Petition for Writ of Certiorari — Delta Air Lines, Inc. v. August
Supreme Court brief1981
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IN THE
Supreme Court of the Unites S
OCTOBER TERM, 1979
No. 79-
DELTA AIR LINES, INC..
Petitioner,
Vs.
ROSEMARY AUGUST.
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR
THE SEVENTH CIRCUIT.
E. ALLAN KOVAR,
Max G. BRITTAIN, JR.,
BuRR E. ANDERSON,
The Law Offices of
E. ALLAN Kovar, P. C..
Suite 1526,
100 South Wacker Drive.
Chicago, Illinois 60606.
Counsel tor Delta Air Lines, Inc.
Of Counsel:
ROBERT S. HARKEY,
GREGORY L. RIGGS.
Delta Air Lines, Inc.
Hartsfield Atlanta
International Airport.
Atlanta, Georgia 30320.
Gunthorp-Warren Printing Company, Chicago e Financial 6-6565
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ES enn
1.
iif.
By the Imposition of Trial Court Discretion in
Awarding Costs Pursuant to Rule 68 Offers, the
Court of Appeals Has Emasculated Rule 68....
A. Rule 68 Is Unambiguous and Mandatory. .
1. “Must” Is Imperative..............
2. Progenitor State Laws Compel an
Operation of Rule 68 ..............
3. Post Enactment Interpretation Compels
an Automatic Operation of Rule 68 ..
B. Rule 54(d) Has Been Effectively Duplicated
by the Court of Appeals Redrafting of
EE asia x we hes 6a OH Oo ep eases
By Its Admitted Rewriting of Rule 68, the Court
of Appeals Exceeded Its Authority..........
A. The Supreme Court Has Primary Responsi-
bility for Promulgating the Federal Rules. .
B. Redrafting of the Rules Should Be Done by
Legislation, Not Judicial Interpretation... .
Title VII Cases Do Not Warrant a Redrafting
ee ae bee kt hones be Od ee Oss
A. Exceptions to the Federal Rules Are Not
EPS Per ee eee ee eee
B. The Court of Appeals Ignored This Court's
Direction in Christiansbure Garment Co.
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United States vob & M> Schacter Brewing ©ompany. 356
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United States vo Hyass. $55 08. 570 (195K)
United States vo Indrelunas, 441 US. 216 (1978). . 2,
United States v. Isthmian Steamship Co., 359 LS. 314
(1959) 21
Untied States v. Mississippi, 380 US) 12% (1965)
United States v. Reynolds, 397 U.S. 14 61970)
”
9
Vili
United States v. Robinson, 361 U.S. 220 (1960)..... 21, 23
United States v. Schurz, 102 U.S. (12 Otto) 407 (1881)
Pi SEE TET Ee EO Pere LE Pee TT eee TT OTe. a i
Untermeyer v. Fidelity Daily Income Trust, 79 F. R. D. 36
Se MR, COIN sc panes dep asentaeertestuneenss 24
Van Dusen v. Barrack, 376 U.S. 612 (1964)......... 20
Wachsmuth v. Orient Ins. Co., 49 Neb. 590, 68 N. W.
ee Perry ee eee ere 11
Walters v. Roadway Express, 557 F.2d 521 (Sth Cir.
UM a seeart gp eee aicne sok pe Sanaa See ie 18
Weade v. Dichmann, Wright & Pugh, Inc., 337 U.S. 801
NS reli pad tA ARO a oak we RL ke ae 20
West v. Springfield Fire & Marine Ins. Co., 104 Kan. 157,
2 eB. ers es ee eee 11
Wolfsohn v. Hankin, 376 U.S. 203 (1964) .......... 20
Wordin v. Bemis, 33 Conn. 216 (1866).............. 11
Yeager v. Campion, 70 Colo. 183, 197 P. 898 (1921).. 11
Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S.
nO eee Sh ot IDE eye ARO 20
Statutes:
NE i Me ye as S taw yo ae sa meee 2
§$ 723b et seq. (1934) (current version at 28 U.S.C.
i a cae hades KARDON TRY Reece aces 6 es 19
42 U.S.C. § 2000(e) et seg., as Amended.......... passim
OE s.r eer are ee eee rer 15
ESS ESE ES Sear ee oa ae 15
Ce Pee china keke ch san taka ean he 15
Federal Rules of Civil Procedure:
er Ce dca aan CoN EK Oe Kea eS 9
Pe a ey eS cee ea kes eke ea ace ea ye eee 24
a ee es a EE oo ko dg baad be nda oan ee ee 23
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ee Se a a ee rer ee ae ey passim
Ps OD 6 5 hae now owdeee od Kaw eciee cea 9
Pe ks Nas pideh eNO eae passim
Fed. R. Civ. P. 1-4, 6, 8, 12-20, 22-38, 41, 42, 45, 48, 50-
54, 56-61, 65, 71A, 73, 77, 79, 81-83, 86.......... 19-20
Fed. R. Civ. P. 6(b), 12(a), 15(a), 16, 24(b), 26(a),
26(b), 26(d), 29, 59(d), 58, 62(a), 62(b), 62(c),
ee PR EAE ae Clo as stew eed. 8 kak Daw ares 25
Federal Rules of Criminal Procedure:
Re es S ) ee eer 21
ee eS ON os weir c etc eebas vee ne saeen 21
State Rules of Civil Procedure:
Alaska R. Civ. P. 68; Ariz. R. Civ. P. 68, D. C. R. Civ. P.
68; Fla. R. Civ. P. 1.442; Nev. R. Civ. P. 68......... 22
Cal. Civ. Proc. Code § 997 (West Supp. 1978)....... 11
Miscellaneous:
Recommendations of the Advisory Committee on the Pro-
posed Amendments to the Rules of Civil Procedure re-
produced in 5 F.R. D. 339 (1946)................ 8
Report of the Advisory Committee on the Proposed
Amendments to the Rules of Civil Procedure, repro-
ee a ee ee 8
Armstrong, “Proposed Amendments to Federal Rules of
Civil Procedure”, reproduced in 4 F.R. D. 124 (1946)
BLACKSTONE'S COMMENTARIES (Lewis ed. 1897)...... 15
Dobie, “The Federal Rules of Civil Procedure’, 25 Va.
en a OIG 5g eins Sys he's Case ae oO 7
Goodhart, “Cows, WW Yare bd 849 C1929) 14
Greenberger, “The Cos of Justice, An American Prob
lem. tn Dnelish Solution’, OVut bE Rev. d00 Ch9Gd) TF 7
Hod Tashi. Corprerip Prax Pavers CbQ20). 0
6 Moorr’s brprrar Prvciicr, Vol 6 C2d ed) 1976) 17
Selle and Girossman. EAPPh oy MEN E DESC REMEN CETON Taw
(1970) 22, 24
YA Sutherland, SEVEU TORY CONnseREC HON Goth ed E987 yy 10
Wright and Miller, Prone vt PRACTION AND Pro cr purt
(Rev ed 1979)
Note, 49 Yaurr Pood eo (boda) 1s
Note. “Rule 68. ASNew Pool tor Prtigation’, 87S Dunst
L. J. 888 ¢1978) 9
IN THI
Supreme Court of the United States
OcroBER TERM, 1979
No. 79-....
DET TA AIR LINES, INC,
Petitioner,
Vs
ROSEMARY AUGUST,
Respondent.
PETITION FOR A WRITE OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR
THE SEVENTH CIRCUIT.
Petitioner, Delta Air Lines, Inc. (“Delta”), prays that a writ
of certiorart issue to review the judgment and opinion of the
United States Court of Appeals for the Seventh Circuit entered
in these preeeedings on July 6. 1979.
OPINIONS BELOW.
The Order of the Court of Appeals denving Delta's petition
for rehearing and suggestion for hearing en banc is set forth
in Appendix A to this Petition. The epinion of the Court of
Appeals on the Rule 68 matter, reported as August v. Delta
Air Lines, Inc., 600 F.2d 699 (7th Cir. 1979), is set forth in
Appendix B to this Petition,
The unreported opinion of the United States District Court
for the Northern District of Ilinois on the Rule 68 matter is
set forth in Appendix C to ths Petition.
2
The separate unpublished opinion of the Court of Appeals on
the merits is set forth in Appendix D to this Petition. The un-
reported opinion of the United States District Court for the
Northern District of Illinois on the merits is set forth in Ap-
pendix E to this Petition.
JURISDICTION.
The judgment of the Court of Appeals for the Seventh Circuit
was entered on July 6, 1979. Delta’s timely petition for re-
hearing and suggestion for hearing en banc was denied by
Order of the Court of Appeals entered on August 28, 1979.
This Petition is filed within 90 days of said Order. This Court's
jurisdiction is invoked under 28 U.S.C. § 1254(1).
QUESTIONS PRESENTED.
Rule 68 of the Federal Rules of Civil Procedure provides
that the offeree who rejects an offer of judgment and does not
receive a more favorable judgment “must pay” the costs incurred
after the making of the offer. Delta made such an offer to a
Title VII plaintiff whose complaint was ultimately dismissed.
The court of appeals denied costs to Delta, holding that “a
liberal, not a technical, reading of Rule 68 is justified, at least
in a Title VII case.” (600 F.2d at 702, A7). The questions
thus presented are:
1. Whether the court of appeals erred in nullifying the
clear and unambiguous mandatory imposition of costs
under Rule 68?
2. Whether the court of appeals exceeded its authority
by rewriting Rule 68?
Rule 54(d) of the Federal Rules of Civil Procedure provides
that costs shall be allowed as of course to the prevailing party
unless the court otherwise directs. The question thus raised is:
3. Whether the court of appeals abused its discretion
3
by denying costs to the prevailing defendant under either
its liberal reading of Rule 68 or the unchallenged reading
of Rule 54(d)?
FEDERAL RULES INVOLVED.
Rule 54(d) of the Federal Rules of Civil Procedure for the
United States District Courts provides in relevant part:
“Costs. Except when express provision therefor is made
either in a statute of the United States or in these rules,
costs shall be allowed as of course to the prevailing party
unless the court otherwise directs... .”
Rule 68 of the Federal Rules of Civil Procedure for the
United States District Courts provides:
“At any time more than 10 days before the trial begins,
a party defending against a claim may serve upon the ad-
verse party an offer to allow judgment to be taken against
him for the money or property or to the effect specified in
his offer, with costs then accrued. If within 10 days after
the service of the offer the adverse party serves wriiten
notice that the offer is accepted either party may then file
the offer and notice of acceptance together with proof of
service thereof and thereupon the clerk shall enter judg-
ment. An offer not accepted shall be deemed withdrawn
and evidence thereof is not admissible except in a pro-
ceeding to determine costs. If the judgment finally obtained
by the offeree is not more favorable than the offer. the
offeree must pay the costs incurred after the making of the
ofier. The fact that an offer is made but not accepted does
not preclude a subsequent offer. When the liability of one
party to another has been determined by verdict or order
or judgment, but the amount or extent of the liability
remains to be determined by further proceedings, the party
adjudged liable may make an offer of judgment, which
shall have the same effect as an offer made before trial if
it is served within a reasonable time not less than 10 days
prior to the commencement of hearings to determine the
amount or extent of liability.
STATEMENT OF THE CASE.
In Tannary 1877 plaintiff sxed Delta allegung that her termina
Hon from emptov nent was discriminatorily motivated. i vie
lation of Title Vib et the Cit Rights Vet of 1064) as amended,
VS © SS We ef veg CVitle VIET) and further alleging
that Delta had defamed plant Delta demied such allegations
iui. nevertheless, inn Mav, 1877 made an Ofer of Tudgment
COME) pursuant te Rule OX of the Tederal Rules of Civil
Procedure Co bederal Rules”) an the amount of S480 C App br,
Ww QUT UL) Mantel failed te accept the OMTer. and the cause
was heard Ix Pystriet Cenrt tndge Titus J Hothvan between
September 21, 1877 and October Vy F877 Phe planttl
admitted mya deposition that she knew of we facts fe sup
port ber clan ef defamation and Deltas metion for sum
mart judgment was granted without appesition I planet
Tudgment on the Tile VU claun was, after trial entered: fort
Delia CApp bo pp AT 8D) Although mdicating that “the
court has ne difheulty a reaching tts decston CNTY. the
ditret court. witheut expheation. ordered cach party to beat
is own costs of Ttegation. ( \%2.)
Thereafter, Delta brought to the courts attention the pra
Ofer and moved that plamnff be ordered te pay all costs in
curred after the Offer had been made The District Court denied
the motion on the bavs that the Offer was net “arguably rea
conable” CApp ©. ALD)
Appeals were fled by beth parties. planttt appealed on the
merits, Delia appealed on the issue of the denial of costs, The
court of appeals afirmed the pidgment tor Delta on the merits,
commenting that plamnufis ev denee of discrimination was
Superheial, incomplete, madequate ot otherwise defective”
(App DD. Ale)
With respect to the Rule 68 matter, although stating that
‘the issue ws not free from doult” and “ijn spite of the foree of
5
[Delta's] arguments” (600 F.2d at 701, AS-6) the court of
appeals held that in the context of a Tithe VIL case a trial judge
may exercise his discretion and refuse to award costs to. the
offeror defendant who prevails, (600 F.2d at 702, App. B, pp.
A2.7.) The court of appeals aflirmed the trial court's order
that each party bear its own costs.
Delta's timely Petition for Rehearing and Suggestion for Hear-
ing En Bane was denied by the court of appeals on August 28,
1979) (App. AL p. AL)
REASONS FOR GRANTING THE WRIT.
In a narrow sense, the propriety of the Seventh Circuit's
extirpation of Rule O& in the context of a Tithe VIE case ts at
issue. Inca broader sense. the eflicaey and sanctity of a uniform
system of rules governing the operation of our federal district
COUTTS Is at issue
On the surface. this case involves the proper interpretation
and application of the cost shifting provisions of Rule 68. The
court of appeals, despite the mandatory, imperative language of
the rule, held that poley considerations constrained it) from
following the rule as written, inthe context of a Tithe VIP case.
Mithough aware that it was thus essentially duplicating the
provisions of Rule S4¢d). the court of appeals nevertheless
subjected Rule @8's operation to trial court discretion. That de-
cision alone, ignoring, as it does, the legislative history of the
rule, tenents of statutory construction, and federal and state
ease law precedent, compels this Court’s review.
The mischiet of the court of appeals decision, however, cuts
a deeper swath By rewriting and thereby effectively nullifying
the clear and unambiguous provisions of a Federal Rule, the
court of appeals has usurped the power expressly conferred by
Congress upon this Court, that of establishing general rules
governing civil procedure in the federal district courts.
{s
Thomight be urged that the urstant case, invelving “merely”
an awondoetoeests rs tet at suet magiitude as fe require this
Comet camtercesstam Delta subirits however, that the unbridled
evr et atroam at fle Dederal Rules ts mere than a harmless trans
pressnat Ns Tustiee Heelies trenehanth stated “May keenest
iiterest ts ee tte! vet ba wlyat ane c Wed great anesthans and
privat eases. burt tea ttle deers which the commen ran et
selee tons wand prass bey vet whieh have ur them the eenm
ad osemne Wider theer and therefore et seme profound: rites
etitral elvan rir tlre very) trsstte at the law WoT oT asa Gam
vee tered eesay Partners, *6O Gree)
Tre cemrt et appeals rn the distant ease Iv rewriting Rute
OS te ALA vrew ef temporal needs. has pormterusty torn at the
Cabra ot cot mterweven federal rites et procedure and: therety
orormached upen cre poevinee af iis Cau and the Comeress
Accontingly. ecause substantial questiens affecting the proper
ater eretanat amd verter app tration of the Pederal Rules are
mvt tes Ceort should grant this petuhen fer certrenan
Ry he nposition of Dial Cont Diseretion in Awanting Costs
Trrsnant fo Rute 68 Offers, the Court of Appeals Has Pinas:
ontated Rute 68
Kale G8 peevates a omeetaientt fy owlnelt a defomdant may
ai at Gave mowe dan ten dave betorw ta wer te have nidg
mre: Taker agate; for a So cet aru wieether witls oarsts
* * } ’ a ’
‘ Ae AN Wt vite Ow S THA AOE Pes Awl Te Maaigiiwitl
ALN OMS aLING “\ av XK Yo Wh we Tavawaiwie Ulan the
wie Ri ¢ SS inweots what wh wk iat Ve \ i SAN Ure Casts
iow alte Ge making of dhe oder ban iass addal
Vhove ov ae digsote that all a the fecha raquirements
YR gs Rule 88 have wor met oo the aisiant case Delta
made a ens afer crows han fen dave Defore tral CAPD br.
A 23.26) Maw dai as oan a nnigawat mow favorable
7
than the rejected offer, Nevertheless, both the trial court and
appellate court refused to award Delta its costs. Contrary to
the unambiguous language of the Rule, and admittedly at odds
With proer court decisions, the court of appeals adopted an
amorphous standard by which offers under Rule 68 are to be
viewed ) Ino se doing. the court of appeals has emasculated
Rule @8
A. Rule 68 Is Unambiguous and Mandatory.
The device of an Offer of Judgment was entirely new to the
federal courts when it was promulgated and adopted in 1938 as
Rule OS of the then new Federal Rules of Civil Procedure. See
Dobie. The Pederal Rules of Civil Procedure, 28 Val Ll. Rev
Sot, WOR E1938) Offers of Judgment were well known and
used in vatious state courts prior to P938. Accordingly, the
Advisory, Committee Notes concomitant with Rule 68 in its
mitial mtreduction ite the federal system contamn no exphica-
thon of the rule, but merely cite the state stgtutes of Minnesota,
Montana and New York See 12 Wright AND MILLER, Fep-
PRAD PRactICn AND PRocrepurr § 3001 (Rev. ed. 1973),
The Rule was amended in 1946 (etl March 19, 1948). Of
partioular sigmificance i the fact that the language requiring an
unsuccesstul offeree to pay costs was cnanged from “shall pay
costs” fo the present language of “must pay costs.” (App. G,
1 The court et appeals stated standard ts:
“Ina litle VEL case the tual judge may exercise his discretion
and allow costs under Rule 68 when, viewed as of the time of
the offer along with consideration of the final outcome of the
case. the offer can be seen to have been made in good faith
and to have had some reasonable relauenship in amount to the
issues. Lingatien risks. and expenses anticipated and involved in
the case.” LooO FE. 2d at 702, A7)
2 A contemporaneous commentary on the newly enacted Rules
stated that the provision directing the offeree to pay coasts
“reheves the offenng defendant of the burden of future costs,
therety constituting an inducement in the making of such offer.”
Tytic, The Fadend® Rules ot Civil Procedure. capra at 304, n. 198.
Ss
A35). The Advisory Committee Notes to the 1948 amendments
do not specifically discuss this change from “shall” to “must”.
However, in the Report of the Advisory Committee on the Pro-
posed Amendments to the Rules of Civil Procedure (repro-
duced in 5 F.R. D. 433 (1946)) it is stated with respect to
Rule 68 that “[defendant’s] first and only offer will operate to
save him the costs from the time of the offer if the plaintiff
ultimately obtains a judgment less than the sum offered.” 5
F.R.D. at 483. Further, a First Draft of the Advisory Com-
mittee, (submitted by Walter P. Armstrong as “Proposed
Amendments To Federal Rules For Civil Procedures” and re-
produced in 4 F.R.D. 124 (1946)) indicates that Rule 68
was changed to “remove ambiguities” and stated that the
amended provision would provide that “no costs shall be re-
coverable by the offeree which were incurred after the making
of an offer equal to or greater than the judgment finally ob-
tained by the offeree, and that he should pay costs from the time
of such offer.” 4 F.R.D at 126. Additionally, in the final
Recommendations of the Advisory Committee (submitted by
Walter P. Armstrong and reproduced at 5 F.R.D. 339
(1946)), the changes in Rule 68 are discussed in the section
titled “Ambiguities Resolved and Unresolved,” wherein the
sentence changing “shall” to “must” is quoted. 5 F. R. D. at 350.
While the comments and intentions of the Advisory Committee
are not binding, they are entitled to considerable weight in in-
terpreting the Federal Rules. See Mississippi Publishing Corp.
v. Murphree, 326 U.S. 438, 444 (1946). The Committee's
intentions with respect to the operation of Rule 68 are clear; a
discretionary operation was neither envisioned nor drafted.
1, “Must” Is Imperative.
The federal courts have had little occasion to decide what
standards of statutory construction govern the use of the word
“must”. Ostensibly that is due to the infrequency with which
9
it is used.* In no case has “must” been interpreted as being
discretionary. In Berg v. Merchant, 15 F.2d 990 (6th Cir.
1926), cert. den. 274 U.S. 738 (1927) the Sixth Circuit in-
terpreted the word “must” in the context of a wills statute and
stated:
“(T]he word ‘must’ is so imperative in its meaning that no
3. Delta’s scrutiny of the Federal Rules of Civil Procedure, for
example, reveals that “must” is used but three times in addition to
Rule 68:
Rule 14(a)
Otherwise he must obtain leave on motion to all parties. . . .
Rule 30(a)
Leave of court, granted with or without notice, must be ob-
tained only if the plaintiff seeks to take a deposition prior to
the expiration of 30 days... .
Rule 56(e)
When a motion for summary judgment is made and sup-
ported . . . an adverse party . . . must set forth specific
facts showing that there is a genuine issue for trial.
The cases construing the above-referenced provisions have applied
them in a mandatory, non-discretionary manner. See generally,
Rule 14(a): State Mutual Life Assurance Company vy. Arthur
Andersen & Co., 65 F. R. D. 518, 521 (S. D. N. Y. 1975); Meilinger
vV. Metropolitan Edison Company, 34 F.R.D. 143, 145 (E. D. Pa.
1963); 6 WricHT & MILLER, Feperat Practice & PROCEDURE,
S$ 1454 (Rev. ed. 1973).
Rule 30(a): Brause v. Travelers Fire Insurance Co., 19 F.R.D.
231, 234 (S.D.N. Y. 1956); Park & Tilford Distillers Corp. v.
Distillers Co., 19 F.R.D. 169, 171 (S.D.N. Y. 1956); 8 WRIGHT
& MILLER, supra at § 2104.
Rule 56(e}: Adickes v. S. H. Kress & Co., 398 U.S. 144, 160
(1970); Macklin v. Butler, 553 F.2d 525, 528 (7th Cir. 1977);
Felix v. Young, 536 F. 2d 1126, 1135 (6th Cir. 1976); Turof] v.
May Co., 531 F.2d 1357, 1362 (6th Cir. 1976); Modern Home
Institute, Inc. v. Hartford Accident & Indemnity Co., 513 F. 2d
102, 109 (2d Cir. 1975); Stevens v. Barnard, 512 F.2d 876, 878
(10th Cir. 1975); Brown v. Ford Motor Co., 494 F.2d 418, 420
(10th Cir. 1974); Pace v. Southern Express Co., 409 F.2d 331,
334 (7th Cir. 1969); Town House, Inc. v. Paulino, 381 F.2d 811,
814 (9th Cir. 1967); Liberty Leasing Co. Vv. Hillsum Sales Corp.,
380 F. 2d 1013, 1015 (Sth Cir. 1967); Fov v. Norfolk & Western
Railway Co., 377 F.2d 243, 246 (4th Cir. 1967); Fowler v.
Southern Bell Telephone & Telegraph Co., 343 F.2d 150, 154
(Sth Cir. 1965).
10
case has been called to our attention where that word has
been read ‘may’”. 15 F. 2d at 991.
Moreover, the word “may” is used three times in Rule 68. It
is a fundamental principle of statutory construction that “[wJhere
both mandatory and directory verbs are used in the same statute,
... it is a fair inference that the legislature realized the differ-
ence in meaning, and intended that the verbs used should carry
with them their ordinary meaning.” 2A SUTHERLAND STATU-
TORY CONSTRUCTION § 57.11 (4th ed. 1973).
Finally, this Court has recognized that “the meaning of the
statute must, in the first instance, be sought in the language
in which the act is framed, and if that is plain, . . . the sole
function of the courts is to enforce it according to its terms.”
Caminetti v. United States, 242 U.S. 470, 485 (1917). This
Court has previously admonished appellate courts to refrain
from the sort of judicial legislation here involved. In Schlagen-
hauf Vv. Holder, 379 U.S. 104 (1964), Justice Goldberg stated
for the Court:
“The Federal Rules of Civil Proceuure should be liberally
construed, but they should not be expanded by disregard-
ing plainly expressed limitations.” 379 U.S. at 121.
Where courts of appeals have chosen to ignore plain lan-
guage and clear meaning, this Court has interceded. See, e.g.,
Agosto v. Immigration & Naturalization Service, 436 U.S. 748,
754-55 (1978).
The language of Rule 68 is clear and unambiguous. It is
cast in mandatory, non-discretionary language and should be
so interpreted. To do otherwise is to ignore the imperative
“must”, thereby eviscerating the Rule.
2. Progenitor State Laws Compel an Automatic Operation
of Rule 68.
As previously noted, the original adoption of Rule 68 into
the federal rules was based upon similar state court procedures.
Although the Advisory Committee Notes reference only the
1}
states of Minnesota, Montana and New York, several other
states had established procedures for offers of judgment prior to
1938.4
A feview of state court decisions rendered pursuant to the
respective state procedures for offers of judgment, prior to the
enactment of Rule 68, clearly reveals that a mandatory, non-
discretionary imposition of costs under said procedures was
upheld.”
4. See, e.g. California—Cal. Civ. Proc. Code § 997 (West Supp.
1978); Colorado— Yeager v. Campion, 70 Colo. 183, 197 P. 898
(1921); Connecticut—Wordin vy. Bemis, 33 Conn. 216 (1866);
Indiana—Prather v. Pritchard, 26 Ind. 65 (18606); Kansas—-W est
v. Springfield Fire & Marine Ins. Co., 104 Kan. 157, 185 P. 12
(1919); Nebraska—Wachsmuth v. Orient ins. Co., 49 Neb. 590,
68 N. W. 935 (1896); Nevada—Herring-Hall-Marvin Sate Co. v.
Balliet, 44 Nev. 94, 190 P. 76 (1920); Orcgon—Hammond Vv.
Northern Pac. R. Co., 23 Or. 157, 31 P. 299 (1892): South
Dakota—Sioux Falls Adjustment Co. v. Penn Soo Oil Co., 53 §. D.
77, 220 N. W. 146 (1928); Wisconsin—Newton v. Allis, 16 Wis.
210 (1862).
5. For example, in Ranney v. Russel, 3 Duer 689 (Super. Ct.
N.Y. 1854) the New York court iaterpreted section 3858 of the New
York Code, predecessor to the statute noted in the Advisory Commit-
tee Notes to Rule 68, and stated, in part: “If a defendant. . . . wishes
to make an offer, which a plaintiff must accept at the peril of paying
the subsequent costs, unless he recovers a more favorable judgment
than the one offered. . . .” Id. at 690. In Mareulis v. Selaman &
Berck, 223 A. D. 634, 229 N. Y.S. 157 (Super Ct. N. Y. 1928) the
court stated: “[IIf an offer properly made is net accepted, penalty is
provided in the matter of costs after an offer has been tendered and
refused, dependent on the final result.” 229 N. Y.S. at ISS.
In Wachsmuth v. Orient Ins. Co., supra, the Nebraska Supreme
Court held: “It is plainly the purpose of the statute to require in
such case the plaintiff to bear his own costs, and also to bear the
costs of defendant accruing after the offer” 68 N.W. at 957.
In Herring-Hall-Marvin Safe Co. v. Balliet, supra. the Nevada
Supreme Court interpreted its statute and held: “{I}f the plaintiff
fail to obtain a more favorable judgment, he shall not recover costs,
but shall pay the defendant’s costs from the time of the offer.”
190 P. at 77.
In Sioux Falls Adjustment Co. v. Penn Soo Oil Co.. supre, the
South Dakota Supreme Court stated: “As this [plaintiff's judgement]
was less than the amount stated in the offer of judgment. defendant
(Footnote continued on next page.)
12
The conclusion is inescapable that if the drafters of original
Rule 68 intended it to operate in the federal courts as it had
in the various states, an automatic, non-discretionary operation
was mandated.
3. Post Enactment Interpretation Compels an Automatic
Operation of Rule 68.
While there have not been an abundance of cases decided in
which the issue of mandatory versus discretionary application
of Rule 68 has been an issue, the few available decisions support
the mandatory approach.
Directly on point and at odds with the decisions below in the
instant case, is the recent decision of Dyal v. Cleland, 1/9
F.R. D. 696 (D. D.C. 1978). Dual involved a Title VII case
in which the trial court ruled in favor of defendant and dismissed
plaintiff's claim. As part of his dismissal order, Judge Richey
ordered that each party bear its own costs. Thereafter, defend-
ant (the Veteran’s Administration, represented by the United
States Attorney's office in Washington) brought to the court's
attention the fact inat a Rule 68 offer had been made. After
contrasting Rule 54(d) with Rule 68, Judge Richey stated:
“Rule 68 automatically charges the plaintiff with the
defendant's costs incurred after an offer of judgment when
the requirements of the rule are satisfied . . . The plain
language of the rule eliminates the Court’s discretion.” 79
F. R. D. at 697.
In support of his conclusion, Judge Richey cited the only
(Footnote continued from preceding page.)
is entitled to its taxable costs in this court and in the trial court.”
220 N. W. at 147.
Finally, in Hammond v. Northern Pacific R. Co. supra, the
Oregon Supreme Court interpreted its offer of judgment provision
(which stated that a plaintiff who failed to recover a more favorable
judgment shall not recover costs from the time of the offer) to
provide that: “[UJnless the plaintiff accept [the offer], or recover a
more favorable judgment, the defendant is entitled to costs accruing
subsequent to such offer.” 31 P. at 301.
13
other federal decision directly on point, Mr. Hanger, Inc. Vv.
Cut Rate Plastic Hangers, Inc., 63 F.R.D. 607 (E.D.N. Y.
1974). 79 F.R.D. at 697.
In Mr. Hanger, a patent infringement suit, defendant had
made a twenty-five dollar ($25.00) offer pursuant to Rule 68
before trial. After trial, the court ruled for defendant, con-
cluding that plaintiff's patent was invalid. However, under the
discretion permitted by Rule 54(d), costs were not awarded to
defendant. Thereafter defendant brought to the court’s attention
its prior Rule 68 offer and requested all costs incurred after the
making of the offer. Plaintiff argued that the awarding of costs
is always a matter of the court's discretion, even in the presence
of a Rule 68 offer. Judge Re held that:
“Although there is no case directly in point, the express
language of the rule . . . leave[s] no doubt that costs must
be awarded once a proper offer of judgment has been
made. It cannot be questioned that the rule itself is couched
in mandatory terms. .. .” 63 F. R. D. at 610."
Likewise, state courts interpreting identical or similar pro-
Visions as Rule 68, after its amendment in 1948, have had no
difficulty finding an automatic, mandatory intendment to the
6. All other federal cases interpreting Rule 68, while not directly
addressing the issues raised herein, have implicitly accepted the
automatic, non-discretionary operation of Rule 68. See, e.g., Truth
Seeker Co., Inc. v. Durning, 147 F.2d 54, 56 (2d Cir. 1945):
Staffend v. Lake Central Airlines, Inc., 47 F.R.D. 218. 219-20
(N. D. Ohio 1969); Maguire v. Federal C rop Insurance Corp., 9
F. R. D. 240, 242 (W. D. La. 1949), rev'd in part on other erds. 181
F. 2d 320 (Sth Cir. 1950); Nabors v. Texas Co., 32 F. Supp. 91, 92
(W. D. La. 1940); see also 12 Wricut & MILLER, FEDERAL PRAC-
TICE & PROCEDURE, § 3005 (Rev. ed. 1973). Further, in federal
cases which have mentioned Rule 68 either in comparative con-
texts or without any explication of its operation, no indication is
given therein of a discretionary application of said rule. See, e.2.,
Mason v. Belieu, 543 F. 2d 215 (D.C. Cir.) cert. denied 429 U. S.
852 (1976); Thomas v. Trans World Airlines, Inc., 457 F. 2d
1053 (3d Cir. 1972); Scheriff v. Beck, 452 F. Supp. 1254 (D. Colo.
1978); Read v. Baker, 438 F. Supp. 737 (D. Del. 1977), aff'd. 577
F. 2d 728 (3d Cir.), cert. denied, 439 U.S. 869 (1978): Perkins
Vv. New Orleans Athletics Club, 429 F. Supp. 661 (E. D. La. 1976):
Honea v. Crescent Ford Truck Sales, 394 F. Supp. 201 (E.D.
La. 1975).
operation ef therm respective ules. Phus, the following deersians
SUpPport Phe ni anelatony Hpesthan ab costs: ats Patel of the opera
fon et offers of padyment MiAdautsed vo Dominick, 482 2. 2d
JAS ¢ Alaska 1969) Clnterpreting a proveston identical to fed
eral Rule OS. the Alaska Supreme Court stated) “ATE that ts
requinedd te brag ite play the offence mist pty the costs
portion of Civil Rule G8 as a recavery whieh falls short of the
otter ot pudeanent [Alay other interpretation would) be
comtiaty fo fhe clear meanmy of the text ot the rule. as well
asain derogation of the rule's cationate "fd at dO. Pomeroy
Voi TP Cal App HE BE 986 Cal Rpts S22 CEal App
IYVTTY (A OME ASE S OO ot the Cade of Civil Procedure,
which was worded smlarly fo) Rule O8) with COP 98s
whieh was broader a scope and: couched un the permissive
nav” the court stated “Under COP 9887 costs: frome the
date ef offer are recevened as a imatter of right, whereas
inidet new COP YN Costs are treeovered: at the disere
homoat the eau fe at 476 MY Cal Rpts at Soa),
Sanesreinan VO Metinart 220 Sa Md a7 CEla Apyy 1978)
(Ulan argued that the fermmelogy Comist pay tie costs
wt Dlomda Rule 1 4d0) REPL should be unterpreted as) dis
erehenan and net omandaters Rereting such argument, the
court stated) These arguments are not well taken bromia
reading of faferal cases Loring Nader vO Devas Co. siapral,
eomsimie Rale OS et the Pederal Rules of Cial Procedure,
whieh ts oidemneal fe Rule 144°) ROP. amd from what we
determine f° Be the untent of the Plomda rule. we hold that the
eupress language leaves me doubt chat reasonable costs be
awaniad th Ure defendant The rule itself. as couched i man
Gatory fers ‘Pd at 478.) Condes \. HePman, 19 Wis, 2d
Sta, PN Woda TET EC EM@EY CTE Wasconsit Supreme
Court, etiag an earher case of Novae V. Sperteld, 207 Wis, 248,
od NW SaNSO (TOSS), statad “[Detendants mnght have
ARerad nadement uinter sec 209 O02) Stats in wineh case if
,
the plauiafls had recta the otter and the plaids Gilad to
recever a mnwe (4. wrabic janigmient the defendants would have
i)
been entitled to full costs.” 19 Wis. 2d at 238, 120 N.W, 2d
at 138). see also Krawiee V. Aratt, 163 Conn, 445, 311 A. 2d
R82 (1972); Crudup \. Marrero, ST N. J. 383, 273 A. 2d 16
(1971). Benda Vv. Fana, 1O Ohio St, 2d 259, 227 N. E. 2d 197
(1967).
Its abundantly clear that the court of appeals herein ignored
precedent and persuasive reasoning from all available sources
when it chose te climinate the “technical” requirement of the
rule i the instant case. This Court: should therefore review
and redress the lower courts emasculation of Rule 08.
B. Rule 54(d) Has Been Effectively Duplicated by the Court
of Appeals Redrafting of Rule 68.
The present “American” position regarding the litigation bur-
dens of costs rs the product of a gradual seven hundred year
evolution. At the outset, the common law denied costs to both
Partics. Ri vcksTONE’S COMMENTARIES 398-400) (Lewis ed.
1887). Although the losing party was lable to the Crown tor at
least a nominal sum, neither unsuccesstul plaintit® nor defendant
Wais faved for costs payable to the prevailing opponent. Good-
hart, Coss 38 Yart bo J. 848 882 (1929). In the early
thirteenth century, the courts began to award to prevailing plain-
ifs a reasonable sum as costs of prosecuting their rightful
clams Note. 49 Yare Lb. J. 689, 700 (1940). This practice
Was noida frm rule. however, unul the Statute of Gloucester
(O Rdwo deg bl 27S) >. wherein costs to the prevailing plaintiff
were made mandatory. Over the next several hundred vears, a
scenes of enactments provided for cosis to successful defendants
Wa Variety of enumerated actions culminating in a 1607 statute
(4 James Lg 3) which gave costs to the prevailing defendants
ut all those achons where prevailing plainuitfs would be entitled
‘ . ’
te) COSTS
In the Supreme Court of Judicature Act of 1878, (38 and 39
Nact 6. 77 CESTS)). Order SS of the Rules of Court attached
16
wy the Act orovided that “the costs of an incident to all proceed
ings inthe High Court shall be inthe diseretion of the Court”
This short order was expanded in E883 when the Rules of Court
were substintially rewertten
The above history of the imposition of costs in Pnghand per
tains only to the practice at haw Ta equity, the giving of costs
was entirely discretionary, Jones \. Coverer, 2 Atk, dOO CL742)
Therefore the merger of law and equity in the Judheature Net of
I87S and the attendant Rules of Court made no basic change in
CqUHty Costs
Prior to the promulyation of the Bederal Rules of Civil Pro
cedure, the Amerean position regarding costs was that the pre
Vatling party man action at law was entitled to costs as of right
Justice Brander: stated the prnerple
“While in equity proceedings the allowance and unposition
of costs rs. unless controtled byw statute or tule of court a
matter of discretion, uohas been unitormly held that in
achons at law the prevailing party is entitled to costs: as
of right. except in thease few cases where by express statu
tory provision oor by established principles costs are
demed ~
In Re Pererson, ISU VS WO, FETUS E19)
The decision whieh most sharply lustrates the binding power
ot the rule giving costs to the winner in litigation was lo nited
Nrates \— Sehurs, W2 LOS. C12 Otted 407 CESST). Tn that
case pudgaent was obtained against Mr Schurz for the aman
ner in whieh he had discharged certam ofhoial duties as Secretary
of the Latenor Ne ritentional wrong was charged agaist him,
and the lower court felt that it would be wrong to require him
to par costs out ot his own pocket, An order was therefore made
that cach party should pay his own costs. The Supreme Court
svinpathized with the defendant but felt compelled to reverse
ihe order
“LA) ecaretal examination of the authorities leaves us ne
option bat to follow the rule that the prevailing party shall
17
recover of the unsuccessful one the legal costs which he has
expended in obtaining his rights.” 102 U.S. at 408.
As was stated above, in England equitable costs were always
discrctionary. That same status existed in American equity juris-
dictions as well:
“In actions at law costs follow the result as of course, but
in equity costs not otherwise governed by statute are given
or withheld in the sound discretion of the court according
to the facts and circumstances of the case.”
Aansas City Southern Railway Co, v. Guardian Trust Co., 281
U.S. 1,9 (1929).
Very much as law and equity merged in England in 1875, the
two bars jomned in this country in the Federal Rules of Civil
Procedure with the result that in tederal cases the trial court
generally has broad discretion as to costs at law as well as in
equity, © Moorr’s Proerar Pracricr § S4.70[3} (2d) ed.
1970)
While the use of discretion as a judicial safety valve to avoid
abuses of the general rule is certamly desirable, objective stand-
ards would seem to be necessary to avoid abuses of the disere-
tion, In England the Taxing Master under court: rules may
allow only those costs necessary for defending the rights of any
party. Greenberger, The Cost ot Justice, An American Problem,
4n English Solution, 9 Nut. Lo Rev. 400, 402 no 9 (1964).
In the United States, restraints on the courts discretion to levy
costs have developed gradually through case law so that the
discretion, in most circuits, is not unbridled.
Indeed, most circuits impose a requirement that the trial
court articulate justification for not allowing costs to the pre-
vailing party or there will be a finding of abuse of dis-
cretion.
7. See generally, Shima \. Brown, 140 F. 2d 337 (DOC. Cir)
cert. denied, 318 U.S. 787 (1943): Compania Pelineon de Nare-
gacion V. Texas Petroleum Co, 840 F. 2d 83 (2d Cir. 1970) cert.
(Footnote continued on next page.)
Is
By its untoward construction of Rule 68, therein granting
broad discretion to the tral judge, the court of appeals in the
instant case has not only rendered Rule 6&8 essentially duplica-
tive of Rule S4¢d) inca Tithe VEE contest, but has ignored the
considerable historical evolution of rules with respect to costs.
Rule Sd0d) presumes, absent special delineated circumstances,
that the prevarhiog party will be awarded costs. (See cases cited
note 7. supra). Rule O8. oa the other hand. rests not on dis
tinetions of prevailing litigants, but on judgments ultimately
rendered. Tt provides insurance against the obdurate plamiii,
and contimns its own set of internal incentives. Tt offers protec-
thon te the defendant who os willing, before tral to settle a case
by giving plamtil more than the court eventually decides plain
tit ws due
Its axiomatic that rules of the courts are net to be construed
as individually isolated rules, but rather should be interpreted
as a harmonious whole. Nasser \. Isthmian Lines, 331 6. 2d 124,
127 (2d Car 1964) Only a mandatory construction of Rule
OS ensures that wt has significance independent of Rule S4(d),
and that the two rules are allowed to achieve historical intend-
ments
(Footnote continued from preceding page. )
demed, 429 US. L041 (1977). ADM Corp. v. Speedmastic Packag-
ine Corp, S28 bk. 2d O62 (3d Cur, 1978); Constantino \. American
ST Achilles, S80 F.2d 121 (4th Cur, 1978), Walters vo Roadway
Eupress, S87 F.2d S22 (Sth Cir, 1977): Lichter Foundation, Inc
Vv. Welch, 269 F.2d 142 (oth Cir, 1989), Popeil Brothers, Inc. v.
Schick Electric. Inc., $16 F.2d 772 (7th Cur. 1978); Chicago Sugar
Co. Nv. American Sugar Refining Co. 176 F.2d 1 (7th Cir. 1949),
cert. denied, 338 U.S. 948 CLYSO): Subscription Television, Inc. v.
Southern Calitornia Theatre Owner's Assoc, 876 F. 2d 230 (9th
Cir. 1978).
19
By Its Admitted Rewriting of Rule 68, the Court of
Appeals Exceeded Its Authority.
The court of appeals held that it did “not propose to permit
a technical interpretation of a procedural rule to chill” Title
VIL litigation, (600 F. 2d at 701, A6). By inferentially inter-
preting the word “must” to mean “may”, if so required by the
court, the court of appeals has rewritten Rule 68.
A. The Supreme Court Has Primary Responsibility for
Promulgating the Federal Rules.
Congress, by the enactment in 1934 of the Rules Enabling
Act. 28 U.S.C. § 723 b et seg., Courrent version at 28 U.S.C.
$$ 2071, 2072 (1970) ), empowered the United States Supreme
Court to promulgate rules of practice and procedure in’ the
district courts. Upon taking effect, the Federal Rules et Civil
Procedure acquired the force of federal statutes, contro! ng all
district courts. Sibbach v. Wilson & Company, 312 U.S. 1, 13
(1041); United States v. Brandt, & F.R.D. 163, 164-65
(D. Mont. 1948); C.J. Wieland & Son Dairy Products Co. V.
Wickard, 4 FR. D. 250, 252 CE. D. Wis. 1945).
The proper construction and application of the Federal Rules
has traditionally been a subject of great concern to this Court
See, e.g., Schlagenhauf \. Holder, 379 U.S. 104, Ttt-t2
(1964); La Buy v. Howes Leather Co., 352 U.S. 249, 256
(1957): Los Angeles Brush Mtg. Co. v. James, 272 U.S. 701,
706 (1927).* Indeed, this Court has manifested iis responsi-
8. This Court, since the enactment of the Federal Rules in 1938.
has interpreted and given guidelines for proper application of the vast
majority of the extant rules. See, ¢.¢., Beacon Theatres \ Westover,
359 U.S. 500 (1959) (Rules 1, 2. 18. 38. 42 & 87). Reem \
Merchants Transfer & Warehouse Co., 337 U.S. 530 (1949) (Rules
(Footnote continued on next page.)
20
bilities with respect to the cules by allowing the extraordinary
writ of mandamus to issue where a lower court has acted in
derogation of the rules. In Lov Angeles Brush Mig. Co., Chief
Justice Taft, for a unanimous court, stated:
“(Wie think it clear that where the subject concerns the
enforcement of the... rules which by law it ts the duty
of this court to formulate and put in foree, oo 2. it may
use its power of mandamus and deal directly with the dis
trict court in requiring it to conform to them.” 272 U.S.
at 706,
(Pootnote continued from preceding page.)
VR 4). Manna vo Plamer, 3800S. 400 C19OS) CRule 4). Jones A
Laughlin Steel Corp. \. Gridiron Steel Co, AB2 US. S2 CF E9GS)
(Rule 6). Conley vo Gibvon, JSS US. 4b C1987) CRules 8 & 12),
Southern Constructon Co. Vv. Pickard, 371 US. S87 C19O2) CRule
14), Owen bquipmrent & Erection Co vo Aroger, 447 US. 30S
(1978) CRule 14). United States vo Moueham, Jo4 US) ALO
(19YGO) CRules TS & 16). ban Dusen vo Rarrack, 376 US. O12
(1964) CRule 17): Provident: Tradesmen Bank & Trust Con vy.
Xattervon, JMO US. 102 C198) CRule 19). United States \
Mississippe, AWOOU S128 CL9OS) CRule 20), State Farm Fire &
Casualiy Co ov. Tashire, SOULS) 8243 CL9O7) CRule 22). Ameri-
can Pipe & Construction Co Vv. Utah, 414 US. S38 (1974) CRules
DAR 24). Row vo Bernhard, MOUS SAE CL97O) CRules 24.1, 38
& 42). Robertson Vo Weemann, 446 US) S84 (1978) CRule 28);
Hickman Vo Tavlor, 329 US 498 (1947) CRules 26-37). Link v
Wabash Railroad Co. 370 US O26 C1967) CRule 40). Farner
frabian American Oil Co. 37H US 227 (19O4) CRules 48 & S54);
Colerove \) Battin, 443 US) 149 (1979) CRule 48): Veely vo bby
Construction Co. Oo US Al? Cl9O7T) CRule SO), Weade s
Dichmann, Wrieht & Pugh, inc 337 US. SOL C1949) CRule SI);
Zenith Radio Corp. V. Hazeltine Research, Ine, 39S US. 100
(1969) (Rule $2): Mathews vo Weber, 423 US. 261 C1976)
(Rule 83); Pishgold vo Sullivan Drvdowk & Repair Corp, 328 US
278 (1940) (Rule 84): ddiches voSo MH Kress & Co, 98 US
144 (1970) (Rule 86); United States Vv. Indrelunas, 411 US. 216
(1973) (Rule 88): Forman vo Davis, JTL ULS. 178 (1962) CRules
89, OO & 73): Mercer v. Theriot, 377 US. 182 (1964) CRule 61).
Granny Goose Foods, Inc v. Teamsters Local No. 70, 418 US.
$23 (1974) (Rule 68): United States vo Reynolds, 397 U.S. 14
(1970) (Rule TIA): Woltsoln vo Hankin, 376 US. 203 (1964)
(Rule 73): Hill vo Hawes, 320 US. §20 (1944) (Rules 77 & 79);
Porchess Vv. Davis, 421 U.S. 482 (1975) (Rule 81): Snvder v.
Harris, 394 US. 332 (1969) (Rule 82): United States v. Hvass,
386 LS 870 (1988) (Rule 83): and MeCrone v. United States,
307 U_ S. 61 (1939) (Rule 86).
21
Accord, Schlagenhauf v. Holder, 379 U.S. at 111-12; La Buy
Vv. Howes Leather Co., 352 U.S. at 256.
The instant case represents the first substantive construction
of the cost-shifting provisions of Rule 68 by a court of appeals.
Its interpretation has resulted in its declination to follow the
rule as written. While district and circuit courts unquestionably
have the right to interpret the rules, they have no authority to
extirpate and effectively nullify them. The court of appeals
exceeded its authority aad this Court should grant review to
remedy that usurpation.
B. Redrafting of the Rules Should Be Done by Legislation,
Not Judicial Interpretation.
Under the guise of interpretation, the court of appeals has
admittedly redrafted Rule 68. Without regard to the policy
arguments for or against a mandatory construction and opera-
tion of the rule in a Tithe VIP context, the court of appeals has
erroneously encroached upon the legislative function, This Court
has consistently held that fundamental changes in the Federal
Rules are subjects for rulemaking, not judicial decision, Thus,
in Harris Vv. Nelson, 394 U.S. 286 (1969), this Court stated:
“We have no power to rewrite the Rules by judicial interpreta-
tions.” 394. US. at 298. And in United States v. Robinson, 361
U.S. 220 (1960), in a case involving interpretation of Federal
Rules of Criminal Procedure 37(a)(2) and 45(b), this Court
stated:
“That powerful policy arguments may be made both for
and against greater flexibility . . . is indeed evident. But
that policy question, involving, as ii does, many weighty
and conflicting considerations, must be resolved through
the rule-making process and not by judicial decision.” 36]
U. S. at 229.
Further, in United States v. Isthmian Steamship Co., 359
U.S. 314 (1959), in response to the Government's arguments
that the setoff and cross-libel procedures and rules operative in
Admiralty proceedings were in need of revision. Chief Tustice
Warten declared Gor a uiammeus court
The Gavernment contends that the rule has become
OW anachronism amd is cout oat tine wilh the practee in
specie commis and with the general cules af practtee for
federal courts: Tat it should be observed that where the
procedure as beon changed in this regard it las been the
rosutt ot teptstation on rufenmaking and: net the deeisronal
PPCUSS We think that th the Taw is te change if
showld be by colemaking of lepistation and not by dee
TTT ee US|
Rule OS on au umpertat and qitegeal partet the cules govern
my btipants om federal courts Vithough wide usage of the tute
’
by defendants was et cially Gorton rb new appears te
ho pare, QNeetCu hari or suis seman fo the crstamt ane!"
Maoreover several state topistatures thawe adoptod identical pre
Visnos as Rule @8' > and state courts are relying om the federal
courts for guidanmee i applying them respective rules See eg
Merrnader Vo Travelers Davee Car UV Sa dd VIN, VAT
tla Yep 19°70). Natevtetaan VO Mera, F20 So Sd 470,
HPN CVU App POTS Danie Vv Chem STEP Sd ats, AST
(Masha POO Uy Phis Court tras un the past noted: and: accepted
HA OHM POTLANE Teapecsriihiay fe prewide the mecessaey gurdanmee
my ge apyMieation af the Pederal Rules As stated: by Tustice
Curvldbour mn Novagen fait
[Miho assne comeecrm the constriction and: applieation of
the Doderal Rules of Crt Procedure Ths dus approprrate
for us de detente on dhe arertts he issues: presented: and
to toemulate the necessary guidelines un this area 279
LoS at lie
v Nex Note, Rauie SN 4 \ n Pon bo l ede Qatar, iY 'S
Waar Lob SSM C18 7s)
v | rr sw \N. Canter 4Ne H cd | 377 ( th Cn |v PS)
Bead 482 Bo Supp bo84 CD Cole 19o8), Read
Sb. Supp. 737 CD. Del, 1977), afd. 877 Bo dd 728 (ad
Ow), cen. demed, 4389 LLS. SOO CI9I8S), Daal vo Cleland, 79
rR Oe (DDC. 19808). wee wemeraiv, Scurei AND: Grass
MOAN EMEP OVEN TD TRscrtan ation Law. Ei48-4@ (197)
li See ee Alaska ROC POS. Ane RO Cw POS, DCR
On Po os) Ma R Ow PL 4dt. New R Cr Pos
pm)
This Court should grant review and give the reasoned guid-
ance required. ‘That responsibility should not be abdicated and
conferred upon a court of appeals. The conclusion of this Court
in United States Vv. Robinson, JEL USS. 220 C1960), is: par-
ficularly compelling herein: “Whatever may be the proper
resolution of the policy question involved, it was beyond: the
power of the Court of Appeals to resolve it” JOT US. at 230.
Tithe VIE Cases Do Not Warrant a Redrafting of Rule 68.
The court of appeals held that its decision was applicable
only to Tithe VED cases. (600 FF. 2d at 702, A7.) This result is
contrary to clearly established precedeat of this Court.
A. Exceptions to the Federal Rules Are Not Favored.
This Court has consistently held that in order to provide
certunty to district courts and avoid confusion by litigants, a
uniform application of the Federal Rules is required. See, e.g.
United States vo Indrelunas, 441 U.S. 216, 219-21 (1973),
United States vo BO & M. Schaefer Brewing Company, 356 U.S.
227, SOUL CLYSR): City of Morgantown Vv. Royal Insurance
Co. Ltd, 337 US. 254, 258 (1949); see also cases cited note
Ro ovupra
More spectheally, this Court has rejected arguments that
particular kinds of cases warrant dispensations from the un-
ambiguous requirements of the Federal Rules. Thus, in Eisen v.
Carlisle & Jacquelin, 417 U.S. 156 (1974), in a case interpret-
ing the requirements of Rule 23(¢)(2), the Court stated:
“The short answer to these arguments is that individual
notice to identitiable class members is not a discretionary
consideration to be waived in a particular case. It is, rather,
an unambiguous requirement of Rule 23... . There is
nothing in Rule 23 to suggest that the notice requirements
can be talored to fit the pocketbooks of particular plain-
tiffs.” 417 ULS. at 176.
24
And in First National Bank of Arizona v. Cities Service Co,
AOE S. 284 (186K), this Court explicitly rejected the sup
gestion that Rule S6¢e) should. in effect, he read out of anti
trust cases, VOT US. at 288-90.
Title VL claimants do not require the obsequiousness be
stowed by the court ot appeals in the instant case. Hf that result
had heen intended. Conetess could have amended Rule 68 when
HW enacted the Civil Rights Actoof L894) Tt didi not. therefore
the subsequently enacted law should be interpreted compatibly
with the Federal Rules. See Unrermever \. Lidelity Daily In
come Trust, TOR ROD 46. 458 CD Mass. L97R)) Rule O8. an
iis plainty written terms. should apply equally to Tithe VIE hit
pants, See SOUT TER GROSSMAN, spr at LId6.6f Jones. City
of San Antone, S68 bo Od 1224, 1226 (Sth Cir, 1878) (Ap
plying Rule S4cd) without exception for Tithe VEE claimant).
Rormann Vv. Lone Island Prews Publishing Co. VAY Supp
OST O84 (EDN VY. 1974) (Applying Rule 2) without ex
ception fer Tidle VU claimant)
BR. The Court of Appeals Ignored This Court's Decision
in Christiansburg Garment Co. v. KFEOC,
The court of appeals suggests that were it foreed to follow
the plam language of Rule 68, such an approach nught “chill
the pursuit” to seek judicial relief bv individuals myured) byw
racial discnmination. (OOO bo dd at 701, AG) Delta submits
that such fears. if relevant. are unfounded. A legitimate Title
NUL plata ws afforded vast: protection without emasculating
Rule 68
VW plainatl prevails. costs ad attorneys fees are generally
awarded. Civil Rights Act of 1964. ax amended, 42 US. ¢
§ 2000e-S(K)." This is clearly contrary to the normal opera
12. “Ta any action or proceeding under this subchapter the court,
in tis discretion, may allow the prevailing party, other than the
Commission or the United States, a reasonable attorney's fee as
part of the costs. and the Commission and the United States shail
he hable for coasts the same as a private person.” 42 US,
S 2000¢-8(k).
25
tion of our legal system, but is based upon the desire to protect
those wronged by discriminatory treatment in secking redress
This Court bas further protected Tithe VIE plamtils by declar
ing that attorneys’ fees will not be awarded to successful de
fondants unless the action brought as) frivelous. unreasonable
or vexatious. Christiansbure Garment Co Vv Equal Employ-
ment Opportunity Commission, ASE US AN2, 422 Cl9OTR)
Of critical importance to the instant case, however. ts the
fact that ino Christiansburg, this Court mterpreted a statute
which speciically provided for the allowance of attorney's fees
in the cournt’s diveretion. Us opimen was intended to give guid
ance to district courts forced to exercise the discretion directed
by the statute Dhis Court adicated that there were policy
reasons for treating prevarling: defendant, differently than. pre
vanhing plamtdls. thus the articulation of diverse standards wath
respect to awarding attorneys: fees
Rule 68, however, expresses no latitude. Tt provides for no
discretion, and needs no purded interpreiation ots applica
tion is limited solely to defendants who offer to settle, prior
to trial, inan amount nm excess of that which plantff ultimately
receives. Ht insures only costs, not attorneys’ fees, and its opera
tion is clearly mandatory. Tas intended to protect. as rt should,
a defendant who is willing to settle a case by giving plaintiff
more than the court eventually decides plamtff ss due. How
can that possibly “chill” a legitimate plantif? Tt may force an
honest appraisal of the worthiness of plants claim, bat isnt
that what the rule is intended to do?
Rule 68 fills a void. It fairly protects a defendant who wants
to avoid litigation, and settle at an amount in excess of that
duc the plaintiff. It protects that defendart by insuring that at
13. The drafters of the Federal Rules were well aware of the
specific means for vesting lower courts with discretion Phe exphest
language “in its discretion” or “unless the court otherwise (directs)
orders” is used in Federal Rules 6(b), 12(4), [Sfa), 16, 240b),
2o(a), 26(bS, 26(d), 29, 54(d), 58, 62a), 620b), 62(c), 63
and 7IA(h).
26
least the costs of litigation, absent attorneys’ fees, will be
awarded. In the Christiansburg case this Court interpreted the
Congressional instruction (that a court may grant attorneys’
fees to the prevailing party in a Title VII case) to mean that a
prevailing defendant may be granted attorneys’ fees when the
suit is frivolous or vexatious. This is a lower standard for the
imposition of attorneys’ fees than the common law standard
of “bad faith”. See Christiansburg v. EEOC, 434 U.S. at 417
n. 9. Apparently Congress and this Court did not feel that this
lowered standard would “chill the pursuit” of legitimate Title
VII plaintiffs.
Likewise, the intuaded mandatory operation of Rule 68 will
not “chill” the legitimate Title VII plaintiff.
IV.
The Court of Appeals Ignored Its Own Standards in
Denying Delta Costs.
Assuming, arguendo, that the court of appeals had some
basis for revising Rule 68 and substituting its discretionary test,
it nonetheless abused its discretion by not awarding costs to
Delta.
In the first instance, wholly apart from the standards of Rule
68, are the prescriptions of Rule 54(d). As previously dis-
cussed (see Argument I, B, supra) Rule 54(d) embodies the
long evolved principle that a prevailing party is entitled to its
reasonable litigation cosis. The Seventh Circuit has, in response
to situations involving denial of costs to prevailing parties, re-
ferred to such denial as a “penalty” and has adopted a require-
ment that to extract such a “penalty” a trial court must indicate
that defendant engaged in bad faith or deliberate confusion.
Chicago Sugar Co. Vv. American Sugar Refining Co., 176 F. 2d
1, 11 (7th Cir. 1949), cert. denied, 338 U.S. 948 (1950).
Furthermore, the Seventh Circuit has indicated that it is the
27
unsuccessful party’s burden to show that the prevailing party
should be penalized by a denial of costs. Popeil Brothers, Inc.
v. Schick Electric, Inc., 516 F.2d 772, 776 (7th Cir. 1975).
This latter requirement cannot be met by a mere showing that
“the unsuccessful party was an ordinary party acting in gocd
faith.” Id.
In the instant case neither the trial court nor the court of
appeals gave any indication that Delta acted in bad faith. To
the contrary, although stating that the case was not frivolous
(A18). the court of appeals held that plaintiff's evidence was
“superficial, incomplete, inadequate or otherwise defective.”
(A16.) Similarly, the trial court stated that it had “no dif-
ficulty in reaching its decision.” (A24.) Neither court suggested
that Delta had done anything wrong, either in its treatment of
plaintiff or in its conduct at trial. Accordingly, by the appellate
court’s own standards, Delta should have been awarded costs
pursuant to Rule 54(d). To hold otherwise is clearly an abuse
of discretion.
Secondly, even under the court of appeals newly articulated
standard for the operation of Rule 68 in a Title VII case,
Delta should have been awarded costs. The test is that the offer
must have been made in good faith and have had some reason-
able relationship (whatever that means) to the issues, litiga-
tion risks and expenses of the case. (600 F. 2d at 702, A7.)
Consider the untenable position Delta was placed in at
the outset of the instant suit. It discharged a flight attendant
who was not properly performing her job. Through no tault of
its own, a lawsuit was not filed until a year and five months
later; requesting back pay and reinstatement, and claiming dam-
ages for alleged defamation. Delta was convinced that it had
violated no law and had not defamed plaintiff, yet it faced ex-
pensive and protracted litigation. Attempts to settle were un-
successful; the plaintiff was obdurate. There could be no as-
surance, even when ultimately successful in defense, that Delta
would recover court costs, much less attorneys’ fees. Therefore,
28
based on its absolutely correct appraisal that it had done nothing
wrong, it offered nevertheless to have judgment taken against
it and actually pay a sum of $450 to a plaintiff who deserved
nothing.
The gnawing question, left unanswered by the court of ap-
peal’s redrafting of Rule 68 and its imposition of a new test
is, simply, What is a reasonable good faith amount which must
be offered to someone who has not been wronged and deserves
nothing? Under these circumstances, it is, we respectfully sub-
mit, an ineredible determination that Delta’s offer was not
made in good faith.
The test used by the court of appeals is not supported by
the clear language of Rule 68; but beyond that, the district
court and court of appeals’ determination is not supported by
the test. This Court should grant review to redress this obvious
abuse of discretion.
29
V.
CONCLUSION.
The court of appeals compounded failures herein, first by
ignoring the unambiguous application of Rule 68, second by
rewriting Rule 68 for Title VII plaintiffs, third by failing to
follow its own redrafted rule, have brought to life Voltaire’s
admonition that: “I was never ruined but twice—once when
I gained a lawsuit, and once when I lost one.”
This Court should not countenance such an untoward result.
Accordingly, a writ of certiorari should issue for review of the
judgment and opinion of the United States Court of Appeals
for the Seventh Circuit.
Respectfully submitted,
E. ALLAN KOVAR,
Max G. BRITTAIN, JR.,
Burr E. ANDERSON,
The Law Offices of
E. ALLAN Kovar, P.C.,
Suite 1526,
100 South Wacker Drive.
Chicago, Illinois 60606,
Counsel for Delta Air Lines, Inc.
Of Counsel:
ROBERT S. HARKEY,
GREGORY L. RIGGs,
Delta Air Lines, Inc.
Hartsfield Atlanta
International Airport,
Auanta, Georgia 30320.
. =a a
. ‘
APPENDICES.
es
Order of the Court of Appeals for the Seventh Circuit
denying petition for rehearing and suggestion for hear-
ing en banc (August 28, 1979) ......--..5-008:
Opinion of the Court of Appeals en the Rule 68
rea
Unreported opinion of the United States District Court
for the Northern District of Illinois on the Rule 68
a OR oe oe oe ae a ea
Unpublished opinion of the Court of Appeals on the
EG ce U rk ona e kee ee eee seers
Unreported opinion of the United States District Court
EON ee
Proof of Service and Offer of Judgment ...........
Rule 68; as enacted effective September 16, 1938;
as amended effective March 19, 1948; as amended
I ES Shas oe ess ocd no sane oo i
PAGE
Al
Al5
Al9
A33
Al
APPENDIX A.
flere Srares Cortror or Aprrars
For the Seventh Circuit
Chicage, Hhinots 60604
August 28, 1979
Refore
Hos Ponrer A Seereuee, Cirenit Judge
Hos Pores Wo Lose. ¢frenit Indge
How Harrinaron Woon Ie Cirenit Inder
Appeal from the United
States Pristrict Court
for the Northern
Posratapy Anegerer.
Plaintiff? Appellee.
Nir 78.9919 te Pristrict of Filinois,
Fastern Division
Pye ra Arp Passes. fave No. 77 C 95S
Ferliers
Delendant Appellant sets ae ore
OOP TER
On consideration of the petition for rehearing and suggestion
for rehearing fn bane fled in the above entitled cause by counsel
for the defendant appellant, mo judge in active service has
requested) a vote thereon, and all of the judges on the original
panel have voted to deny a rehearing Accordingly,
Ir Is Ornrern that the aforesaid petition for rehearing he,
and the same is hereby, Deatvren
‘rrhstee of
RYE Pree mend revete prone try fitle vor Of the ¢ jit
Piphte Aetot Gnd gage S08 Mittin py a |
ie Ate Pe peg ables Niereunpy brad Ail Talat Be) ST
Te Peet tered engy ee Oh prdpene rt tes PE ity thes crore
to Lea Here bee dineg rrvete py Whore ye Pane WOOHOO Fey Hate
PSHE HTT bry Bittn HO ost thy. Veteral Dilan Of Civil Prrodipe t
METITIE Laer Jer tert then dng
Nee nee metaget # 9S Mey Wap gy trial fi tha Wer rieninaticny
eHerpe the Mena , HOt DDD Obyeny Orci thes plorrtifh bo
MAR ed) eT eee twlitng tre ebyrvey pay tal Ave, Peer atin
she bel Podbaed ayy ratty the bitten sf Peep taeial Aieepipny
Merete ity merrePatnm ithe Viton ethinyl Mee Neth Ol Venn
Op Vite Sintee AVE 1) @ ane CTIIN vpyeg LV Pepe
I ttoline type firrn ALE TE & poe (1974)? Accordingly.
the trial jute mertapard A Adda Le Of the AohendAane and
bee J Ca prorty ter bem ite ‘Wn oriete mF Mtipaticny
Phat La ftir iAee
y
At mei bien trirvee Meme Pfs Hay broPripe the op Y he gine a porty
lol se Hitee THM Ie! mW later pry ty Ye tn the arfyapen party an
las 4 levee brtclperrrenee ‘, fabkor 2Pomet him fee the money
P ptieperiy te te the afhans prectiod in bee Aas WIth Crete Phen
rere OF mittin It Have mftee tha enpy, Of the offer phe
mst ous Patty carves FIP tem ppeyes thos the ar ie weentad,
wtibens party tray then ty thy iff + INA Arena” of Ieee NtaAnce
frome thar with rr Wtf éa¥ viene thaeas and ther ‘upon the ly ad
ehrall meytny jnAprnent An of fr net accented ahall ta Aeomed
HMw ae » Maree sheen Wie are MmMice hla yrent in 4a
trem aribee ts, Hetevrninn AAws ff hh. pilamens Ga Why Ntanod
[ th Herne ie tev preven Prcvoop aby ‘han the sffar the oforen
reveee? fay thie pevete jp, mrted aftar tha on king OF the Affae rhe
Fant threat wey ebbane fe Premio Pree rest ae rapicd Aen are prechode ’
cttbremepremet (Atay When the fat lity Af ARa PYETY TO anOhee Hye
bieme, Ne te verrryacd by vaedice rr ofrler Ar pylaoment Sot othe
wrrscettey! crt welmnt 7h the liability pemaine ta Bn determined hey
Fite thins Preecedinge thy preety wi rwiger hable may make a”
fleas off beget arbink thall have tha tame offact ae an Far
trimle bebrren teint if i ie cap ad within 4 reasonable time ane
leee than If) theye prior te the CAM MeAcement af hearings ta
leterinine the amen ve pvtent af liahility
hie cemmet tne firmed the Aictricr -, whan the merite of the
rte VET beter bry 8 eeparate Ardar reed hic date surcnane tn
firemit Rule 44
ae
Ad
Pursuant to Rule 68 the defendant then filed a motion for
costs incurred after the date of the Rule 68 offer, The motion
was denied.” We affirm and add only a few comments in
support of Judge Hoffman's holding. At the time the order was
timely tendered, the plaintiff's alleged actual damages from the
loss of her employment for the preceding 19 months exceeded
$20,000, not including attorneys’ fees and costs. Plaintifl also
anticipated possible reinstatement as a flight attendant. Although
plaintil did not succeed in her discrimination claim, it was not
frivolous. Plaintiff presented some evidence suggesting racial
bias. The trial judge found that plainufl, although guilty of
4. In denying the motion, Senor District Court Judge Hothman
explained:
While there is litthe authority on the point, this court. ts
satistied that in order to be effective, a Rule 68 offer must be
nade ina good faith attempt to settle the parties’ higation and,
thus, must be at least arguably reasonable.
If the purpose of the rule is to encourage settlement, it os
impossible for this court to concede that this purpose can be
furthered or aided by an offer that ts not at least: arguably
reasonable.
At the time this offer of $450 was made this litigation was
approximately four months old) While the offer was intended
ty be received in full settlement of the parties’ dispute, it ts
unlikely that such a small sum of money would even have fully
satisfied the plaintil’s then incurred costs in attorneys fees
lt must also be remembered that the plaintiff was given some
encouragement as to the merit of her claim from the findings of
the Pqual Employment Opportunity Commission, Additionally,
a suceessful lingant inca Tithe VIL case is as a general rule
entitled not only to reinstatement, but also to back pay plus
costs and attorneys fees.
Finally, while the court did ultimately find itself constrained
ty enter its judgment for the defendant, the court certainly did
net find the planutt’s claim to be wholly specious. In- the
opinion of this court and in the particular facts and circum
stances of this case, an offer of only the sum of $450 could onty
have been effective were the phuntifl’s claim totally lacking im
ment or were there present additional factors which would
mutigate in faver of the defendant.
For the reasons T have stated, the court concludes that. the
defendant's Rule 68 offer of May 12, 1977 did not constitute
an effective offer.
AS
poor and unacceptable performance, rendered good service on
occasion. Her file revealed a record of some company awards
and compliments from co-workers and passengers.
Against that general background, the Rule 68 offer of judg-
ment of less than S$SOG6 before tral is not of such significance im
the contert of this case to justify serious consideration by the
plantll At oral argument the defendant urged that even an
offer of $10 would have met the requirements of Rele 6% and
served the purpose of shifting cost lability. If that were so, a
nunimal Rule 6& offer made in bad faith could become a routine
practice bv defendants seeking cheap insurance agaist costs
The useful vitality of Rule 68 would be damaged! U nrealistic
use of the rule would not cncourage settlements, avoid pro
tracted btigation or reheve courts of vexatious litigation
The detendant’s arguments to the contrary that the allowance
of costs is automatic and non-discretionary evidences that the
issuc ts not free from doubt The defendant points to the lan
guage of the rule where there is no specific requirement that the
offer be “reasonable” or un “good faith” If the dgment finally
obtained by the offerce is not more favorable than the offer, the
offerce “must” pay the costs incurred after the making of the
offer, Fed. Ro Civ. Po 68) The defendant contends that it is
entitled to the benefit of the rule if the technical requisites of
the rule have been observed.
The defendant claims that, unless Rule 6% 1s rigidly followed,
the rule will overlap the tral judges express discretion under
Rule S4¢d), which provides costs to the prevailing party unless
4. The concept onginated in state practice and was novel to the
federal courts when the federal rules were adopted in 1938 © Wright
& A. Miller, Federal Practice and Procedure Civil § 300) (1973)
The general principle was cnunciated in Crete her \ Jovce, 146 F 2d
STR, $20 (10th Cir, 1945), where the Tenth Circuit. sitting as an
equity court and without referring to the rule. held that a plaintiff
may be denied costs when he sucs vexatiously after refusing an offer
of setthement and then recovers practically the same sum previously
offered. At feast in cases such as that, Rule 68 provides a just and
fair procedure to all concerned parties.
A6
the court directs otherwise. In spite of the force of these argu-
ments, We are not persuaded.
Title VII embodies a basic national policy given a high
p iority by Congress and contains an authorization for the award
ef attorney’s fees intended to encourage aggrieved individuals to
seek redress for violations of their civil rights. Christianburg
Garment Co. v. Equal Employment Opportunity Commission,
434 U.S. 412 (1977); Newman v. Piggie Park Enterprises,
Inc., 390 U. S. 400 (1968). In considering the counsel fee provi-
sion under Title II of the Civil Rights Act of 1964, 42 U.S.C.
s 2000a-3(b), similar to the present provision of Title VII,
42 U.S.C. § 2000e-5(K), the Supreme Court in Newman v.
Piggie Park Enterprises, Inc., explained that the counsel fee
p ovision was “to encourage individuals injured by racial dis-
crimination to seek judicial relief.” 390 U.S. at 402. We do not
propose to permit a technical interpretation of a procedural rule
to chill the pursuit of that higit objective.
The other cases which have considered this Rule 68 issue are
limited. Defendant relies on Mr. Hanger, Inc. v. Cut Rate
Plastic Hangers, Inc., 63 F. R. D. 607 (E. D. N. Y. 1974), and
Dual v. Cleland, 79 F.R.D. 696 (D. D.C. 1978). tn Mr.
Hanger the plaintiff was unsuccessful in a patent infringement
suit and was assessed with the defendant’s defense costs. There
ihe plaintiff argued that the Rule 68 offer was a “tactical sham,”
unreasonable and in bad faith. Although the court considered
Rule 68 as mandatory, the district court nevertheless pointed
out that the offer afforded ihe plaintiff substantially all the relief
prayed for in the complaint and was not a sham.
In Dual the district court in a Title VII case ruled in favor
of defendants after a trial on the merits. The court considered
the application of Rule 54(d) which specifically provides for the
exercise of discretion and Rule 68 which does not. Viewing the
rule as automatic, the district court allowed costs to the defend-
ant under Rule 68 but not under Rule 54(d). The issues of
reasonableness and guod faith apparently were not raised in
A7
Dual, although the court noted that the plaintiff, albeit unsuc-
cessful, had a good faith claim.
The plaintiff argucs that her position is supported by Perkins
v. New Orleans Athletic Club, 429 F.Supp. 661 (E. D. La.
1976), and Honea v. Crescent Ford Truck Sales, Inc., 394
F. Supp. 201 (E.D.La. 1975), but that support is at best
only inferential.
For the considerations stated above, we believe that a liberal,
not a technical, reading of Rule 68 is justified, at least in a
Title VII case. We need not decide whether this same approach
should be taken in other kinds of cases. In a Title VII case the
trial judge may exercise his discretion and allow costs under
Rule 68 when, viewed as of the time of the offer along with
consideration of the final outcome of the case. the offer can be
seen to have been made in good faith and to have had some
reasonable relationship in amount to the issues, litigation risks,
and expenses anticipated and involved in the case.
AFFIRMED.
A true Copy:
Teste:
Appeals for the Seventh Circuit
\8
APPENDIX ©.
i 1] Inne UNiep States Distrier Cours
Northern District of Mlinots
astern Division
ROSEMARY AUGUST, l
Plaintiff, |
No. 77 € 95
|
Der va Atm Ines,
|
Defendant
PRANSCRIPE Ob PROCEEDINGS
had i the above entitled cause before the HON. JUETES J
HOLE MAN, one of the Senior Indges of said) Court, tn tts
courtreont inthe United States Courthouse, Chicage, MHliners
on Monday. September U8, 878. at the hour of LO OO oc clock
am
\ppearances:
Messis) Glazer & Vance
179 W. Washington Street, Room 1125
Chicaro, Uhners 60602
By. Ms. Susan Margaret Vance, appeared on behall
ot the plaintil,
Messrs. Schiff, Hardin & Wate
233 South Wacker Drive
Chicago, Uhnois 60666,
By. Mr Eo Allan KRovar, appeared on behall ot the
defendant,
(2) he Clerk) 77 C98 Rosemary August vo Delta: Atrlines,
Inco porated. metion for hearing and decision on defendant's
} :
pending Moker for costs pursuant to Rule O8.
AY
Mr. Kovar: This, your Honor, is also the defendant Delta
Air Lines’ motion, As you recall there is currently a Rule 68
motion ponding before the Court, which has been fully briefed
And we have here, pursuant to Rule TSC). requested: the
Court fora determination on this because of the pending appeal
and because of the tmminence of that appeal. As noted, the
appellants brief ts due on the 29th of this month and our brief,
of course. is due within thirty days thereafter, We do believe that
a determination of the Rule 68 motion is relevant and significant
to that appeal.
The Court. You style your motion, “Motion for a hearing
and decmton on defendants pending motion for costs pursuant
to Rule 68° Did TP not see in the advertisement that Delta Air
Pines. Incorporated, next to United, was the most solvent and
most prosperous anline im the country and you are concerned
about
Mr Kevar. PE certainly hope so, your Honor
The Court) And you want to hurry me into this decision ona
small matter Tike this
Mr. Kovars Noo We are most: appreciative, your Honor,
Js} of vour own heavy schedule. The only reason we filed this
motion was because of the pendency of the appeal and we be
heved the relevancy of this decision and the importance of. it
possibly to the appellate court,
The Court: Do you want to say anything?
Ms. Vance. No, your Honor, the plaintiff has nothing to say
at this time,
Phe Court: There is now outstanding in this case a motion by
the defendant Delta Air Lines for its costs of litigation. By the
instant motion the defendant now seeks a ruling on that motion,
In its Memorandum of decision in this case, the Court exer:
cised ats discretion under Rule S54(d) of the Federal Rules of
Civil Procedure and ordered cach party to bear its own costs
of litigation. By the instant motion the defendant Delta Air
Ane
Piivvec vein yestire peercnnnmt fies Parte ek oot the Pectoral Dirlec arf
Pa Decerdee fav aren linea tiong tye potable tes retebartse
Aran RT) | Rd Hay Dede cherie Nv > 907?
Vy crypt oot Hyie vvotiery thre onerncaet cubite with the
vvetiene een at tye otter oot direlamvent syvevetes Tey DMette tee tye
yl ainnnsdd ase Way 0 F077 Wey etyert atten Dveltin rtteredd tee yen
Ween SERV awd doy Coat cote lever ot thyis Vitioovtieny
LAD Votes Rate et the Vaaterat Ravtec of Cf Precedtane at
any Hae were than tea dvs Potowe te trial Pregine a penn tle
Herve aparently CD te vyen a eeeaye vypsenns the advenree geaety en
atten fecaliow prdipraveat to be taken aporiivst Tytyny fess tlyer pyvevtyery cant
preypeyyy uy vive atVer tt spec itiondt tn Wats otter wth eavcte then
Nevevyyeed Nyy antVery ovyeet voorp ted vo ereeteced ac dttvelecvaey cued eat
yee iver ove oes yedyyyyccutstes eee mo proceeding ti
ere wyie oc iyere
Ve vtye overedgrrvvervay tev ally vadepeveavecet Tey ttyes cetbernerer Fs vend tnestes
favwalte raw tye offer lve fieree Hyrst pon thre casts toured
syes Vive oval at tle otter
Vise vivweclvoled qurestren that rvarct Tre vvecatyedd ts whether 9
Wark WS prertreed ve psyvapier vy ayer Gye est ey ospetere Tey tthe Goce
persoann te Role Red) vlyay en ty peared Peony VS AMA CENSES
AY wary Vie emt weed spend teat Verde tervve eee Pat ascites
oo han aleearedy seer foly coer vet oy doveseteed ti tle ne
went awe aw My Banger Teerporated vo cut Rate Bhasin
Weagers nn NE TEENY evry ol \l nw 4 yorgy
Vhens the etourt Reld and Hye Clowrt mst agive yt pean
yyy “> tb bak - AP VET MD edSt® vitae Rae eS even ragly the
Clon Ra ee rosy denned cesta Pues ait tes Wale Veedd da
es anclnd nag Phe Court doen Wet However oadheterre that the
defemdaar Welt N Vorrterw eu rtd evrtiekt tee pate TER CUlsts i
eaeyy Mmirweerant fr Role &®S® ov hw Veeder vi Rules af coaval
‘
‘ White phere is ile aathont) on he pneu thas Clout ous
sorta ooh ~ areicr fy Ie effective a Rule OS offer must be
All
mrad doa goed Faith attempt te cettle the partios Litigation amd.
Hire net beat beact arprrably ceqcenrabybe
Pha very prreprases of Pate G& of the Pederal Paleo of © aval
Procite ae welloae the few authorities which lave addrecced
Hh too ab this application nm date (his come tachom as stated
try thee Nabe tcery © ceppeittien ce Neve ter Porple QR the preprese of
Hhhicotithe de fee eco cotthemmentc aad agape prrestess todd det
potion Oe ae chated tm Staffemd yo Dake Central Atebies. Dave
1° oP PR Dd PER ON Fd }dbntee FON) Peele GR is tetemedled te
eroompape early cetthemmentc of Ttigattewn Tt as alco uatemeded te
preted the perty whe ds willtop te setthe frown the barreben ef
corte whieh crbycecuny thy noone ‘7 RR al Pays 19
Thoth Ver prerse eel three cenbe ts tee pee cere vine cotter ee he
prossthete few this Coot fee comedies thet thas Pe pros: aw bee
Frethered: on atded: by og other that ts met oat least arguably
peoncorm bebe
Phe few cacec white dy brave acldeeccedd thic asper tof Rule Oa
ppt this come tact Ta Perkins vo New Orleans Athen
Ctaots $99 PF Supp Got cb DP ba 19760, the Cont. in de
Wing aoredquest for attorneys fees meted that under Bute O84
Ie} deferment may offer whoatis neatly dire and put the borden
Wooestsoon the plantte:
Ncllitiomeally da Themed oy Cresont Bord Prack Sales. Pnoor
erated SOE SF Supp OE CE Ud Pa PO75) the Court stated
that of a reasonable offer is spurned. Rule 68 of the bederal
Rules of Civil Procediee prowides a manner am which a party
cam step casts from accemmg JOG bE Supp oat Page 20? Phos
roqurrement that the Rule @8 offer must be reasonable, at least
veuably sel would: alse appear tebe supported by Baldwan
Cooke Company vo Reith © hack, dn orporated, 7} b RD 564
iN 1 TH 1876)
Donally, the Court notes the decision of the Lonited States
Custom Court dodge a Mr Planger, Incorporated vo Cut Rate
last Hangers, Incorporated, 643 6 ROD 607, 4b DON Y
Al?2
1074) In that case in awarding costs pursuant to a Rule 68
offer, Tudge Reed rejected arguments that the offer there in
volved was oa sham” He alse found that it was not made “in
had faith ” Instead he concluded the offer was a “proper offer”
Ry the motion new befere this Court, the Court must now
decide whether in the specific facts and circumstances of this
case the defendant's offer of May i. 1977 in the sum of 441so
sufficiently satisfied Rule 68 of the Pederal Rules of Civil Pro
cedure to warrant the | 7} entry of the order now sought,
In the epmien of the Court it did not bor this reason the mo
tion made parsuant te Rule 68 will be denied) At the time this
offer of S280 was made this litigation was approximately four
months old While the offer was intended to be received in full
settiement of the parties dispute, itis untikely that such a small
sum of money would even have fully satistied the plaintiffs then
Meurred costs my attornervs fees.
le must alse be remembered that the plainti® was given some
encouragement as te the merit of her claim from: the findings
of the Pqual Paytorment Opportunity Commission. Addition
ally. a suceesstul Htigant ina Tithe VID case is as a general rule
enutied. net onl to remstatement, but also te back pay plus
costs and attorners fees
Tinally. while the Court did ultimately find itself! constrained
fy enier Us yudgment for the defendant. the Court certamly did
net Ond the plavii®s clam te be wholly spectous. Tn the epinion
of this Court and am the particular facts and circumstances of
this case. an offer of only the sum of $480 could only have
heen effective were the plamtifs claim totally lacking im merit
or were there present additional factors which would mitigate
m taver of the defendant,
|s) Por the reasons E have stated. the Court concludes that
the defendant’s Rule @8 offer of Mav 12, 1977 did not constitute
an eflecuive offer under that rule) offer of settlement under that
rule Por that reason, Mr Clerk. the motion of the defendant
Als
Delta Air Lines, Incorporated for costs pursuant to Rule 68 of
the Federal Rules of Civil Procedure will be denied. As pre
viously ordered each party to this action will bear its own costs
of litigation,
Mr Kovar: Thank you, your Horner,
Ms Vance: Thank vou. vour Honor
’ + *
[9] In po UNiirp Stares Distrier Court
Northern District of Tinots
Pastern Division
Rosemary AnGust,
Plaintiff, She
o ; Y Civil Action
| No. 77 © 95
Drira Atm Lines,
Defendant.
CERTITICATE
I. Joan M. Unzicker, do hereby certify that the foregoing ts
a true. accurate, and complete transcript of the proceedings had
in the above-entitled cause betore the Hon. Julius J. Hoffman,
one of the Judges of said Court, in his courtroom at Chicago,
liners. on September TR, 1978.
/s) JOAN M. UNZICKER
Official Court Reporter
United States District Court
Northern District of HMlinois
Unite STATES DistRicr Court
Northern District of THlinois
Fastern Division
Name of Presiding Judge. Honorable Tutus 2) Hoffman
Cause No. 77 C 85 Date September 18, 1478
Vitle of Cause -Rosemary August vo Delta Arr Eines. th
Brief Statement of Motion. Motion for Hearnng on
on Defendant's Pending Motion for Costs |
O8
Names and Addresses of moving counse) fb Noam &
Max G. Brittain, Jr. Sechitl Hardin & Waste. 72)
Tower, 2338S. Wacker, Chicago, 60606,
f
Representing Defendant Delta Air Lines.
Names and Addresses of other counsel entitled te motice and
names of parties they represent —Carole Ko Bellows, Rellows
& Rellows, One IBM Plaza. Suite 14, Chicago. Susan M
Vanee, Giazer & Vanee, 179 W. Washington, Chicago. P
ttt Rosemary August.
Defendants motion for costs pursuant to Rule 6)
Hoffman S.J.
AIS
APPENDIX D.
Unirep States Court or Apprars
For the Seventh Circuit
C thy ig Hin ms 60604
hed Order Not to be Cited
Per Cur t Rule 35
A\rgu G bebr ury 20 1979)
luly 6. 1979
Before
Hon. Rorert A. Sprecupr, Circuit Judge
Hon. Pruiuipe Wo Tone, Circuit Judge
HON. HARLINGTON Woop, Jr. Circuit Judge
Appeal from the
Lnited States Dis-
Plaintifi- Appellant trict Court for the
Northern District of
Hlinow, Eastern Di-
\ 7R.1922 Vision.
No. 77 C 95
Dri ta AIRLINES, INC.,
Julius J. Hoffman,
dele t-, Mee.
Defendant-A ppellee Judge.
ORDER.
Rosemary August initiated this Title VII action against de-
fendant Delta Air Lines, Inc. alleging, inter alia, that she was
discharged from her position as flight attendant solely because
she was black. August sought reinstatement, back pay, benefits,
Alt
Soyer eat wt welled pvt attoniyes feos and costs qrrvycvecvent {’
Vine VW ot the t iil Riglte Netoot w64 APU S.&. 8 TRIAL ATS
coe Miter a bench triat the Aictiet com centered) pidiparent
Se gaged at the defendant Vhe plata Wave appealed oon thy
wronnd that the cee haan was mnsnrpported hy the outdone ayy
sae the dhetaet come improperly aprtied the Taw) Wee fling
avd ada oly a few otbveer cations fe enypypterven ye terad coeds
spore ary oot Herve and order entered on Vane 9 yur7Q
Dianne offered come proog whiel cnooested that che ney
have been anbieet fe aiseviyy ation lav the evidener wey svg
feral ye op © madeqwate om” other wer An fer trve Vhe ev
denee fared Te eetahicels that che was qreated cht yerthy than
camara catnated whites Vhe evidence frome Wrely wap ava
thar Backs on ocersen nan have receiied seme pref semtral
eeatment Wace Mconclhyswe W the absence of thy conyptete files
atainine to the allegedls preferred emplovers and Others sim
lariy cpnated Vie yrtaynt A who had dye Paver of prop ay
seamatnon eclected ois related wvetanees ters yypreyyrcesyy ant
frearmeni & Tormriets sereannel wcerds of other tiroht att yredevryte
eer net mrduced to help establish a basis far meanmoetnt cow
aan of those emplavees sim lavly sitvated Sec Tiere ‘
rexcay Invrerments. Inc. SSF 20 V281, 1257 cSt iy 1077)
Vhe startettes evidence Wace ik omplete aya Poca) eVNTN yyysennt
Nemitad cammics. Which Mav ar MAY Net have fynly reflected what
thes alah AEE Be! fo chow Ve womens LY “ave ‘ ) Lid ‘ Iai
‘ ) fooationeg } gual . / eae Ais \ QS a@d& ere! ( 174)
® spre less ~w the ceftetenctes wore ih mA Ss cVideter tie
Apfoadon: St “ones defended the re or ee OI ih anon a THER BR EARR EL RIA |
fr COP TEIC TION with hic order, an anor has eon yyy) shea
\
thi, dos. afhemiag the tera) CoMr’s AISPoe Hoan oF he Rule 6S offer of
sateen: ieene in plnintifits fave
be Pone Eoptoemenm Onnorriaiv ¢ YWraneeaat pte ryver3
ty, pve of A) Re ‘ mrokow rh, clement4 . mn sar eomeara
‘
bn vwwtener mui be camplete an eciaté TO A cnMoentv large
= -
comp vo similar sitretead Negcoos om Caeaerans co ae Te PrOvice
chal rome hny wan Lay drewing ~s womn sen
Al?
explanation’ As a resntt of the charge of her fourth no show
on December FG. bO7 4. the plaintiff# was placed on indefinite
enepenreion imam corlonce with the cules of Delta Air Eines. On
Ionnar 2. O03 the regtonal manager for Delta reviewed the
ploaintifls file ond informed her thet she was on “last chance
etatus saying:
Contente within your file revealed innumerable discrep
aneies ranoine from one sheas poor condnet while pass
riding. Tafenese oon worker writeups and passenger com
plaints
Actions cue ag vom ve demonstrated: will no longer be
tolerated: You have been adequately warned and previously
disciplined: becamse of you comfinmning tnsatistac tory job
perborate Ry copy of this fotter vou are notiied that
thic is vou finab warning and oany firtere infraction will
reoult dm the femmiaation of yor employment with Delta
Nin Pines
a The following ic a brief cummary of the plaintiffs infractions
white werhine with Delta Ate Lines
7) 4) 90 ten oh 1) 7k Coworker complaint
- yO 7) Ce werker conplaint 5 8 74 Passenger complaint
7 31.72 Ne show S18 74) Discrepancy report
Q 99 7) Neaoshow f 7 TA Coworker complaint
OF 2 Cex worker ceounngetavint 6 OL 74) Discrepaney report
Y 16 7) Noshow 1 2% 74) Discrepancy report
10) 1 7) Dscrepaney report 1) *8 F4 Neo show
1 @ 7D DNiscrepanen repent 1b 19 74) Co worker complaint
WwW te 7 Twe passenger 11 34 740 Discrepancy report
complaints 11 WO 74 Coworker complaint
1) 7) Cewerker complaint oT? 8 74 Discrepancy report
No show 1’ Iq 74 No show
y
4 11 72) Diserepaney reper 1 11 75) Passenger complaint
G@ *1 7) Diiserepaney report 8 1 75) Cooworker complaint
7 77 78) Discrepanes repert 8 1b 78) Coworker complaint
> 8 74 Diserepaney repent 8 6 75) Discrepaney report
i
aes em | Neo show
After the Nevember Wl P2 7d coworker complaint about the
paintift’s lateness iy boarding the plane. the plaintuf, for her third
tardiness my GO) days. was suspended) for two days. Following the
impesitien of the cuspension. the plainti® wrote separate letters: to
her Delta superviser and base manager apologizing for her lack of
responsibility. The plaintif® also told her supervisor, “Getting sus-
ponded is oxag tly what TP deserved).| ne one brought this upen myself
bat me Ponty erateful Pwas suspended for 2 days and not three.”
Al8
After that notification, another passenger complained about the
plaintiff's service, two co-workers complained about her unpro-
fessional conduct, and other discrepancy report for tardiness
was lodged against her. On August 27, 1975, the plaintiff was
asked to resign, and on September 5, 1975, was fired. The
record suggests considerable company forbearance without re-
gard to the employee's race. Nonetheless, we do not view this
case as frivolous.
We find no violation of the Title VIL requirements. Board of
Trustees of Keene State College v. Sweeney, —... U.S...
(1978); Furnco Construction Co. v. Waters, 438 U.S. 567
(1978); McDonnell Douglas Corp. v. Green, 411 U.S. 792
(1973).
AFFIRMED.
ALY
APPENDIX E.
IN THE UNrTreD STATES District Court
For the Northern District of Hlinois
Eastern Division
Rost MARY AUGUST, )
Plaintiff,
st No. 77 € 95
DELTA AIR LINES, INC..
Defendant.
MEMORANDUM OF DECISION AND ORDER.
Juttus J. HoFFMAN, Senior United States District Judge.
This is an action by the plaintiff Rosemary August to recover
against her former employer, defendant Delta Air Lines, Inc.
The plaintiffs complaint, as originally filed, was in two counts.
In Count I, she seeks redress for employment discrimination al-
legedly practiced by Delta Air Lines. It is her position that in
violation of Title VII of the Civil Rights Act of 1964, 42
U.S.C. § 2000¢, et seq., Delta subjected her to “. . . terms and
conditions of employment different from those of her similarly
situated Caucasian co-workers . . .” and ultimately discharged
her because she is a Negro. As relief, the plaintiff prays for
reinstatement, back pay and such other equitable relict as may
be proper. She also seeks an award of attorneys’ fees and costs.
These forms of recovery are expressly provided for in the Act.
See 42 U.S.C. § 2000e-5.
Count II of the complaint was brought pursuant to the court's
pendent jurisdiction. Ia that count, the plaintiff alleged that
subsequent to her discharge by defendant, she sought employ-
ment with several companies, but “. . . has not been hired de-
A20
spite her good qualifications. . . .” Pleading further, the plaintiff
states that she “. . . therefore believes that . . . defendant has
maliciously caused to be published to prospective employers
libelous, slanderous, and defamatory statements concerning the
plaintiff and having the effect of preventing her employment.”
For this alleged defamation, the plaintiff sought actual and puni-
tive damages totalling $150,000.
In its answer, Delta denied all substantive allegations in the
plaintiff's complaint. Delta also filed a motion for summary
judgment as to Count II, arguing that there was no evidence to
support the plaintiff's “belief” that she was being defamed. In
support, deposition testimony from the plaintiff and the affidavit
of one E. Kendall Allen, a Delta employee, were presented. The
plaintiff admitted in her deposition that she was unable to cite
any facts to support her “belief” she was being defamed. The
afliant stated that no prospective employer inquiries regarding
Rosemary August had even been received by Delta. The plaintiff
elected not to oppose the motion for summary judgment, and
it was granted by the court. This case therefore proceeded to
trial only on the plaintiffs allegations of race discrimination in
violation of Title VII.
In order for this court to have subject matter jurisdiction
in this case, certain procedural prerequisites must have been
satistied. These requirements are detailed in §$ 706 of the Act,
42 U.S.C. § 2000e-5. First, under sub-part (c):
In the case of an alleged unlawful employment practice
occurring in a State, or political subdivision of a State,
which has a State or local law prohibiting the unlawful
employment practice alleged and establishing or authoriz-
ing a State or local authority to grant or seek relief from
such practice or to institute criminal proceedings with
respect thereto upon receiving notice thereof, no charge
may be filed (with the Equal Employment Opportunities
Commission) before the expiration of sixty days after
proceedings have been commenced under the State or local
law, unless such proceedings have been earlier terminated,
~. . 42 USC. § 2000e-5(c).
A2l
More importantly, under sub-part (¢) of § 706:
A charge under this section shall be filed within one hun-
dred and eighty days after the alleged unlawful employ-
ment practice occurred . . . except that in a case of an
unlawful employment practice with respect to which the
person aggrieved his initially instituted proceedings with
a State or local agency . . . such charge shall be filed...
within three hundred days after the alleged unlawful em-
ployment practice occurred, or within thirty days after
receiving notice that the State or local agency has terminated
the proceedings under the State or local law, whichever is
earlier... . 42 U.S.C. § 2000e-5(e).
The purpose of the State agency filing requirement is to give
available State agencies a prior opportunity to consider dis-
crimination complaints. Compliance with this requirement is
critical. Love v. Pullman Co., 404 U.S. 522, at 524 and 526
(1972). In fact, because these requirements are jurisdictional,
the plaintiff has the burden of establishing them by a preponder-
ance of the evidence. A failure to do so will leave the court
without subject matter jurisdiction. Curliff v. Greyhound Lines,
Inc., 558 F. 2d 803, at 806 (5th Cir. 1977); Bere v. LaCrosse
Cooler Co., 548 F.2d 211, at 212 (7th Cir. 1977); Abshire
Vv. Chicago and Eastern Illinois Railroad Co., 352 F. Supp. 601
(N. D. Ill. 1972).
At the trial of this cause, Rosemary August presented evi-
dence of compliance with the procedural requirements of $ 706.
In its post-trial brief, the defendant argued that the plaintiff
had not sustained her burden of proof on this issue, and that
this court therefore was without subject matter jurisdiction
herein. In response to that argument, the plaintiff filed a motion
by which she petitioned the court to“... reopen the proofs . .
for the limited purpose of further establishing that all jurisdic-
tional requirements .. . have been met by plaintiff.” That motion
was granted, and a special supplementary proceeding was held
for the limited purpose of accepting additional evidence on the
jurisdictional issue.
N22
Tron all the evidence presented, the court finds that heeause
the plaintifl has sustained her burden of establishing comptiance
with the procedural requirements of § 706 by a preponderance
of the evidence, this comm does have the requisite subject matter
jrisdicfion to decide the merits of this litigation. Rosemary
\npust was emploved asia flight attendant for Delta Ain T ines,
Ine commencing November 22. F8 7b Ter employment was
terminated on oor about Anupust 27, 1978 On April 7, 1975,
and apa on Anpust 28, 1878. she filed charges of unfair em
plovment practices against Delta with the Chicago Distriet OF
fice ot the Equal Dinplowment Opportunities Commission On
Apo Pt. 1978, and again ion August 298 1987S. the Conmisston
deterred her charges te the Whines bain Pimplovment Practices
Commission, which is the State agenew with authenty te ad
dress her complaint Prom the evidence adduced. the only ree
sonable conclision ta be reached is that the Pan Pamplovment
Practices Commission elected fo fake ne action on Miss August's
complaint Therefore. acting pursuant to ifs statutory authority,
the Equal Payplovinent Opportunities Commission assumed jit
vabetion over this matter On Tanna 4. 1877. it issned: tts
Notice of Right te Sue The plaintt then filed her complaint
with this court on January EE, 1877,
Prom these facts mos elear that the fime requirements of
§ TOG have been satisfied More importantly. this proeedure dy
whieh the plant fled ber charges with the Equal Pimplovment
Opportunities Commission, which) Commission thea deterred
those charges fo the Ula Pan Pimplovinent Practees Com
AMSsiOn for its prior consideration, dees comply with the State
ageney Hhing requirement of § TO) Love Vv Pidiman Co. 404
ON S822 (1972). Therefore. all procedural requirements of
Tile NUD have been satisfied This court does have qurisdietion
i) deode the merits of this action
In Count Toot her eomplamt, Miss August has alleged that
sho was sulveeted fo emploviment discrimination on the basis
ot ber Negre race A number of cases have addressed the proof
A23
requirements in private, non-class actions challenging employ
ment discrimination. In the leading case of McDonnell Douglas
Corp. Vv. Green, ALL US, 792 (1973), the Supreme Court was
confronted with a situation where the complainant in a Title VI
case alleged that his discharge and the general hiring practices
of his former employer were racially motivated. In that case,
the Court held that the initial burden of establishing a prima
facie case of racial discrimination may be satisfied by a showing
(i) that the plaintiff belongs to a racial minority: (it) that he
applied for and was qualified for a job for which the employer
was seeking applicants; (iii) that, despite his qualifications, he
was rejected, and (iv) that, after his rejection, the position re-
mained open and the employer continued to seek applications
from persons of equal qualifications. Assuming this burden of
proof is discharged, the burden then shifts to the defendant to
articulate some legitimate, nondiscriminatory reason for the
individual's rejection. Uf that is done, the plaintiff then has the
additional burden of proving the stated reason was just a pretext
for a racially discriminatory decision. Accord, Flowers v.
Crouch-Walker Corp., 552 F. 2d 1277, at 1281 (7th Cir. 1977);
Kinsey Vv. First Regional Securities, Inc., 557 FP. 2d 830, at 836
(D.C. Cir, 1977); Sime v. Trustees of California State Uni-
versity and Colleges, 526 F. 2d 1112, at 1114 (9th Cir. 1975).
While the Court in McDonnell Douglas Corp. v. Green pre-
sented this as one acceptable articulation of the specific ele-
ments necessary to establish a prima facie case, it specifically
pointed out that the facts will vary in Title VII cases, so that
iis statement of the prima facie proof required should not be
considered “. . . necessarily applicable in every respect to differ-
ing factual situations.” /d., at page 802, n. 13. The Court again
addressed this point in International Brotherhood of Teamsters
V. United States, 431 U.S. 324 (1977), where it gave a more
complete statement of the proposition:
The importance of McDonnell Douglas lies not in its spe-
cification of the discrete elements of proof there required,
ASS
but in its recognition of the general principle that any Title
VIL plainti® must carry the initial burden of offering evt
dence adequate ty create an inference that an employment
decision was based on discriminatory ertterion legal under
the Act. 431 ULS. at 358,
See alvo. MeDonald v. Santa Ve Trail Transportation Co., 427
US. 274, at 279, no 6 (1976).
While this court does find the approach articulated in MeDon
nell Douglas Corp. ¥. Green to be instructive. ih must conclude
that the evidence presented here does not lend itself to Che
appheation thereat, But regardless of the approach adopted,
what a plant must establish as a minimum ina Tithe VET case
is that he she is a member of a protected class and that he she
Was subjected to disparate treatment whieh was “rackilly: prem
ised! International Brotherhood of Teamsters \. United States,
AVL ULS. at B38) see alve, Barnes Vo Nt. Catherine's Hospital,
SOX E Md 824 CT Cir, 1977). These facts must be established
by a preponderance of the net ot all the evidence. Barnes \V.
St, Catherine's Hospital, supra: Henry Vv. Ford Motor Company,
§§3 Pod 46 (Sth Cir, 1977). In other words. in order to
prevail, as a minimum, Rosemary Angust must establish bv oa
preponderance of all the evidence that because she is a Negro,
she was subjected to emplovment standards thar were different
from those imposed on similarly situated Caueasnin: fight at
tendants so that she was terminated while siamlacy situated
Caucasian fight attendants were not, Viewing the evidence pre
sented in this case against these requirements, the court has no
dificulty in reaching ts decision.
Rosemary August is 27 years old: she is a member of the
Negre race. She applied for a position as a flight attendant
with Delta Air Lines by sending her employment: application
to their corporate offices in| Atlanta, Georgia in October of
1. This is not to sav that a showing of a discriminatory purpose
is required in Tithe Vib cases. Iris clear that there is no stich require
ment Washington vo Davis, 426 US) 248 CI970). United States \
Civ ot Chicago. No 77-1071 (7th Cir, February 21, 1978)
A25
1971. Following an interview on November 3, 1971, the plain-
tiff was employed as a flight attendant and, after an initial
training period, she was assigned to Delta's base at O'Hare
International Airport in Chicago, Illinois. She worked as a
flight attendant for Delta until her termination on August 27,
1975.
Delta Air Lines, Inc. is a national airline with its headquarters
in Atlanta. It operates various bases throughout the country.
The O'Hare base has a Base Manager who is in charge of all
Delta flight attendants assigned to that base. Reporting directly
to the Base Manager are supervisors. Each supervisor is charged
with primary responsibility for a certain number of flight at-
tendants.
From 1971 through October of 1973, the Base Manager at
O'Hare Airport was June Kulencamp. Commencing in October
of 1973, Nancy Severtsen filled that position. Throughout the
period of Miss August's employment her immediate supervisor
was Carolyn Powers.
These positions are important both because they are positions
of authority and because responsibility for flight) attendants’
employment files is vested in the Base Manager and supervisors.
The importance of this later factor lies in the fact that Delta
employment decisions such as advancement, discipline and
termination are, to a large extent, made based on what. is
contained in the flight attendant’s file.
A termination decision at Delta normally requires first a
determination by the supervisor and Base Manager that a flight
attendant has failed to satisfy Delta standards for continued em-
ployment. Next, the employee file and a recommendation for
termination are sent to the defendant's corporate headquarters
in Atlanta where they are reviewed by various management
personnel, These people include a member of the defendant's
staff of in-house counsel, defendant's Equal Employment Man-
ager, and the corporate Vice-President in charge of personnel.
Oi their concurrence, a Delta flight attendant is terminated.
A26
In the case of Rosemary August these steps were carried out
After Nancy Severtsen and Carolyn Powers decided to recom
mend her termination, Miss August's records were transmitted
to Atlanta. There, they were reviewed by Peter Caldwell, Ad
ministrative Assistent-Persennel, Hunter Hughes, one of the
defendant's in house counsel, Richard Paley, Equal Employment
Manager. and Ro W. Allen, Vice-President-Personnel Benefits
Each of these individuals agreed with the original recommenda:
tion, and Rosemary August was terminated.
The decision to terminate was based on a determination
of “poor job performance and attitude’. The supervisory per
wnnel invelved based this conclusion on their findings that
Rosemary August had committed a number of “no shows”
(failures to report for an assignment on time or other equally
serious misconduct), that numerous co-worker and passenger
complaints had been tiled against her, that she was not properly
performing her job and that she had been guilty of various
Delta policy infractions.
The plaintiff has taken the position that Delta Air Lines’
base at O'Hare International Airport had, between 1971 and
1978. a policy or practice of subjecting Negro flight attendants
to discriminatory treatment, and that she was the victim of this
discrimination. She argues that in the case of Negro emplovees
in general and herself in particular, in making entries into flight
attendant’s files and im reaching employment decisions, the de-
fendant held Negro attendants to higher or stricter standards
than Caucasians. As the court has previously noted, entries
in flight attendants’ employment files are critical to the defend
ant’s employment decisions. Therefore, a showing that the
defendant was guilty of disparate treatment regarding file com
pilations would be highly probative of a Tithe VIE violation.
In support of her allegations of disparate treatment, the plain-
tiff Chose not to present for comparison the full employment
files of Rosemary August and similarly situated Caucasian flight
attendants. As will be more fully developed. she also elected to
A27
make only limited use of statistical data. Instead, her approach
was primarily to present evidence to demonstrate that on particu.
lar occasions Caucasian flight attendants were treated a certain
way while in similar situations either Rosemary August or one
of Delta’s other Negro flight attendants was dealt: with more
harshly.
The record presented in this case does establish that Rosemary
August did perform her job on various flights in what one
individual described as a “top notch” manner, During her career
with Delta, she received a number of complimentary. letters
from passengers, which letters were placed in her file. She was
also formally complimented by co-workers on occasion, those
compliments were also made a part of her tle More im-
portantly, she also received one Customor Service Award and
two Feather-In-Your- Cap Awards. The co are awards issucd by
Delta’s corporate office for outsiandine scrvice by an employee.
They are awarded to a fight attendanc who has conductoc him-
self or herself on a fight, or has in some coer manner per-
formed his or her duties in. an excniplary manner, The Customer
Service Award includes Delta Air Lines, Inc. stock certificates,
recognition in the Delta Digest, a company newsletter, and a
letter of appreciation from the Chairman of Delta’s Board of
Directors.
However, the record also contains evidence that establishes
Mis August was capeble of poor or unacceptable performance
Her file contains four “no show” citations: it is Delta's estab-
shed policy that an employee may be subject to dismissal for
four such infractions. Her file also contains a number of co-
worker and supervisor complaints. Co-workers found that the
plaintiff could be offens.ve in her manner and uncooperative.
Additionally a number of Ictters of crit. ism were received from
passengers. The plaintiff defendant against these complaints by
claiming they were not factually correct. She also argued they
were not adequately investigaicd by Delta. The court cannot
respect failures to investigate complaints. Nevertheless, the com-
A28
plaints were filed, and they were received from a number of
sources.
From all of this evidence, the court concludes that Rosemary
August was capable of quality work performance, but was also
guilty of carrying out her duties in a manner that was unac-
ceptable to her employer. However, this is not the issue now
before the court. What this court must now decide is whether
the plaintiff has established by a preponderance of the evidence
that two standards of performance were applied at Delta's
O'Hare Airport base, and that Rosemary August, as a Negro,
was a victim of this double standard. After a thorough review of
the record in this case, the court must conclude that this burden
has not been met.
The most probing evidence of disparate treatment presented
in this case was a showing that in the period from 1972
through 1975, of a total of 34 flight attendants terminated, 10
(or 29%) were Negroes. And when the period is extended
through 1976, 13 out of 38 (or 34° ) were Negroes. Delta
maintains a total staff of approximately 500 flight attendants at
its O'Hare base. From the available evidence, approximately
one-fifth of that total, or approximately 100 of Delta’s flight
attendants, are Negroes.
The defendant has argued that where the statistical sample
is small as is admittedly the case here, the results obtained
should be rejected as meaningless. In support, it cites, inter alia,
Mayor of Philadelphia v. Educational Equality League, 415
U.S. 605 (1974); Robinson v. City of Dallas, 514 F.2d 1271
(Sth Cir. 1975); Morita v. Southern California Permenente
Medical Group, 541 F.2d 217 (9th Cir. 1976); Ochoa v.
Monsanto, 473 F.2d 318 (Sth Cir. 1973). With this argu-
ment, the court does not agree.
In the recent Supreme Court case of /nternational Brother-
hood of Teamsters Vv. United States, 431 U.S. 324 (1977),
the Court did caution that “(c)onsiderations such as a small
sample size may, of course, detract from the value of such
A29
evidence, [citing Mayor of Philadelphia v. Education Equality
League, 415 U.S. 605, at 620-621 (1974)]. . . .” However,
in that case the Court also noted that wtih proper caution, they
can be of assistance to the fact finder in reaching his decision.
See International Brotherhood of Teamsters v. United States,
431 U.S. at 339-240. Other cases are in accord; see e.g., Burns
Vv. Thiokol Chemical Corporation, 483 F.2d 300, at 305-307
(Sth Cir. 1973); Equal Employment Opportunity Commission
v. Eagle Iron Works, 424 F. Supp. 240 (S. D. la. 1976).?
While these statististics do constitute evidence of disparate
treatment because of the small numbers of employees involved
relative to Delta’s employment population, they cannot consti-
tute conclusive proof thereof. See International Brotherhood of
Teamsters v. United States, supra, and other cases previously
cited herein. Rather, they must be considered aiong with all of
the evidence in deciding this case.
As the court has previously stated, the main thrust of the
plaintiff's case was a showing that in numerous specific situa-
tions Delta’s supervisory personnel dealt more harshly with
Negroes, ooth as to the disciplinary action taken and as to the
entries made to the employees’ files, than Caucasians. A review
of every such incident is not practicable, and the court will
not now attempt to do so.
However, one incident involving the plaintiff is sufficiently
offensive to this court that individual recognition must be given
to it. Based on little more than rumors or gossip, in April of
1972 defendant's then Base Manager, June Kulenkamp, de-
termined to have Rosemary August examined for a venereal
disease. Not only was the plaintiff not given any chance to con-
2. In reaching this decision to give weight to this statistical
evidence presented by the plaintiff, the court has determined that it
must reject plaintiff's argument that the proper measuring period is
only 1975, the year she was terminated. In that year, 6 of 8 termi-
nations involved Negroes. Clearly, 1975 cannot stand alone because
the sample is too small, the measuring period is too short to be
meaningful, and the results obtained are misleading.
A30
front the sources of Kulenkamp’s information, she was not even
told why she must submit to the medical examination until after
the tests proved negative. In the interim, she was left to specu-
late on the need for this immediate physical examination,
While the court believes the embarrassment and anxiety caused
Rosemary August in this incident were unnecessary and the
result. of improper handling of the situation, it cannot find a
racial motive therefor in the record. There simply was no show-
ing that any other Hight attendant, Negro or Caucasian, was
subjected to treatment even remotely similar thereto.
By the remainder of her evidence, the plaintil presented
numerous other incidents where one employee, a Nero, was
dealt with severely while in sinilar situations lesser measures
were taken against Caucasian fight attendants, ‘These included
showings that Negroes were given “no shows”, suspensions, and
“discrepeney reports” Con the order of a warning notice) where
in like cases, Caucasians were dealt with more tolerantly. How-
ever, both by its own evidence and during cross-examination,
the defendant established that on an equal number of occasions,
Delta personnel showed favoritism to Negroes.
For example, the plaintiff established that for infractions such
as tardiness, missing Delta training sessions, not being within
ready telephonic reach while on reserve duty, substandard work
performance, substandard service to passengers, offensive dis-
position, missing scheduled uniform and weight checks, and for
various other inftactions, stern measures were taken against
Negroes in general and Rosemary August in particular, while a
more tolerant attitude was displayed toward Caucasians. Addi-
tionally, the plaintit! demonstrated that in’ certain cases, the
benetit of any doubt was shown a Caucasian flight attendant but
not a Negro. Finally, certain Caucasian flight attendants who
were in jeopardy of losing their jobs were given more warnings
and “last chances” than certain Negro attendants,
Standing unrebutted, this evidence would raise the necessary
inference of racial bias, However, the evidence establishes that
A31
in equal numbers of cases, it was the Negro that benefited from
a benevolent supervisor, Negroes were given discrepancy reports
(warnings) instead of “no shows”, or were excused from any
discipline where in similar situations Caucasians were dealt
with severely,
Rosemary August's own employment history includes such
incidents. While her file contains four “no shows”, it was es-
tablished that she was properly subject to citation on at least
three additional occasions. At other times, she received only
verbal reprimands or was excused from any discipline when her
conduct could under Delta policy have resulted in the imposi-
tion of stronger sanctions,
In reaching its conclusion in this case, the court must note
certain discrepencies in the testimony. It is established Delta
policy that an applicant disclose any prior employment within
the airline industry, Rosemary August had previously been em-
ployed by United Airlines, Inc. when she applied for the posi-
tion of flight attendant with Delta Air Lines. Her employment
application fails to disclose this fact. While Miss August testified
that she orally disclosed this experience during her job inter-
view but was told “not to worry about it’, the interviewer in-
volved, Kendall Allen, denied this. Allen also testified, and it
appears reasonable to conclude, that prior airline experience is
an important clement in evaluating a job applicant. Miss August
also testified that in her opinion she had performed her duties
as a flight attendant in an acceptable manner and was not ade-
quately apprised of dissatisfaction harbored by her supervisors.
However, it was shown that in December of 1974, following a
series of events culminating in a two-day suspension, Rosemary
August sent letters of apology to both Base Manager Severtsen
and her immediate supervisor, Carolyn Powers, in which she
acknowledged that she may have been guilty of substandard
work performance and would endeavor to correct the situation.
As is its duty, the court has taken these factors into account in
A32
determining the weight to be given to the evidence presented by
the parties in this lawsuit.
From the evidence presented, it would appear that Delta Air
Lines, Inc. may not be the most pleasant place to work. How-
ever, this trial record does not establish that its employment
practices are racially premised. It further does not support the
conclusion Rosemary August was subjected to disparate treat-
ment, either in her employment or termination, because of the
fact she is a Negro. For this reason, this court has concluded
that it must enter its judgment in this case in favor of the de-
fendant.
Accordingly, this case will be, and the same hereby now is
dismissed with prejudice in favor of the defendant Delta Air
Lines, Inc. and against the plaintiff Rosemary August. Each
party will bear its own costs of litigation. No award of attorney’s
fees will be made in favor of either party.
This Memorandum of Decision and Order is intended to
satisfy the provisions of Rule 52(a) of the Federal Rules of
Civil Procedure which require the court to set forth its findings
of fact and conclusions of law in all cases tried by the court sit-
ting without a jury.
Dated at Chicago, Illinois, this 9th day of June, 1978.
A33
APPENDIX F.
IN THE UNITED STATES DistTRICT COURT
For the Northern District of Illinois
Eastern Division
ROSEMARY AUGUST, 7
Plaintiff,
se - No. 77 € 95
DELTA AiR LINEs, INC.,
Defendant. }
PROOF OF SERVICE OF OFFER OF JUDGMENT
State of Illinois
County of Cook
Max C. Brittain, Jr., being duly sworn, deposes and says:
1. I am attorney for the defendant in this action.
2. On May 12, 1977, Delta Air Lines, Inc., the defendant
in this action, served upon plaintiffs attorney the annexed offer
of judgment.
Max G. Brittain, Jr.,
One of the Attorneys for
Defendant Delta Air Lines, Inc.
Dated:
Notary Public
A34
IN THE UNITED STATES District CouRT
For the Northern District of Illinois
Eastern Division
ROSEMARY AUGUST, a
Plaintiff,
vs.
r No. 77 C 95
DELTA Arr Lines, INC.,
Defendant.
OFFER OF JUDGMENT
To: Carole K. Bellows
Bellows & Bellows :
One IBM Plaza, Suite 1414
Chicago, Illinois 60611
Pursuant to Rule 68 of the Federal Rules of Civil Procedure,
defendant hereby offers to allow judgment to be taken against
it in this action, in the amount of $450 which shall include at-
torney’s fees, together with costs accrued to date. This offer of
judgment is made for the purposes specified in Rule 68, and is
not to be construed cither as an admission that the defendant is
liable in this action, or that the plaintiff has suffered any damage.
Max G. Brittain, Jr.,
One of the Attorneys for
Of Counsel: Defendant Delta Air Lines, Inc.
Schiff Hardin & Waite
7200 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
876-1000
Sidney F. Davis
Hunier R. Hughes
Delta Air Lincs, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
A35
APPENDIX G.
Original Rule 68, eff. September 16, 1938
At any time more than 10 days before the trial begins, a
party defending against a claim may serve upon the adverse
party an offer to allow judgment to be taken against him for
the money or property or to the effect specified in his offer, with
costs then accrued. If within 10 days after the service of the
offer the adverse party serves written notice that the offer is
accepted, either party may then file the offer and notice of
acceptance together with proof of service thereof and thereupon
the clerk shall enter judgment. If the offer is not so accepted it
shall be deemed withdrawn and evidence thereof is not ad-
missible. If the adverse party fails to obtain a judgment more
favorable than that offered, he shal! not recover costs in the dis-
trict court from the time of the offer but shall pay costs from
that time.
As amended, eff. March 19, 1948
At any time more than 10 days before the trial begins, a
party defending against a claim may serve upon the adverse
party an offer to allow judgment to be taken against him for
the money or property or to the effect specified in his offer, with
costs then accrued. If within 10 days after the service of the
offer the adverse party serves written notice that the offer is
accepted, either party may then file the offer and notice of
acceptance together with proof of service thereof and thereupon
the clerk shall enter judgment. An offer not accepted shall be
deemed withdrawn and evidence thereof is not admissible ex-
cept in a proceeding to determine costs. If the judgment finally
obtained by the offeree is not more favorable than the offer, the
offeree must pay the costs incurred after the making of the offer.
A36
The fact that an offer is made but not accepted does not pre-
clude a subsequent offer.
As amended, eff. July 1, 1966
At any time more than 10 days before the trial begins, a
party defending against a claim may serve upon the adverse
party an offer to allow judgment to be taken against him for
the money or property or to the effect specified in his offer, with
costs then accrued. If within 10 days after the service of the
offer the adverse party serves written notice that the offer is
accepted, either party may then file the offer and notice of
acceptance together with proof of service thereof and thereupon
the clerk shall enter judgment. An offer not accepted shall be
deemed withdrawn and evidence thereof is not admissible ex-
cept in a proceeding to determine costs. If the judgment finally
obtained by the offeree is not more favorable than the offer, the
offeree must pay the costs incurred after the making of the offer.
The fact that an offer is made but not accepted does not pre-
clude a subsequent offer. When the liability of one party to
another has been determined by verdict or order or judgment,
but the amount or extent of the liability remains to be deter-
mined by further proceedings, the party adjudged liable may
make an offer of judgment, which shall have the same effect as
an offer made before trial if it is served within a reasonable time
not less than 10 days prior to the commencement of hearings to
determine the amount or extent of liability.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.