Marek v. Chesny
Headline: Court ruled that settlement offers can prevent plaintiffs from recovering attorney’s fees incurred after rejecting an offer when the fee law treats fees as ‘costs,’ giving defendants stronger leverage to settle.
Holding: The Court held that when a statute expressly allows attorney’s fees “as part of the costs,” a Rule 68 offer that exceeds the plaintiff’s later judgment bars recovery of attorney’s fees incurred after the offer.
- Makes settlement offers more powerful leverage for defendants.
- Stops plaintiffs from recovering postoffer attorney’s fees if offer exceeds judgment.
- Requires plaintiffs and attorneys to weigh offers carefully before rejecting them.
Summary
Background
A man sued three police officers after they shot and killed his adult son. He sued under the federal civil-rights law (42 U.S.C. §1983) and state tort law. Before trial, the officers offered to settle for $100,000 “including costs now accrued and attorney’s fees.” The man rejected the offer and went to trial. The jury awarded small money recoveries and the courts later agreed that $32,000 represented preoffer costs; the plaintiff sought about $171,692 in costs including fees incurred after the offer.
Reasoning
The central question was whether the Rule that shifts post-offer costs to a losing plaintiff (Federal Rule of Civil Procedure 68) includes attorney’s fees when Congress has authorized fees “as part of the costs” in a statute. The Court held that a lump-sum offer that does not exclude costs is valid and that Rule 68’s word “costs” includes attorney’s fees when the underlying law (here, §1988) expressly makes fees part of costs. The Court emphasized Rule 68’s goal of encouraging settlements and concluded applying the Rule to §1988 is consistent with the statute’s objectives and fee reasonableness rules.
Real world impact
As a result, plaintiffs in civil-rights suits who reject a settlement offer higher than their later judgment can lose the right to recover attorney’s fees for work done after the offer. Defendants may gain more leverage to make lump-sum offers. The ruling requires plaintiffs and their lawyers to weigh offers knowing postoffer fees may be unrecoverable.
Dissents or concurrances
Several Justices concurred with the holding but criticized formality. A vigorous dissent argued the decision creates unfair and inconsistent results across fee laws, undermines Congress’s fee-reasonableness standards, and that Congress or the rules committee — not the Court — should change Rule 68.
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