Page images
PDF
EPUB

1

BRENNAN, J., dissenting

As

The Court argues, however, that its interpretation of Rule 68 "is neutral, favoring neither plaintiffs nor defendants." Ante, at 10. This contention is also plainly wrong. the Judicial Conference Advisory Committee on the Federal Rules of Civil Procedure has noted twice in recent years, Rule 68 "is a 'one-way street,' available only to those defending against claims and not to claimants."43 Interpreting Rule 68 in its current version to include attorney's fees will lead to a number of skewed settlement incentives that squarely conflict with Congress' intent. To discuss but one example, Rule 68 allows an offer to be made any time after the complaint is filed and gives the plaintiff only 10 days to accept or reject. The Court's decision inevitably will encourage defendants who know they have violated the law to make "low-ball" offers immediately after suit is filed and before plaintiffs have been able to obtain the information they are entitled to by way of discovery to assess the strength of their claims and the reasonableness of the offers. The result will put severe pressure on plaintiffs to settle on the basis of inadequate information in order to avoid the risk of bearing all of their fees even if reasonable discovery might reveal that the defendants were subject to far greater liability. Indeed, because Rule 68 offers may be made recurrently without limitation, defendants will be well advised to make ever-slightly larger offers throughout the discovery process and before plaintiffs have conducted all reasonably necessary discovery.

This sort of so-called "incentive" is fundamentally incompatible with Congress' goals. Congress intended for "private citizens... to be able to assert their civil rights" and for "those who violate the Nation's fundamental laws" not to be

v. Finney, 437 U. S. 678, 693–695 (1978); S. Rep. No. 94-1011, at 5; H. R. Rep. No. 94-1558, at 7.

"Advisory Committee's Note to Proposed Amendment to Rule 68, 98 F. R. D. 339, 363 (1983); Advisory Committee's Note to Proposed Amendment to Rule 68, 102 F. R. D. 407, 434 (1984).

BRENNAN, J., dissenting

473 U. S.

able "to proceed with impunity."" Accordingly, civil rights plaintiffs "appear before the court cloaked in a mantle of public interest""; to promote the "vigorous enforcement of modern civil rights legislation," Congress has directed that such "private attorneys general" shall not "be deterred from bringing good faith actions to vindicate the fundamental rights here involved." 45 Yet requiring plaintiffs to make wholly uninformed decisions on settlement offers, at the risk of automatically losing all of their postoffer fees no matter what the circumstances and notwithstanding the "excellent" " results they might achieve after the full picture emerges, will work just such a deterrent effect."

Other difficulties will follow from the Court's decision. For example, if a plaintiff recovers less money than was offered before trial but obtains potentially far-reaching injunctive or declaratory relief, it is altogether unclear how the Court intends judges to go about quantifying the "value" of the plaintiff's success.48 And the Court's decision raises

"S. Rep. No. 94-1011, at 2.

"H. R. Rep. No. 94-1558, at 6; S. Rep. No. 94-1011, at 4-5 (emphasis added). See generally Northcross v. Memphis Board of Education, 412 U. S. 427, 428 (1973) (per curiam); Newman v. Piggie Park Enterprises, Inc., 390 U. S. 400, 401-402 (1968) (per curiam).

47

Hensley v. Eckerhart, 461 U. S., at 435.

"The Judicial Conference Advisory Committee on the Federal Rules has emphasized the unfairness of forcing a party to make such a decision before "enough discovery has been had to appraise the strengths and weaknesses of a claim or defense," and thus has proposed extension of Rule 68 to attorney's fees only in connection with measures to ensure that the offeree has all "information to which it would be entitled by way of discovery under the rules to appraise the fairness of the offer." Advisory Committee's Note to Proposed Amendment to Rule 68, 102 F. R. D., at 434-435.

48

For example, a plaintiff who is unable to prove actual damages at trial and recovers only nominal damages of $1, but who nevertheless demonstrates the unconstitutionality of the challenged practice and obtains an injunction, is surely a "prevailing party" within the meaning of § 1988. If the plaintiff had earlier rejected an offer of $500 to "get rid" of the controversy, the damages portion of his suit will fall within Rule 68 as interpreted

1

BRENNAN, J., dissenting

additional problems concerning representation and conflicts of interest in the context of civil rights class actions.49 These are difficult policy questions, and I do not mean to suggest

by today's decision. Yet we previously have emphasized that "a plaintiff who failed to recover damages but obtained injunctive relief, or vice versa, may recover a fee award based on all hours reasonably expended if the relief obtained justified that expenditure of attorney time." Hensley v. Eckerhart, supra, at 435-436, n. 11. See also 461 U. S., at 445, n. 5 (BRENNAN, J., cóncurring in part and dissenting in part) (“Civil rights remedies often benefit a large number of persons, many of them not involved in the litigation, making it difficult both to evaluate what a particular lawsuit is really worth to those who stand to gain from it and to spread the costs of obtaining relief among them. . . . [The] problem is compounded by the fac[t] that monetary damages are often not an important part of the recovery sought under the statutes enumerated in § 1988"). Although courts must therefore evaluate the "value" of nonpecuniary relief before deciding whether the "judgment" was "more favorable than the offer" within the meaning of Rule 68, the uncertainty in making such assessments surely will add pressures on a plaintiff to settle his suit even if by doing so he abandons an opportunity to obtain potentially far-reaching nonmonetary relief-a discouraging incentive entirely at odds with Congress' intent. See S. Rep. No. 94-1011, at 5-6; H. R. Rep. No. 94-1558, at 8-9.

Of course, the difficulties in assessing the "value" of nonpecuniary relief are inherent in Rule 68's operation whether or not the Rule applies to attorney's fees. But when the Rule was interpreted simply as affecting at most several hundred or several thousand dollars of traditionally taxable costs, these inherent problems were of little practical significance. Now that Rule 68 applies in some situations to the vital question of attorney's fees, these problems will assume major significance.

"Like the question of injunctive relief, see n. 48, supra, these problems are inherent in Rule 68 but were inconsequential so long as the operation of the Rule was limited to taxable costs as defined in 28 U. S. C. § 1920. Now that the Rule has been extended to many attorney's fee provisions, these difficulties can be expected to create substantial problems in administering class actions. "[S]uits alleging racial or ethnic discrimination are often by their very nature class suits, involving classwide wrongs." General Telephone Co. v. Falcon, 457 U. S. 147, 157 (1982). Rule 68 makes no distinctions between individual and class actions. Yet, as the Advisory Committee recently has cautioned, in the class-action context "[an] offeree's rejection would burden a named representative-offeree with the risk of exposure to heavy liability [for costs and expenses] that could

BRENNAN, J., dissenting

473 U. S.

that stronger settlement incentives would necessarily conflict with the effective enforcement of the civil rights laws. But contrary to the Court's 4-paragraph discussion, the policy considerations do not all point in one direction, and the question of whether and to what extent attorney's fees should be included within Rule 68 has provoked sharp debate in Congress, in the Advisory Committee on the Federal Rules, and among commentators.50 The Court has offered some inter

not be recouped from unnamed class members. . . . [This] could lead to a conflict of interest between the named representatives and other members of the class." Advisory Committee's Note to Proposed Amendment to Rule 68, 102 F. R. D., at 436.

Moreover, Rule 23(e) requires the court's approval before a class action is compromised; the Rule protects class members "from unjust or unfair settlements affecting their rights by representatives who lose interest or are able to secure satisfaction of their individual claims by compromise.” Moreland v. Rucker Pharmacal Co., 63 F. R. D. 611, 615 (WD La. 1974). Yet Rule 68 does not mesh with such careful supervision. Its "plain language" requires simply that upon the plaintiff's acceptance "the clerk shall enter judgment."

In addition, Rule 68 sets a nondiscretionary 10-day limit on the plaintiff's power of acceptance-a virtually impossible amount of time in many cases to consider the likely merits of complex claims of relief, give notice to class members, and secure the court's approval.

In addition to the sources cited in nn. 57, 59, and 61, infra, see, e. g., Branham, Offer of Judgment and Rule 68: A Response to the Chief Justice, 18 John Marshall L. Rev. 341 (1985); Fiss, Comment, Against Settlements, 93 Yale L. J. 1073 (1984); Shavell, Suit, Settlement, and Trial: A Theoretical Analysis Under Alternative Methods for the Allocation of Legal Costs, 11 J. Legal Studies 55 (1982); Simon, Rule 68 at the Crossroads: The Relationship Between Offer of Judgment and Statutory Attorney's Fees, 53 U. Cin. L. Rev. 889 (1984); Notes, The Impact of Proposed Rule 68 on Civil Rights Litigation, 84 Colum. L. Rev. 719 (1984); Note, Rule 68: A "New" Tool for Litigation, 1978 Duke L. J. 889; 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); The 'Offer of Judgment' Rule in Employment Discrimination Actions: A Fundamental Incompatibility, 10 Golden Gate L. Rev. 963 (1980); Notes, The Proposed Amendment to Federal Rule of Civil Procedure 68: Toughening the Sanctions, 70 Iowa L. Rev. 237 (1984).

1

BRENNAN, J., dissenting

esting arguments based on an economic analysis of settlement incentives and aggregate results. Ante, at 10. But I believe Judge Posner had the better of this argument in concluding that the incentives created by interpreting Rule 68 in its current form to include attorney's fees would "cu[t] against the grain of section 1988," and that in any event a modification of Rule 68 to encompass fees is for Congress, not the courts. 720 F. 2d, at 479.

B

Indeed, the judgment of the Court of Appeals below turned on its determination that an interpretation of Rule 68 to include attorney's fees is beyond the pale of the judiciary's rulemaking authority. Ibid. Congress has delegated its authority to this Court "to prescribe by general rules... the practice and procedure of the district courts and courts of appeals of the United States in civil actions.' 28 U. S. C. § 2072.51 This grant is limited, however, by the condition that "[s]uch rules shall not abridge, enlarge or modify any substantive right." Ibid. The right to attorney's fees is "substantive" under any reasonable definition of that term. Section 1988 was enacted pursuant to § 5 of the Fourteenth Amendment, and the House and Senate Reports recurrently emphasized that "fee awards are an integral part of the remedies necessary to obtain . . . compliance" with the

51 Section 2072 provides in relevant part:

"The Supreme Court shall have the power to prescribe by general rules, the forms of process, writs, pleadings, and motions, and the practice and procedure of the district courts and courts of appeals of the United States in civil actions, including admiralty and maritime cases, and appeals therein, and the practice and procedure in proceedings for the review by the courts of appeals of decisions of the Tax Court of the United States and for the judicial review or enforcement of orders of administrative agencies, boards, commissions, and officers.

"Such rules shall not abridge, enlarge or modify any substantive right and shall preserve the right of trial by jury as at common law and as declared by the Seventh Amendment to the Constitution."

« PreviousContinue »