s i ons .
3
LDF thus b e l i e v e s t h a t the C o u r t ' s
d e c i s i o n in the case at bar may s i g n i f i
c a n t l y a f f e c t both i t s own a b i l i t y to
r e pr esen t c l i en - t s in f u t u r e cases and the
a b i l i t y o f v i c t i m s o f d i s c r i m i n a t i o n in
general to v in d i ca t e t h e i r r i g h t s .
Summary o f Argument
1. D e f i n i n g the word " c o s t s " in Rule
68 to in c lu d e a t t o r n e y ' s f e e s in cases
i n v o l v i n g f e e —s h i f t i n g i s incons i s t en t with
the purpose o f the Rule and would not
promote j u s t and speedy s e t t l e m e n t s . In
a d d i t i o n , adopting p e t i t i o n e r ' s r e ad ing o f
" c o s t s " would simply r e d i s t r i b u t e the gains
o f set t l ement in favor o f defendants.
2, P e t i t i o n e r ' s cons truct ion o f Rule
68 would s i g n i f i c a n t l y undermine Cong ress '
i n t e n t in e n a c t i n g f e e - s h i f t i n g s t a t u t e s .
Congress and th i s Court have made c l e a r 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
a c t i o n s a re e n t i t l e d to r e a s o n a b l e a t t o r
n e y ' s f e e s un less th e r e are s p e c i a l c i r
cumstances which would re nde r an award o f
a t t o r n e y ' s f e e s un jus t . A p l a i n t i f f ' s
go od - fa i th r e fu sa l o f a de f endant ' s o f f e r o f
judgment s i m p l y i s not such a s p e c i a l
c i rcumstance.
3. I n c l u d i n g a t t o r n e y ' s f ee s wi thin
the d e f i n i t i o n o f c o s t s would pose t r e
mendous problems in c l a s s a c t i o n s . The
intent o f the d r a f t e r s o f Rule 68 to prevent
the c ou r t from becoming i n v o l v e d in the
o f f e r o f judgment c o n f l i c t s wi th the
s u p e r v i s o r y 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 d r i v e a wedge between the i n t e r e s t s o f
the named p l a i n t i f f and those o f the c l a s s .
4. P e t i t i o n e r s ' cons t ruct i on o f Rule
68 would c r e a t e , at the v e r y l e a s t , an
apparent c o n f l i c t o f i n t e r e s t between p l a i n
5
t i f f s and t h e i r a t t o r n e y s . I t would create
an i n c e n t i v e f o r l awye rs to counse 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 to guar
antee t h e i r own f ees rather 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 . PETITIONERS' CONSTRUCTION OF RULE 68
NEITHER PROPERLY INTERPRETS THE
LANGUAGE OF THE RULE NOR SERVES THE
POLICIES UNDERLYING THE RULE.
"The purpose o f Rule 68 i s to encourage
the s e t t l e m e n t o f 1 i t i g a t i o n , " D e l t a A i r
L in es v . A u gu s t ,, 4 5 0 U. S . 346, 352 ( 1 981 ) ,
and thus to cont r ibute 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. Civ . P. 1. In t e rp re t in g the
word " cos ts " to in c lude a t t o r n e y ' s f e e s as
wel l as the costs l i s t e d in 28 U.S. C. § 1920
6
(1982) in ca ses i n v o l v i n g s t a tu to ry a t t o 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 r e l e va n t to the inc en t i v es
i t prov ides f o r se t t l ement . The Rule app l i es
t o o f f e r s , " with costs then accrued." Fed.
R. C i v . P. 68 (emphasis a d d e d ) . The Rule
f u r t h e r p r o v i d e s tha t " [ i ] f the judgment
f i n a l l y ob ta ined by the o f f e r e e i s not more
f avorab le than the o f f e r , the o f f e r e e must
pay the c o s t s i n cu rr ed a f t e r the making o f
the o f f e r . " I d . (emphasis added) .
P e t i t i o n e r s argue t h a t c o u r t s should
look to any d e f i n i t i o n o f costs p r o v id e d by
a s u b s t a n t i v e s ta tu te invo lved in the case.
Because 42 U .S.C. § 1988 (Supp. V 1981)
s t a t e s t h a t " i n any ac t i on or proceeding to
enforce a prov i s i on o f Sect ions 1977, 1978,
1979, 1980, and 1981 o f the Rev i sed
7
S t a t u t e s , T i t l e IX o f Publ ic Law 92-318, or
T i t l e VI o f the C i v i l R i gh 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 th e r than the Uni ted
S t a t e s , a reasonable a t t o r n e y ' s f ee as part
o f the c o s t s , " p e t i t i o n e r s would in c lu de 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 to rn ey ' s
fees w i th i n 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 imate r e c o v e r y at t r i a l . As the
Court o f Appeals noted in th i s case, such a
conclusion " r e s t s on [a] r a t h e r mechanica l
l ink ing up" o f the two pr ov i s i ons . Chesny v.
Marek, 720 F . 2d 474, 478 (7th C i r . 1983).
A. The Language o f Rule 68 Does Hot
Permi t the Equat ion o f ^ C o s t l ^
Under tFe~" Rule w i th ' ." "Cos ts " as
UseH^^^Tee^sETft ing..Statutes I
In Roadway Express, Inc, v . P i p e r , 447
U.S. 752 ( 1980 ) , t h i s Court he ld tha 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 9 8 8 and
8
2000e-5 (k ) should not be incorporated into
28 U.S.C. § 1927 (1976; c o d i f i e d as amended,
1982) , which per m i t s a c o u r t t o tax the
ex cess c o s t s o f a p r o c e e d in g a g a in s t a
l awye r who m u l t i p l i e s the p r o c e e d in g s
unreasonab ly 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" tha t the n on -d e f i n e d
" c o s t s " ment ioned in § 1927 could be gi ven
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 to the case at
b a r .
To paraphrase 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
in t r od uc e i n t o the [Ru le ] d i s t i n c t i o n s
un r e la t ed to i t s g oa l . . . and could re su l t
in v i r t u a l l y random app l i ca t i on o f [Rule 68]
on the b a s i s o f o th e r laws tha 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 ocesses . " 447 U.S. at 761-762. I t
would make l i t t l e sense to i n t e rp 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 we igh 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 example , many employment d i s
cr iminat ion cases a l l e g in g bias on the basis
o f gender are brought under both T i t l e VI I
o f the C i v i l Rights Act o f 1964, 42 U.S.C. §
2000e (1976) , and the Equal Pay Act o f 1963,
29 U.S.C. § 206(d) (1982 ) . 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 recover 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 prov i s i on o f the Fa i r Labor
Standards Act a p p l i c a b l e t o Equal Pay Act
claims, however, d i r e c t s the cour 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 end an 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 tha t a p r e v a i l i n g
10
p l a i n t i f f should not r e c o v e r tha t pa r t o f
his p o s t - o f f e r f ees 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 tha t pa r t
involved 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 Hensley v.
Eckerhart , _____ U.S. _____ , 76 L.Ed.2d 40, 51
( 1 9 8 3 ) , t ha t many c i v i l r i g h t s cases
" in v o l v e a common co re 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 inappropr iate f o r a court to apport ion an
a t t o rn e y ' s f ees request among var ious claims
on a mechanical bas i s. Rule 68 simply 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 ees f o r the Equal Pay Act c l a im , s i n c e
they a re not " c o s t s . " Thus, a de f endant 's
c la im tha 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 ing 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 ra ns f o rm 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 . Surely ,
t h e r e i s no l o g i c a l reason to suppose that
the j u d i c i a l system should be more ea ge 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 la ims tha t o f v i r t u a l l y
id e n t i c a l Equal Pay Act causes o f ac 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 ly es ka 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), reserved f o r
Congress the d e l i c a t e duty o f dete rmining
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 , procedura l
p rov i s i ons . 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. §1927 (1982 ) ) , (amending § 1927
to i n c lu d e " a t t o r n e y ' s f e e s r e a s on a b l y
incurred" as we l l as " c o s t s " ) . In add i t i on ,
unl ike Rule 68, Fed. R. Civ P. 37 (b ) , which
- 1 1 -
12
concerns sanc t i ons f o r a p a r t y ' s f a i l u r e to
comply wi 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 no rma l l y
assess " the reasonab le e xpen se 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
comply ] ."
The r e c e n t p r oposa l by the A d v i s o r y
Committee on C i v i l Rules to amend Rule 68 to
in c lu d e a t t o r n e y ' s f e e s in a l l cases adds
support to the in ference that the Rule does
not c u r r e n t l y v i ew f e e s as c o s t s . The
proposed amendment provides that 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 luding reasonable
a t t o r n e y ' s f e e s , in cu rr ed 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 iminary Draf t o f Proposed Amendments to the
Federa l Rules o f C i v i l P r oc e d u re , 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
(1 983) [ h e r e i n a f t e r c i t e d as Proposed Rule
13
6 8] (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 luded 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 t h e ' p h r a s e "and
expenses inc luding . . . f e e s " would have been
unnecessary . The d r a f t e r s ' i n c l u s i o n o f
"and expenses including . . . f e e s " t he re fo re
supports the i n f e r e n c e tha t " c o s t s " as i t
now stands 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 chn ic a l " meaning, whi le " c o s t s " under §§
1988 and 2000e-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 id ing
fo r award o f " reasonable a t t o rn e y ' s f ees
and other l i t i g a t i o n costs reasonably
incurred" ) .
The proposed amendment a l s o would
e l i m i n a t e the r e qu i r emen t tha t a Rule 68
o f f e r include cos ts . The Advi sory Committee
Note exp la ins th 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 on which the i n c l u s i o n o f the
r equ i rement would cause i f read in con
j u n c t i o n wi 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 68, 98
F .R.D. at 364. This c o n f u s i o n would a l s o
a r i se i f p e t i t i o n e r s ' erroneous cons truct ion
o f the Rule i s adopted . I f a t t o rn e y ' s f ees
are not viewed as part o f the costs to which
Rule 68 a p p l i e s , then there 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 ea tment o f c o s t s in
f ed era l courts , 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.
at 761 ( quo t ing H.R. Rep. No. 50, 32d Cong.
1st Sess. 6 (1852 ) ) . The aim o f u n i f o r m i t y
- 14 -
15
embodied in Congress' in ten t and the Federal
Rules o f C i v i l P rocedures would b es t be
se rved by d e f i n i n g c o s t s in Rule 68 p r o
ceedings i d e n t i c a l l y in a l l cases.
B. P e t i t i o n e r s ' Construct ion o f Rule
nT~~Woul<3..No t " Promote In c r eased
Settlement.
P e t i t i o n e r s ' argument assumes that the
a l l owance o r d i s a l l o w a n c e o f p o s t - o f f e r
counse l f e e s w i l l o n l y a f f e c t p l a i n t i f f s
d e c i s i o n s whether to ac cep t s e t t l e m e n t
o f f e r s or continue to t r i a l . This exc lus i ve
c o n c e n t r a t i o n on the way in which Rule 68
i n f l u e n c e s p l a i n t i f f s ' inc en t i v es to accept
an o f f e r i g n o r e s the d e t e r r e n t e f f e c t
p e t i t i o n e r s ' p r op osa l w i l l have on d e
f e n d a n t s ' d e c i s i o n s to make s e t t l e m e n t
o f f e r s .
Through an o f f e r o f s e t t l e m e n t , the
defendant can f i x his l i a b i l i t y at a ce r t a in
sum and, he hopes, pay l es s 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 prospec ts should the
case go to t r i a l . Under the ru l e enunc ia ted
by the Seventh C i rcu 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 expe c t ed va lu e o f the
p l a i n t i f f ' s r e a s on a b l e a t t o r n e y ' s f e e s
(di 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 de f end an t
has a s t r ong i n c e n t i v e to 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 ing 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 de te rmine. The c o s t - s h i f t i n g
scheme embodied in § 1988 cont r ibutes to the
p r e s su re on de f endan ts to s e t t l e . See
Hens ley v . E c k e r h a r t , _____ U.S. _____ , 76
L.Ed .2d 40, n.2 (1983) (Brennan, J . ,
concurring in part and d i ss en t ing in p a r t ) ;
17
Dennis v . Chang , 611 F . 2d 1 3 0 3, 1 307 ( 9th
C i r . 1980). In n e go t i a t i ons , the p l a i n t i f f ,
who does not know the de f endant ' s su b j e c t i v e
assessment , w i l l t r y t o d r i v e the
d e f e n d a n 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 ' p r oposa l
would simply be to s h i f t the " p r i c e range "
w i t h i n which s e t t l e m e n t n e g o t i a t i o n s take
p lace. A defendant w i l l make a l owe r o f f e r
to a p l a i n t i f f , s ince the expected value o f
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 p o s t - o f f e r
a t to rney ' s f ees 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 a l so
w i l l decrease, since the cost o f p r o c e e d in g
to t r i a l w i l l now al so include that part o f
his a t t o rn e y ' s f ees which he cannot r e c o v e r
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 no th ing 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 - -wh i ch 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
narrower .
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 decrease , defendants w i l l r e t a in
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 ,
however , t ha t i t o r the r u l e s o f c i v i l
p rocedure in g e n e r a l are in tended to
d i s t r i b u t e the amount at issue in a lawsui t
in the de f endant 's f avo r . Indeed, the o n l y
cases which p e t i t i o n e r ' s cons truct ion 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 Congressional po 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 rp 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 equ i t i e s o f a
d i s p u t e and to the v a lu e s advanced by the
s u b s t a n t i v e l a w , " Roadway Express, I n c , v .
P iper , 447 U.S. at 762, i t must be r e j e c t e d .
I I . PETITIONERS' CONSTRUCTION OF ROLE 68
WOULD UNDERMINE THE CLEAR CONGRESSIONAL
POLICIES EMBODIED IN FEE-SHIFTING
PROVISIONS IN CIVIL RIGHTS CASES.
In dec iding to enac t § 1988 f o l l o w i n g
the dec i s i on in Alyeska P ip e l i n e Serv i ce Co.
v . W i l d e rn ess S o c i e t y , 421 U.S. 240 ( 1 975),
Congress c l e a r l y s t a t e d i t s b e l i e f tha t
a t to rney ' s f ees to p r e va i l i n g p a r t i e s play 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 ca ses : "One
aspec t o f comple 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 cons idered
necess ar 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 Club, In c , v .
Carey, 477 U.S. 54, 67—68 (1980) ; see S. Rep
20
No. 1011, 94th Cong. , 2d Sess . 5 ( 1 9 7 6 ) .
There are three p r in 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 spec ia l circumstances
would rende r such an award unjus t . " Hensley
v , Ecke rhar t , 76 L. Ed . 2d at 49; see
Christ 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 (1968) (per
c u r i a m ) ; S. Rep. No. 1011, 94th Cong. , 2d
Sess . 2-3 (1 97 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 reasonable . Hensl ey ,
76 L . Ed.2d at 50. T h i r d , a de f end an 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 § 1988 only "where the sui t
was v e x a t i o u s , f r i v o l o u s , or brought to
harass o r embarrass the de f endant . " Hensley
v . Eckerhart , 76 L.Ed.2d at 48, n.2.
21
As t h i s Court noted in Chris t iansburg
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 ea tment 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
inst 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 id e r e d o f the
highest p r i o r i t y . ' Second, when a d i s t r i c t
c ou 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 in s t a
v i o l a t o r o f f ed era 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 operate in c i v i l r i gh t s cases ignores
these concerns.
A. The Current Standard f o r Awarding
Counse lFees in C i v i l Rights Cases
Bet t e r Serves the Purposes o f §
1988.
R e c e n t l y in Hensley v . Eckerhart ,
t h i s Court c l a r i f i e d the proper r e l a t i o ns h ip
o f the r e s u l t s obtained to an award o f
P e t i t i o n e r ' s construct iona t t o r n e y ' s f e e s .
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 wi th the c o n s i d e r a t i o n s
enunciated in Hensley .
Hens ley s e t out the process by which a
t r i a l c ou r t should assess a p r e v a i l i n g
p l a i n t i f f ' s request f o r counsel f e e s . "The
most useful s t a r t in g po int . . . i s the number
o f hours reasonably expended mu l t ip l i ed by a
reasonable hourly r a t e . " 76 L.Ed. 2d at 50.
In d e t e r m in in g the number o f hours r e a
sonab ly expended, the d i s t r i c t court should
exclude " e x c e s s i v e , redundant, or 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 co ur t may a d ju s t t h i s
" l odes ta r f i g u r e to r e f l e c t the d eg r e e o f a
p l a i n t i f f ' s suc ce ss . 76 L . E d . 2d at 52.
23
This 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 " r eemphas i ze [ d ] t ha 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. This 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 unders tand ing o f the l i t i g a t i o n , "
id . at 53 and stressed the u n d e s i r a b i l i t y o f
hav ing the request f o r counsel f ees " r e s u l t
in a second major l i t i g a t i o n , " i d .
1. P e t i t i o n e r s 1 Standard Would
Im p rop e r 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
Hens le y 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 reques t , g i ven
a l l the c i r cu m s ta nc es . 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 cu mstanc es o f p a r t i c u l a r
c a se 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 thin 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 ou r t s award f e e s adequate to insure 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 inquiry in
favor o f a mechanical ru l e tha t would hold
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 matter , Rule 54,
Rule 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 in cu rr ed 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 ines ,
25 -
however , 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 presumpt ion in Christ iansburg
Garment Co. , 434 U . .S . at 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 rg 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 imply because he has
l o s t , the case a g a in s t r e qu i r in g a winning
p l a i n t i f f to pay what would otherwise be the
d e f e n d a n t ' s o b l i g a t i o n s imp ly because he
made an e r roneous guess about h is r ecovery
at t r i a l i s a l l the more compel l ing .
Moreove r , p e t i t i o n e r s ' construct ion o f
Rule 68 would impai r the accuracy 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 defendant 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 comple ted d i s
covery , 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 thou t
adequate in format 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 his own
fees i f d i s cov e ry shows that he i s u n l i k e l y
to be more successful 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 proposed 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 areas o f
an t i d i s c r im ina 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
ul t imate de t e rminat i on . Thus, at 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 time o f t r i a l , however, standards may
27
have changed in a way that denies 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 su 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 expenditure o f
hours s p e n t , they may not be equal to 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
incurr ed 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 ees merely because p l a i n t i f f s could
have done b e t t e r than the law 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 ha t a de f en dan t whose f i r s t
o f f e r was not accepted 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 costs
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
No te , Fed. R. C i v . P. 68. I f , however , a
28
p l a i n t i f f ' s a t t o r n e y adv 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 ow s tha 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 ts o f
his add i t i ona l r e fu sa 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 attempting
to ex t ra c t a b e t t e r se t t l ement o f f e r from a
de f en dan t who o f f e r s an unacc ep tab 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
claims are r e a l l y worth.
O v e r a l l , then , 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 proper 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 in g approach to the award o f
a t t o rn e y ' s f e e s .
29
2. P e t i t i o n e r s ' Construct ion o f Rule
Would Result in Increased
L i t i q a t i o n Over A t to rn ey ' s Fees.
There are two reasons why adop t ing
p e t i t i o n e r ' s in t e rp 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 substant ia l amount o f
f e e -award l i t i g a t i o n now occupy ing 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
prov id es 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 tandards which w i l l encourage appeals from
t r i a l c o u r t ' s f ind ings .
I f p e t i t i o n e r s ' r e ad ing 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 tha t o f f e r ,
know mat 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 rn e y ' s f ees i f
30
the p l a i n t i f f was l ess success fu l at t r i a l ,
increase the a l r eady s u b s t a n t i a l amount o f
f e e - awa rd l i t i g a t i o n now occupy ing the
courts. P e t i t i o n e r s ' i n t e rp r e t a t i o n prov ides
d e f end an 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 quest i ons , and i t invo l v es 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 encourage appea ls from t r i a l c o u r t ' s
f ind in g s .
I f p e t i t i o n e r s ' r e ad ing o f the Rule
were adopted, a defendant would have to be a
f o o l not to make some o f f e r in e v e r y case
invo 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 automat i ca l l y t o l l the
accumulat 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 end an t may c la im
re l ea se from p o s t - o f f e r f e e s . This 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 la ims.
Th is t e m p ta t i o n to l i t i g a t e w i l l be
exacerbated by the complexi ty 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 invo l v ing pure l y monetary c l a i m s .
I t i s easy to see tha t an o f f e r o f $50,000
plus costs i s more f avorab 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 noted in H e n s l e y ,
however , 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 meri ts o f var ious "packages" o f
r e l i e f which invo l ve non-pecuniary r ecovery .
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 rn ey ' s f ees 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
3 2
o f the r i g h t s i n v o l v e d . S. Rep. No. 1011,
94th Cong . , 2d Sess . 6 ( 1 9 7 6 ) . Thus, to
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 $10,000 in damages and
an i n j u n c t i o n s t opp ing 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
def 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 di 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 rove a c tu 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 iphus , 435 U.S. 247, 266 (1978) ,
33
but he succeeds in p r o v in g the
u nc on s t i tu 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 i n g an in junc t i on. I t i s undoubtedly
c l e a r tha 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 w i th i n the meaning o f § 1988. See
H e n s l e y , 76 L . Ed.2d at 5 0; McCann v .
C o u g h ! i n , 6 98 F . 2d 112 ( 2d C i r . 1983)
(upholding award o f f ees in a s i m i la r c a s e } .
I t i s f a r l e s s c l e a r , however , tha t e v e r y
d i s t r i c t c o u r t would hold tha t such a
p l a i n t i f f was more successful at t r i a l than
he would have been had he accep ted the
d e f e n d a n t ' s o f f e r . Thus, even though the
de f end an t knows tha 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 eques ts on the ground tha 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 Standard Undermines
the Substant ive Goals o f t h e ' c i v i Y
Rights Laws.
For n e a r l y twenty years th i s Court has
r e c o g n i z e d t h a t en fo rcement 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 tha 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 , 1 v ind i ca t ing a p o l i c y that Congress
considered o f the highest p r i o r i t y . " Newman
v . P i g g i e Park E n te rp r i se s , 390 U.S. at 402.
The Senate Repor t accompanying the passage
o f § 1988 put the matter b lu n t l y :
A l l o f these 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 fo r c em en 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
mean 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 important
Congressional p o l i c i e s which these
laws c o n t a i n ......... "No t to award
counse l f e e s . . . would be
tantamount to r epea l ing the [ c i v i l
r i g h t s ] laws [ th 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 ges ture .
S. Rep. No. 1011, 94th Cong., 2d Sess. 2, 3
(1976) ( c i t a t i o n s omi 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 na l
concern in two ways: F i r s t , i t w i l l de te r
p l a i n t i f f s from v i g o r o u s l y pursuing v i n
d i c a t i o n o f t h e i r p e r s o na l i n t e r e s t s in
nondiscr iminatory treatment , 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 wid'er p u b l i c
i n te r e s t s invol ved in h i s p a r t i c u l a r c a se .
Because o f th e s e adve rs 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 law,
P e t i t i o n e r s ' i n t e rp r e t a t i o n o f Rule 68 runs
afoul o f the Rules Enabling Act .
36
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 to r i ous Cl~aImsT~
As the Second C i r c u i t n o t e d , " [ t ] he
standard by which [courts ] a l l o c a t e counse 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 in g s u i t . " Faraci v . Hickey-Freeman Co.,
607 F . 2d 1 025 , 1 027 ( 2d C i r . 1 979 ) . 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 that ind i v idua ls who a l l eged 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 in d i ca 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 the re w i l l be no p r i v a t e
enforcement . " S. Rep. No. 1011, 94th Cong.,
2d Sess. 2, 6 (1976).
37
P e t i t i o n e r s ' po s i t i on would ra i s e these
costs because i t penal i zes 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 value o f the o f f e r and his l es s
va luable r ecovery at t r i a l . The danger o f
such a r e s u l t a l ready prov ides an incent i ve
f o r p l a i n t i f f s to s e t t l e . I t i s important
t o n o t e , however , t ha 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 laim.
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 io na l purposes embodied in
ant id 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 mechanica l fashion
Pet i t i o ne 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 gh t s p l a i n t i f f s are persons o f e x t r e m e l y
modest means who could not po ss ib l y a f f o rd
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 im 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 concerned , 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 ecovery between
himsel f and his lawyer. The l awyer 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 assessing the
p r o b a b i l i t i e s o f var ious outcomes.
In c o n t r a s t to the p r e s e n t ca se , 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 or u n a v a i l a b l e . See
Hens ley v . Eckerhart , 76 L.Ed.2d 58 at n.5
(Brennan, M a r s h a l l , Blackmun, & S te v ens ,
JJ. , c onc ur r in g in par t and d i s s e n t i n g in
3 9
par t ) ; Carey v . P i phus , 435 U . S . , a t 266 ;
Newman v . P i g g i e Park E n t e rp r i s e s , 390 U.S.
a t 402. In such c a s e s , a c o n t in g e n c y f e e
G°uld never prove adequate to induce lawyers
to undertake 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 ons t i tu t i on a l p r i n c i p l e are
not monetary , and t h e r e f o r e cannot be
appo r t i o ned 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 imp l i c a t i on , a p l a i n t i f f ' s
a b i l i t y to pursue h i s c a se . 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
are n on p e c u n ia r y . Such a p l a i n t i f f simply
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
his r ecovery with his a t to rney : his r ecovery
i s n on d i v i s i b l e and non t ra ns fe ra b l e .
Moreover , in o rde r to compensate f o r
the p o s s i b i l i t y that , although 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 ecover any monetary
damages, a t t o r n e y s are l i k e l y t o demand a
higher proport 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 th i n Rule 68 ' 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 in 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 "undercut 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 wi 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 .
Christ iansburq Garment Co. , 434 U.S. at 422.
2. P e t i t i o n e r s ' Reading o f Rule
/8 C on f l i c t s with the "Cent ra l
Ro l e o£ " P r i v a t e A t t o r n e y s
Genera l " in the Enforcement
o f the C i v i l Rights LawsT~
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 his case not only prevents him from
v in d ic a t in g his 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 ider 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 those 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 whatever
d ec la ra to ry or in junc t i ve r e l i e f i s obtained
and those o f the na t i on a t l a r g e in the
v i g o r o u s en fo rcement o f the c i v i l r i g h t s
laws ( see Newman v . P i g g i e Enterpr i ses , Inc.
supra) . P e t i t i o n e r s ’ cons truct ion o f Rule 68
g i v e s r i s e to two dangers: f i r s t , i t f o rces
ind i v idua 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 c o n t in u in g 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 cc ep 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 invo l ved.
J u s t i c e Brennan' s o p i n i o n in Hensley
p o in t e d out t ha t " [ c ] 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 involved 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 va lu a t e what a
p a r t i c u l a r l awsui 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 68, th 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 value on e i t h e r the de f endant ' s o f f e r
or the p l a i n t i f f ' s ul t imate r e covery — both
es s en t ia 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 to recoup 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 though o th e r p a r t i e s w i l l b e n e f i t
from whatever s y s t em ic r e l i e f i s obtained
and would have b e n e f i t e d from what ever
sy s t em ic r e l i e f i s ob ta ined 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 low the others
to obtain 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 cont r ibut ing equal 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 charge ] the o th e r s unjust 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 ' construct ion 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 aced wi 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 eva luate 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 presents them wi th an i n c e n t i v e
to accept a de f endant ' s o f f e r which prov ides
them with some persona 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 in t e r e s t s o f the
publ i c . Because the p l a i n t i f f cannot r ecover
h i s p o s t - o f f e r f e e s , e i t h e r from the thi rd
p a r t i e s who would have shared h i s ga 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 incur these 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 ion thus
enhances a d e f end an t ' s o p p o r t u n i t y to "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 es 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 to a
p l a i n t i f f o f $10,000 may l eave 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 ion 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 im in a -
t i o n , 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 pub l i c . Moreover,
because Rule 68 cont em pla te s no j u d i c i a l
in vo l v em en 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 publ ic 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 F i ss , Against Se t t l ement ,
1
93 Yale L.J. 1073 (1984).
3. P e t i t i o n e r s 8 I n t e r p r e t a t i o n
oT~^uTe~~"66 I s Tr iconsTsTent
with TEeHRin^s^Enabling Act.
The Rules Enabl ing A c t , 28 U .S .C. §
2072 (1 9 8 2 ) , p r o v i d e s th a t r u l e s o f
p rocedure " s h a l l not a b r i d g e , e n l a r g e or
P e t i t i o n e r s ' i n t e rp r e t a t i o n o f Rule 68
would c rea te even g r ea t e r dangers in c lass
act ions brought under Fed. R. Civ . P. 23 See
i n f r a Sect i on I I I .
46
modify any substant i ve r i g h t . . . . " While " 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 context changes, " Hanna
v . P Iumer , 380 U.S. 460 , 471 ( 1 965 ) ,
P e t i t i o n e r s ' cons truct ion o f Rule 68 poses a
subs tant 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 are a component o f
comple 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 Club, In c , v . Car ey , 447 U.S. 54,
67-68 ( 1 9 8 0 ) . By chang ing the s tandard
under which such f e e s are 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 idge" and "mod i f y " p l a i n t i f f s ' r i g h t s ,
as the l owe r c ou r t noted in t h i s c ase .
Chesny v . Marek, 720 F.2d at 479-80.
47 -
Indeed , the way in which even cour ts
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 ex c lude a
d e f e n d a n t ' s a t t o r n e y ' s f e e s from " c o s t s "
i m p l i c i t l y concedes the substant ive 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 eached" 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
Ru le . Chesny v . Marek, 547 P. Supp. 542,
547 (N.D. 111. 1982) . The court explained
i t s dec i s i on by claiming that defendants who
have l o s t are not p r e va i l i n g p a r t i e s under §
1988. Id. This reading i s disingenuous. I t
i s o n l y by v i e w i n g the defendant 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 ha t the de f endant 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 ea r . However, there is
no pr in c ip l ed d i s t i n c t i o n between the " su b
s t a n t i v e " s h i f t i n g o f de f endants ' f ees 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
avo id the s u b s t a n t i v e impairment
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 ee s from "co s ts " covered by Rule
68 would b es 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.
This Court has r e p e a t e d l y r e c o g n i z e d
tha 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
nature 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 ngs . " E. g . , General Te lephone Co. v .
49
Falcon, 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 act i on lawsui 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 ions o f t en a f f o rd 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 to obtain
representa t i on a chance to have th e i r claims
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 68, however , c o n f l i c t s wi th both the
broad purposes o f c l ass act i on c i v i l r i gh t s
l i t i g a t i o n and the narrow p r oce d u ra l
r e qu i r em en ts 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 23 (a ) ( 4 ) ' s r e qu i r em en t tha t " the
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 equ a te 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 problems wi th Rule
50
2 3 ( e ) ' s p r ov i s i on that "a c l ass act i on shal l
not be dismissed or compromised w i thou t the
approval o f the c o u r t . . . . "
A. P e t i t i o n e r s ' Construct ion o f Rule
6~8 W i l l Cr ea te C o n f l i c t s o f
I n t e r e s t s Between Representat i ves
and Class Members.
As c u r r e n t l y w r i t t en , 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 ropos ing t h a t the Rule be
amended to i n c lu 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 ions 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 int 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 could 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 68, 98
F.R.D. at 367. The only court to discuss 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 dec i s i on not to apply Rule 68
in s im i la r terms. Rule 68 i s intended 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
accep t s e t t l e m e n t o f f e r s but " the same
c o e r s i v e n e s s t h a t , when d i r e c t ed against a
party suing 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 ra i s i ng 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 in 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 duty to the c l a s s . " Gay v .
W a i t e r s ' & Da i ry 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 rn e y ' s f ees by a c c e p t i n g
a s e t t l e m e n t ; he faces overwhelming o b l i g a
t i ons i f he re fuses the o f f e r and the c l a s s
52
recovers 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 rce the c lass members to share. The
named p l a i n t i f f thus f a c e s a po w e r fu 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 cc ep 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 set 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
his 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 rp . , 652 F .2d 651, 652 (6th C i r . 1981)
( per cur iam) .
In most cases in which a p a r t i c u l a r
proposed re p re s en ta 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 tu a l c o n f l i c t with the
unnamed c lass 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 vo l v ed . P e t i t i o n e r s ' i n t e rp 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 yin t h i s case
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 less 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 ep re s en ta t i v es and t h e i r members.
B. rne A p p i i c a t
I n t e r p r e t e d
iun
■By”
U l XV U A C V W f
P e t i t i o n e r s , t o
C la ss A c t i o n s Would Be
Incons i s t en t ’with the Requirements
ol~Rule~23 (e )
Rule 2 3 ( e ) , which requ i res the c o u r t ' s
approval b e f o r e a c l a s s a c t i o n i s compro
mised, i s des i gned " t o p r o t e c t non -pa r t y
members o f a c lass . . . from unjust or unfa 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 are
a b l e to secure 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 ims by compromise." Moreland
v . Rucker Pharmacal Co. , 63 F.R.D. 611, 615
(W. D. La. 1 974 ) ; see Neseno f f v . Muten, 67
54
F.R.D. 500, 502 (E .D .N .Y . 1974). In short ,
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 rp 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 qu i r em en ts o f Rule 68,
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 se t t l emen t acc ep tance p r o c e s s .
See S c h e r i f f v . Beck, 452 F. Supp. 1254 (D.
Co lo . 1978 ) . 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 judgment . " Fed. R. C i v . P. 68
( emphasis added ) . 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 ab roga ted in some
r e s p e c t s in o rd e r to s a t i s f y Rule 2 3 ( e ) .
- 5 5 -
E s s e n t i a l l y , Rule 23(e) r equi res a j u d i c i a l
hearing to consider 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 ta n c e . But
Rule 68 does not r e q u i r e any showing o f
r e a s on a b le n ess by a p a r t y . See D e l t a Ai r
L in es v . A u gu s t , 450 U.S. at 349-50. I f
r e a s on a b le 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. Importing
a r e a s on 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 rende r the r u l e
superf luous. See supra Sect ion I I . A .
Second, Rule 68 s e t s an e x p l i c i t
t en -d ay l i m i t on how long an o f f e r may
remain open. See S t a f f e n d v . Laxe Central
A i r l i n e s , 47 F .R.D. 218 (N.D. Ohio 1969).
There i s no way tha t a p l a i n t i f f can
consc i en t i ous ly determine whether or not t o
accep t a s e t t l e m e n t o f f e r in a case
invo lv ing complex claims o f r e l i e f and many
56
c l a im an ts in so l i m i t e d a p e r i o d o f t ime.
Nor is 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 to c l a s s members o f a pending
se t t l emen t o r f o r them to r espond . Aga in ,
some a l l ow 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 se , whatever the
t e rms , i t cannot be the law that i f a judge
r e j e c t s the set 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 incu rr ed 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 Rule ' s goal o f
encouraging se t t lement , s ince the p l a i n t i f f
cannot s e t t l e the case w i thou t o th e r
p a r t i e s ' co nsen 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 mul t ip le l awsu i t s , in c reas
ing the costs to p l a i n t i f f s , defendants, and
the courts a l i k e .
Making e x cep t i ons to Rule 68 f o r c lass
a c t i o n s would, however , 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
cases as c l a s s a c t i o n s . Th is t oo would
r e s u l t in added l i t i g a t i o n costs since the
procedural requi 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 te rpr e ted to avoid
these dangers.
IV. PETITIONERS' CONSTRUCTION OP RULE 68
WOULD SIGNIFICANTLY IMPAIR THE
ATTORNEY-CLIENT RELATIONSHIP.
P e t i t i o n e r s ' i n t e rp 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 lu 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 lu 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 ines v . August , 450 U.S. at
3 6 5 ( P o w e l l , J. , c o n c u r r i n g ) ; S c h e r i f f v.
B e c k , 452 F. Supp. at 1260. 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 aced wi 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 de f en
dant ' s o f f e r , then he w i l l be guaranteed a
reasonable a t t o rn e y ' s f e e , but i f h is 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 his p o s t - o f f e r f e e s , r egard
l ess o f the r easonab leness 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 or how
successful he i s at t r i a l .
This poses two dangers. F i r s t , when a
l awyer counse l s h i s c l i e n t t o accep t an
o f f e r , i t may appear tha t h i s advice stems
more from a d e s i r e to ensure tha t h i s f e e
w i l l be pa id than from a b e l i e f t ha 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 ie ty ,
and a p l a i n t i f f ' s awareness o f the p o t en t i a l
compromise o f his 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 on a b l e o f f e r s because they
mistrust t h e i r a t to rneys ' adv ice .
Second, i t encourages 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 .
Al though a t t o r n e y ' s f e e s are f o r m a l l y
awarded to the p r e v a i l i n g pa r ty , they are in
r e a l i t y granted to the counsel . According 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 ba lance o f
s e t t l e m e n t d i s c u s s i o n s . " Regalado 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
co n t in gen t - f ee l i t i g a t i o n , these dangers do
not 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 to h i s own
success 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 P .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 imp le
way to guard against a l awye r ' s serv ing his
s e l f - i n t e r e s t f i r s t . C_f. P r an d in i v .
N a t i o n a l Tea Co. , 557 P.2d 1015, 1020 (3d
C i r . 1977) . In cases in vo l v ing non-monetary
cla ims, the c l i e n t cannot t i e his a t t o rn 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 unc l ea r to him whether h i s
a t t o r n e y has t raded o f f some o f h i s
in junc t i ve or d e c l a r a t o r y r e l i e f in r e tu rn
61
f o r a h i g h e r f e e . See Mendoza, v . Uni ted
S t a t e s , 623 F . 2d 1 338, 1 352-53 ( 9th C i r .
1980) .
Th is problem i s e x a c e rb a t e d in c l a s s
act i ons . A defendant who i s i n t e r e s t e d in
s e t t l i n g the t o t a l claim aga inst him w i l l be
i n d i f f e r e n t to the a l l o c a t i o n o f the t o t a l
poo l between the c l a s s and i t s a t t o r n e y .
Prand i n i , 557 F . 2d at 1020. There i s a
tremendous danger that both s ides w i l l agree
to a " s w e e t h e a r t " arrangement under the
de f end an t w i l l pay the named p l a i n t i f f and
his lawyer enough to s a t i s f y them, and they
w i l l s e l l out the i n t e r e s t s o f the r e s t o f
the c la ss . I d . at 1021.
Both the Th i rd and the Ninth C i rcu i t s
have he ld tha t i t i s a p l a i n t i f f ’ s
a t t o r n e y ' s e t h i c a l duty to r e s o l v e the
p l a i n t i f f ' s s u b s t a n t i v e c l a ims b e f o r e
n e g o t i a t i n g his f ee s . See Mendoza, 623 F .2d
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 ees in the nego t i a t i ons in order to
b e n e f i t from the R u l e ' s c o e r c i v e power and
which does no th ing to p r o t e c t p l a i n t i f f s
from sweetheart deal s 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
be l ow , 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 . Marek , 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 that t e n s i o n in o rd 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 set t l ement is 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 l d be a f f i r m e d .
Res pec t fu l l y submitted,
BARRY L. GOLDSTEIN
Sui te 940
806 15th S t r e e t , N.W.
Washington, D.C.20005
(202) 638-3278
JULIUS LeVONNE CHAMBERS
CHARLES STEPHEN RALSTON *
99 Hudson S tree t
16th Floor
New York, N.Y. 10013
(212) 219-1900
Attorneys f o r Amicus
Curiae
* Counsel o f Record
ft
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