Petitioners Brief — Marek v. Chesny

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No. 83-1437 ite us.

JUL 16 19g

IN THE ALEXANDER L. STEVAs.

CLERK

Supreme Court of the Anited States

OCTOBER TERM, 1983

JEFFREY MAREK, THOMAS WADYCKI

and LAWRENCE RHODE,

Petitioners,

vs.

ALFRED W. CHESNY,

Respondent.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF OF THE PETITIONERS

*DONALD G. PETERSON ELIZABETH HUBBARD

SCHAFFENEGGER, WATSON ELIZABETH HuBBARD, LTD.

& PETERSON, LTp. 55 East Monroe Street

69 West Washington Street Suite 3420

Suite 3105 Chicago, Illinois 60603

Chicago, Illinois 60602 (312) 332-5988

(312) 346-5430

Attorneys for Petitioners

*Counsel of Record

Pandick Midwest, Inc., Chicago * 454-7600

BEST AVAILABLE COPY "

¥ i

QUESTIONS PRESENTED

1. Whether those attorney’s fees of a civil rights plaintiff

which are incurred after an offer of judgment ( Fed. R. Civ. P.

68) must be paid by the defendant under the Civil Rights

Attorney’s Fees Awards Act ( Title 42 U.S.C. § 1988), when the

plaintiff rejects the defendant’s valid Rule 68 offer of judgment

and then fails to recover an amount on verdict in excess of the

defendant’s offer.

2. Whether attorney’s fees’ already paid to an attorney for

a civil rights plaintiff under a contingent fee contract with

plaintiff, should be disregarded by the district court in awarding

“a reasonable attorney’s fee” under Title 42 U.S.C. § 1988,

although the contingent fee contract in violation of the local

rule for the district court was not filed and was not disclosed on

the record until the oral argument in the United States Court of

Appeals.

TABLE OF CONTENTS

PAGE

CORORD PUIGIIG cvecccsccevsiscsiinivvcntibsciaitabiiniieiiaiiatinilis. i

TE GE GI ictitssccssaneinssnisbitiivingtihiiansbainghiditia elidel il

BOD Oe Fi cssectccstcccscrcssesisdiicessdibisteabbitatilaahacasiaceats iv

IT SIIIUD cccccnnincsascunecensnnucinnsiciessendecnmiesiaaiaieennnan l

PU tarreniececassccsstssscerareevtianicstticeaeiaaasitaaaae 2

IG IG scsesecevesccssncssestensstecnenisantacaiiiaaialemanis 2

URES OE GD GID wsecccsntnscccescnttoenctnsehantaiedaciditiaitaaiaadia 4

SIE OE PIII ic ccccicccinsccvininmtecsnseasintiasaianamiaia 7

PEATE cnscssscnscreniunicntenplviineennapgenininmmniinamaaaeaiada 10

I. THE VINDICATION OF A PLAINTIFF’S

CIVIL RIGHTS IS NEITHER HAMPERED

NOR DETERRED BY CONSTRUING STAT-

UTORY ATTORNEY’S FEES AS PART OF

THE COSTS UNDER 42 USS.C. § 1988 AND

PRU FEAES GB. ncccocesmsevemnsvensesuisenssntatsniiateadimmaiaiiiiatlia 10

A. RULE 68 SHOULD EXIST IN HARMO-

NY WITH § 1988, IF THE INTENT OF

BOTH LAWS IS TO BE UPHELD. ............. 10

B. RULE 68 IS A LONGSTANDING PART

OF THE UNIFIED, COMPREHENSIVE

LAW OF FEDERAL CIVIL PROCE-

EIU FUE casccecencensesenstbonnanbotinnentensieinilietetiive 13

C. ENACTMENT OF THE RIGHT TO AT-

TORNEY’S FEES UNDER § 1988 AS-

SUMES THE PROCEDURES OF THE

FEDERAL COURTS AS THEN EXIST-

TROD .xnsseccasevecensscenienenesninssanibinntidedilasaldsutiiiieies 16

D. REVERSAL OF THE COURT BELOW

WILL REMOVE PETITIONERS FROM

UNWARRANTED JEOPARDY AND

PRESERVE THE HARMONY BE-

TWEEN § 1988 AND RULE 68................. 23

ill

E. NUMEROUS CIRCUIT COURTS AND

DISTRICT COURTS THROUGHOUT

THE UNITED STATES HAVE APPLIED

RULE 68 IN A HARMONIOUS AND

LEGALLY SOUND MANNER TO CIV-

IL RIGHTS CASES...............cc.ccccosssescoorseees

Il. WHEN THE TRIAL COURT DETERMINES

THE AMOUNT TO BE AWARDED UNDER

§ 1988, IT SHOULD AWARD ONLY THAT

PORTION OF A_ REASONABLE AT-

TORNEY’S FEE AMOUNT WHICH IS IN

EXCESS OF THE AMOUNT THE PLAIN-

TIFF HAS PAID HIS ATTORNEY UNDER

AN ATTORNEY'S FEE CONTRACT ...............

EEE EET a eT

PAGE

TABLE OF AUTHORITIES

Alyeska Pipeline Service Co. v. Wilderness Society,

RE SRE enna

Bitsouni v. Sheraton Hartford Corp., 33 F.E.P.

es 6 NG,

Brown v. Stackler, 612 F.2d 1057 ( 7th Cir. 1980) .

Buxton v. Patel, 595 F. 2d 1182 ( 9th Cir. 1979) .....

Chesny v. Marek, 547 F. Supp. 542 (N. D. Ill.

1982), aff'd in part and rev'd in part, 720 F. 2d

474, (7th Cir. 1983), cert. granted, 104 S. Ct.

BOG Ge iencncencetnenee

Christianburg Garment Co. v. EEOC, 434 U.S. 412

€ CRE tacienteeeneirerneenemmn

Cooper v. Singer, 689 F. 2d 929, on rehearing, 719

F. 2d 1496 ( 10th Cir. 1983 )............ccccccsccceseeceeeees

Cruz v. Pacific American Insurance Corp., 337 F.

26 Fad Cle Ge: BSE eagnenmemeenenn

Delta Air Lines, Inc. v. August, 450 U.S. 346,

Fairmont Creamery Co. v. Minnesota, 275 U.S. 70

Fulps v. City of Springfield, 715 F. 2d 1088 (6th

Gi Be ccecennmatetnenmmnsinaieniinnebinninin

Gamlen Chemical Co. v. Dacar Chemical Products

Co., 5 F.R.D. 215 (W.D. Pa. 1946) 2.0.0.0...

Hensley v. Eckerhart, 103 S. Ct. 1933 (1983)..........

Hutto v. Finney, 437 U.S. 678 (1978) ..........0.cccceee

Johnson v. Georgia Highway Express, Inc. 488 F.

a FOO CO a, Se ccrcnctnectictinantnenmnsine

PAGE

14, 15, 22,

27, 29,

30, 31,

33, 34,

18, 38, 40

6, 8, 12;

29, 34,

Kokoszka v. Bedford, 417 U.S. 642 (1974)...00000.0....

Krause v. Rhodes, 640 F. 2d 214 ( 9th Cir. 1981)...

Lyons v. Cunningham, ____ F. Supp. —_., 79 Civ.

Dose COED WE. Y. Gab. BD, BGG B Poccccccencccccscscscescscese

Maine v. Thiboutot, 448 U.S. 1 (1980) .......0...0...

Neal v. Berman, 576 F. Supp. 1250 (E.D. Mich.

Newman v. Piggie Park Enterprises, Inc., 390 U.S.

SE ee Prcnstetiettinictitntetnstinnntinnteeriininiatintinnesenes

Owen v. City of Independence, 445 U.S. 622 (1980)

Pigeaud v. McLaren, 699 F. 2d 401 (7th Cir.

Pulliam v. Allen, 104 S. Ct. 1970 (1984) 0.0.0.0...

Roadway Express, Inc. v. Piper, 447 U.S. 752

Rosquist v. Soo Line Railroad, 692 F.2d 1107 (7th

Sis TEI cicereetnenetenianitsienininiitnanipenenantnemcemenssaans

Sargeant v. Sharp, 579 F. 2d 645 ( ist Cir. 1978)...

Scheriff v. Beck, 452 F. Supp. 1254 (D. Colo.

Sisco v. J. §. Alberici Construction Co., 34 EPD

Skoda v. Fontani, 646 F. 2d 1193 (7th Cir. 1981)

on remand, 519 F. Supp. 309. ( N.D. Ill. 1981)...

Spero v. Abbott Laboratories, 396 F. Supp. 321

SUE Aa BUND eeiiertenninantenennenarzenennntinmectantinomanssates

Waters v. Heublein, Inc., 485 F. Supp. 110 (N.D.

EERE RIE ete arte one

Zarcone v. Perry, 581 F.2d 1039 (2d Cir. 1978) ....

Statutes Involved

United States Code, Title 42, § 1988 0000... 2, 5, 6, 7,

United States Code, Title 28, Rule 68. ..................... 3, 4, 5, 6,

United States Code, Title 28, Rule 1 ................0.00.0. 11, 20, 24,

General Rule 39 of the United States District

Court, Northern District of Illinois Eastern Divi-

oe a ee ee a 3,7

fF reer ee ONS OTY e ee eee 17, 18, 19,

20, 21,

22, 23,

24, 25,

26, 28,

29, 30,

32, 33,

34, 35,

36, 37,

38, 39,

40, 41,

REARS EE SRE, ers i ic BN ae 16, 20, 21,

22, 23,

24, 25,

26, 29,

30, 31,

32, 33,

35, 36

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1983

No. 83-1437

JEFFREY MAREK, THOMAS WADYCKI

and LAWRENCE RHODE,

Petitioners,

vs.

ALFRED W. CHESNY,

Respondent.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF OF THE PETITIONERS'

OPINIONS BELOW

The opinion of the Seventh Circuit Court of Appeals

(Pet. A. Al-11) is reported at 720 F. 2d 474 (7th Cir. 1983).

The opinion of the district co (Pet. A. Bl-12) is

reported at 547 F. Supp. 542 (N.D. Ill. 1982).

‘The authors gratefully eieetuail the contributions and

suggestions made by Professor Roy D. Simon, Jr., Assistant Professor

of Law, Washington University School of Law, during the prepara-

tion of the Brief.

JURISDICTION

Judgment of the Seventh Circuit Court of Appeals was

entered on November 3, 1983. (J.A. 11) A petition for

rehearing en banc was denied on January 20, 1984 with Justices

Bauer, Coffey and Pell dissenting. (J.A. 12). On February 29,

1984, the Petition for a Writ of Certiorari was filed with the

Supreme Court of the United States. (J.A. 13) Jurisdiction of

the United States Supreme Court is invoked under 28 U.S.C.

§ 1254(a). On April 23, 1984, the Petition for a Writ of

Certiorari to the Seventh Circuit Court of Appeals was granted

by the United States Supreme Court. (J.A. 13)

STATUTES INVOLVED

United States Code, Title 42, § 1988 as amended. Proceedings

in vindication of civil rights; attorney’s fees.

The jurisdiction in civil and criminal matters conferred on

the district courts by the provisions of this Title, and of Title

“CIVIL RIGHTS,” and of Title “CRIMES,” for the protection

of all persons in the United States in their civil rights, and for

their vindication, shall be exercised and enforced in conformity

with the laws of the United States, so far as such laws are

suitable to carry the same into effect; but in all cases where they

are not adapted to the object, or are deficient in the provisions

necessary to furnish suitable remedies and punish offenses

against the law, the common law, as modified and changed by

the constitution and statutes of the State wherein the court

having jurisdiction of such civil or criminal cause is held, so far

as the same is not inconsistent with the Constitution and laws of

the United States, shall be extended to and govern the said

courts in the trial and disposition of the cause, and, if it is of a

criminal nature, in the infliction of punishment on the party

found guilty. In any action or proceeding to enforce a provision

of § 1981, 1982, 1983, 1985, and 1986 of this title, Title [IX of

Public Law 92-318, or Title VI of the Civil Rights Act of 1964,

the court, in its discretion, may allow the prevailing party, other

than the United States, a reasonable attorney’s fee as part of the

costs.

Federal Rules of Civil Procedure, Rule 68. Offer of Judgment.

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 the proof of service thereof and

thereupon the clerk shall enter judgment. An offer not accepted

shall be deemed withdrawn and evidence thereof is not admis-

sible except 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 preciude a subsequent offer. When the liability of one party

to another has been determined by verdict or order or judg-

ment, 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 com-

mencement of hearings to determine the amount or extent of

liability.

General Rule 39 of the United States District Court, Northern

District of Illinois Eastern Division appears in Pet. A. D.

STATEMENT OF THE CASE

The petitioners Jeffrey Marek, Thomas Wadycki and Law-

rence Rhode are police officers employed by the Village of

Berkley, located in Cook County, Illinois. (R. 1) On October 5,

1979, a civil rights action was filed by Alfred Chesny, Sr., whose

adult son had been killed during a confrontation with the three

officers. (R. 1) The Village of Berkley, the village president,

and the police chief were also named as defendants. (R. |)

Before a pre-trial was held (J.A. 3-4), petitioners sub-

mitted an offer of judgment pursuant to Rule 68 to respondent’s

attorney (J.A. 16-17). This offer of judgment, transmitted to

the respondent on November 5, 1981, stated as follows:

Pursuant to Federal Rule of Civil Procedure 68, the

defendants Jeffery Marek, Thomas Wadycki and Lawrence

Rhode, hereby offer to allow judgment to be taken against

them by the plaintiff for a sum, including costs now

accrued and attorney’s fees, of One Hundred Thousand

($100,000) Dollars. (J.A. 17).

The respondent failed to accept the offer of judgment.

Five and one-half months later, on April 19, 1982, a jury tral

was begun (J.A. 4). The jury did return a verdict for the

respondent and against the three police officers but only for a

total of $60,000. (R. 119) The sum of $5,000 was awarded for

the “wrongful death”, the sum of $52,000 for violation of civil

rights and a sum in total of $3,000 for punitive damages. (R.

119) The Village of Berkley and the police chief were found not

guilty (J.A. 6). The village president, Leslie David, was

granted a directed verdict (R. 118).

The petitioners tendered payment of judgment on verdict,

which respondents refused (R. 122). The monies were depos-

ited with the clerk of court in accord with order of the court (R.

122). During the pendency of the post trial motions, the

petitioners and the respondent with the court’s prompting ( Pet.

A. B-11) agreed that the respondent’s attorney’s fees for the

legal work done prior to the November 1981 offer of judgment,

totalled $32,000 (J.A. 10). This sum was a compromise from

the respondent’s fee petition of $34,392.35 (J.A. 24). The

$32,000 was paid by the petitioners to the respondent under the

court’s award of that amount under § 1988 (J.A. 24).

The respondent by post-trial motion demanded that his

attorney’s fees accrued after the November, 1981 offer of

judgment through the trial be paid by the petitioners (R. 139).

These additional fees were claimed to be about $171,000 (R.

139).

The petitioners interposed an objection to the payment of

post-offer fees and filed the Rule 68 offer of judgment with the

court (R. 144). The verdict of $60,000 did not exceed the

$100,000 offer. The trial court assumed that the respondent's

judgment was not more favorable than the petitioner’s offer

(Pet. A. B-9). The petitioners urged the trial court to hold that

the respondent’s post-offer of judgment attorney’s fees, defined

as part of § 1988 costs, should remain the respondent’s respon-

sibility (R. 144).

In its memorandum opinion ruling on this issue, the district

court agreed with petitioners. (Pet. A. B-9) The district court

held that the term “costs” in Rule 68 should include attorney’s

fees within the meaning of Title 42 U.S.C. § 1988, which

specifically states that attorney’s fees may be allowed by the

court in its discretion “as part of the costs”. (Pet. A. B-9)

Judge Shadur held that the respondent is precluded from

recovering his attorney’s fees for work performed post-offer of

judgment, since the judgment obtained was not more favorable

than the offer. (Pet. A. B6-9) In deciding the issue, Judge

Shadur relied upon Waters v. Heublein, Inc., 485 F. Supp. 110

(N.D. Cal. 1979). (Pet. A. B-7-9).

The district court in the memorandum opinion also ana-

lyzed the policy considerations behind § 1983 and the congres-

sional encouragement of “vigorous enforcement”. (Pet. B-9).

In holding that the Waters result is proper and that the

inclusion of attorney’s fees as part of the costs under Rule 68

upholds the congressional intent of § 1988, the district court

stated that it was not going to “adopt a wrong rule because the

right one may have a harsh application in a few cases”. (Pet.

A. B-9). While emphasizing the policy considerations behind

§ 1988, Judge Shadur also cited with approval the strong policy

aaa of promoting settlement of litigation. (Pet. A.

-9)

The case was appealed by the respondent to the United

States Court of Appeals. (J.A. 10) The Seventh Circuit

reversed Judge Shadur’s opinion. (J.A. 11) In its opinion, ( Pet.

A. Al-11) the Seventh Circuit found reversal to be necessary,

because of its view of the congressional policy behind the Civil

Rights Attorney’s Awards Fees Act, 42 U.S.C. § 1988. The

Seventh Circuit expressed concern that a “little known and little

used” rule from the Federal Rules of Civil Procedure should

not be allowed to undercut claims for fees by plaintiffs’ civil

rights attorneys. (Pet. A. A-2, 10). In reaching this conclusion,

the Seventh Circuit did not follow Fulps v. City of Springfield,

715 F. 2d 1088 (6th Cir. 1983) which held that the word

“costs” in Rule 68 does include attorney’s fees when an

applicable statute such as § 1988 allows attorney’s fees to be

taxed as costs to the prevailing party. (Pet. A. A-10, 11).

According to the opinion, the decisive precedent for not follow-

ing Fulps is this Court’s opinion in Roadway Express Inc. v.

Piper, 447 U.S. 752 (1980). (Pet. A. A-11) Roadway Express

held that the costs, defined in 28 U.S.C. § 1920, which may be

assessed against an attorney who so multiplies the proceedings

unreasonably and vexatiously (under §$ 1927), did not include

attorney’s fees in a civil rights case. (Pet. A. A-11) Accord-

ingly, the Seventh Circuit held on November 3, 1983, that the

respondent should receive an award of all fees for services

beyond the offer of judgment date. (Pet. A. A-11) The case

was remanded to the district court to determine a reasonable

fee for those services. (Pet. A. A-11).

The respondent’s attorney in oral argument before the

court of appeals on June 3, 1983, revealed on the record that he

had a written, contingent fee contract with his client (Pet. A. A-

6). This agreement had not been filed with the United States

District Court, contrary to General Rule 39 for the Northern

District of Illinois which requires that any contingent fee

agreement be filed at the time the complaint is filed with the

clerk of the district court (Pet. A. D; J.A. 46). The terms of che

agreement were finally disclosed (J. A. 51), after the petitioners

filed a petition for rehearing en banc in the Seventh Circuit

based in part upon the respondent’s failure to advise anyone of

the contingent fee agreement. (J. A. 34-35). The petitioners

contended in the petition for rehearing en banc that the

contingent fee agreement is a significant factor to be considered

in assessing any reasonable attorney’s fee under § 1988 (J.A.

36). After receiving an answer from the respondent to the

petition for rehearing, (J.A. 39), the Seventh Circuit denied the

petition for rehearing en banc with three justices dissenting

(Pet. A. C-1).

SUMMARY OF ARGUMENT

I. In this case, petitioners, defendants in the district court,

made a Rule 68 offer of judgment which included the attorney’s

fees for the civil rights plaintiff as part of the costs. Respondent

did not accept the offer, which ultimately proved to be greater

than the sum of the jury verdict plus respondent’s fee award for

pre-offer legal work. The Seventh Circuit opinion held, not-

withstanding Rule 68, that respondent can recover his post-

offer of judgment attorney’s fees under § 1988, because the

denial of such fees would blunt the effectiveness of the Civil

Rights Act of 1964 and would be contrary to congressional

policy. 42 USC, § 1983, § 1988.

The petitioners’ position is that the express congressional

intent of § 1988 was to allow § 1988 attorney’s fees to be paid

to prevailing civil rights plaintiffs, but only within the frame-

work of federal procedure.

Because of its express definition of “attorney’s fees as part

of the costs” and because of congressional commentary that

attorney’s fees be taxed “like other items of costs”, § 1988

clearly contemplates a boundary on the term “attorney’s fees”.

That boundary line is drawn by the Federal Rules of Civil

Procedure, including Rule 68, which should govern civil nights

cases.

Rule 68 and § 1988 can and should harmonize with each

other. Rule 68’s sole purpose is to settle protracted litigation.

Delta Air Lines, Inc. v. August, 450 U.S. 346 (1981). The

purpose of the Rule, however, is negated by the circuit court

opinion. Plaintiffs civil rights attorneys have now been, in

effect, instructed by the Seventh Circuit to ignore Rule 68 offers

of judgment, since the only “cost” of any signifi-

cance—plaintiff’s attorney’s fees—will still be paid by defend-

ants.

If Rule 68 and § 1988 are interpreted correctly, the Sev-

enth Circuit’s concern that congressional policy will be thwarted

can be satisfied. Rule 68 promotes the vindication of the civil

rights statutes by its very operation. Its acceptance immediately

elevates plaintiff to the status of “prevailing party”, which is

certainly a higher position, when he accepts an offer, than his

previous position. Rule 68 to be valid, while effective, must

accomplish two goals: it must vindicate plaintiffs civil rights

and it must compensate plaintiff's attorney for fees as part of

the costs. This interpretation of § 1988’s interaction with Rule

68 is in accord with numerous district court opinions and the

Sixth Circuit Court of Appeals. Fulps v. City of Springfield, 715

Fed. 1088 (6th Cir. 1983).

In contrast, the Seventh Circuit’s opinion in the instant case

misapprehends a holding of this Court of when fees are to be

considered as “costs”, Roadway Express, Inc. v. Piper, 447 U.S.

752 (1980). The Circuit Court, also, fails to cite or rely on the

relevant holding in Hutto v. Finney, 437 U.S. 678 (1977),

where the correct view that “costs” include fees in a civil rights

action is set forth.

II. Contingent attorney’s fees must be considered in

determining what is a reasonable attorney’s fee under § 1988.

Otherwise, a windfall profit can result. The policy of § 1988 is

to vindicate civil rights by securing effective legal representa-

tion. It is not a policy to award unreasonable fees or to instigate

suits to benefit lawyers. The respondent has already received a

substantial attorney’s fee which should be taken into account

before any further fee award is made. The reasonable fee

standard of Hensley v. Eckerhart, Ds cts COD GA.

1933 (1983), is not satisfied unless the contingent fee paid is

taken into account by the district court.

ARGUMENT

I. THE VINDICATION OF A PLAINTIFF'S CIVIL

RIGHTS IS NEITHER HAMPERED NOR DETERRED

BY CONSTRUING STATUTORY ATTORNEY’S FEES

AS PART OF THE COSTS UNDER 42 U.S.C. § 1988

AND RULE 68.

A. RULE 68 SHOULD EXIST IN HARMONY WITH

§ 1988, IF THE INTENT OF BOTH LAWS IS TO BE

UPHELD.

Section 1988 of the Civil Rights Attorneys’ Fees Awards

Act of 1976 provides that the trial court in its discretion may

allow a “prevailing party” in a civil rights case a “reasonable

attorney’s fee as part of the costs.” Rule 68 of the Federal Rules

of Civil Procedure provides that, if a plaintiff in a federal civil

case rejects an offer by the defendant to allow judgment to be

taken against the defendant and if the plaintiff later obtains a

judgment less favorable than the offer, then the plaintff “must

pay the costs incurred after the making of the offer.”

The case at bar involves a civil rights plaintiff's rejection of

a Rule 68 offer of judgment. That offer did expressly include

attorney’s fees as part of costs offered. The amount of the

subsequent jury verdict plus the amount of pre-offer attorney’s

fees awarded by the district court totalled less than the amount

of defendant’s offer of judgment.

The petitioners here, who were the defendants in the trial

court, present the question of whether the post-offer costs which

the respondent must now bear include respondent’s own “at-

torney’s fees as part of the costs”. 42 U.S.C. § 1988.

The facts of this case, under both the law and expressed

congressional policies, mandate that the post-offer of judgment

attorney’s fees are “part of the costs” which the respondent

must absorb. When respondent chose to reject an offer of

judgment which turned out to be more favorable than the

subsequent verdict he won, plus the pre-offer fee which he was

awarded, shifting of his post-offer attorney’s fees was barred.

Rule 68 became part of the Federal Rules of Civil

Procedure in 1938.2 Thirty-eight years later, Congress enacted

§ 1988 with its specific statutory language that defines costs to

include attorney’s fees. Neither Rule 68 nor § 1988 was

enacted in a vacuum. Fundamental legislative principles

establish that statutes should harmonize with one another and

apply in a consistent fashion. Kokoszka v. Bedford, 417 US.

642 (1974). The interpretation of § 1988 must be viewed

within the framework of previously existing statutes and

procedural rules. Judicial rulings should not create disharmony

between the Civil Rights Acts and the Federal Rules of Civil

Procedure, where conflict need not exist. Nor should judicial

rulings elevate § 1988 beyond the reach of the federal court's

procedural rules which were established to govern “‘all suits of a

civil nature... .” Fed. R. Civ. P.19

To construe § 1988 as exempt from certain Federal Rules

of Civil Procedure would be precedent for havoc in the federal

judicial system. Undermining the structure of federal civil

procedure would be the result of such construction.

The simplest and most basic solution to the case at bar is

found by reading the plain language of the two laws involved.

Attorney’s fees are defined “as part of the costs” which a court

may award under § 1988. The costs are the plaintiffs, not

2The Rule was amended in 1948 and again in 1966. The

language of the Rule itself is derived from three state statutes from

Minnesota, Montana and New York, which statutes were in existence

prior to the enactment of the Federai Aule 68. 2 Minn. Stat. § 9323

(Mason 1927); 4 Mont. Rev. Codes Ann. § 9770 (1935); N.Y. Civ.

Prac. Law § 177 (Cahill 1937).

3 Fed. R. Civ. P. | provides: “These rules govern the procedure

in the United States district courts in all suits of a civil nature whether

cognizable as cases at law or in equity or in admiralty, with the

exceptions stated in Rule 81. They shall be construed to secure the

just, speedy, and inexpensive determination of every action.”

defendant’s obligation, after he rejects a Rule 68 offer of

judgment and then recovers less on judgment. The obligation

is not discretionary: the plaintiff must pay the costs under Rule

68’s language; and part of those costs are his own attorney's

fees incurred post-offer of judgment. While the Seventh Circuit

rejected this approach in the case at bar by labeling it “mechan-

ical” it is the one and the only approach which can harmonize

the legislative intent of the statute with the rule of procedure to

assure a unified, comprehensive judicial process.

The harmony of this approach is adopted by the Sixth

Circuit in Fulps v. City of Springfield, 715 F. 2d 1088 (6th Cir.

1983), which held:

When Congress drafted 42 U.S.C. § 1988, it described

attorney’s fees as “part of the costs”. Congress could have

simply authorized the recovery of attorney’s fees, but it

chose to go further and characterize the fees as costs.

Required as we are to construe the language of the statute

so as to avoid making any word meaningless or super-

fluous, we conclude that Congress expressly characterized

fees as costs with the intent that the recovery of fees be

governed by the substantive and procedural rules appli-

cable to costs. Jd. at 1092-93.

The Sixth Circuit went on to conclude that a Rule 68 offer of

judgment on a civil rights case will preclude the plaintiff from

recovering attorney’s fees after the offer of judgment, when the

plaintiff recovers less on judgment than the amount of the offer.

When petitioners in the case at bar made the offer of

judgment on November 5, 1982, they had to rely upon the

language of Rule 68 and § 1988 and to harmonize one with the

other. Especially here, the power to shape and articulate just

rules of law in an adversary context is at the command of this

Court. The adversary process must be subject to the orderly

administration of justice under law, using rules of procedure. In

obedience to Rule 68, the petitioners’ offer of judgment not only

would make the respondent whole, but would reasonably

compensate the respondent’s attorney. As a result, the offer

also honors and fully satisfies § 1988 of the Civil Rights Act.

Construing attorney’s fees to be part of the costs which become

the plaintiffs own responsibility after the rejected offer of

judgment, can only promote the litigation settlement policies

underlying Rule 68. The Civil Rights Act and the Federal

Rules of Civil Procedure should be found to be in harmony.

B. RULE 68 IS A LONGSTANDING PART OF THE

UNIFIED, COMPREHENSIVE LAW OF FEDERAL

CIVIL PROCEDURE.

Rule 68 has been part of the fabric of the Federal Rules of

Civil Procedure for over 40 years. Its sole purpose is the

promotion of settlements and the termination of protracted

litigation.* Delta Air Lines, Inc. v. August, 450 U.S. 346, 352

(1981). 12 C. Wright & A. Miller, Fed. Prac. and Proc.

§$§ 3001-3005 (1973). While pre-trial and discovery rules can

promote settlement, Rule 68 has had the unique distinction,

since its inception, of being the only federal rule of procedure

enacted solely to facilitate the settlement of lawsuits.5

The procedure in using Rule 68 is simple. The defendant

may serve an offer not less than 10 days before trial upon

plaintiff to allow judgment to be taken against the defe ‘dant,

“for the money or property or to the effect specified in his offer,

with costs then accrued.” Fed. R. Civ. P. 68. Plaintiff then has

10 days to accept the offer, which if not accepted is deemed

withdrawn. It is a simple, straightforward procedure, available

to defendants only.

* Professor A.M. Dobie observed in 1939: “This provision [ Rule

68] in a case involving some doubt might strongly influence the

plainuff to accept the defendant's offer; or, if the offer is not accepted,

it, of course, relieves the offering defendant of the burden of future

costs, thereby constituting an inducement to the making of such

offers.” Dobie, The Federal Rules of Civil Procedure, 25 Va. L. Rev.

261, 304, n. 195 (1939).

5 As part of the 1983 amendments to the Federal Rules of Civil

Procedure, Rule 16 now expressly designates a function of pre-trial to

be to facilitate settlement. Prior to this new amendment, Rule 68

stood alone as the one officially expressed method of dispute resolu-

tion under the Federal Rules of Civil Procedure.

The results of a rejected offer of judgment are mandatory:

“... 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.” (emphasis added). Such

language leaves no ambiguity as to the plaintiff's duty. See,

Delta Air Lines v. August, 450 U.S. 346 (1980) ( Rehnquist, J.

dissenting ).

In the case at bar, the letter and spirit of Rule 68 were

followed precisely by petitioners. The offer of judgment was

made by petitioners five and a half months before trial,

specifying a sum of $100,000, including attorney’s fees as part

of “the costs then accrued”. The offer of judgment was

submitted by petitioners in an effort to resolve the lawsuit

through settlement. The respondent disregarded the offer. At

the end of a three week jury trial, the jury awarded respondent

a total of $60,000. Pre-offer attorney’s fees of $32,000 were

agreed upon by the parties and approved by the court. Thus,

respondent won $8,000 less after trial than the $100,000 offer of

judgment. The respondent’s total recovery was $92,000, which

is an amount “not more favorable than the offer.” Fed. R. Civ.

P. 68.

The opinion in the Severta Circuit Court of Appeals, in

this case derogates Rule 68 as “little known and little used.”

While the court expressed its annoyance, as if Rule 68 were a

thorn in the side of § 1988, it does concede that Rule 68 is not

“inflexibly drafted” and can easily encompass che statutory

award of attorney’s fees to prevailing parties. Chesny v. Marek,

720 F. 2d 474, 477 (7th Cir. 1983).

Petitioners would concur with the interpretation of federal

procedure by the Seventh Circuit to the extent that the offer of

judgment here made by the petitioners is valid in its inclusion of

attorney’s fees as part of the offer in the Seventh Circuit’s view.

A Rule 68 offer, because it allows judgment to be entered,

would not be feasible in the face of a fee statute such as § 1988,

if the offer could not encompass all potential liabilities of the

defendant in the lawsuit. Any civil rights defendant com-

petently advised would balk at authorizing judgment to be

entered against himself, if attorney’s fees of an unknown

amount would later be imposed upon him, because his accepted

offer has made plaintiff a “prevailing party”. In the instant

case, the offer of judgment was made with the intent that the

amount offered would terminate the lawsuit completely, with

no further litigation costs or attorney’s fees incurred by either

side.

While the validity of petitioners’ offer is upheld, the

Seventh Circuit speculates that including attorneys’ fees as part

of the costs “would not have occurred to the draftsmen of Rule

68, because the award of attorney’s fees to prevailing plaintiffs

was uncommon in 1938, although not unknown—the copyright,

securities, and antitrust statutes all allowed such awards.” 720

F. 2d at 477. However, a closer reading of federal statutory

history shows that federal laws providing for attorney’s fees

awards to prevailing parties were much more common in 1938

than the court of appeals opinion discloses. At least a dozen

federal statutory provisions in nine different federal acts on the

books in 1938 allowed the prevailing party to obtain an award

of his attorneys’ fees. These dozen statutes included not only

antitrust,’ securities,® and copyright laws,® but also included the

Communications Act of 1934, 47 U.S.C. §§ 206 & 407; the

Merchant Marine Act of 1936, 46 U.S.C. § 1227; the Packers

and Stockyards Act, 7 U.S.C. § 210(f) (1921); the Perishable

6 Appendix A to this brief contains a list of statutory provisions

existing in 1938 which allowed a court to make an award of attorney’s

fees under the rubric of “costs.” The amicus brief of the Solicitor

General identifies 21 federal statutes (out of 27 attorney fee statutes )

which in 1938 described fees as “costs.” All are currently in force.

7 Clayton Act, 15 U.S.C. § 15 (1914).

® Securities Act of 1933, 15 U.S.C. § 77(e) and Securities Ex-

change Act of 1934, 15 U.S.C. §§ 78i(e) & 78r(a)

9 Copyright Act of 1909, 17 U.S.C. § 40. This provision has since

been replaced by § 505 of the Copyright Act of 1976, 17 U.S.C. § 505,

which uses virtually identical language.

Agricultural Commodities Act, 7 U.S.C. §§ 499g(b) & (c)

(1930); the Railway Labor Act, 45 U.S.C. § 153(p) (1926);

and the Unfair Competition Act, 15 U.S.C. § 72 (1916).

Most significant, every one of the twelve statutes, allowing

attorney’s fees awards in 1938, included and defined attorney’s

fees as part of the “costs.” Section 407 of the Communications

Act of 1934, 47 U.S.C. § 407, for example, provided, in

pertinent part:

If the petitioner shall finally prevail, he shall be allowed a

reasonable attorney’s fee, to be taxed and collected as a

part of the costs of the suit.

Section 210(f) of the Packers and Stockyards Act, 7 U.S.C.

§ 210(f), used the identical language, as did Section 499g(b)

of the Perishable Agricultural Commodities Act, 7 U.S.C.

§ 499g(b), and Section 153(p) of the Railway Labor Act, 45

U.S.C. § 153(p). Even more striking, in relation to § 1988 of

the Civil Rights Act, was Section 40 of the Copyright Act of

1909, 17 U.S.C. § 40 (1940 ed.), which provided that a court

could “award to the prevailing party a reasonable aitorney’s fee

as part of the costs”—language virtually identical to § 1988.”

The drafters of Rule 68 could not have been oblivious to

these many federal statutory provisions allowing an award of

attorney’s fees “as part Jf the costs,” which language was

subsequently approved by Congress. The drafters must have

realized and intended that Rule 68’s reference to “costs” would

include attorney’s fees where Congress had frequently provided

that attorney’s fees were to be taxed and collected “as part of

the costs.” Rule 68 was not enacted in a vacuum.

C. ENACTMENT OF THE RIGHT TO ATTORNEY’S

FEES UNDER § 1988 ASSUMES THE PROCE-

DURES OF THE FEDERAL COURTS AS THEN

EXISTING.

The passage of § 1988 in 1976 was triggered by this

Court’s decision in Alyeska Pipeline Service Co. v. Wilderness

Society, 421 U.S. 240 (1975) requiring Congress, not the courts,

to decide when and if fees should be shifted. Congress came to

recognize that individual civil rights litigants would assume the

laudable role of “private attorney generals” to vindicate con-

gressional civil rights policies. Private litigation was viewed as

a key factor in the enforcement scheme. Senate Report 94-

1011, 1976 U.S. Code Cong. & Admin. News 5908. (here-

inafter cited as Sen. Rep. 94-1011). The concept of fee shifting,

which requires the defendant to pay the prevailing plaintiff's

attorney, furthers the policy concept of enforcing fundamental

civil rights through the litigation of good faith, meritorious

causes of action.

Prior to the Alyeska opinion and to the passage of § 1988,

the Senate Judiciary Committee in 1973 had held six days of

hearings on the legal fees issues before the Subcommittee of the

Representation of Citizen Interests. In 1976 the Committee’s

1973 proceedings were adopted and published as Sen. Rep. 94-

1011. According to the Subcommittee Report, over 30 wit-

nesses testified, including state and federal public officials,

scholars, practicing attorneys and private citizens. Written

material was submitted by the American Bar Association, the

District of Columbia Bar Association and 22 state bar associ-

ations. Sen. Rep. 94-1011 at 5909. The Senate Report states:

“The purpose and effect of [§ 1988] are simple—it is designed

to allow courts to provide the familiar remedy of reasonable

counsel fees to prevailing parties in suits to enforce the civil

rights acts which Congress has passed since 1866.” Sen. Rep.

94-1011, at 5910. (emphasis added.) The Report further

explains: ““We have, since 1870, authorized fee shifting under

more than 50 laws.... In cases under these laws, fees are an

integral part of the remedy necessary to achieve compliance

with our statutory policies.” Sen. Rep. 94-1011 at 5910.

The legislative enactment of fee shifting was for the

purpose of attracting competent counsel to represent civil rights

litigants. This purpose has been achieved in the case at bar

with the employment of competent, experienced counsel, as

demonstrated by the affidavit of respondent’s attorney, which

lists his outstanding qualifications. J. A. A-18-22. The legisla-

tive purpose was not to produce “windfall” fees to attorneys.

As the Senate Report notes: “These cases have resulted in fees

which are adequate to attract competent counsei, but which do

not produce windfalls to attorneys. In computing the fee,

counsel for prevailing parties should be paid, as is traditional

with attorneys compensated by a fee-paying client, “for all time

reasonably expended on a matter. [cites omitted]” Sen. Rep.

94-1011, at 5913. In analysing this congressional purpose, the

Tenth Circuit subsequently stated:

The caution against ‘windfalls’ for attorneys shows that

Congress was exclusively interested in making civil rights

actions more attractive to prospective plaintiffs. Congress

was not trying to get these cases into court by making them

lucrative to attorneys. Therefore, an award of attorney's

fees which benefits a plaintiff's attorney rather than a

plaintiff does not further congressional policy. Cooper v.

Singer, 689 F. 2d 929, 931 (10th Cir. 1982)'°

The fee shifting provisions were designed to encourage private

attorneys in bringing meritorious suits, even though the total

damage amount might be small or the relief requested might be

injunctive in nature. Sisco v. J.S. Alberici Const. Co., Inc.,

F. 2d. ___., Slip. Op. 83-1757 (8th Cir. April 24, 1984).

After the extensive hearings held by the Senate and the

House Committees, § 1988 was passed with the language that

the reasonable attorney’s fees would be assessed for the pre-

vailing party “as part of the costs.” Congress was not naive in

drafting fee shifting statutes. The numerous fee statutes that

have preceded or followed § 1988 manifest sophisticated,

knowledgeable congressional initiatives in designating fees “as

part of the costs” to serve legislative purposes. Numerous

statutes utilize similar, and sometimes the same language as

§ 1988 to define the fees to be shifted “as part of the costs”.

10 This opinion in Cooper v. Singer was subsequently reviewed by

the Tenth Circuit pursuant to a petition for rehearing en banc. The

opinion on rehearing is reported in Cooper v. Singer, 719 F. 2d 1496

(10th Cir. 1983).

At least sixty-nine federal statutory provisions currently

provide for a court award of attorney’s fees under the rubric of

“costs.”'' At least seven of the sixty-nine attorney’s fee award

provisions define attorney’s fees as costs in language identical to

§ 1988, allowing the court to award “a reasonable attorney’s fee

as part of the costs.'2 The numbers may be substantially

higher.'3 At least five other statutory provisions among the

sixty-nine use language nearly identical to § 1988.14 The hold-

ing in this case will thus have an impact on provisions of the

United States Code far beyond § 1988. If the opinion of the

'! The complete text of these 69 statutory provisions is reprinted

in Appendix B to this brief.

12 Statutes allowing an award of “a reasonable attorney’s fee as

part of the costs” are: the Agricultural Unfair Trade Practices Act, 7

U.S.C. § 2305 (enacted in 1968); Title II of the Civil Rights Act of

1964, 42 U.S.C. § 2000a(3)(b) (enacted 1964); Title VII of the Civil

Rights Act of 1964, 42 U.S.C. § 2000e-5(k) (enacted 1964); the Civil

Rights Attorney’s Fees Awards Act of 1976, 42 U.S.C. § 1988 (as

amended in 1980); the Copyright Act of 1976, 17 U.S.C. § 505; the

Jury System Improvement Act of 1978, 28 U.S.C. § 1875(d)(2); the

Rehabilitation Act of 1973, 29 U.S.C. § 794a(b) (enacted in 1978);

and the Voting Rights Act amendments of 1975, 42 U/S.C.

§ 1973(1)(c). Except for the Copyright Act of 1976 and the Jury

System Improvement Act of 1978, all of the statutes just listed also

mimic 42 U.S.C. § 1988 by providing that the court “in its discretion”

may make the award to the “prevailing party.”

The amicus brief of the Solicitor General identifies 142 federal

attorney fee statutes and reports that fees are described as part of

“costs” in 92 of them.

‘4 The five statutes using language similar to § 1988 are found in

the Communications Act of 1934, 47 U.S.C. § 206 (‘“attorney’s fees

shall be taxed and collected as part of the costs in the case”) and 47

U.S.C. § 407 (“If the petitioner shall finally prevail, he shall be

allowed a reasonable attorney’s fee, to be taxed and collected as a

part of the costs of the suit”); the Perishable Agricultural Com-

modities Act, 7 U.S.C. § 499g(b) (“If the petitioner finally prevails,

he shall be allowed a reasonable attorney’s fee to be taxed and

collected as part of the costs of the suit”); and the Securities Act of

1933, 15 U.S.C. § 77k(e) (court may, in its discretion, award costs of

suit, including a reasonable attorney’s fee, “such costs to be taxed in

the manner usually provided for taxing of costs in the court in which

the suit was heard”. )

court of appeals is affirmed, a valid Rule 68 offer will provide

no incentive for the offeree to settle in any case brought under

one of the sixty-nine attorney’s fees award statutes. Each

statute under the Seventh Circuit analysis would be “substan-

tive”, foreclosing the use of Rule 68 which is “procedural”. On

the other hand, under any of the 69 statutes, if “costs” in Rule

68 are defined to exclude attorney’s fees, then the offeree will

almost always disregard Rule 68. He will do so, because he will

be able to finance any award of costs made against him under

Rule 68 (should the offeree fail to finally obtain a judgment

more favorable than the offer) out of the attorney’s fees award

which he will receive so long as he is the “prevailing party”.

The impact which an affirmance here could have on

litigation in the federal courts can be roughly quantified. Over

20% of all civil cases commenced in the United States district

courts during the twelve month period ended June 30, 1983

potentially involved awards of attorney’s fees as part of the

costs under § 1988 or some other federal statute. Annual

Report of the Director of the Administrative Office of the United

States Courts 122-123 (1983) (hereinafter “1983 Annual Re-

port’’).15 Since the Federal Rules of Civil Procedure “govern

the procedure in the United States district courts in all suits of a

civil nature,” Fed. R. Civ. P. 1, it is clear that Rule 68 may play

SA chart on page 123 of the 1983 Annual Report gives the

following breakdown for civil cases commenced in federal district

courts during the 12 month period ended June 30, 1983: State prisoner

petitions, 10.9%; federal prisoner petitioners, 1.8%; civil mghts cases,

8.2%; and antitrust cases, 0.5%—all of which add up to a total of

21.4% of the 241,842 civil cases filed in federal district courts during

that period. This amounts to approximately 51,750 cases covered by

either 42 U.S.C. § 1988 or by the Clayton Act, 15 U.S.C. § 15. A

more detailed listing on page 122 of the 1983 Annual Report (Table

18) shows that an additional 19,361 cases were brought during the

same 12 month period under federal labor laws (11,033 suits) patent,

modities, and exchange laws (2,915 suits), many of which were

undoubtedly brought under federal statutes allowing an award of

attorney’s fees to a prevailing party.

Footnote continued on following page.

a part in all civil cases covered by statutes that award attorney’s

fees as part of the costs. Even if this Court’s opinion on Rule 68

in the instant case were to apply only to § 1988 cases, that

opinion can have a positive effect on overloaded federal trial

court calendars.

What is patently apparent in § 1988’s congressional history

is the existence of obvious concern that these many thousands

of civil cases do not become a vehicle for attorneys to subsidize

a law practice with “harassing litigation and its potential for

intimidation of defendants.” Pulliam v. Allen, __. U.S. ___.,

52 U.S.L.W. 4525 (1984) ( Powell J., dissenting). The “lure of

substantial fees”, which can easily become the single largest

expense of the litigation,'® was not countenanced by Congress

with the enactment of § 1988. Jd. at 4535. Sen. Rep. 94-1011,

at 5913. However, in the courthouse the “lure of substantial

fees” on marginal civil rights cases has now begun to clog

dockets and undercut both the general litigants’ and the

public’s “overriding” interest “in settlement rather than the

exhaustion of protracted court proceedings”. Delta Air Lines,

Inc. v. August, 450 U.S. 346, 363 (1980) (Powell, J. con-

Footnote continued from preceding page.

Moreover, since 42 U.S.C. § 1988 applies not only to suits

alleging constitutional violations but also to suits alleging violations of

the statutes or laws” of the United States, Maine v. Thiboutot, 448

U.S.C. 1 (1980), there are probably thousands of additional suits in

which the prevailing party is eligible for attorney’s fees under § 1988

but which cannot be broken out of the statistics in the 1983 Annucl

Report. The same may be true of federal cases lumped together in the

1983 Annual Report under the heading of “Other Statutory,” account-

ing for 9.9% of civil cases filed in federal district courts during the 12

months ended June 30, 1983.

Reading all of these statistics together, it is estimated that

upwards of one-third of all federal civil cases are covered by federal

Statutory provisions authorizing an award of attorney’s fees to the

prevailing party as part of the “costs.”

16 See, Note, The Impact of Proposed Rule 68 on Civil Rights

Litigation, 84 Column L. Rev. 719 (1984).

Footnote continued on following page.

curring). The exacerbation of the problem by the holding in

the case at bar is caused by the guarantee of a post-offer fee,

irrespective of whether, in practical terms, plaintiff wins or

loses.

A solution appears beyond reach under the decisional law

of the Seventh Circuit. For example, in Skoda v. Fontani, 519

F. Supp. 309 (N.D. Ill. 1981) a jury awarded the plaintiffs

$1.00 each as civil rights damages. The district court then ruled

that an award of attorney’s fees and costs should be denied.

The court saw the verdict to be a “special circumstance” under

Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400 (1968),

especially since the only circumstance hindering a pre-trial

settlement had been the attorney’s fees demand of plaintiff's

counsel. In reversing the trial court the opinion in the Seventh

Circuit held that, since the plaintiffs were prevailing parties

under 42 U.S.C. § 1988, the district court had to award

attorney’s fees.‘7 Skoda v. Fontani,.646 F. 2d 1193 (7th Cir.

1981). Obedient to instruction, on remand, District Court

Judge Marvin Aspen reluctantly awarded the plaintiff's attorney

the sum of $6,086.12, including attorney’s fees and costs. Judge

Aspen sagely commented “...it is doubtful that Congress

envisioned that § 1988 would become the catalyst for litigating

a claim which otherwise would be settled.” Skoda v. Fontani,

Foocnote continued from preceding page.

In Chesny v. Marek, 720 F. 2d 474 (7th Cir. 1983), the

respondent has now claimed post-offer of judgment fees of approxi-

mately $250,000, through the appeal, in addition to the previously

paid $32,000 for pre-offer of judgment fees. The respondent, if he

prevails, would thus receive about $282,000 in fees in a case the jury

found to be worth only $60,000.

17 The Seventh Circuit has evolved other judicial pronounce-

ments on the basis of $1.00 verdicts. In Pigeaud v. McLaren, 699 F.

2d 401 (7th Cir. 1983), it was held that a plaintiff who accepted a

$1.00 offer of judgment that did not include attorney’s fees, was not a

prevailing party under § 1988. As the plaintiff had attained no success

on the merits, he could not claim fees under § 1988. Further, the

Seventh Circuit held that no fee could be awarded under Rule 68 if

the offer had not included attorney’s fees, which the defendants had

not offered in Pigeaud.

519 F. Supp. 309, 310 (N.D. Ill. 1981). Because of the Skoda

and Chesny opinions, both the “special circumstances” and the

“offer of judgment” exceptions to the draconian force of § 1988

are now foreclosed in the Seventh Circuit. In consequence, the

petitioners in the case at bar are exposed to almost a quarter

million dollars in attorney’s fee with no recourse. Only this

Court can prevent this result from happening.

D. REVERSAL OF THE COURT BELOW WILL RE-

MOVE PETITIONERS FROM UNWARRANTED

JEOPARDY AND PRESERVE THE HARMONY BE-

TWEEN SEC. 1988 AND RULE 68.

An offer of judgment which includes attorney’s fees can

terminate otherwise protracted litigation, such as the instant

case, and force the plaintiff's attorney to look at his “hole card”,

before either proceeding to trial or settling. Delta Air Lines,

Inc. v. August, 450 U.S.. 346, 380 (1981) (Rehnquist, J.

dissenting). Rule 68 can be an effective method of dispute

resolution in civil rights cases, if it receives this Court’s

imprimatur. The increasing use of Rule 68 signals recognition

of its potential usefulness in this era of national litigiousness.

Footnote 15, Supra. Respectfully, rejection of Rule 68 here

could be its death knell with no feasible alternative currently

available. '8

In the case at bar, the Seventh Circuit has chosen to

devastate the one effective procedural method defendants have

available in civil rights cases to resolve litigation fairly. Ignor-

ing the express language of § 1988, the Seventh Circuit’s

opinion seems oblivious of the rectitude of petitioners’ offer of

judgment which exceeded the sum of the verdict and fees

respondent and his attorney have now accepted and spent. The

ratio decendi of the opinion here on review is the appellate

court’s expressed view of public policy. This view places

petitioners in serious jeopardy but produces no concomitant

public benefit.

8 Petitioners presume that consideration of the proposed new

Rule 68 has been shelved at this time.

The Seventh Circuit’s opinion provides plaintiffs civil

rights attorneys with an impetus to dishonor the policy behind

§ 1988 -as well as the policy behind the Federal Rules of Civil

Procedure, particularly Rule 68. Without the inclusion of

attorney’s fees in “costs”, the plaintiff's attorney will be sub-

jected to a temptation he may not be able to resist. When a

valid Rule 68 offer is made, even if realistic and acceptable to

the plaintiff, his counsel is tempted to reject it. The attorney

may protract the litigation and ignore a Rule 68 offer to

increase his billable time. If he does so under the law in the

Seventh Circuit, he will then be paid by the defendant even

though he might only win $1.00 at trial. If this hypothetical

attorney perceives even a remote possibility of recovering a

verdict, although it would be less than the offer of judgment, he

will keep the meter of billable time running. When the meter

finally runs out, he can petition for a very large fee. This

hypothetical plaintiff's attorney has little, if any, incentive to

even consider the Rule 68 offer of judgment, even though valid.

It is the view expressed in the Seventh Circuit’s opinion that the

only repercussion to a plaintiff who fails to accept a reasonable

offer is the obligation to pay nominal deposition costs, postage,

telephone and photocopy charges, incurred after the date of the

offer of judgment. In the trial courts, those “costs” are

insignificant when compared with the amount of the attorney’s

fees accrued during trial, even at reasonable hourly rates. The

threat of having to absorb these insignificant “costs” is not

sufficient incentive to settle cases. Note, Offer of Judgment and

Statutorily Authorized Attorney’s Fees: A Reconciliation of the

Scope and Purpose of Rule 68, 16 Ga. L. Rev. 482 (1982). By

extinguishing Rule 68 as a vigorous procedural rule, the

Seventh Circuit opinion chooses to compensate those attorneys

who have erred in assessing the merits of their case and who

may, instead, have chosen to keep the clock running, rather

than “secure the just, speedy and inexpensive determination of

every action.” Fed. R. Civ. P. 1.'9

19 Petitioners do not imply criticism of the conduct of respond-

ent’s attorney in the case at bar and believe that conduct was of the

appropriate ethical and professional standards.

When a defendant in a civil rights case makes a valid offer

of judgment, which includes attorney’s fees, the defendant is

not only complying with an important public policy of settling

otherwise protracted litigation, but he is also complying fully

with congressional policies underlying the Civil Rights Acts

generally and § 1988 particularly. In the first instance, the offer

of judgment by its very terms immediately elevates the plaintiff

to the status of a prevailing party. The defendant is allowing

“judgment to be taken against him for the money . . . specified

in his offer, with costs then accrued.” Fed. R. Civ. P. 68. Prior

to the offer being conveyed to the plaintiff, the plaintiff has

merely a possibility, but no assurance of winning “... for

seldom can a prospective plaintiff be sure of ultimate success.”

Christianburg Garment Co. v. EEOC, 434 US. 412, 422

(1978). But when an offer of judgment is accepted, the offer of

judgment has elevated the plaintiff to the posture of a “pre-

vailing party”. 42 U.S.C. § 1988. Once the defendant miakes

the plaintiff a prevailing party, the offer of “money or property

or... effect specified in [the defendant’s] offer, with costs then

accrued...” should then vindicate the plaintiffs alleged civil

rights violation and compensate the plaintiff's attorney. Fed. R.

Civ. P. 68.

Careful reflection suggests that an offer of judgment should

include the attorney’s fees as “costs”. Scheriff v. Beck, 452

F. Supp. 1254 (D. Colo. 1978). The defendant should receive

a benefit commensurate with his burden in making an offer of

fees. The defendant making an offer of judgment not only must

forecast the reasonable value of the plaintiff's case on the

merits, but must also calculate the approximate “costs”, in-

cluding fees, incurred by his opponent to the date of the offer of

judgment. If the attorney for the defendant misjudges in this

difficult effort, he exposes his client to the full liability of all

attorney’s fees of the prevailing plaintiff after a trial. To protect

a defendant from post-offer fees would be just, after he carries

this burden successfully.

If this Court were to reverse the Seventh Circuit, petitioners

respectfully submit that unreasonably or ridiculously low Rule

68 offers would produce no threat to the Civil Rights Act. A

low offer in practice will have the same effect as no offer, if the

“costs” with attorney’s fees are included in a Rule 68 offer. In

the case of a low offer, plaintiff's “judgment finally obtained”

with fees and costs can be expected to exceed the defendant’s

offer. Fees and costs will be awarded plaintiff under § 1988 as

“prevailing party”. To create an example from the facts of

Delta Air Lines, Inc. v. August, 450 U.S. 346 (1981), if the

defendant makes a small, $450 offer, even the sum of the

attorney’s fees plaintiff will have incurred before filing the

complaint plus the filing fee for the complaint, will probably

approach or exceed the $450 offered. In making such an offer,

the defendant should know his offer is too low to merit

consideration by the plaintiff and will be rejected. When

plaintiff recovers even a nominal sum, such as $100, the

defendant’s $450 offer of judgment will not foreclose a fee

award to the prevailing plaintiff. The plaintiff can confidently

reject a frivolous offer, knowing that the defendant is still

obligated to pay his attorney’s fees through the completion of

the case, because when the plaintiff prevails with a minimal

judgment amount plus pre-offer fees he will exceed the Rule 68

offer. Plaintiff's civil rights will be vindicated and the policy of

§ 1988 will remain secure. If the amount of the pre-offer fees is

contested, the court can resolve the issue as to amount and then

determine whether the result is more favorable than the Rule

68 offer.

The Seventh Circuit retreated from the holding here

suggested in part because of its concern with the Rules Ena-

bling Act, 28 U.S.C. § 2072. After some expressed uncertainty,

the Seventh Circuit opinion finally concludes that § 1988 at-

torney’s fees are a “substantive”, rather than “procedural” and

cannot be abridged by Rule 68. A simple demonstration of this

“substantive/ procedural” theory in operation will show its flaw.

Assume that a defendant is awarded attorney’s fees under Rule

37 (sanctions on motion to compel discovery) or Rule 11

(attorney’s representations of good faith action by signing

pleading) but that subsequently the civil rights plaintiff prevails

at trial. When it comes time to pay Rule 11 or 37 fees to

defendant, plaintiff's award of attorney’s fees could not be

reduced by the amount he owes the defendant, because plain-

ffs “substantive” right to fees cannot be jeopardized or

diminished by any Federal Rule of Civil Procedure. This

would be the logic of the “substantive/procedural” theory. But

a district court cannot be denied all discretion to set off fees due

the defendant without dismantling Rule 11 or 37. Clearly,

procedures can, and must impinge on “substantive” rights. So

long as the “substantive” right is duly honored, it can be

effected by procedure in accord with the Rules Enabling Act.

28 U.S.C. § 2072.

Although not overtly expressed in the opinion, the Seventh

Circuit seems to be concerned over the possible chilling effect

that the district court’s ruling would have on civil rights cases.

The Circuit Court suggests a dilemma of forcing plaintiff's civil

rights attorneys “to think very hard before rejecting [ an offer of

judgment] even if they consider it inadequate, knowing that

rejection could cost themselves or their client a lot if it turned

Out to be a mistake” is too burdensome for plaintiff's civil rights

attorneys, according to the opinion below. Chesny v. Marek,

720 F. 2d 474, 479 (7th Cir. 1983). The argument would be

that plaintiff's civil rights attorneys will hesitate to undertake

litigation, if their fees will be curtailed upon failing to beat an

offer of judgment by even a few dollars. Petitioners do not

believe this argument is true or persuasive. But if the assump-

tion is correct, the answer to it is twofold. First, the plaintiff's

attorney has seriously misjudged the case, if he leaves no

margin for error in assessing the offer of judgment. Clearly an

offer of judgment which includes attorney’s fees and proves to

be only a few dollars over the verdict plus fees is an offer based

on a solid, accurate evaluation of the case. It makes the

plaintiff whole and compensates his attorney. For the plaintiff's

attorney to reject such an offer suggests that the attorney is

either gambling needlessly or is unable to evaluate his case.

Petitioner’s second response to the Circuit Court’s dilemma

consists of a principle respectfully submitted for this Court’s

consideration: the Federal Rules of Civil Procedure should

apply without exception to all litigants, not just some. Con-

sistent with this principle, Rule | mandates uniform application

of the Rules to “all suits of a civil nature” Fed. R. Civ.

P. 1.20 Truncating a federal procedural rule, as the Circuit Court

has done, leaves the overburdened trial courts with little, if any,

guide to whether that rule is inapplicable to some cases but is

applicable to others.

Unless attorneys are forced to abide by the Federal Rules

of Civil Procedure by “thinking very hard” about the fair

settlement of their cases, civil rights cases will be litigated for

the sake of fees, not the vindication of civil rights. If the denial

of post-offer fees to an attorney, who receives less on verdict

than the offer, can be labeled unfair, it is an unfairness present

in any lawsuit where there is a winner and loser. We should

remember that the defendant also is running a risk of a verdict

for plaintiff which exceeds the offer by even a few dollars. The

defendant then must pay all fees of plaintiffs attorney. All

litigants should be bound by § 1988 which Congress has

enacted with an express definition of attorney’s fees “as part of

the costs.”

The courthouse is still open to any individual who chooses

to bring a civil rights lawsuit for the vindication of his or her

rights. Competent legal counsel will still be attracted to civil

rights cases by the assurance that their attorney’s fees will be

included as part of an offer of judgment, whether it be by

settlement or verdict. As this Court notes in Owen v. City of

20 Rule 81 has exceptions to Rule |, but Rule 81 does not exempt

any civil rights case from coverage of the Federal Rules of Civil

Procedure. Fed. R. Civ. P. 81.

Independence, 445 U.S. 622, 654 (1980), “elemental notions of

fairness dictate that one who causes a loss should bear the loss.”

It follows that the plaintiffs attorney who misjudges and

unreasonably protracts litigation causes a loss to his client.

Accordingly he should bear the loss of his fees, if he has refused

a more favorable offer of under Rule 68.

E. NUMEROUS CIRCUIT COURTS AND DISTRICT

COURTS THROUGHOUT THE UNITED STATES

HAVE APPLIED RULE 68 IN A HARMONIOUS

AND LEGALLY SOUND MANNER TO CIVIL

RIGHTS CASES.

In deciding Chesny v. Marek, 720 F. 2d 474 (7th Cir.

1983) the Seventh Circuit held that a valid Rule 68 offer can

include attorney’s fees. The petitioners, according to the

Seventh Circuit, have made a valid offer: the verdict of $60,000

plus the accrued pre-offer costs and attorney's fees of $32,000

was in sum less than the offer of $100,000.

After finding that all prerequisites to a valid offer have

been met by the petitioners’ offer of judgment, the Seventh

Circuit concludes that this valid offer of judgment should not

defeat the congressional policy of awarding all fees to a

prevailing party, regardless of the Federal Rules of Civil

Procedure. In so holding, the opinion asserts a belief that Rule

68 is inappropriate in a civil rights context because it is “little

known and little used.” Chesny v. Marek, 720 F. 2d 474, 475,

479 (7th Cir. 1983).

This conclusion and the opinion of which it is a part

ignores a substantial body of case law which has developed

during the past fifteen years and which has addressed the issue

of Rule 68’s impact in a variety of fee shifting contexts. The

opinion is silent about contrary conclusions reached by several

district courts. Further, the opinion would distinguish the case

at bar from the denial of § 1988 fees in the Sixth Circuit to a

plaintiff by operation of a Rule 68 offer of judgment. Fulps v.

City of Springfield, 715 F. 2d 1088 (6th Cir. 1983).

First, in examining early district court cases, two cases

which discuss Rule 68, do not lend support to an argument that

attorney’s fees are not part of “costs” in this case. In Gamlen

Chemical Co. v. Dacar Chemical Products Co., 5 F.R.D. 215

(W.D. Pa. 1946), plaintiff had accepted an offer of judgment

which did not mention attorney’s fees, in a copyright in-

fringement case and then applied to the court for fees. The

court heid that the fees must be specifically mentioned in the

offer of judgment. Next, Cruz v. Pacific American Insurance

Corp., 337 F. 2d 746 (9th Cir. 1964) held that under the Guam

offer of compromise statute, Guam Code Civ. P. § 997, the

defendant need not pay attorney’s fees as part of the costs, if

defendant had not agreed to do so in the offer. Cruz is not

precedent in an analysis of Rule 68 at this time. The Guam

statute, while similar to Rule 68 in language, does not require

that the offer include costs then accrued. More recently, in

Waters v. Heublein, Inc., 435 F. Supp. 110 (N.D. Cal. 1979),

the district court rejected the Ninth Circuit’s rationale in Cruz

as not controlling, even though the district court is bound by

Ninth Circuit decisions. See, Chesny v. Marek, 547 F. Supp.

542, 546 n. 3 (N.D. Ill. 1982).

After the passage of § 1988 in 1976, district courts were

increasingly faced with Rule 68’s impact on the new legislation.

In 1978, the Colorado district court held in Scheriff v. Beck, 452

F. Supp. 1254 (D. Colo. 1978), that if an offer of judgment

excludes attorney’s fees as part of the costs, the offer of

judgment is invalid. In following Scheriff v. Beck, the Northern

District of California held in Waters v. Heublein, Inc., 485 F.

Supp. 110 (N.D. Cal. 1979) that an offer of judgment for costs

then accrued should include attorney’s fees. Further, the court

held that if the judgment finally obtained does not exceed the

offer, Rule 68 will bar the recovery of the fees after the date of

the offer. The rationale of the court in Waters v. Heublein is

persuasive:

Rule 68 is designed to prevent needless litigation by

punishing a party that chooses to reject a reasonable

settlement offer. Awarding fees covering their pre-offer

work to attorneys who settle cases through acceptance of

an offer of judgment advances the purposes underlying the

fees provision. On the other hand, applying Rule 68 to bar

the recovery of post-offer fees in a case in which a party

has rejected a reasonable offer that ultimately exceeds the

judgment does not unduly interfere with the operation of

this provision. Since the pre-offer efforts of the attorney

reached a result more favorable to the client than the

verdict, there seems little reason to reward shat attorney for

the post-offer work necessitated by a mistaken judgment

that failed to obtain any additional benefits. Thus, this

application of the Rule should work to further the legiti-

mate concerns of judicial economy and efficiency without

pgs wg attorneys from pursuing civil rights litigation.

. at ‘

While discounting Rule 68 offers of judgment, the Circuit Court

in Chesny v. Marek, amazingly never mentions Waters v.

Heublein, even though the district court opinion it reverses

extensively discusses Waters as persuasive authority.

The Seventh Circuit opinion ultimately seems to rely on

this Court’s holding in Roadway Express, Inc. v. Piper, 447 U.S.

752 (1980). In Roadway Express, this Court held that in the

contex: of 28 U.S.C. § 1927, attorney’s fees would not be

incluced as part of the costs in a civil rights case where the

plaintiff's attorney had “so multiplied the proceedings in any

case as to increase costs unreasonably and vexatiously”. 28

U.S.C. § 1927. The opinion below makes the quantum leap to

conclude: “No more should ‘costs’ in Rule 68 be read to include

attorney’s fees in such a case.” Chesny v. Marek, 720 F. 2d 474,

480 (7th Cir. 1983). In so holding, the Circuit Court not only

misapplies the holding of Roadway Express, but also misses this

Court’s reasoning in Hutto v. Finney, 437 U.S. 678 (1978) and

the statements of Justice Powell in Delta Air Lines, Inc. v.

August, 450 U.S. 347 (1980) ( Powell, J. concurring).

In Roadway Express, this Court was called upon to con-

strue “costs” in § 1927 in conjunction with its compamon

section, § 1920. 28 U.S.C. § 1920 specifies with particularity,

without mentioning attorney’s fees, those costs which are

ordinarily taxed to a losing litigant, such as marshal’s fees,

witness fees, copying costs, printing and court reporter costs.

Since the Act itself defines the “costs” in § 1920, the Court had

no reason to look beyond the Act for a definition of the costs

which would include attorney’s fees. This Court noted that the

concept of punishing attorneys who multiply proceedings nee-

dlessly first appeared in 1813. The Act of February 26, 1853,

10 Stat. 161 later coupled the definition of costs (now found in

§ 1920) with the award of costs against attorneys who vexa-

tiously multiply proceedings (now found in § 1927). Thus, this

Court concludes that the sections must be read together,

because of their history. The Circuit Court opinion in dis-

cussing Roadway Express glosses over the important distinction

between the Federal Rules of Civil Procedure, which do not

define costs, and § 1920, which does. In doing so, it fails to

account for Justice Powell’s concurring opinion in Delta Air

Lines v. August, 450 U.S. 347, 364, n. 2 (1980) which interprets

the Court’s Roadway Express holding.2’ In Delta Air Lines,

Justice Powell comments that attorney’s fees are part of the

costs in a Rule 68 offer of judgment situation and that the

Roadway Express opinion is not contrary to his conclusion. In

distinguishing §§ 1920 and 1927 from the Federal Rules of

Civil Procedure, Justice Powell states: “In approving the Feder-

al Rules, Congress appears to | ave incorporated the definition

of costs found in the substant’e statute at issue in the litiga-

tion.”” Jd. at 364, n. 2.

In Hutto v. Finney, 437 U.S. 678 (1977), this Court notes

the substantial number of “statutory and common-law situ-

ations in which allowable costs :1clude counsel fees.” Jd. at 697.

In holding that the Eleventh Amendment does not preclude the

award of attorney’s fees as part of the costs under § 1988

against a state official, the Court found that:

21 Justice Powell is the author of the Roadway Express opinion.

It is much too late to single out attorney’s fees as the one

kind of litigation cost whose recovery may not be author-

ized by Congress without an express statutory waiver of the

States’ immunity. Jd. at 698.

In § 1988, Congress has clearly chosen to authorize this “litiga-

tion cost,” within the context of the Federal Rules of Civil

Procedure. It is unsupportable to contend, as the Seventh

Circuit does, that a contemporaneous understanding of costs in

1938 did not include attorney’s fees, when Rule 68 was enacted.

Statutes in existence when Rule 68 was enacted did include

attorney’s fees as costs. Appendix A to this brief is a com-

pilation of some of those statutes. The Seventh Circuit offers no

justification to single out attorney’s fees as the one kind of

litigation cost exempt from the operation of Rule 68.

When Congress decided to enact a statute using the word

“costs” to define attorney’s fees, it drew upon two centuries of

experience in drafting such language. See, Footnote 22 infra.

Congress had 40 years, between the passage of Rule 68 and

§ 1988, to learn of this Federal Rule of Civil Procedure. To

assume, as the Seventh Circuit does, that knowledge of Rule

68’s language had not percolated into congressional awareness

by 1976 would be, at best, implausible, if not frightening.

In a factually identical case to Chesny v. Marek, Judge

Cannella of the Southern District of New York in Lyons v.

Cunningham ___ F. Supp. —__, 79 Civ. 3953 (S.D. N.Y. Oct.

19, 1983, opinion to be published) has held that Rule 68

precludes the plaintiffs’ recovery of attorney’s fees, after rejec-

tion of an offer of judgment with a subsequent verdict less than

the offer. Judge Cannella’s comments are noteworthy. In citing

Hutto v. Finney for the proposition that attorney’s fees are an

element of the costs and Fairmont Creamery Co. v. Minnesota,

275 U.S. 168 (1927) for the proposition that courts have

authority to award attorney’s fees to further the administration

of justice, Judge Cannella sees the distinctions between at-

torney’s fees and costs not to be particularly significant, either

historically or currently under § 1988.22 Lyons v. Cunningham,

pp. 18-19. In light of the express language of the Sen. Rep., 94-

1011, this blurring of the distinctions between costs and fees by

the inclusion of attorney’s fees as one element of the costs is

understandable. In setting out congressional intent for § 1988,

the Senate Report 94-1011 at 5913 states:

[D Jefendants in these cases are often state or local bodies

or state or local officials. In such cases it is intended that

the attorneys’ fees, like other items of costs, will be

collected either directly from the official, in his official

capacity, from funds of his agency or under his control, or

from the state or local government (whether or not the

agency or government is named party.) ( Emphasis

added). (Footnotes omitted ).

This stated legislative intent patently demonstrates that Con-

gress intended these fees to be governed as if they were costs

within the context and ambit of the Federal Rules of Civil

Procedure.

In employing the same analysis, the Sixth Circuit Court of

Appeal has rendered a decision actually contrary to that in

Chesny v. Marek. Fulps v. City of Springfield, 715 F. 2d 1088

(6th Cir. 1983). In Fulps, the Sixth Circuit found that

attorney’s fees were clearly part of the costs under § 1988 in a

case where an offer of judgment had been accepted. The

judgment entered by the clerk recited the settlement amount of

$2,500 for each of the two plaintiffs, “plus cost accrued to date

of judgment.” The plaintiff's attemey subsequently petitioned

22 Coupling attorney’s fees as an element of the costs is a well-

established and frequently exercised congressional activity. On March

1, 1793, Congress passed an Act since expired, that stated: “Sec. 4.

And be it further enacted, That there be allowed and taxed in the

supreme, circuit and district courts of the United States, in favour

[sic] of the parties obtaining judgments therein, such compensation

for their travel and attendance, and for attornies [sic] and counsel-

lors’ fees, except in the district courts in cases of admiralty and

maritime jurisdiction, as are allowed in the supreme or superior courts

of the respective states. | Stat. 419 (1793)

the district court for an award of his attorney’s fees, arguing

that the fees had not been included in the $5,000 total sum

indicated in the offer of judgment. The plaintiff contended that

the offer should be read as an offer to pay $5,000 plus costs plus

attorney’s fees. The defendant City of Springfield argued that

they were only responsible for the § 1920 costs and not

attorne y’s fees.

The Sixth Circuit held that “costs” as specified in Rule 68

must include attorney’s fees “where the fees are authorized by

the substantive statute at issue in the litigation.” Jd. at 1095.

Relying on the language of Hutto v. Finney and finding that

Roadway Express v. Piper was not inopposite to their holding,

the Sixth Circuit concluded that “Congress expressly character-

ized fees as costs with the intent that the recovery of fees be

governed by the substantive and procedural rules applicable to

costs.” Jd. at 1093.

The opinion in the Seventh Circuit appears to reject Fulps.

However, the Sixth Circuit did not rule as the Seventh Circuit

suggests it had that Rule 68 “can be used to abrogate the right

to attorney’s fees that a plaintiff would otherwise have by virtue

of § 1988.” Chesny v. Marek at 480. The use of the term

“abrogate” causes the point to be missed. The plaintiff's

attorney receives all amounts due to him prior to the offer of

judgment and thus there is no “abrogation”. By refusing to

follow the Fulps judicial definition of costs to include fees

causes the court below to skirt the issue: Should post-offer fees

be denied by operation of Rule 68?

In following the Fulps decision, a district court opinion in

Connecticut has held that a Rule 68 offer of judgment will

preclude the award of post-offer attorney’s fees to the plaintiff's

attorney, when he fails to recover more on verdict than the

offer. Bitsouni v. Sheraton Hartford Corp., 33 F.E.P. Cases 898

(D. Conn. 1983). While concerned that the plaintiff not be

saddled with the obligation to pay the defendant’s attorney’s

fees, if the amount is not bettered by trial, the Bitsouni court

had no trouble at all reaching the conclusion that the plaintiff's

cost under Rule 68 will include his attorney’s fees.

Another district court has strongly encouraged the idea of

defendants submitting offers of judgment in order to toll the

amounts civil rights plaintiffs could recover in fees after of the

offer. Neal v. Berman, 576 F. Supp. 1250 (E.D. Mich. 1983).

In Neal, the defendants had orally offered to settle the case.

Defendant never put its settlement offer in writing. Plaintiff

“prevailed” with a verdict amount which the defendants would

have been willing to pay. In concluding that the time spent by

the plaintiffs attorney at trial was unnecessary, the district court

observed that the plaintiff would be denied fees for post-offer

work, but for the fact that defendants had not submitted a

formal, written settlement offer. See also, Spero v. Abbott

Laboratories, 396 F. Supp. 321 (N.D. Ill. 1975).

Il. WHEN THE TRIAL COURT DETERMINES THE

AMOUNT TO BE AWARDED UNDER § 1988, IT

SHOULD AWARD ONLY THAT PORTION OF A REA-

SONABLE ATTORNEY’S FEE AMOUNT WHICH IS

IN EXCESS OF THE AMOUNT THE PLAINTIFF HAS

PAID HIS ATTORNEY UNDER AN ATTORNEY’S FEE

CONTRACT.

Petitioners have argued in Point I of this brief in support of

the district court opinion that by operation of Rule 68 no

further fees at all are due respondent’s attorney for his post-

offer of judgment work. If petitioners’ and the district court’s

view presented here is rejected, this case should be remanded

for a determination of what, if any, fees additional to those

already paid are appropriate. It is respectfully submitted that

the district court on remand should scrutinize the previously

undisclosed contingent fee agreement for fairness to Geiciraine

what is a reasonable fee. Because respondent had not d'sclosed

his fee agreement in the district court, that court had no

occasion to consider the contingent fee which is already paid.

The contingent fee was paid under an agreement in this

case which was not disclosed by respondent when the complaint

was filed. J.A. A-46. As revealed during the appellate phase of

this case, the terms of that contingent fee agreement provide a

division between respondent and his attorney of “all amounts

recovered”. J.A. A-51. Respondent has treated the meaning of

that phrase in the contract to include fees under § 1988 with

55% of the fee being paid to respondent and 45% being paid to

his attorney. J.A. A-51. The pre-offer of judgment fees and

costs here recoverable by § 1988 are established at $32,000.23

The respondent’s attorney acknowledges that he retained

45% of the $32,000 paid by petitioner as fees, as well as 45% of

the $60,000 paid by petitioners in satisfaction of judgment on

verdict (J.A. A-52). The resulting sum in total is $41,400 in

* attorney’s fees received. J.A. A-48. It was approximately one

year after receiving these fees that respondent’s attorney first

admitted (in response to a question from the court during oral

argument on appeal) that a contingent fee agreement did, in

fact, exist. Pet. A. A-6.

Petitioners advocate that respondent’s fully executed con-

tingent fee contract be honored, not abolished. While district

courts may review the reasonableness of a fee agreement, an

attorney and a client nevertheless have a right to execute

contingent fee agreements. Rosquist v. SooLine Railroad, 692

F. 2d 1107 (7th Cir. 1982); Krause v. Rhode, 640 F. 2d 214

(9th Cir. 1981); Sargeant v. Sharp, 579 F. 2d 645 (Ist Cir.

1978). Petitioners submit that a frustration of the district

court’s review of the fee contract by non-disclosure of its

existence defeats justice. Contingent fee contracts to the extent

they establish a “reasonable attorney’s fee” under § 1988

prevent a windfall profit being paid to a prevailing plaintiff's

attorney.

23 Respondent’s attorney and petitioners’ attorney agreed to

reduce respondent’s fee demand from $34,392.35 to $32,000,

although respondent continued to request a multiplier to this lodestar

amount. Judge Shadur denied the multiplier. J.A. A-24-25.

In asserting the existence of a congressional policy of

disfavor for unjust enrichment of respondent’s attorney, peti-

tioners cite as authority Sen. Rep. 94-1011. That Senate record

establishes the congressional goal of attracting and com-

pensating competent attorneys in civil rights cases. The Senate

Report admonishes that “windfall” fees should not be awarded

to counsel. Sen. Rep. 94-1011 at 5908. Civil rights attorneys

are expected by Congress and the courts to advocate against

civil rights violations. But Congress does not intend that

attorney’s launch their own private, capital ventures under the

guise of § 1988. Brown v. Stackler, 612 F. 2d 1057 (7th Cir.

1980).

This Court has now established in Hensley v. Eckerhart,

103 S. Ct. 1933 (1983) that the § 1988 fee award must be

reasonable. This Court has stated that “the district court should

focus on the significance of the overall relief obtained by the

plaintiff in relation to the hours reasonably expended on the

litigation.” Jd. at 1940. By their very nature, contingent fees are

inexorably linked to “relief obtained” in behalf of the client. In

calculating the reasonableness of a fee, it is not surprising to

learn that one of the factors which should be considered by

district courts is the contingent fee agreement between the

prevailing plaintiff and his attorney. Johnson v. Georgia

Highway Express, Inc., 488 F. 2d 714 (Sth Cir. 1974). Some

circuits have even gone so far as to hold that compensation paid

to attorneys through a percentage of judgment on verdict is a

basis sufficient to deny § 1988 fees. See, Buxton v. Patel, 595 F.

2d 1182 (9th Cir. 1979); Zarcone v. Perry, 581 F. 2d 1039 (2d

Cir. 1978); contra, Cooper v. Singer, 719 F. 2d 1496 (10th Cir.

1983).

In the case at bar, respondent’s attorney has been awarded

by the district court $32,000 as his § 1988 reasonable, pre-offer

of judgment fee. However, he has actually been paid by his

OO ee

Se a

client $41,400 to date.24 In calculating the reasonableness of

this amount in the face of the contingent fee, the jury verdict in

this case warrants analysis. An itemized verdict was reached in

this case. (R. 119). The jury found that the civil rights

violation standing alone justified a verdict of $52,000. Punitive

damages of $1,000 under analogy to a common law tort cause

were assessed against each of the three police officers. Com-

pensatory damages of $5,000 under analogy to the [Illinois

Wrongful Death Act were assessed. Thus, it could be realisti-

cally argued that, the “pure” § 1983 cause of action, i.e.

“violation of civil rights”, produced for the respondent by

judgement on verdict $52,000 (or $60,000, if the offer of

judgment had been accepted?5).

It cost $32,000 in pre-offer fees to obtain that $52,000. The

contingent fee paid cannot be disregarded in measuring a

reasonable fee under § 1988. The wrongful death cause at

$5,000, and the punitive cause at $3,000, on a 45% contingent

fee basis cost $3,600 to produce. While these latter two actions

were prosecuted under § 1983, they were cognizable under state

law where common law tort actions have always been a means

to vindicate individual rights. The $32,000 statutory fee looked

at in conjunction with the 45% contingent fee should demon-

Strate that reasonableness in awarding § 1988 fees mandates

factoring the contingent fees paid into the trial court’s decision.

Contingent fee payments under this analysis can operate as

a limitation on fees awards under § 1988. This limitation would

depend on how successful in a monetary sense a plaintiff is.

24 Respondent had asked the jury for $3,500,000 in damages.

Had the verdict followed respondent's request, respondent's attorney

would have recovered $1,575,000 in fees (45% of $3,500,000). It

would seem only equitable that any sum previously recovered under

such contingent fees contracts must be disclosed by plaintiff and then

be factored in by the district court in deciding fees under the Johnson

and Hensley guidelines.

25 The $100,000 offer minus the $8,000 for death and punitive

damages and minus the $32,000 fee leaves $60,000 for the civil rights

violation.

40)

The success factor has been recognized in Hensley v. Eckerhart.

In the case at bar the result cannot be claimed to be “excellent”.

Excellent results may justify full, compensatory fees. Con-

versely, under Hensley, limited achievement justifies reductions

in fees. Especially here, since the “success” of respondent is

partial at best in the face of a $100,000 offer of judgment made

long before trial, the attorney’s fees received under the contin-

gent fee agreement should cause the district court to limit or

reduce any additional fees which otherwise might be awarded

now. The amount of that reduction should be established by

the tria. court’s sound discretion. Respondent’s attorney has

been awarded to date $32,000 as § 1988 attorney’s fees. He

credited 55% of that sum to his client. Nevertheless, he is also

entitled to 45% ($27,000) from the $60,000 verdict, because of

the terms of the contingent fee contract. The contract, respond-

ent attorney has asserted, provides that he and his client (not a

lawyer) split “all amounts recovered”, including attorney’s fees,

on a 45%/55% basis, and that is what they have done (J.A. 52).

A fee agreement in a civil rights case should expressly deal with

fees under § 1988 and the impact of the award on the agree-

ment. The opinion in Cooper v. Singer, 710 F. 2d 1496 (10th

Cir. 1983) by use of sound reasoning has held this to be the

law. Since the instant fee contract is silent about § 1988 fees,

the district court must decide any additional § 1988 fees in light

of fees already paid to respondent’s attorneys under.the contin-

gent fee agreement.

The fee issue on this contingent agreement is not a question

of prospective payments. There has been a $27,000 payment to

respondent subject to the attorney’s fee (as part of the payment

of the $60,000 judgment). It was earmarked for attorney’s fees

because of the contingent fee contract. Petitioners submit that

the $27,000 paid and available to respondent’s lawyer as

attorney’s fees can only be a windfall profit, when stacked on

top of the $32,000 paid in § 1988 fees by petitioners. The sum

of these two amounts is $59,000, and every penny of it came

from petitioners. The fact that the respondent’s attorney only

took $41,400 and credited the balance of the $59,000 to his

client does not justify an assessment against petitioners of an

additional fee award over and above the $59,000 which already

has been funded by petitioners. The contingent fee contract

should be a factor used in arriving at a reasonable fee award

and this should be done in a manner consistent with the policy

of § 1988 as defined by Hensley v. Eckerhart, _. U.S. ___.,

103, S. Ct. 1933 (1983).

CONCLUSION

The petitioners respectfully request affirmance of the dis-

trict court and reversal of the circuit court in the award of costs

including attorney’s fees under 42 US.C. § 1988. Petitioners

further request a finding of law that no fees or other «costs

incurred after the offer of judgment be awarded to respondents.

Petitioners further request that the taxable costs of petitioners

before the circuit court and before this Court be awarded to

petitioners against respondent, with this suit to be remanded

solely for the award of those taxable costs by the circuit court

which are not included by the Clerk of the Supreme Court in

the mandate to the courts below. In the alternative, petitioners

respectfully request directions issue to the district court on

remand to consider the contingent fees paid in awarding

additional fees, if any.

Respectively submitted,

*DONALD G. PETERSON ELIZABETH HUBBARD

SCHAFFENEGGER, WATSON ELIZABETH HUBBARD, LTD.

& Peterson, LTD. 55 East Monroe Street

69 West Washington Street Suite 3420

Suite 3105 Chicago, Illinois 60603

Chicago, I!linois 60602 (312) 332-5988

(312) 346-5430

Attorneys for Petitioners

*Counsel of Record

APPENDIX

A-1

APPENDIX A

STATUTES IN EXISTENCE IN 1938 WHICH ALLOW

ATTORNEY’S FEES AS PART OF THE COSTS

CLAYTON ACT. 15 U.S.C. § 15

Except as provided in subsection (b) of this section, any

person who shall be injured in his business or property by

reason of anything forbidden in the antitrust laws may sue

therefor in any district court of the United States in the district

in which the defendant resides or is found or has an agent,

without respect to the amount in controversy, and shail recover

threefold the damages by him sustained, and the cost of suit,

including a reasonable attorney’s fee.

enacted Oct. 15, 1914; no amendments

CLAYTON ACT, 15 U.S.C. § 15(b)

Except as provided in paragraph (2), any person who is a

foreign state may not recover under subsection (a) of this

section an amount in excess of the actual damages sustained by

it and the cost of suit, including a reasonable attorney’s fee.

enacted Oct. 15, 1914; no amendments.

COMMUNICATIONS ACT OF 1934, 47 U.S.C. § 206

In case any common carrier shall do, or cause or permit to

be done, any act, matter, or thing in this chapter prohibited or

declared to be unlawful, or shall omit to do any act, matter, or

thing in this chapter required to be done, such common carrier

shall be liable to the person or persons injured thereby for the

full amount of damages sustained in consequence of any such

violation of the provisions of this chapter, together with a

reasonable counsel or attorney’s fee to be fixed by the court in

every case of recovery, which attorney’s fee shall be taxed and

collected as part of the costs in the case.

enacted June 19, 1934; no amendments.

A-2

COMMUNICATIONS ACT OF 1934, 47 U.S.C. § 407

If the petitioner shall finally prevail, he shall be allowed a

reasonable attorney’s fee, to be taxed and collected as a part of

the costs of the suit.

enacted June 19, 1934, no amendments.

Court may “award to the prevailing party a reasonable

attorney’s fee as part of the costs.”

enacted 1909, amended 1976

FEDERAL POWER ACT, 16 U.S.C. § 825q-1(b)(2)

The Commission may, under rules promulated by it,

provide compensation for reasonable attorney’s fees, expert

witness fees, and other costs of intervening or participating in

any proceeding before the Commission to any person whose

intervention or participation substantially contributed to the

approval, in whole or in part, of a position advocated by such

person. Such compensation may be paid only if the Commis-

sion has determined that—

(A) the proceeding is significant, and

(B) such person’s intervention or participation in such

proceeding without receipt of compensation constitutes a

significant financial hardship to him.

enacted June 10, 1920, as added Nov. 9, 1978.

FEDERAL TRADE COMMISSION IMPROVEMENT ACT,

15 U.S.C. § 57a(h)(1) :

(1) The Commission may, pursuant to rules prescribed by

it, provide compensation for reasonable attorneys fees, expert

witness fees, and other costs of participating in a rulemaking

proceeding under this sectic a.

enacted Sept. 26, 1914, as added Jan. 4, 1975.

A-3

HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS

ACT OF 1976, 15 U.S.C. § 15e(a)(2)

The court shall award the State as monetary relief three-

fold the total damage sustained as described in paragraph (1)

of this subsection, and the cost of suit, including a reasonable

attorney’s fee.

enacted Oct. 15, 1914, as added Dec. 2, 1980.

HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS

ACT OF 1976, 15 U.S.C. § 26.

In any action under this section in which the plaintiff

substantially prevails, the court shall award the cost of suit,

including a reasonable attorney’s fee, to such plaintiff.

enacted Oct. 14, 1914; amended Sept. 30, 1976 to include

attorney’s fees.

MERCHANT MARINE ACT OF 1936, 46 U.S.C. § 1227

Any person who shall be injured in his business or property

by reason of anything forbidden by this section may sue

therefor in any district court of the United States in which the

defendant resides or is found or has an agent, without respect to

the amount in controversy, and shall recover threefold the

damages by him sustained, and the cost of suit, including a

resonabie attorney’s fee.

enacted June 29, 1936; no amendments.

PACKERS AND STOCKYARDS ACT, 7 U.S.C. § 210(f)

If the petitioner finally prevails, he shall be allowed a

reasonable attorney’s fee to be taxed and collected as part of

the costs of the suit.

enacted Aug. 15, 1921; no amendments.

A-4

PERISHABLE AGRICULTURAL COMMODITIES ACT,

7 US.C. § 499g(b), (c)

(b) If the petitioner finally prevails, he shall be allowed a

reasonable attorney’s fee, to be taxed and collected as part of

the costs of the suit.

if appellee prevails he shall be allowed a reasonable attorney’s

fee to be taxed and collected as part of his costs.

enacted June 10, 1930; no amendments.

RAILWAY LABOR ACT, 45 U.S.C. § 153(p)

If the petitioner shall finally prevail he shall be allowed a

reasonable attorney’s fee, to be taxed and collected as part of

the costs of the suit.

enacted May 20, 1926; no amendments.

SECURITIES ACT OF 1933, 15 U.S.C. § 77k(e)

In any suit under this or any other section of this subchap-

ter the court may, in its discretion, require an undertaking for

the payment of the costs of such suit, including reasonable

attorney’s fees, and if judgment shall be rendered against a

party litigant, upon the motion of the other party litigant, such

costs may be assessed in favor of such party litigant ( whether or

not such undertaking has been required) if the court believes

the suit or the defense to have been without merit, in an amount

sufficient to reimburse him for the reasonable expenses incurred

by him, in connection with such suit, such costs to be taxed in

the manner usually provided for taxing of costs in the court in

which the suit was heard.

enacted May 27, 1933; no amendments.

A-5

SECURITIES EXCHANGE ACT, 15 U.S.C. § 78i(e)

In any such suit the court may, in its discretion, require an

undertaking for the payment of the costs of such suit, and assess

reasonab'e costs, including reasonable attorneys’ fees, against

either party litigant.

enacted June 6, 1934; no amendments.

SECURITIES EXCHANGE ACT, 15 U‘S.C. § 78r(a)

In any such suit the court may, in its discretion, require an

undertaking for the payment of the costs of such suit, and assess

reasonable costs, including reasonable attorneys’ fees, against

either party litigant.

enacted June 6, 1934; no amenaments.

TRUST INDENTURE ACT, 15 U.S.C. § 77000(e),

www(a)

000(e) The indenture to be qualified may contain provi-

sions to the effect that all parties thereto, including the in-

denture security holders, agree that the court may in its

discretion require, in any suit for the enforcement of any right

Or remedy under such indenture, or in any suit against the

trustee for any action taken or omitted by it as trustee, the filing

by any party litigant in such suit of an undertaking to pay the

costs of such suit, and that such court may in its discretion assess

reasonable costs, including reasonable attorney’s fees against

any party litigant in such suit, having due regard to the merits

and good faith of the claims or defenses made by such party

litigant ....

www(a) In any such suit the court may, in its discretion,

require an undertaking for the payment of the costs of such suit

and assess reasonable costs, including reasonable attorneys’

fees, against either party litigant, having due regard to the

merits and good faith of the suit or defense.

enacted May 27, 1933, as added Aug. 3, 1939.

A-6

UNFAIR COMPETITION ACT, 15 U.S.C. § 72

Any person injured in his business or property by reason of

any violation of, or combination or conspiracy to violate, this

section ... shall recover threefold the damages sustained, and

the cost of the suit, including a reasonable attorney’s fee.

enacted Sept. 8, 1916; no amendments.

B-|

APPENDIX B

FEDERAL STATUTES AUTHORIZING THE AWARD OF

ATTORNEY’S FEES AS COSTS, IN ADDITION TO

THOSE PREVIOUSLY LISTED IN APPENDIX A.

ACT TO PREVENT POLLUTION FROM SHIPS, 33 U.S.C.

§ 1910(d)

The court, in issuing any final order in any action brought

pursuant to this section, may award costs of litigation (in-

cluding reasonable attorney and expert witness fees) to any

party including the Federal Government.

enacted Oct. 21, 1980; no amendments

AGRICULTURAL UNFAIR TRADE PRACTICES,

7 U.S.C. § 2305

In any action commenced pursuant hereto, the court, in its

discretion, may allow the prevailing party a reasonable at-

torney’s fee as part of the costs.

enacted April 16, 1968; no amendments

BANK HOLDING COMPANY ACT, 12 U.S.C. § 1975

Any person who is injured in his business or property by

reason of anything forbidden in... this title... shall be en-

titled to recover three times the amount of the damages

sustained by him, and the cost of suit, including a reasonable

attorney’s fee.

enacted Dec. 3, 1970; no amendments

CIVIL RIGHTS ACT OF 1964, TITLE II, 42 U.S.C.

§ 2000a-3( b)

In any action commenced pursuant to this subchapter, the

court, in its discretion, may allow the prevailing party, other

B-2

tham the United States, a reasonable attorney’s fee as part of the

costs, and the United States shall be liable for costs the same as

a private person.

enacted July 2, 1964; no amendments

CIVIL RIGHTS ACT OF 1964, TITLE VII, 42 U.S.C.

§ 2000e-5( k)

In any action or proceeding under this subschapter the

court, in its 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 shall be iiable for costs the same as a private

person.

enacted July 2, 1964; no amendments

CIVIL RIGHTS ATTORNEY'S FEES AWARDS ACT of

1976, 42 U.S.C. § 1988

In any action or proceeding to enforce a provision of

sections 1981, 1982, 1983, 1985, and 1986 of this title, title IX

of Public Law 92-318 [20 U.S.C. 1681 et seq.], or title VI, the

Civil Rights Act of 1964 [42 U.S.C. 2000d et seq. ], the court, in

its discretion, may allow the prevailing party, other than the

United States, a reasonable attorney’s fee as part of the costs.

enacted Oct. Oct. 19, 1976; amended Oct. 21, 1980, deleting

reference to Internal Revenue Code.

CLEAN AIR ACT, 42 U.S.C. § 7413(b)

In the case of any action brought by the Administrator

under this subsection, the court may award costs of litigation

(including reasonable attorney and expert witness fees) to the

party or parties against whom such action was brought in any

case where the court finds that such action was unreasonable.

enacted July 14, 1955; no amendments

B-3

CLEAN AIR ACT, 42 U.S.C. § 7604(d)

The court, in issuing any final order in any action brought

pursuant to subsection (a) of this section, may award costs of

litigation (including reasonable attorneys and expert witness

fees) to any party, whenever the court determines such award is

appropriate.

enacted July 14, 1955; no amendments.

CLEAR AIR ACT, 42 U.S.C. § 7607(f)

In any judicial proceeding under this section, the court may

award costs of litigation (including reasonable attorney and

expert witness fees) whenever it determines that such award is

appropriate.

enacted July 14, 1955; no amendments.

CLEAN AIR ACT, 42 USS.C. § 7622(b)(2)(B)

If an order is issued under this paragraph, the Secretary, at

the request of the complainant, shall assess against the person

against whom the order is issued a sum equal to the aggregate

amount of all costs and expenses (including attorneys’ and

expert witness fees) reasonably incurred, as determined by the

Secretary, by the complainant for, or in connection with, the

bringing of the complaint upon which the order was issued.

enacted July 14, 1955; no amendments.

CLEAN AIR ACT AMENDMENT OF 1970, 42 U.S.C.

§ 1857h-2(d)

The court, in issuing any final order in any action brought

pursuant to subsection (a) of this section, may award costs of

litigation (including reasonable attorney and expert witness

fees) to any party, whenever the court determines such award is

appropriate.

enacted July 14, 1955, as added in Dec. 31, 1970.

B-4

CONSUMER PRODUCT SAFETY ACT, 15 U.S.C. § 2060(c)

A court may in the interest of justice include in such relief

an award of the costs of suit, including reasonable attorneys’

fees (determined in accordance with subsection (f) of this

section and reasonable expert witnesses’ fees.

enacted Oct. 27, 1972; amended May 11, 1976 to include award

of attorneys’ fees.

CONSUMER PRODUCT SAFETY ACT, 15 U.S.C.

§ 2072(a), (b)

(a) Any person who shall sustain injury by reason of any

knowing (including willful) violation of a consumer product

safety rule ... may, if the court determines it to be in the

interest of justice, recover the costs of suit, including reasonable

attorneys’ fees (determined in accordance with section 2060( f)

of this title) and reasonable expert witnesses’ fees: Provided,

That the matter in controversy exceeds the sum or value of

$10,000, exclusive of interest and cost, unless such action is

brought against the United States, any agency thereof, or any

officer or employee thereof in his official capacity.

(b) Except when express provision is made in a statute of

the United States, in any case in which the plaintiff is finally

adjudged to be entitled to recover less than the sum or value of

$10,000, computed without regard to any setoff or counterclaim

to which the defendant may be adjudged to be entitled, and

exclusive of interests and costs, the district court may deny costs

to the plaintiff and, in addition, may impose costs on the

plainuff.

enacted Oct. 27, 1972; amended in 1976 and 1980 to include

“interest of justice” and minimum amount in controversy,

respectively.

B-5

CONSUMER PRODUCT SAFETY ACT, 15 U.S.C. § 2073

In any action under this section the court, may in the

interest of justice award the costs of suit, including reasonable

attorneys’ fees (determined in accordance with section 2060( f)

of this title) and reasonable expert witnesses fees.

enacted Oct. 27, 1972; amended in 1976, substituting “interest

of justice” for prevailing party standard.

Except as otherwise provided by this title, the court may

also award a reasonable attorneys’ fee to the prevailing party as

part of the costs.

enacted Oct. 19, 1976; no amendments.

DEEP SEABED HARD MINERAL RESOURCES ACT, 30

U.S.C. § 1427(c)

The court, in issuing any final order in any action brought

under subsection (a) of this section, may award costs of

litigation, including reasonable attorney and expert witness

fees, to any party whenever the court determines that such an

award is appropriate.

enacted June 12, 1980; no amendments.

ENDANGERED SPECIES ACT, 16 U.S.C. § 1540(g)(4)

The court, in issuing any final order in any suit brought

pursuant to paragraph (1) of this subsection, may award costs

of litigation (including reasonable attorney and expert witness

fees) to any party, whenever the court determines such award is

appropriate.

enacted Dec. 28, 1973; no amendments.

B-6

ENERGY POLICY AND CONSERVATION ACT, 42 U.S.C.

§ 6305(d)

The court, in issuing any final order in any action brought

pursuant to subsection (a) of this section, may award costs of

litigation (including reasonable attorney and expert witness

fees) to any party, whenever the court determines such award is

appropriate.

enacted Dec. 22, 1975; no amendments.

ENERGY REORGANIZATION ACT OF 1974, 42 U.S.C.

§ 5851(e)2

The court, in issuing any final order under this subsection,

may award costs of litigation (including reasonable attorney

and expert witness fees) to any party whenever the court

determines such award is appropriate.

enacted Nov. 6, 1978; no amendments.

ETHICS IN GOVERNMENT ACT OF 1978, 2 U.S.C.

§ 288i(d)

The Senate may by resolution authorize the reimbursement

of any Member, officer, or employee of the Senate who is not

represented by the Counsel for fees and costs, including at-

torneys’ fees, reasonably incurred in obtaining representation.

enacted Oct. 26, 1978, no amendments.

FEDERAL MINE SAFETY AND HEALTH ACT, 30 U.S.C.

§ 815(c)(3)

Whenever an order is issued sustaining the complainant’s

charges under this subsection, a sum equal to the aggregate

amount of all costs and expenses (including attorney’s fees) as

determined by the Commission to have been reasonably in-

curred by the miner, applicant for employment or representa-

tive of miners for, or in connection with, the institution and

B-7

prosecution of such proceedings shall be assessed against the

person committing such violation.

enacted Dec. 30, 1969; no amendments.

FEDERAL MINE SAFETY AND HEALTH ACT, 30 U.S.C.

§ 938(c)

Whenever an order is issued under this subsection granting

relief to a miner at the request of such miner, a sum equal to the

aggregate amount of all costs and expenses (including the

attorney’s fees) as determined by the Secretary to have been

reasonably incurred by such miner for, or in connection with,

the institution and prosecution of such proceedings, shall be

assessed against the person committing the violation.

enacted Dec. 30, 1976, as added May 19, 1972

FEDERAL WATER POLLUTION CONTROL ACT

AMENDMENTS OF 1972, 33 U.S.C. § 1365(d)

The court, in issuing any final order in any action brought

pursuant to this section, may award costs of litigation (in-

cluding reasonable attorney and expert witness fees) to any

party, whenever the court determines such award is appropri-

ate.

enacted June 30, 1948, as added Oct. 18, 1972.

FOREIGN INTELLIGENCE SURVEILLANCE ACT OF

1978, 50 U.S.C. § 1810(c)

An aggrieved person, other than a foreign power or an

agent of a foreign power, as defined in section 1801(a) or

(b)(1)(A) of this title, respectively, who has been subjected to

an electronic surveillance or about whom information obtained

by electronic surveillance of such person has been disclosed or

used in violation of section 1809 of this title shall have a cause

of action against any person who committed such violation and

shall be entitled to recover—

B-8

litigation costs reasonably incurred.

enacted Oct. 25, 1978; no amendments.

GOVERNMENT IN THE SUNSHINE ACT, 5 U.S.C.

§ 552b(i)

The court may assess against any party reasonable attorney

fees and other litigation costs reasonably incurred by any other

party who substantially prevails in any action brought in

accordance with the provisions of subsection (g) or (h) of this

section, except that costs may be assessed against the plaintiff

only where the court finds that the suit was initiated by the

plaintiff primarily for frivolous or dilatory purposes.

enacted Sept. 13, 1976; no amendments.

HOBBY PROTECTION ACT, 15 U.S.C. § 2102

In any such action, the court may award the costs of the

suit, including reasonable attorneys’ fees.

enacted Nov. 29, 1973; no amendments.

JEWELERS HALL-MARK ACT, 15 US.C.

§ 298(b), (c), (d)

(b) Any competitor, customer or competitor of a customer

of any person in violation of .. this title, or any subsequent

purchaser of an article of merchandise which has been the

subject of a violation... of this title... shall recover damages

and the cost of suit, including a reasonable attorney’s fee.

ation shall be entitled to injunctive relief restraining any person

in violation ... of this title from further violation ... and if

successful shall recover the cost of suit, including a reasonable

attorney’s fee.

B-9

(d) Any defendant against whom a civil action is brought

under the provisions of... this title shall be entitled to recover

the cost of defending the suit, including a reasonable attorney’s

fee, in the event such action is terminated without a finding by

the court that such defendant is or has been in violation of...

this title.

enacted Nov. 2, 1978; amended Jan. 12, 1983 to award

attorney’s fees under listed conditions.

JURY SYSTEM IMPROVEMENT ACT OF 1978, 28 U.S.C.

§ 1875(d)(2)

In any action or proceeding under this section, the court

may award a prevailing employee who brings such action by

retained counsel a reasonable attorney’s fee as part of the costs.

The court may tax a defendant employer, as costs payable to

the court, the attorney fees and expenses incurred on behalf of a

prevailing employee, where such costs were expended by the

court pursuant to paragraph (1) of this subsection. The court

may award a prevailing employer a reasonable attorney’s fee as

part of the costs only if the court finds that the action is

frivolous, vexatious, or brought in bad faith.

enacted Nov. 2, 1978; amended Jan. 12, 1983 to award

attorney’s fees under listed conditions.

MAGNUSON-MOSS WARRANTY ACT, 15 US.C.

§ 2310(d)2

If a consumer finally prevails in any action brought under

paragraph (1) of this subsection, he may be allowed by the

court to recover as part of the judgment a sum equal to the

aggregate amount of cost and expenses (including attorney's

fees based on actual time expended ) determined by the court to

have been reasonably incurred by the plaintiff for or in

connection with the commencement and prosecution of such

action, unless the court in its discretion shall determine that

such an award of attorneys’ fees would be inappropriate.

enacted Jan. 4, 1975: no amendments.

B-10

MARINE PROTECTION, RESEARCH, AND SANC-

TUARIES ACT, 33 USS.C. § 1415(g)(4)

The court, in issuing any final order in any suit brought

pursuant to paragraph (1) of this subsection may award costs

of litigation (including reasonable attorney and expert witness

fees ) to any party, whenever the court determines such award is

appropriate.

enacted Oct. 23, 1972; no amendments.

NATIONAL HISTORIC PRESERVATIONS ACT, 16 U.S.C.

§ 470w-4

In any civil action brought in any United States district

court by any interested person to enforce the provisions of this

subchapter, if such person substantially prevails in such action,

the court may award attorneys’ fees, expert witness fees, and

other costs of participating in such action, as the court deems

reasonable.

enacted Oct. 15, 1966, as added Dec. 12, 1980.

NOISE CONTROL ACT OF 1972, 42 U.S.C. § 4911(d)

The court, in issuing any final order in any action br »ught

pursuant to subsection (a) of this section, may award costs of

litigation (including reasonable attorney and expert witness

fees) to any party, whenever the court d~termines such an

award is appropriate.

enacted Oct. 27, 1972; no amendments.

OCEAN DUMPING ACT, 33 U.S.C. § 1415(2)(4)

The court, in issuing any final order in any suit brought

pursuant to paragraph (1) of this subsection may award costs

of litigation (including reasonable attorney and expert witness

fees ) to any party, whenever the court determines such award is

appropriate,

enacted Oct. 23, 1972; no amendments.

B-11

ORGANIZED CRIME CONTROL ACT OF 1970, 18 U.S.C.

§ 1964(c)

Any person injured in his business or property by reason of

a violation ... of this chapter may sue therefor in any

appropriate United States district court and shall recover

threefold the damages he sustains and the cost of the suit,

including a reasonable attorney’s fee. |

enacted Oct. 15, 1970; no amendments.

OUTER CONTINENTAL SHELF LANDS ACT, 43 U.S.C.

§ 1349(a)(5)

A court, in issuing any finai order in any action brought

pursuant to subsection (a)(1) or subsection (c) of this section,

may award costs of litigation, including reasonable attorney

and expert witness fees, to any party, whenever such court

determines such award is appropriate.

enacted Aug. 7, 1953, as added Sept. 18, 1978.

POWER PLANT AND INDUSTRIAL FUEL USE ACT OF

1978, 42 U.S.C. § 8435(d)

The court, in issuing any final order in any action brought

under subsection (a) of this section, may award costs of

litigation (including reasonable attorney and expert witness

fees ) to any party, whenever the court determines such award is

appropriate.

enacted Nov. 9, 1978; no amendments.

PRIVACY ACT OF 1974, 5 U.S.C. § 552a(g)(2)(B), (3)(B)

(2)(B) The court may assess against the United States

reasonable attorney fees and other litigation costs reasonably

incurred in any case under this paragraph in which the com-

plainant has substantially prevailed.

B-12

(3)(B) The court may assess against the United States

reasonable attorney fees and other litigation costs reasonably

incurred in any case under this paragraph in which the com-

plainant has substantially prevailed.

enacted Dec. 31, 1974; no amendments.

RAILROAD REVITALIZATION AND REFORM ACT, 45

U.S.C. § 854(g)

The United States shall indemnify the Corporation, its

Board of Directors, and its individual directors against all costs

and expenses (including fees of accountants, experts, and

attorneys) actually and reasonably incurred in defending any

litigation testing the legal validity of any security, obligation,

agreement, or transaction, given, issued, or entered into

pursuant to such subsection (e) of this section.

enacted Feb. 5, 1976; no amendments.

REAL ESTATE SETTLEMENT PROCEDURES ACT, 12

U.S.C. § 2607(d)

In any successful action to enforce the liability under this

paragraph, the court may award the court costs of the action

together with a reasonable attorney’s fee as determined by the

court.

enacted Dec. 22, 1974; no amendments.

REHABILITATION ACT OF 1973, 29 U.S.C. § 794a(b)

In any action or proceeding to enforce or charge a violation

of a provision of this subchapter, the court, in its discretion, may

allow the prevailing party, other than the United States, a

reasonable attorney’s fee as part of the costs.

enacted Sept. 26, 1973, as added Nov. 6, 1978.

B-13

SAFE DRINKING WATER ACT, 42 U.S.C. § 300j-8(d)

The court, in issuing any final order in any action brought

under subsection (a) of this section, may award costs of

litigation (including reasonable attorney and expert witness

fees) to any party whenever the court determines such an

award is appropriate.

enacted June 1, 1944; no amendments.

SOLID WASTE DISPOSAL ACT, 42 U.S.C. § 6971(c)

such violation, at the request of the applicant, a sum equal to

the aggregate amount of all costs and expenses (including the

attorney’s fees) as determined by the Secretary of Labor, to

have been reasonably incurred by the applicant for, or in

connection with, the institution and prosecution of such pro-

ceedings, shall be assessed against the person committing such

violation.

enacted Oct. 21, 1976; no amendments.

SOLID WASTE DISPOSAL ACT, 42 U.S.C. § 6972(e)

(e) The court, in issuing any final order in any action

brought pursuant to this section, may award costs of litigation

(including reasonable attorney and expert witness fees) to any

party, whenever the court determines such an award is appro-

priate. |

enacted Oct. 21, 1976; amended Nov. 8, 1978 to include award

of attorney’s fees.

SURFACE MINING CONTROL AND RECLAMATION

ACT, 30 U.S.C. § 1270(d)

The court, in issuing any final order in any action brought

pursuant to subsection (a) of this section, may award costs of

B-14

litigation, (including attorney and expert witness fees) to any

party, whenever the court determines such award is appropri-

ate.

enacted Aug. 3, 1977; no amendments.

SURFACE MINING CONTROL AND RECLAMATION

ACT, 30 U.S.C. § 1275(e)

Whenever an order is issued under this section, or as a

result of any administrative proceeding under this chapter, at

the request of any person, a sum equal to the aggregate amount

of all costs and expenses (including attorney fees) as deter-

mined by the Secretary to have been reasonably incurred by

such person for or in connection with his participation in such

proceedings, including any judicial review or the Secretary,

resulting from administrative proceedings, deems proper.

enacted Aug. 3, 1977; no amendments.

SURFACE MINING CONTROL AND RECLAMATION

ACT, 30 U.S.C. § 1293(c)

Whenever an order is issued under this section to abate

any violation, at the request of the applicant a sum equal to the

aggregate amount of all costs and expenses (including at-

torneys’ fees) to have been reasonably incurred by the appli-

cant for, or in connection with, the institution and prosecution

of such proceedings, shall be assessed against the persons

committing the violation.

enacted Aug. 3, 1977; no amendments.

TOXIC SUBSTANCE CONTROL ACT, 15 US.C.

§ 2605(c)(4)(A)

The Administrator may, pursuant to rules prescribed by

the Administrator, provide compensation for reasonable at-

torneys’ fees, expert witness fees, and other costs of participat-

ing in a rulemaking proceeding for the promulgation of a rule

under subsection (a) of this section ....

enacted Oct. 11, 1976; no amendments.

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TOXIC SUBSTANCE CONTROL ACT, 15 USC.

§ 2622(b)(2)(B)

If such an order issued, the Secretary, at the request of the

complainant, shall assess against the person against whom the

order is issued a sum equal to the aggregate amount of all costs

and expenses (including attorneys’ fees) reasonably incurred,

as determined by the Secretary by the complainant for, or in

connection with, the bringing of the complaint upon which the

order was issued.

enacted Oct. 11, 1976; no amendments.

VOTING RIGHTS ACT AMENDMENTS OF 1975, 42 U.S.C.

§ 19731(c)

In any action or proceeding to enforce the voting guaran-

tees of the fourteenth or fifteenth amendment the court, in its

discretion, may allow the prevailing party, other than the

United States, a reasonabie attorney’s fee as part of the costs.

enacted Aug. 6, 1965; amended Aug. 6, 1975 to include award

of attorney’s fees.

WATER POLLUTION PREVENTION AND CONTROL

ACT, 33 U.S.C. § 1365(d)

The court, in issuing any final order in any action brought

pursuant to this section, may award costs of litigation (in-

cluding reasonable attorney and expert witness fees) to any

party, whenever the court determines such award is appropri-

ate.

enacted June 30, 1948, as added Oct. 18, 1972.

WATER POLLUTION PREVENTION AND CONTROL

ACT, 33 U.S.C. § 1367

Whenever an order is issued under this section to abate

such violation, at the request of the applicant, a sum equal to

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the aggregate amount of all costs and expenses (including the

attorney’s fees) as determined by the Secretary of Labor, to

have been reasonably incurred by the applicant for, or in

connection with, the institution and prosecution of such pro-

ceedings, shall be assessed against the person committing such

violation.

enacted June 30, 1948, as added Oct. 18, 1972.

WIRE INTERCEPTION ACT, 18 U.S.C. § 2520

Any person whose wire or oral communication is inter-

cepted, ... shall (1) have a civil cause of action against any

person who intercepts, ... and (2) be entitled to recover from

any such person—

reasonably incurred.

enacted June 19, 1968; no amendments.

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.