Court Opinion

ID: 6980324
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:18:29.651247+00
Date Added: 2024-06-11T16:09:09.970557
License: Public Domain

FLAUM, Circuit Judge,
dissenting in part.
I join in all but one part of the Judge Cudahy’s well reasoned opinion. Rule 68 allows a defendant to recover all costs incurred after a plaintiff rejects its settlement offer provided that “the judgment finally obtained by the [plaintiff is] not more favorable than the offer.” This rule is designed to discourage wasteful litigation by forcing plaintiffs to soberly assess the value of their claims when a defendant makes a. reasonable offer on the eve of trial. Marek v. Chesny, 473 U.S. 1, 5, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985). When a pre-trial offer is refused and the trial fails to produce a judgment more favorable to the plaintiff, all litigation subsequent to that rejected offer, and all costs associated with it, have produced no meaningful benefit. This is because both parties are left in a worse position than they would have been had the plaintiff accepted the offer. Id. at 11, 105 S.Ct. 3012. The rale seeks to hold responsible those parties who incur this expense by not realistically assessing the merits of their claims. Here, the plaintiffs rejected Dobbs House’s reasonable, good faith offer, and the judgment they finally obtained was clearly less favorable than the offer had been. Thus, because the award of costs in this case is fully consistent with the purpose of Rule 68,1 respectfully dissent from this part of the panel’s decision.
Prior to trial, Dobbs House made a lump sum offer of judgment for $10,000 to the attorney representing all three plaintiffs. After trial, the plaintiffs were awarded a total of only $6,500. However, the panel is now denying the defendant the mandatory operation of Rule 68 because Dobbs House had not apportioned the offer among the three plaintiffs. I find nothing in the language or Rule 68, nor in the ease law interpreting it, which compels this result. Id. at *10796-7,105 S.Ct. 3012. While a defendant must come forward with a clear offer under Rule 68, the question of who bears the burden of apportioning a lump sum offer is open. The policy goals underlying the rule suggest that the party best able to apportion it accurately should be required to do so. Dobbs House’s single act of negligence was alleged to have caused the plaintiffs’ injuries. No one was in a better position to assess the relative extent of the individual injuries than the plaintiffs themselves and they were capable of accurately dividing the offer. This is exactly what they had done with the earlier lump sum offer of $105,000 from Westinghouse. If a satisfactory agreement could not be reached among the plaintiffs, they could then have requested individual settlements -with the defendant. They never made such a request. I suggest that requiring that individual settlement offers must in all cases originate from the defendant puts form over substance. The panel’s decision relieves the parties best able to assess the relative degree of their own injuries from the responsibility to do so in the first instance. Instead it forces defendants to guess at how plaintiffs might divide a given settlement amount. Future plaintiffs can avoid Rule 68’s cost shifting provision, and the sober assessment that it entails, by simply remaining silent anytime there is a lump sum offer.
I am also not convinced that, in a matter such as the one before us, an unapportioned offer makes it impossible to determine if that offer is more favorable than the final judgment. I read nothing in the statute which precludes comparing a lump sum offer with the sum of the judgments finally received where plaintiffs are represented by the-same attorney and complain of similar injuries resulting from the defendant’s undifferentiated act of negligence. In this ease, Dobbs House offered $10,000 while Gavoni was awarded $2000, Rosedale $2000 and Jordan $2500. Because $10,000 is greater than $6,500, the sum of the plaintiffs’ judgments, they should be required to pay the defendant’s costs. Moreover, even if individual comparisons are required, the plaintiffs have provided an appropriate benchmark. After rejecting Dobbs House’s offer, plaintiffs requested $825,000 in damages. Of this amount, Gavoni sought 28%, Rosendale 38% and Jordan 33%. We should assume that these percentages represented the plaintiffs’ most accurate assessment of the relative merits of their different injury claims at the time of trial. I see nothing improper in holding the plaintiffs to the proportions of their own requests. Using these percentages, and applying them to the $10,000 Dobbs House offered, it is clear that each plaintiffs judgment was less favorable than their portion of the offer had been.1
Finally, I am not persuaded by the panel’s warning that applying Rule 68 in cases like this would increase derivative litigation over how much of the costs each plaintiff should bear. This is essentially a situation created by the plaintiffs’ decision to be represented by the same attorney. To the extent it imposes a burden on the plaintiffs by requiring them to be clear among themselves before accepting or rejecting an offer, this is certainly part of the responsibility they assumed by choosing to proceed together. The plaintiffs did not reject Dobbs House’s offer because they could not figure out how to divide the lump sum among themselves. They rejected it because they thought they could do better before a jury. The plaintiffs’ assessment proved to be incorrect and Dobbs House should not now be required to pay for their miscalculation.

. Application of the requested percentages to Dobbs House’s $10,000 offer, and a comparison of the result with each plaintiff's trial judgment, breaks down as follows: Gavoni: .28 x $10,000 = $2,800 > $2,000. Rosendale: .38 x $10,000 = $3,800 > $2,000. Jordan: .33 x $10,000 = $3,300 > $2,500.