Court Opinion

ID: 9007126
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:40:57.125587+00
Date Added: 2024-06-11T17:11:19.465347
License: Public Domain

LUTTIG, Circuit Judge,
dissenting:
A defendant’s “offer to allow judgment ... with costs then accrued” must be compared with the “judgment finally obtained” by the plaintiff to determine under Fed. R.Civ.P. 68 whether the plaintiff must bear his post-offer costs. The majority holds that, for purposes of this comparison, the “judgment finally obtained” is not the amount that the jury or trial court awarded on the substantive cause of action, but rather the sum of this amount and the amount of pre-offer costs awarded to the plaintiff by the trial court. This holding contradicts the text of Rule 68, in which the phrase “judgment finally obtained” clearly relates only to the judgment on the plaintiff’s substantive claim. It will frustrate the purpose of the Rule by inflating, for reasons unrelated to the merits of claims, the amount at which plaintiffs will be willing to settle disputes, thereby reducing the number of settlements that will be obtained under the Rule. And it conflicts not only with the prevailing practice in the federal courts, but also with the only decision in this Circuit that has considered the question. See Spencer v. General Elec. Co., 894 F.2d 651 (4th Cir.1990). I would hold that the “judgment finally obtained” refers only to the award on the underlying cause of action, exclusive of any costs or fees ordered by the trial court, and therefore I dissent.
I.
The majority’s interpretation of Rule 68 is supported by neither the text nor the purposes of the Rule, nor the prevailing practice of other federal courts, nor the cases cited by the majority.
A.
Under Rule 68, a defendant may serve upon the plaintiff “an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued.”1 It is evident from this language that the offer to allow judgment relates only to the plaintiff’s substantive claim. The Rule contemplates, in other words, that the defendant will offer (1) to allow judgment to be entered on the substantive claim for the amount specified in *695the offer, and (2) an amount in payment of costs then accrued.2
That the drafters understood the defendant’s “offer to allow judgment” as exclusive of costs—an understanding that comports with common practice3—is clear from the structure and text of the Rule. The first portion of the first sentence of the Rule provides in relevant part that a defendant may serve upon the plaintiff “an offer to allow judgment ... for the money or property or to the effect specified in the offer.” This language is then followed by a comma, after which appears the prepositional phrase, “with costs then accrued.”
The fact that the phrase “with costs then accrued” is set off by a comma from the phrase “an offer to allow judgment ... for the money or property or to the effect specified in the offer,” and that the preposition “with” is used instead of the preposition “for,” confirms that the drafters viewed the “offer to allow judgment for the money or property specified in the offer” both as distinct from the offer as to costs and as related solely to the plaintiff’s substantive claim. Had the drafters intended, as the majority holds, that the offer to allow judgment refer to both the substantive claim and the accrued costs, they would have had no need to include the prepositional phrase “with costs then accrued”; the accrued costs would be subsumed as a portion of the “money ... specified in the offer.” Even if they had wished to provide explicitly that the defendant’s offer of judgment would be as to costs as well, they would not have drafted the Rule as they did. They would have written the Rule so as to permit the defendant to “offer to allow judgment ... for the money or property or to the effect specified in the offer and for costs then accrued.”
If there were any question that the drafters meant for the offer of judgment to relate only to the substantive claim, it was answered by the Supreme Court in Marek v. Chesny. In Marek, the Court held that the offer to allow judgment on the substantive claim is distinct from an offer as to costs, and that, indeed, the offer of judgment need not include or otherwise make any reference to costs:
[I]t is immaterial whether the offer recites that costs are included, whether it specifies the amount the defendant is allowing for costs, or, for that matter, whether it refers to costs at all. As long as the offer does not implicitly or explicitly provide that the judgment not include costs, a timely offer will be valid.
473 U.S. at 6, 105 S.Ct. at 3015.4 If the “offer to allow judgment” referred to costs *696as well as to the substantive claim, then by-force of the Rule the defendant’s offer of judgment would have to include a specific amount for costs.
It follows from the fact that the “judgment” the defendant “offers to allow” relates only to the substantive claim, that the “judgment” the plaintiff “finally obtains” also relates only to the underlying substantive claim. It is axiomatic that the same term should be given the same meaning wherever it appears in the same provision, absent evidence of a contrary intention.
B.
Apart from its conflict with the text, the majority’s interpretation will frustrate the purpose of the Rule. “The plain purpose of Rule 68 is to encourage settlement and avoid litigation.” Marek, 473 U.S. at 5, 105 S.Ct. at 3014; see also Advisory Committee Note on Rules of Civil Procedure, Report of Proposed Amendments, 5 F.R.D. 339, 482-83 (1946) (addition of various provisions, including language “judgment finally obtained,” “should serve to encourage settlements and avoid protracted litigation”). The majority’s interpretation will decrease plaintiffs’ incentive to settle (although their likelihood of success on the merits will be no greater) by increasing substantially the likelihood that their “judgments finally obtained” will be more favorable than defendants’ offers. In this case, for example, the plaintiff Marryshow obviously would have had less incentive to settle if he thought that he needed only to win more than $8,000 in damages—the amount of the defendant’s offer, less pre-offer costs incurred—than he would have had if he thought that he needed to win more than $20,000.
By the same token, by inflating—for reasons unrelated to the merits of claims—the amount at which plaintiffs will be willing to settle disputes, the majority’s interpretation will also reduce the number of settlements that will be offered by defendants. Some defendants will be financially unable to make an offer at the higher amounts required. Still others, even if able to do so, will simply refuse to pay the higher sums and instead take their chances on prevailing at trial. Thus, contrary to the Supreme Court's instruction that the Rule be construed so as to further its purpose of encouraging settlements, see Marek, 473 U.S. at 6, 105 S.Ct. at 3015 (“This construction of the Rule best furthers the objective of the Rule, which is to encourage settlements.”); Delta Air Lines, Inc. v. August, 450 U.S. 346, 352, 101 S.Ct. 1146, 1150, 67 L.Ed.2d 287 (1981) (“Our interpretation of the Rule is consistent with its purpose. The purpose of Rule 68 is to encourage the settlement of litigation.”), the majority has construed the Rule in a manner that in fact will decrease the settlement incentives of both parties.
C.
The majority’s interpretation of the term “judgment finally obtained” to include preoffer attorney’s fees is also inconsistent with the interpretation of the Rule followed by this court in the recent case of Spencer v. General Elec. Co., 894 F.2d 651 (4th Cir.1990), a case not cited by the majority. There, the defendants made a Rule 68 settlement offer of $10,000 plus attorneys’ fees, job-related relief, and an injunction. The plaintiff rejected the offer, prevailed at trial, but received only nominal damages of one dollar. After trial, the district court awarded the plaintiff pre-offer fees of $52,-179, local counsel fees of $2,252.20, and expenses of $2,278.20, but denied her request for post-offer fees on the ground that the defendant’s offer of judgment was more favorable than the judgment that she finally obtained at trial.
We affirmed, reasoning contrary to the majority today, that “[t]he judgment [the *697plaintiff] finally obtained was for one dollar.” Id. at 664. In determining whether the judgment finally obtained exceeded the defendant’s offer, we did not, as the majority’s opinion would require, include in the judgment finally obtained by the plaintiff the $56,709.40 in pre-offer costs awarded by the district court. We observed, in language apparently directed to a different aspect of the plaintiff’s relief than costs but equally applicable to costs, that “common sense informs that often the relief a plaintiff obtains from a lawsuit is quite different from the judgment obtained from a lawsuit.” Id. at 663.
Finally, the majority’s interpretation is at odds with the interpretation employed in practice in the vast majority of federal courts outside our Circuit. See Cox v. Brookshire Grocery Co., 919 F.2d 354 (5th Cir.1990) (per curiam) ($1,698.30 offer compared with $1,181 "judgment ultimately rendered"; $9,250 in fees not included in comparison); Zackaroff v. Koch Transfer Co., 862 F.2d 1263, 1264 (6th Cir.1988) ($250,000 offer compared with $170,700 in damages; $10,926.49 in pre-offer costs not included in comparison: "The Rule 68 offer of judgment made by defendants exceeded the amount ultimately awarded to plaintiff by the jury."); Bright v. Land O’Lakes, Inc., 844 F.2d 436 (7th Cir.1988) ($225,000 offer compared with both $250,000 in damages or $226,608.91 — plaintiff’s damages minus defendant’s damages from counterclaim; pre-offer fees and costs awarded but not included in comparison); Crossman v. Marcoccio, 806 F.2d 329 (1st Cir.1986) ($26,000 offer compared with $5,010 in damages; $503.40 in pre-offer costs, see 108 F.R.D. 433, not included in comparison), cert. denied, 481 U.S. 1029, 107 S.Ct. 1955, 95 L.Ed.2d 527 (1987); Real v. Continental Group, Inc., 653 F.Supp. 736 (N.D.Cal.1987) ($42,000 offer compared with $50,000 in damages; $202,140.53 in fees and costs not included in comparison); Stewart v. County of Sonoma, 634 F.Supp. 773 (N.D.Cal.1986) ($200,000 offer compared with $84,600 in damages; $154,440.15 in pre-offer fees and costs not included in comparison); Quintel Corp., N.V. v. Citibank, N.A., 606 F.Supp. 898 (S.D.N.Y.1985) (offer of $17,500 compared with $17,500 in damages; pre-offer costs not included in comparison); Waters v. Heublein, Inc., 485 F.Supp. 110 (N.D.Cal. 1979) ($10,000 offer compared with $6,449 in damages and interest; $12,389.22 in pre-offer fees and costs not included in comparison); cf. Hopper v. Euclid Manor Nursing Home, Inc., 867 F.2d 291, 295 (6th Cir.1989) (comparing $750 offer with $100 in damages and warning: "Plaintiffs will evaluate the offer differently knowing that the trial judge can tailor the results of the trial to avoid the imposition of costs if the judge so desires."); Johnson v. Penrod Drilling Co., 803 F.2d 867, 870 (5th Cir. 1986) ("Rule 68 is a mandatory rule designed to operate automatically by a comparison of two clearly defined figures." (emphasis added)).
D.
The majority cites two cases, Marek and Grosvenor v. Brienen, 801 F.2d 944 (7th Cir.1986), in support of its conclusion that logic and consistency with the Rule dictate that “like ‘judgments’ must be evaluated.” Ante at 692. Marek does not support the majority’s holding, and this Circuit has explicitly rejected the reasoning on which Grosvenor was premised.
The majority reasons that Marek supports its interpretation of the Rule because it assumes that the Supreme Court in Marek included pre-offer costs in the Rule 68 comparison. See id. at 692. Marek, however, did not address and had no reason to address the question of whether pre-offer costs should be included for purposes of comparing the defendant’s offer with the judgment finally obtained by the plaintiff, because in that case the “judgment finally obtained” was less favorable than the offer, even with pre-offer costs included.5 *698Marek addressed only whether to include post -offer costs in the comparison, a question that it answered in the negative. See 473 U.S. at 7, 105 S.Ct. at 3015.
The only other case relied upon by the majority is Grosvenor. The Seventh Circuit in Grosvenor, however, did not even purport to undertake a principled analysis of the Rule; it candidly rested its decision entirely on a policy determination that the Rule would have a detrimental effect on the “substantive policies of § 1988 [the civil rights fee-shifting statute], if pre-offer fees were not included in the comparative calculus.” 801 F.2d at 946.6 This court categorically rejected in Spencer the suggestion, accepted in Grosvenor, that “Rule 68 should be given an expansive interpretation to effectuate the strong public policies behind Title VII.” 894 F.2d at 664. We explained there that
Rule 68 is a rule of procedure, not substance. Its purpose is to provide an efficient and neutral means to settle litigation, irrespective of the nature of the underlying disputes. As the Supreme Court noted in Chesny, Rule 68 does not, and was not intended to, favor either plaintiffs or defendants in civil rights litigation. And as the Court recently made clear in Martin v. Wilks [490 U.S. 755, 109 S.Ct. 2180, 104 L.Ed.2d 835 (1989)], the Rules of Civil Procedure must not be warped to conform to the demands of Title VII litigation.
Id. (citations omitted); see also Marek, 473 U.S. at 10, 105 S.Ct. at 3017 (“There is no evidence ... that Congress, in considering § 1988, had any thought that civil rights claims were to be on any different footing from other civil claims insofar as settlement is concerned.”).7 Neither Marek nor Grosvenor, therefore, can be summoned in support of the majority’s interpretation.
E.
The defendants’ Rule 68 offer in settlement of the plaintiff’s claim in this ease was $20,000. The jury returned a verdict against the defendants for $14,500, and the magistrate judge rendered judgment on this amount. Because in my view $14,500 represents the “judgment finally obtained” by the plaintiff, I believe that the defendants’ offer was more favorable than the judgment obtained by the plaintiff. I would therefore hold that Rule 68 bars the plaintiff from recovering his post-offer costs.
II.
Rule 68 does not address whether Marryshow is entitled to recover his pre-offer costs. As a “prevailing party,” he may recover these costs under the relevant fee-shifting statute, 42 U.S.C. § 1988, if he complied with Local Rule 109 of the District of Maryland. The majority holds that, although Marryshow did not comply with the Local Rule, he is nonetheless entitled to recover his pre-offer costs. I disagree with this holding of the court, as well.
There are two petitions at issue, each of which failed for a different reason to comply with Local Rule 109. On January 27, 1992, Marlon Charles (Marryshow’s attorney) filed a petition for fees on his own behalf.8 This petition was invalid because Marryshow’s attorney "has no personal *699right to an award of statutory attorney’s fees," Soliman v. Ebasco Servs., Inc., 822 F.2d 320, 323 (2d Cir.1987), cert. denied, 484 U.S. 1020, 108 S.Ct. 732, 98 L.Ed.2d 680 (1988); see also Evans v. Jeff D., 475 U.S. 717, 106 S.Ct. 1531, 89 L.Ed.2d 747 (1986) (plaintiff, not his lawyer, is "prevailing party" entitled to seek fees under § 1988). Indeed, this petition, as the trial court recognized, "did not comply in any respect with Local Rule 109.2.b." J.A. at 128 (emphasis added). The petition did not set forth "the nature of the case," "the claims as to which the party prevailed," "the claims as to which the party did not prevail," "the attorney’s customary fee for such like work," "the customary fee for like work prevailing in the attorney’s community," or "any additional factors which are required by the case law." See D.Md.R. 109.2.b. "Any motion requesting the award of attorney’s fees must set forth" these elements. Id.
On February 14, 1992—more than twenty days after the entry of judgment—Marryshow filed a petition of his own, “by and through counsel.” J.A. at 110. This petition, however, was untimely, for “any motion ... requesting the award of attorney’s fees must be filed within twenty days of the entry of judgment____[and] [n]on-compliance with these time limits shall be deemed a waiver of any claim for attorney’s fees.” D.Md.R. 109.2.a. Marryshow therefore never filed a petition that both complied with Local Rule 109.2.b and was timely under Local Rule 109.2.a. Indeed, there is no dispute that the petition of Marryshow’s attorney was defective under Local Rule 109.2.b or that Marryshow’s own petition was untimely under Local Rule 109.2.a.
Rather than abide by the Local Rule and deny Marryshow pre-offer costs, the majority fashions out of whole cloth a proviso to the Local Rule to the effect that a magistrate (and presumably the district court) in its discretion may grant exceptions to the plain language of the rule “in order to do substantial justice,” ante at 693, and it concludes that the magistrate did not abuse its discretion in allowing the plaintiff to amend its petition. It then holds that “a relation back” of the plaintiff’s untimely amended petition to his attorney’s totally defective petition “must be inferred from its allowance.” Id. at 694. In my view, the court is without authority to fashion the proviso and without record basis for inferring that the magistrate intended for the amendment to relate back to the original filing.
As to the proviso, while the district court has the authority to authorize discretionary departures from the requirements of its rules, the text of Local Rule 109 as it currently exists is without exception, admitting of no discretion. We recently admonished with respect to the very rule at issue in this case: “The district court is clearly authorized to adopt rules for establishing time limits for motions such as this one. Once it chose to adopt rules, the court, like all parties before it, must abide by them.” Ortega v. Geelhaar, 914 F.2d 495, 498 (4th Cir.1990) (per curiam) (vacating award of attorney’s fees because district court “ignored” Local Rule 109.2 by considering untimely motion for those fees); see also Jackson v. Beard, 828 F.2d 1077 (4th Cir.1987) (denying attorney’s fees to § 1983 plaintiff for failure to file timely petition under previous version of Local Rule 109). I see no alternative for this court other than to heed Ortega’s admonition and give effect to the rule as it is written. In fact, I can discern no difference between what the court does in this case and what the district court did and was reversed for doing in Ortega.9
*700As to the court’s inference that the magistrate judge intended a relation back of the amendment to the original filing, there is no record support for such an inference, and the court offers none. Marryshow never argued for a relation back and nothing in the magistrate judge’s opinion remotely suggests that he ordered a relation back of the amendment.10 If anything, it appears from the magistrate’s holding that the amended petition still did not comply with “all the requirements” of the Rule, that he recognized the petition’s untimeliness and mistakenly believed that he had the authority to excuse it.
I would hold, as did the trial court, that Marryshow failed to comply with Local Rule 109 but, unlike that court, that this failure prevents his recovery of pre-offer attorney’s fees under 42 U.S.C. § 1988.
III.
Because I would hold that Marryshow is barred under Rule 68 from recovering his post-offer costs and that he is barred from recovering his pre-offer costs by his failure to comply with Local Rule 109, I would reverse the magistrate judge’s order, and I dissent from the court’s opinion affirming that order.

. The Rule provides in relevant part that:
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 the defending party for the money or property or to the effect specified in the offer, with costs then accrued____ 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.

. Because "the drafters’ concern was not so much with the particular components of offers, but with the judgments to be allowed against the defendants," see Marek v. Chesny, 473 U.S. 1, 6, 105 S.Ct. 3012, 3015, 87 L.Ed.2d 1 (1985), the Rule also permits the defendant to offer to allow judgment on the substantive claim, but to make no reference at all to the costs accrued. If the offer does not recite that costs are included, and an amount for costs is not specified, however, the Rule requires the district court to include in its judgment an amount for costs. Id.

. In this case, for example, the trial court entered an order, entitled “Judgment" stating:
[I]t appearing that there is no just reason for delay in entering final judgment as between plaintiff Derek Marryshow and defendants James Flynn, Matthew Rhomba and Charles Cowling, IT IS, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure
ORDERED AND ADJUDGED that final judgment Be and Is hereby entered in favor of plaintiff Derek Marryshow against defendants James Flynn and Matthew Rhomba in the Sum of Seven Thousand Five Hundred dollars ($7500.00) compensatory damages and against defendant James Flynn in the sum of Five thousand dollars ($5000.00) punitive damages, and defendant Matthew Rhomba in the sum of Two Thousand dollars ($2000.00) punitive damages and in favor of defendant Charles Cowling against Derek Marryshow.
J.A. at 26-27 (emphases added). Five weeks later, the court entered a separate "order” for costs. Id. at 133.

.The Court has adopted a similar construction of the term "judgment” in its decisions construing the Federal Rules of Civil Procedure. See Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202, 108 S.Ct. 1717, 1722, 100 L.Ed.2d 178 (1988) (enunciating "uniform rule that an unresolved issue of attorney’s fees for the litigation in question does not prevent judgment on the merits from being final" (emphases added)); Buchanan v. Stanships, Inc., 485 U.S. 265, 268, 108 S.Ct. 1130, 1132, 99 L.Ed.2d 289 (1988) (noting "sharp distinction between a judgment *696on the merits and an award of costs under Rule 54(d)" and cautioning that “a request for costs raises issues wholly collateral to the judgment in the main cause of action” (emphases added)); White v. New Hampshire Dep't of Employment Sec., 455 U.S. 445, 451-52, 102 S.Ct. 1162, 1166, 71 L.Ed.2d 325 (1982) (describing "request for attorney's fees under § 1988” as "rais[ing] legal issues collateral to the main cause of action" and "[u]nlike other judicial relief ... not compensation for the injury giving rise to the action”).

. In Marek, the offer was for $100,000, damages were $60,000, pre-offer costs were $32,000, and *698post-offer costs were 5139,692.47. See 473 U.S. at 7, 105 S.Ct. at 3015.

. The only other decisions expressly including pre-offer costs in the comparison are O’Brien v. City of Greers Ferry, 873 F.2d 1115 (8th Cir. 1989); Kessler v. Superior Care, Inc., 127 F.R.D. 513 (N.D.Ill.1989); Profitt v. Municipal Auth., 716 F.Supp. 845 (E.D.Pa.1989), aff’d w/o opinion, 897 F.2d 523 (3d Cir.1990); Staples v. Wickesberg, 122 F.R.D. 541 (E.D.Wis.1988); and Lawrence v. City of Phila., 700 F.Supp. 832 (E.D.Pa.1988). All simply follow Grosvenor, with little explanation or independent reasoning.

. Both the majority and the dissent in Marek recognized that the Rule applies to many fee-shifting statutes, covering a variety of substantive legal areas. See Marek, 473 U.S. at 8, 105 S.Ct. at 3016 (listing examples of such statutes); id. at 43, 105 S.Ct. at 3034 (Brennan, J., dissenting) (noting that "Congress has enacted well over 100 fee-shifting statutes").

. Charles did not purport, at the time, to have filed the petition with Marryshow's authorization. See J.A. at 28-32.

. After assuming that the plaintiffs attorney’s timely petition constituted the plaintiff’s "initial" petition, the court goes to some length to emphasize that "if the plaintiffs initial petition [had been] untimely the issue would be different.” Ante at 693. Under the court's rationale, however, the issue should not be any different. There is no apparent reason why a court should have "broad discretion ... to do substantial justice” by allowing an untimely amendment by a proper party to relate back and cure a timely, but otherwise flawed petition, filed by an improper party, but not the discretion to grant a simple extension of the petition filing date.

. Fed.R.Civ.P. 15 permits the relation back of certain pleadings, as the majority notes. See ante at 694. However, there is not even a hint of reliance upon this provision by the magistrate judge.