# Amicus Curiae Brief — Delta Air Lines, Inc. v. August

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1981
- **Citation:** 450 U.S. 346

## Text

II.

III.

i

QUESTIONS PRESENTED

Whether the offer of judgment failed to

comply with the requirements of Rule
68?

Whether the District Court and the
Court of Appeals abused their discre-
tion in denying Delta's motion for
costs?

Whether the Court of Appeals erred in
examining and balancing the policies
of Title VII of the Civil Rights Act
of 1964 and Rule 68 of the Federal
Rules of Civil Procedure?

ii

TABLE OF CONTENTS

Questions Presented

Table of
Table of

Opinions

Contents
Authorities

Below

Jurisdiction

Statutes

and Rules Involved

Statement of the CAse

Summary of Argument

Argument

Re

II.

III.

The Offer of Judgment
Failed to Comply With
the Requirements of
Rule 68

Neither the District
Court Nor the Court of
Appeals Erred in Denying
Delta Recovery of
Litigation Costs

Rule 68 Cannot Be
Viewed Alone But

Must Be Construed With
Title VII of the Civil
Rights Act of 1964

ii

iv

10

14

ii

Principles of Statutory
Construction Require
Examination of Policies
Underlying Conflicting
Statutes 14

The Courts Below Correctly
Examined the Policies of
Rule 68 and title VII 20

Decisions of State Courts
Allow Review of Offers of
Judgment 26

The Decision of the Court
of Appeals Promoted the
Purpose of Rule 68 36

TABLE OF AUTHORITIES

Cases

Albermarle Paper Company v. Moody, 422
U.S. 405 (1975)

Benda v. Fana, 10 Ohio St. 2d 259 (1967)

Bertilacci v. Avery, 42 Mich. App. 483
(1972)

Christiansburg Garment Co. v. EEOC, 434
U.S. 412 (1978) 13, 22-24,

Colby v. Larson, 297 P.2d 1073 (Ore.
1956) 26, 29,

Cotton v. Hinton, 559 F.2d 1326 (5th
Cir. 1977)

Escoe v. Zerbst, 295 U.S. 490 (1935)

Fanning v. United Fruit Company, 355 F.2d
147 (4th Cir. 1966)

French v. Edwards, 80 U.S. (13 Wall.)
506 (1872)

Herring-Hall-Marvin Safe Co. v. Balliet,
44 Nev. 94 (1920)

Hickman v. Taylor, 329 U.S. 495 (1945)

Honea v. Crescent Ford Truck Sales, Inc.,
394 F. Supp. 201 (E.D. La. 1975)

Howard v. Farley, 29 How. Prac. 4 (1865)

Insurance Company of North America v.
Twitty, 319 So.2d 141 (Fla. App. 1975)

Johnson v. Chapman, 223 N.Y.S. 515 (App.
Div. 1927)

35

33

19

18

34

=

Leeming v. Leeming, 87 Nev. 530 (1971) 35

Manatee County, Florida v. Train, 583 F.2d
179 (5th Cir. 1978) 17

Mr. Hangar, Inc. v. Cut Rate Plastic Hangars,
Inc., 63 F.R.D. 607 (E.D.N.Y. 1974) 7-8

Myers v. Hollister, 226 F.2d 346 (D.C. Cir.
1955) 17, 19

Oliver v. Kalamazoo Board of Education,
346 F. Supp. 766 (W.D. Mich), aff'd per
Curiam, 448 F.2d 635 (6th Cir. 1972) 25

Perkins v. New Orleans Athletic Club, 429
F, Supp. 661 (E.D. La. 1976) 25

Public Bank of New York City v. Birnbaum,
117 N.Y.S. 237 (App. Div. 1909) 34

Ralpho v. Bell, 569 F.2d 607 (D.C. Cir.
1977) 18

Scheriff v. Beck, 452 F. Supp. 1254 (D.Colo.
1978) 7, 9

Schnute Hoffman Co. v. Sweeney, 136 Ky. 773
(Ky. App. 1919) 35

Sierra Club v. Train, 557 F.2d 485 (5th
Cir. 1977) 17

Train v. Colorado Public Interest Research
Group, Inc., 426 U.S. 1 (1976) 17

United States v. American Trucking Associa-
tion, 310 U.S. 534 (1940) 17

United States v. Dunn, 545 F.2d 1281 (10th
Cir. 1976) 19-20

United States v. Mortenson, 11 F.R.D. 516
(D. Neb. 1951) 9

United States v. Reeb, 433 F.2d 381 (9th Cir.
1970) 17
—————————

vi

Vroman v. Kempke, 34 Wis. 2d 680 (1967) 31

Wilshire Oil Company of California v.
Costello, 348 F.2d 241 (9th Cir. 1965) 16

Statutes
42 U.S.C. §1983 9
42 U.S.C. §1988 9-10, 20

42 U.S.C. §§2000e, et seg., as
Amended passim

Federal Rules of Civil Procedure

Fed. R. Civ. P. 68 passim

State Rules of Civil Procedure

Mich. GCR 1963, 519.1 33

Or. Rev. Stat. §17.055 27-28

Or. Rev. Stat. §20.080 27-30

Wisc. Stat. §269.02 31-32
Miscellaneous

6 Moore's Federal Practice, Vol. 6
(2d ed. 1976) 6, 9

Sutheralnd, Statutory Construction
(4th ed. 1973) 18

Wright and Miller, Federal Practice and
Procedure (Rev. ed. 1973) 6, 9, 16, 25

vii

MISCELLANEOUS

6 Moore's Federal Practice, Vol. 6
(2d ed. 1976) 6, 9

Sutherland, Statutory Construction
(4th ed. 1973) 18

Wright & Miller, Federal Practice &
Procedure, (Rev. ed. 1973) 6, 9, 16, 25

In the
Supreme Court of the United States

October TERM, 1979

No. 79-814
DELTA AIR LINES, INC.,
Petitioner,
vB.
ROSEMARY AUGUST,
Respondent.

ON WRIT OF CERTIORARI TO TITE UNITED STATES COURT OF
APPEALS FOR THE SEVENTH CIRCUIT

AMICUS CURIAE BRIEF OF THE LAWYERS’
COMMITTEE FOR CIVIL RIGHTS UNDER LAW

=aj«
OPINIONS BELOW

The opinion of the Court of Appeals
for the Seventh Circuit (Jt. App. pp. 2-7)1
is reported at 600 F.2d 699. The decision
of the District Court (Jt. App. pp. 8-14)
is not officially reported.

JURISDICTION

The judgment of the Court of Appeals
was entered on July 6, 1979. On August
28, 1979 Delta's timely petition for rehearing
and suqgestion for rehearing en banc was
denied. (Jt. App. p. 1). Delta's petition
for a writ of certiorari was filed within
ninety days thereafter and was granted on
April 21, 1980.

STATUTES AND RULES INVOLVED

The relevant statutes and rules are
Title VII of the Civil Rights Act of 1964,
42 U.S.C.§2000e, et seg. and Rule 68 of the

Federal Rules of Civil Procedure.

s Jt. App. refers to the Joint Appendix
filed with the Court by Delta Air Lines, Inc.
and Rosemary august as provided in Rule 30
of the Rules of the Court.

@2-

STATEMENT OF THE CASE

Amicus curiae, the Lawyers' Committee for
Civil Rights Under Law (“Lawyers' Commit-
tee"), concurs with petitioner's statement of
the case as to the sequence of events. It
does not concur in petitioner's description
of the decisions of the District Court and
the Court of Appeals below. The District
Court, in denying petitioner's motion for
costs pursuant to Rule 68 of the Federal
Rules of Civil Procedure ("Rule 68") decided
that in order for an offer of judgment to
trigger the provisions of Rule 68, the offer
must be “at least arguably reasonable" and a
good faith attempt to settle the parties’
litigation. (Jt. App. p. 11) The District
Court considered the time at which the offer
was made, approximately four months after the
institution of the suit, the amount of the
offer, $450 to include all costs and attorneys'
fees incurred to the date of the offer, the

decision of the Equal Employment Opportunity

=-3-
Commission which encouraged August to bring
Suit, and the relief sought by the respon-
dent. The District Court concluded that the
offer of $450 could only have been effective
if respondent's claim were totally lacking in
merit, a situation which was not before it in
this case. (Jt. App. p. 12) The offer,
therefore, was not an effective offer under
all the circumstances, compelling the
application of Rule 68.

The Court of Appeals for the Seventh
Circuit, affirming the District Court, relied
on the significant national policies embodied
in Title VII, 42 U.S.C. §§2000e, et seq. It
rejected a technical interpretation of Rule
68,a procedural rule, which would have the
effect of chilling the pursuit of those
overriding objectives. (Jt. App. p. 6) The
Court of Appeals ruled that, at least in
Title VII cases, the trial judge may exercise
threshold discretion in ruling on a motion
for costs pursuant to Rule 68 and may

consider factors such as the time the offer

Eee

eee
~

was made, the final outcome of the case,

and the qood faith and reasonable relation-

ship of the offer to the issues, litigation

risks, and expenses involved in the case.

The Court also warned that a literal reading

of Rule 68 would encourage bad faith offers

by defendants, and thereby deniqrate Rule 68

itself and its policy of encouraging

settlements. (Jt. App. p. 35)

aS

SUMMARY OF ARGUMENT

The respondent's offer of judgment in
the instant case failed to comply with the
requirements of Rule 68 of the Federal Rules
of Civil Procedure in that it did not encom-
pass the relief prayed for by respondent,
nor did it include an adequate amount for
attorneys' fees, a part of costs in employment
discrimination cases. Neither the District Court
nor the Court of Appeals erred in denying
respondent's motion for costs, particularly
in view of the significant national policies
underlying Title VII. Further, by reviewing
the policies underlying both provisions, the
Court of Appeals promoted the policies of the

Federal Rules of Civil Procedure and Rule 68.

ARGUMENT

I. The Offer of Judgment Failed to Comply
with the Requirements of Rule 68

In order to trigger the cost-shifting
provisions of Rule 68, an offer of judgment
must reascnably encompass the relief prayed

for. Moore's Federal Practice §6804 (2d ed.

1975); Wright & Miller, Federal Practice &

Procedure, §3001 (1973). The nee for careful

analysis of an offer of judgment in a Title
VII case is particularly compelling when the
nature of the relief sought is considered.

One element of relief in a Title VII suit
is equitable relief to remedy past discrimi-
nation and to prohibit future discrimination.
The goal of this relief is to make a victim of
discrimination "whole," as expressed by this

Court in Albermarle Paper Company v. Moody,

422 U.S. 405 (1975):

It is also the purpose of Title VII
to make persons whole for injuries
suffered on account of unlawful
employment discrimination. Where
racial discrimination is concerned,
"the [district] court has not merely
the power but the duty to render a
decree which will so far as possible
eliminate the discriminatory effects

-/]-

cf the past as well as bar like
discrimination in the future.”
Louisiana v. United States, 380 U.S.
145, 154, 422 U.S. at 418.

In addition, Title VII authorizes awards of
back pay, reinstatement, and costs, which
include attorneys' fees. 42 U.S.C. §2000e-
5(k).

Petitioner Delta's offer of judgment was
not in an amount adequate to cover costs,
including attorneys' fees, to the date of the
offer. It failed to offer any equitable relief
It expressly disclaimed liability, offered no
back pay, and did not offer reinstatement.
Thus, Delta's offer was not an “offer of
judgment" within the meaning of Rule 68.

Although there are but a few cases which
deal with offers of judgment under Rule 68,
two recent cases are helpful regarding suffi-

ciency of the relief offered, Mr. Hangar, Inc.

v. Cut Rate Plastic Hangers, Inc., 63 F.R.D.

607 (E.D.N.Y. 1974), and Scheriff v. Beck, 452

F. Supp. 1254 (D. Colo. 1978). In Mr. Hangar,

Inc., Supra, the most oft-cited case dealing

with Rule 68, the plaintiff sought both legal

-8-
infringement of its hanger design. The
defendants made an offer of judgment of $25 in
damages, an acknowledgement of the plaintiff's
rights, an admission of the infringment, and a
promise to cease its infringing practices.
The offer was rejected, and the trial resulted
in a judgment for defendant. Following
defendant's motion for costs from the date of
the offer, the district court reviewed the
terms of the offer, holding:

If costs are to be imposed

pursuant to the provisions

of Rule 68 a preliminary

finding is required that an

appropriate offer of judgment

has been made in compliance

with that rule. 63 F.R.D.

at 610.
The court found that the defendants' offer of
judgment was reasonable because, while it only
offered $25 in damages, it acknowledged the
plaintiff's rights, admitted the infringement,
and promised to cease the infringing prac-
tices. 63 F.R.D. at 610. The offer afforded
plaintiff substantially all the relief prayed

for in the complaint, and thus, complied

with Rule 68.

In Scheriff v. Beck, supra, the district

court examined an offer of judgment in a civil
rights action under 42 U.S.C. §1983. The
plaintiff rejected the defendants' offer of
judgment of $2,200, with costs but not includ-
ing attorneys' fees, but recovered only $500
following the trial. The district court
reviewed the offer, and found it insufficient
because the offer failed to include attorneys'
fees. “Rule 68 does not permit an offeror to
choose which accrued custs he is willing to
pay." 452 F. Supp. at 1260.

The Scheriff court was correct. The
relief offered must include all costs then
incurred by the plaintiff. Wright & Miller,

Federal Practice & Procedure, §3002, Moore's

Federal Practice, §68.04, United States v.

Mortenson, 11 F.R.D. 516, 517 (D. Neb. 1951).

In civil rights actions, attorneys' fees are a
recognized part of costs. §706(k) of Title
VII, 42 U.S.C. §2003-5(k) and the Civil Rights

Attorneys' Fees Award Act of 1976 42 U.S.C.

ii eee

20g ne eeeEEoEoE——E—EeeVOOOowre™™r. rl OE
~10
§19RA, as well as some ninety federal attorneys’
fees statutes, direct that attorneys’ fees he
Asseaaed ac costa, |
In the inetant case, the purported offer
of judament made by Delta did mot fulblidd the
requirements of Rule GAL The failure of
Delta to inelude in ite of fer of Judgment any
egnitable relief, backpay or reinstatement,
any colorably reasonable amount for costs,
includina attorneys’ fees, and the failure ta
admit liability cansed the offer to fail as a
Proper Rule GR of fer of Jndament. Thus, the
ruoliynae of both the Dietriet Conrt and the
Conrt oof Appeals should be upheld.
aa Neither the District Court Nor the
Court of Appeals Frred in Denying Delta
Recovery of Littaation Costs

lt has been generally recognized that the

1 see e.g. Freedom of Information Act,
S ULS.LC. §552(a) (4) (BE) (1976); Bankruptcy
Act, 11 U.S.C. §104(a) (1) (1970); Clayton
15 U.S.C. §15 (1976)

a} 9
District Court in Title VIT action is parti
culary stited to perform the task of deter-
mining the reasonableness of settlement
agreements. Cotton v. Hinton, 559 F.2d 1326,
1330 (5th Cir. IDI). While the decision
of the Fifth Cireuit was directed toward
settlement agreements, the principle is no
less applicable in cases where the district
court is cabled upon to review the sufficiency
of of fers of judgment. The District Court
herein was in the hest position to determine
whether any proposed settlement, or offer of
judgment, met the “make whole” remedial
policies of Title VIT Litigation. The
District Court properly reviewed the contents
of the offer, the time at which the offer was
made, the merits of respondent August's case,
and the remedial policies of Title Vil. The
District Court coneluded that there was
e.idence supporting August's claim of racial
bias, and that August had neen encouraged by
the findings of the Equal Empioymen-s
Opportunity Commission. August sought

eo

~-1?

damauges in her complaint, not ineluding

Attey neys' fees and custs, of S20,000 in

backpay, reinstatement, and a prohibition

auainet future Aicerimination at the time the
offer was made. After the litigation was) fen
monthe old, Delta offered the sum of S450,

which amount was te inmelude coste and

attorneye’ fees tes Aate, an of fer which the
Ayetriet court noted would hardly be

enffiecient te cover coate and attorneys! fees

WNenrved te the date of offer, Vhe district

court eonecluded that respondent Ananet acted

yeasenably wn refusing petitioner's offer.

The Court of Appeals upheld these findinuas

Vetryutrvener now claims that the offer «of

JuGament was reasonable because that coneept

"mav only be measured in terms of the
results, not the expectations of litigation;
the vesult and iudament proved that Delta'ts
offer was more than reasonable," (Pet.
Brief, p. 24) This Court has explicitly and
unequivecably rejected this unrealistic

interpretation of the term “reasonableness.

at 3a

In discussing whether the institution of a

Title VII action was reasonable, this Court
stated in Christianburg Garment Co. v. EEOC,
444 Vi.S. 412 (1978):

['}t is important that a district
court resist the understandable
temptation to engage in post hoc
reasoning by concluding that because
the plaintiff did not ultimately
prevail, his action must have been
unreasonable or without foundation.
This kind of hindsight logic could
discourage all but the most air-
tight claims, but seldom can a
prospective plaintiff be sure of
ultimate success. No matter how
honest one believes that he has
been the victim of discrimination,

’ no matter how meritorious one's
claim may appear at the outset,
the course of litigation is rarely
predictable, Decisive facts may
not emerge until discovery or trial.
The law may change or clarify in
the midst of Litigation. Even when
the law or facts appear unquestion-
able or unfavorable at the outset,
a party may have entirely reasonable
ground for bringing suit. 434 U.S.
at 421-422.

The uncertainties surrounding the decision to
bring an action apply equally to the decision
to accept or reject an offer of judgment.
Because an action results in a judgment for
defendant, it does not follow that bringing

the action was unreasonabie. Likewise,
ee

_14-

hecanece a plaintiff rejecte an offer of
indument and eventually recovers less than
the offer, it deee not follow that the
rejertion wae unreaconable The cetandard «of
reviewing the reaeonablenece of an offer of
jndament cannet be reenlt oriented, Rather,
that etandarad te a fumetion of the time at
which the effer wae made and ite eontent, in
relation te the merite of the plaintiff's
wace Verng thie etandard., ineludinda the
relief eenaht by the plaintiff, the Pietuiet
Cen eemeluded that Weltate offer was
unrveaceonable Theee findings were examined
and upheld by the Court of Appeals and should
mest be dveturbed
111 Role 68 Cannest Re Viewed Alone, Put

Moet Re Cenetrued With Title Vil «of

the Civil Riahts Act of 1964

A Pirnerples of Statutory Construction

Require Fxaminatiron of Polieres
Underlyrne Conflicting Statutes

—

o}§-

The offer of judqment made to August
failed to meet the requiremente of Rule 68,
and there was no abuse of discretion by
either court below in examining the terms of
the offer to determine its propriety under
Pole GA. However, to the extent that the
provisions of Tithe VIT and Rule 68 conflict
in the instant case, the District Court and
the Court oof Appeals correctly examined the
policies of both statutes and construed them
tro best effectuate the provisions of both.

In the Rrief for petitioner, Delta Air
hines ("Delta"), deals at length with the
apparently unquestionable lanquaqe of Pule
OH, Delta's view, however, is somewhat
myopic, isolating the rule from interaction
with any other statutory provisions. In
addition, Delta's approach to Pule 68 95
entirely inflexible, a construction which was

not intended by the drafters of the Federal

Rivleec «vf tivil Porevcodire
Ve example, Delta aqrates that there rs
omby ome meanind fea the weed “moat,” Cblat it
canoomtly be interpreted aa an timperat ive
Many compte, bowen, have taken the persrtten
that terme whieh are general ly mamlatory may
evsmetimec be directery and terme whith are
venerally oometried ae Avrerteory may, br cete
Ce aAces Ire owaredatert y Wilebtine eal Company ov
ealrvedaynva A eovatelle, ah Fi ad 241, 24
iYthyouve lua) lmleed, aa this Cervnet
recvunizedd forty Five years auc, larmguade «of
ecedma ye pends Vlec a eyaguafrecant, QC Yycevsegty orvest

eosydvest bavra feet of the mandatory character

Wole oat the Federal Rules af Cava
Pivwcedoure requrres the cane toocenetrue the

pales Viaberalls te promete the ends of lsttee

and facilitate decrsrens on the merarts,
rather: than determiunat rons on technicalrvtves

Hrveckman \ Tayless VQ ULB, GAN (UI),
wi yah XN Miller Yederal Vr actice 6 Procedure,
SVOHIA (196)

1.

of a statutory provision, Escoe v. Zerbst,
295 ULS, 490, 494 (1935). The interpretation
of mandatory and directory terms depends also
Hpon the background circumstances, the
context im whieh the words are used, and the
intention of the legislature, United States
Vv. Reet, 443 Fl 2d VRE, thd (9th Cir. 1970).
Varticularly, where two statutes conflict, as
here, the court should examine the purposes
of each statute through the extrinsie aids
available. Train ov. Colorado Public Interest
Research toterest Group, 426 U.S. 1, 10
(19/6); United States ve. American Trucking
Assoctation, to uss. 944, 543-544 (1940), as
quoted im Myers v. Hollister, 226 F.2d 346,
46 (D.C. Cie. 29957 Tf that examination
reveals a convineindgd arqument to the
contrary, terms which are generally considered
mandatory may be directory only. Manatee
County, Florida v. Train, 583 F.2d 179, 182
(Sth Car. 1978); Sierra v. Train, 557 F.2d

485, 489 (Sth Cit. 1977); ©. Sands,

Sutherlands Statutory Construction, §25.04

(4th ed. 1973).3

A convincing argument was made by both
the District Court and the Court of Appeals in
the instant case that the seemingly mandatory
language of Rule 68 must not be applied
mechanically. Unthinkingly applying a
mandatory rule that a plaintiff should be
charged with defendant's costs in the event
that the judgment finally secured by plaintiff
is less favorable than defendant's offer of
judgment, would thwart the policies behind
Title VII of the Civil Rights Act of 1964, 42
U.S.C. §§2000e, et seq., and lead to absurd and
harsh results. The Court of Appeals correctly

ruled that Rule 68 cannot be allowed to defeat

3° In statutes which guide the discharge
of a governmental official's duties terms which
propose to secure order and dispatch in pro-
ceedings are usually construed as directory,
whether or not worded in the comparative,
especially when in the alternative is harshness
or absurdity. French v. Edwards, 80 U.S. (13
Wall.) 506, 511 (1872); Ralpho v. Bell, 569
F.2d 607, 627 (D.C. Cir. 1977) (policy of
Micronesian Claims Act to redress damage claims
during World War II overrode provisions in
statute calling for end to agency's handling
af claims. )

one of the primary purposes of Title VII, that
of encouraging victims of discrimination to
seek private redress in the courts. Myers v.

Hollister, 226 F.2d 346, 348 (D.C. Cir. 1955).

Contrary to Delta's argument that the District
Court erred in examining the sufficiency of
Delta's offer, the District Court took the only
action possible in light of the conflict
presented.

Faced with two conflicting statutes, the
District Court and the Court of Appeals
properly looked to the purposes underlying both

enactments. Fanning v. United Fruit Company,

355 F.2d 147, 149 (4th Cir. 1966). The Court
of Appeals for the Tenth Circuit was faced with

a Similar problem in United States v. Dunn,

5945 F.2d 1281 (10th Cir. 1976), in which the
court emphasized:

The problem is one of construing
two statutes, neither enacted in
any obvious contemplation of the
other, but each bearing upon the
other when both are involved in
the factual situation presented.
In such circumstances, we should
seek a solution which avoids
violence to the terms of either
but which brings both into

_——————————————— —

~~ ho SO
correlation, since to construe
either in isolation from the
other would thwart the intention
of Congress. 545 F.2d at 1282.

B. The Court Below Correctly Examined the
Policies of Rule 68 and Title VII

The Civil Rights Act of 1964, including
Title VII, is designed to encourage private
redress of civil rights violations. Relief
which may be sought by victims of discri-
mination includes injunctive relief against
employers to right past wrongs and prohibit
future discrimination, reinstatement of jobs,
and back pay. In addition, to encourage
private enforcement, Congress provided for the
award of attorneys’ fees and costs to
prevailing parties.4 Congress thus recognized
that one of the greatest obstacles to private
Suits to eliminate discrimination was the cost
of litigation and representation by competent

counsel.

4 See, e.g. §706(k) of Title VII, 42
U.S.C. §200e-5(k); Attorneys’ Fees Award Act
of 1976, 42 U.S.C. §1988.

oe

When a plaintiff brings an action under

[Title II] he cannot recover damages.
If he obtains an injunction he does
so not for himself alone but also

as a “private attorney general" vindicatin

a policy that Congress considered of
the highest priority. If successful
plaintiffs were routinely forced to

bear their own attorneys' fees,

few aggrieved parties would be in a

position to advance the public interest

by invoking the injunctive powers of

the Federal courts. Congress therefore
enacted the provision for counsel fees.

to enconrage individuals injured by
racial discrimination to seek judicial
relief under Title II. Newman v.

Piggie Park sorerprises, Inc., 390
U.S. 400, 402 (1968).

The irony of Delta's position in the

instant case is that even successful plaintiffs,

though they may be entitled to an award of
attorneys' fees and costs as prevailing
parties against defendants, may also be
subject to an award to defendants of costs,
including attorneys' fees, where defendants
make an offer of judgment which exceeds the
eventual judgment recovered by plaintiff.

Such a result is untenable. More importantly,
Delta's position flies in the face of the
express intent of Congress to promete access
to the courts in civil rights cases. Congress

could not have intended one of the Federal

i

Rules of Civil Procedure, meant to effectuate
swift and fair adjudication of lawsuits, to
thwart the intent of an entire body of law
designed to promote private actions for
redress of civil rights violations.

Under Delta's reading of Rule 68, a
nominal offer by a defendant, even if
admittedly unreasonable or in bad faith,
would submit a plaintiff to the risk of a
substantial financial burden. This form of
“cheap insurance" cannot be permitted. The
case is rare, indeed, that counsel or a party
can accurately forecast the precise outcome
of litigation. The fear of a mandatory
monetary award could unduly pressure a
plaintiff to opt for an unreasonable offer of
judgment, or worse, to abandon the cause of
action altogether and quite apart from the
merits of a cleim. As this court noted

recently, in Christiansburg Garment Co. v.

EEOC, 434 U.S. 412 (1974), because a
plaintiff does not ultimately prevail, it
does not follow that the action was unreason-

able or without some foundation.

That §706(k) [42 U.S.C. §2000e-5 (k) J]
allows fees awards only to prevailing
private plaintiffs should assure

this statutory provision will not

in itself operate as an incentive

to the bringing of claims that have
little chance of success. [Footnote
omitted.] To take this further step
of assessing attorneys' fees against
plaintiffs simply because they do not
finally prevail will substantially
add to the risks inhering in most
litigation and would undercut the
efforts of Congress to promote the
vigorous enforcement of provisions

of Title VII. Hence, a plaintiff
Should not be assessed his Opponent's
attorneys' fees unless a court

finds that his claim was frivolous,
unreasonable, or groundless, or that
the plaintiffs continued to litigate
after it clearly became so. [Emphasis
in original] 434 U.S. at 422.

In Christiansburg Garment Co. v. EEOC,

Supra, this Court adopted the rationale of
the Courts of Appeals for the Fourth and
Second Circuits”? that attorneys' fees should
only be awarded to prevailing defendants
where the plaintiff's action was found to be

unreasonable, frivolous, meritless or

5 United States Steel Ct. v. United
States, 519 F.2d 359 (4th Cir. 1977); Carrion
v. Yeshiva University, 535 F.2a@ 522 (2d Cir.
1977).

-24-
vexatious. In this decision, the Court
interpreted the “unambiguous” statutory
language of §706(k) of Title VII, 42 u.8.C.
§2000e-5(k), authorizing reasonable attorneys'
fees to the prevailing party in a Title VII

action. The petitioner company in Christiansburg

argued that in the absence of any statutory
language regarding fees awards to prevailing
defendants fees should ordinarily be recover-
able by prevailing defendants unless special
circumstances would render the award unjust.
This Court rejected that mechanical appli-
cation of §706(k) because it would detract
from the express policy underlying Title VII
actions. Similarly, this Court, for the same
reason, should now reject a mechanical
application of Rule 68.

Petitioner's interpretation of Rule 68
would not only wreak havoc with Title VII,
but also would destroy any incentive to make
a genuine offer of judgment. The purpose of
Rule 68 is to encourage settlement, to

encourage defendants to offer the amount

=Z092
plaintiffs "might reasonably be expected to

recover." Wright & Miller, Federal Practice

& Procedure, §3001 (1969); Perkins v. New

Orleans Athletic Club, 429 F, Supp. 661, 666

@.D. La. 1976) (defendant can shift costs to
plaintiff by offering what is realiy due);

Honea v. Crescent Ford Truck Sales, Inc., 394

F. Supp. 201, 202 (E.D. La. 1975) (Rule 68

Operates if a reasonable offer is Spurned).

Discretion is the keystone to the
effective functioning of the federal rules.

Oliver _v. Kalamazoo Board of Education, 346

F. Supp. 766, 789, n.l, (W.D. Mich. 1972),
aff'd per curiam, 448 F.2d 635 (6th Cir.

1972), citing Wright & Miller, Federal

Practice & Procedure, §1029 (1969):

The rules will remain a workable
System only as long as trial court
judges exercise their discretion
intelligently on a case by case
basis; application of arbitrary
rules of law to Particular
Situations only will have a
debilitating effect on the overall]
system,

ms & Vv
Only by allowing the district court discre-
tion to examine the terms of a purported

offer of judgment to decide if the cost
shifting provisions of Rule 68 are applicable,
can the ends of justice be furthered.

C. Decisions of State Courts Allow
Review of Offers of Judgments

As noted by petitioner, several states
have rules similar to the federal offer of
judgment rule. Contrary to Delta's asser-
tion, however, that these rules are applied
strictly and literally, several courts have
arrived at the same result as the District
Court and Court of Appeals in the instant
case. Those cou ts examined the terms of the
offer to determine the applicability of an
offer of judgment rule.

In Colby v. Larson, 297 P.2d 1073

(Ore. 1956), the Supreme Court of Oregon had
the opportunity to consider the effectiveness
of a defendant's offer of judgment where the
defendant tendered to the clerk of the court
the exact amount sought by plaintiff, $372.59.

Both parties sought costs against the other,

defrendant on the basis of the Oregon offer of
judgment statute,® and plaintiff on the basis
of the Oregon statute governing claims less

than $500.7 The court recognized the

6 The defendant may, at any time
before trial, serve upon the
plaintiff an offer to allow judg-
ment or decree to be given against
him for the sum, or the property, or
to effect therein specified. —
If the offer is not accepted. . .and
if the plaintiff fails to obtain a
more favorable judgment or decree,
he shall not recover costs, but the
defendant shall recover of him costs
and disbursements from the time of
the service of the offer. ORS 17.055.

7? plaintiff sought recovery of costs
and attorneys' fees pursuant to ORS 20.080,
which provided:

In any action for damages for an

injury Or wrong to the person or
property, or both, of another where

the amount recovered is $500 or less,
there shall be taxed and allowed to

the plaintiff as part of the costs

of the action, a reasonable amount

to be fixed by the court as attorneys'
fees for the prosecution of the action,
if the court finds that written demand
for the payment of such claim was

made on the defendant not less than

ten days before the commencement of the
action; provided, that no attorneys'
fees shall be allowed to the plaintiff
if the court finds that the defendant
tendered to the plaintiff, prior to the
commencement of the action, an amount
not less than the damages awarded to
the plainti‘f.

eee eee a. _ _ a_=_aaSaaaoa_rS

-28-

conflict between the two sections. If the
plaintiff made a written demand upon the
defendant more than ten days before the
commencement of the action and the defendant
did not tender an amount equal to the demand
prior to the commencement of the action,
plaintiff was entitled to costs, including
attorneys’ fees. On the other hand, if the
defendant offered to allow judgment to be
taken against him for the sum demanded by the
plaintiff after the commencement of the
action but before trial, the defendant was
entitled to costs.

The court held that, assuming that a
proper demand was made by plaintiff, if it
adopted the defendant's position, the
legislative purpose of ORS 20.080 would be
defeated. A defendant could ignore the
plaintiff's demand before commencement of the
action, later, make an offer of judgment in

the amount demanded, and

-29-
[Be] secure in the knowledge that
if action should be brought he
could escape payment of an attorney's
fee and other costs by offering
before trial to allow judgment to
be given against him as provided in
ORS 17.055. 297 P.2d at 1975.
Rejecting the defendant's construction, the
Oregon Supreme Court ruled that this was a
Clear case for applicati: 1 of the rule that
where there is a conflict between two statutes,
both of which would otherwise have full force
and effect, and the provisions of one are
particular, special and specific, and those
of the other are general, the specific
provision must prevail over the general provision
297 P.2d at 1075.

The Court also looked to the general
purposes underlying the two statutory provisions.
The Oregon offer of judgment statute was a
general statute, applicable to every kind of
case at law or in equity and had been a part
of the Oregon law since 1862. On the other
hand, ORS 20.080 was a special statute passed

in 1947, to address a particular situation.

It applied only to tort actions involving

OOO EEE EE EE

-30-

injury in the amount of $500 or less, and was
undoubtedly enacted to encourage settlement
without litigation of meritorious claims
involving small sums.

Frequently the injured person
might forego action upon a small
claim because he realized that,
after paying his attorney, his

net recovery would not be worth the
time and trouble of a vexatious
lawsuit. The legislature may have
found that tortfeasors or their
insurance carriers frequently
rejected meritorious claims of
this kind because of this known
reluctance of injured persons to
litigate. Claims which in

honesty and fairness should have
been paid were not paid, and it
was to remedy this evil that the
statute was passed. 297 P.2d at
1075.

Colby v. Larson, supra, is analogous

to the instant case. Title VIi, like ORS 20.080
was enacted for a specific purpose. The Colby
Court refused to allow plaintiffs to carry the
burden of litigation by the use of the offer

of judgment statute. Nor would the Court allow
the earlier, general statute to override the
specific, later policies enunciated by the

legislature. This same rationale is applicable

-3l-

in the instant case. Defendants should not be
allowed to use the earlier, more general
provisions of Rule 68 to ride roughshod over
later express Congressional intent.

In addition, several courts have allowed
the trier of fact to examine the facts
Surrounding the offer to determine its

reasonableness. In Vroman v. Kempke, 34 Wis.

2d 680, 150 N.W. 2d 423 (Wis. 1967), the
Supreme Court of Wisconsin had the opportunity
to examine an offer of judgment as to its
reasonableness at the time it was made.

The Wisconsin statute in effect at the time,
§269.02, Stats., provided that "(1) after

issue is joined but before trial the defendant

may serve upon the plaintiff a written offer

to allow judgment to be taken against him. . ."
Thereafter, if the offer is rejected and

the plaintiff fails to recover a more

favorable judgment, defendant shall recover

costs.

-32-

In this personal injury action, the
defendant made an offer of judgment shortly
before selection of the jury on the day of ©
trial. The judgment secured by plaintiffs at
trial was less than the amount offered by
defendant. Following the trial, defendant
moved for costs. The trial court held that
the offer of judgment was not timely made.

The Supreme Court of Wisconsin agreed with the
trial court, again, cosentins defendant's
mechanical application of the offer of
judgment rule. The Court acknowledged that
the defendants had made their offer of
judgment before the commencement of trial, in
compliance with the terms of §269.02. The
Court ruled, however, that the section required
a defendant who-sought its benefits to make
his offer at a reasonable time before trial,
not the last minute before trial.

Nor is it an uncommon practice to allow
the trial court discretion to determine if the
offer of judgment is, in fact, more favorable

than the judgment finally obtained. In

-33-

Beitilacci v. Avery, 42 Mich. App. 483, 202

N.W.2d 331 (1972), the court used an equitable
formula to determine if, and in fact, the
offer of judgment was more favorable than the
judgment finally obtained.8 The offer of
judgment in that case was for $3,000, plus
.$500 as costs and attorneys' fees. The
judgment finally obtained by the Plaintiff was
in the amount of $3,000 plus costs and
interest. The court ruled that the judgment
finally obtained was more favorable than the
offer, primarily because of the inclusion of

interest.

8 The Michigan statute in effect at the
time was GCR 1963, 519.1:

+ bf the judgment finally obtained
by the offeree is not more favorable
than the rejected offer, the
offeree must pay the taxable costs
incurred after the making of the
offer. [Emphasis added. ]

—-34-
Similarly, in Herring-Hall-Marvin Safe
Co. v. Balliet, 44 Nev. 94, 190 P. 76 (1920),
the Supreme Court of Nevada ruled that whether
or not a judgment is “more favorable" in a
particular case within the meaning of the
statute is a question to be determined by the
trial court.
We are of the opinion that the term
"more favorable" must be construed
with reference to the facts and
circumstances of each particular
case. While we do not go to the
extent of holding that this court
is without the power or authority
to correct the abuse of the power
conferred by this statute, we do
hold that whether or not a judgment
is “more favorable" in the
particular case must be left to the
csound discretion of the district
court. 190 PB. at 77.
See also Howard v. Farley, 29 How. Prac. 4
(1865) (the amount of judgment is not the only
test of whether a judgment is more favorable
than an offer).
State courts with similar offer of
judgment statutes have also considered the

comprehensiveness or validity of an offer of

judament. In Johnson v. Chapman, 223 N.Y.S.

515 (1927), and in Public Bank of New York

New York courts held that an offer of judqment
which did not include interest up to the time
of the offer of judqment was insufficient to
operate as a valid offer of judqment. In
fact, the Nevada Supreme Court, in Leeming v.
Leeming, 87 Nev. 530 490 P.2d 342 (1971),
refused to apply Nevada's offer of judqment
statute at all to a divorce proceeding,
holding that divorce cases were not the kind
of action to which this rule should apply.
Other courts have required that an offer
must be fair and reasonable. Benda v. Fana,
10 Ohio St. 2d 259, 227 N.F.2d 197 (Ohio 1967)
(the purpose of offer of judqment statute is
termination of litigation where defendant
tenders to plaintiff a fair offer). In other
cases, the courts simply refused to award
costs to either party. Insurance Company

(Fla. App. 1975); Schnute Hoffman Co. v.

Sweeney, 136 Ky. 773, 125 S.W. 180 (Ky. App.
1910).

Thus, it is hardly a novel or uncommon
phenomenon for courts to review offers of
edenent before blindly awarding costs to
defendants who made more favorable offers than
the judgments finally obtained. Rather, it is
the duty of courts to assess all factors,
legal and factual, and arrive at a just
determination of the conflict between the
parties. This duty was fulfilled by the
courts below.

D. The Decision of the Court of

Appeals Promoted the Purpose
of Rule 68

Petitioner raises the in terrorem
argument that the decisions of the courts
below will deprive defendants of the
pessibility of any pretrial resolution in
Title VII actions. (Pet. Brief, p. 16) This
would suggest that offers of judgment are
frequently used by defendants in discrimi-
nation cases to terminate litigation. This
contention is belied by the paucity of case
law interpreting Rule 68 and Title VII. The

fact is, that Rule 68 has been used only

infrequently, especially in employment
discrimination cases. Acceptance of
petitioner's position, however, would result
in a substantial increase in the use of offers
of judgment, particularly nominal offers which
every defense counsel wiki oaks,

In any event, the Lawyers' Committee does
not suggest, nor did the Court of Appeals
decide, that Rule 68 would be inapplicable in
Title VII cases. Rather, the Court of Appeals
decided, and the Lawyers' Committee concurs,
that the District Court should exercise its
discretion and review the terms of the offer
of judgment to determine if in fact, it is a
fair and effective offer of judgment. The
Lawyers' Committee is not asking this Court to
relieve any plaintiff of the "known conse-
quence of his or her own conduct." (Pet.
Brief, p. 16) The Lawyers' Committee is
asking this Court to relieve plaintiffs of the
burden cf lizbility for defendants' costs when
bad faith offers of judgment are used as
"cheap insurance." It does not logically

follow that because the District Court awarded
i CtCCCCi(N...Ud.eeeee

-356-
judgment to defendant in the instant case that
respondent August was a “obdurate" plaintiff.
Where such a plaintiff is encountered,
however, and an action is vexatious or
meritless, a nominal offer of judgment and an
award of costs to defendants may be entirely
proper, just as an award of attorneys' fees
pursuant to the Court's decision in

Christianburg Garment Co. v. EEOC, Supra, may

also be proper.

Finally, petitioner's suggestion that the
policies underlying Title VII will not be
undercut because Rule 68 does not effect the
initiation of litigation is patently absurd.
(Pet. Brief, p. 18) Title VII was not meant
to increase the number of cases in court, but
to encourage private redress of civil rights
violations. Title VII was not designed to
encourage institution of meritless suits. The
outcome of litigation is unpredictable even
for those with meritorious claims. By
punishing those plaintiffs who reject

insufficient offers of judgment, regardless of

the relative merits of the Claim, the national

goal of eliminating civil rights violations

will never be attained.
CONCLUSION

For all the foregoing reasons, the

decision of the Court of Appeals should
be affirmed.
Respectfully submitted,

MARTHA A. MILLS

SUE A. HERRMANN

COTTON, WATT, JONES,
KING & BOWLUS

One IBM Plaza

Suite 4750

Chicago, Ulinois 60611

SYBILLE C. FRITZSCHE,
Executive Director

Tne Lawyers’ Committee For

Civu. Riguts Unper Law

53 West Jackson Street

Chicago, Ilinois 60604

Attorneys for Amicus Curiae

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1292%3A09. Public record. Not legal advice.