Marek v. Chesny

Supreme Court of the United States
105 S. Ct. 3012, 87 L. Ed. 2d 1, 1985 U.S. LEXIS 81 (1985)

ELI5:

Rule of Law:

When an underlying statute defines attorney's fees as an element of 'costs,' those fees are subject to the cost-shifting provision of Federal Rule of Civil Procedure 68, which cuts off a plaintiff's right to recover post-offer costs if they reject a settlement offer and then win a less favorable judgment at trial.

Facts:

Police officers, including Marek, responded to a domestic disturbance call and shot and killed Jeff Allen Chesny's adult son.
Chesny, on behalf of himself and his son's estate, brought a lawsuit against the officers under 42 U.S.C. § 1983 and state tort law.
Before trial, the officers made a formal settlement offer of $100,000, which specified that this sum included costs and attorney's fees accrued up to that point.
Chesny did not accept the offer.
The case proceeded to trial, and a jury awarded Chesny a total of $60,000 in damages.

Procedural Posture:

Chesny sued Marek and other police officers in the United States District Court for the Northern District of Illinois (a federal trial court).
Following a jury trial, Chesny was awarded $60,000 in damages.
Chesny filed a motion seeking to recover his costs and attorney's fees, including over $139,000 for fees incurred after the defendants' settlement offer.
The District Court denied the request for post-offer fees, agreeing with the defendants that Federal Rule of Civil Procedure 68 barred their recovery.
Chesny, as appellant, appealed the denial of post-offer fees to the United States Court of Appeals for the Seventh Circuit.
The Court of Appeals reversed the District Court's decision, holding that Rule 68 did not apply to attorney's fees in civil rights cases.
The officers, as petitioners, sought and were granted a writ of certiorari by the U.S. Supreme Court.

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Issue:

Does Federal Rule of Civil Procedure 68, which shifts post-offer 'costs' to a plaintiff who rejects a settlement offer and then recovers a less favorable judgment, apply to attorney's fees awarded under 42 U.S.C. § 1988, a statute that defines such fees 'as part of the costs'?

Opinions:

Majority - Chief Justice Burger

Yes, Federal Rule of Civil Procedure 68 applies to attorney's fees awardable under 42 U.S.C. § 1988. The court reasoned that Rule 68 does not define the term 'costs' itself; rather, it incorporates the definition of costs provided by the underlying substantive statute. Since § 1988 explicitly states that a prevailing party may be awarded attorney’s fees 'as part of the costs,' such fees are therefore subject to Rule 68’s cost-shifting provision. This 'plain meaning' interpretation serves the Rule's purpose of encouraging settlement without frustrating the policy of § 1988, which is to ensure plaintiffs have effective access to the courts. The court also held that a lump-sum offer that includes both damages and costs is a valid offer under Rule 68.

Dissenting - Justice Brennan

No, Federal Rule of Civil Procedure 68 should not apply to attorney's fees awarded under 42 U.S.C. § 1988. The dissent argued that the term 'costs' as used throughout the Federal Rules of Civil Procedure should have a uniform and consistent meaning, limited to the traditional taxable court costs defined in 28 U.S.C. § 1920. The majority’s interpretation creates an absurd and inconsistent 'patchwork' where the application of Rule 68 depends on minor linguistic variations in over 100 different fee-shifting statutes. This approach undermines the purpose of civil rights legislation by pressuring plaintiffs to accept 'low-ball' settlement offers early in litigation and violates the Rules Enabling Act by using a procedural rule to abridge a substantive right to reasonable attorney's fees.

Concurring - Justice Powell

Yes. While Justice Powell had previously expressed the view that a Rule 68 offer should separately itemize the substantive relief and the costs, he joined the majority opinion to establish a clear and definitive interpretation of the rule. He emphasized that the public has an overriding interest in encouraging settlement, and the Court's clear rule serves that purpose.

Concurring - Justice Rehnquist

Yes. Justice Rehnquist stated that he had previously argued in a dissent in a prior case that 'costs' in Rule 68 did not include attorney's fees. However, upon further examination, he was now convinced that his earlier view was wrong and therefore joined the majority opinion.

Analysis:

This decision significantly bolsters the strategic importance of Rule 68 offers of judgment, particularly in civil rights litigation and other areas with fee-shifting statutes. By including statutory attorney's fees within the scope of 'costs' for Rule 68 purposes, the Court created a powerful incentive for plaintiffs to seriously consider settlement offers. The ruling forces plaintiffs and their counsel to weigh the certainty of a settlement against the risk of winning a smaller judgment and thereby forfeiting potentially substantial post-offer attorney's fees. This may also create a conflict of interest between attorneys who have an incentive to continue litigation to earn fees and clients for whom accepting an offer might be the most financially prudent course.

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