Marek v. Chesny

In Marek v. Chesny (1985) 473 U.S. 1, a civil rights action, the plaintiffs refused a settlement offer made pursuant to Federal Rule of Civil Procedure, rule 68, the federal equivalent of our section 998, and ultimately recovered less at trial. The plaintiff sought attorney fees under 42 U.S.C. 1988. Rule 68 provides: "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." The trial court declined to award costs, including attorney fees, incurred after the settlement offer. The plaintiff appealed the denial of postoffer costs, and the Court of Appeal reversed. The Supreme Court reviewed the policies behind civil rights statutes, which encourage plaintiffs to bring meritorious suits by providing for an award of attorney fees and the public policy in favor of settlement, and concluded they are not mutually exclusive. ( Marek v. Chesny, supra, 105 S. Ct. at p. 3018.) "To be sure, application of Rule 68 will require plaintiffs to 'think very hard' about whether continued litigation is worthwhile; that is precisely what Rule 68 contemplates. This effect of Rule 68, however, is in no sense inconsistent with the congressional policies underlying 1983 and 1988. Section 1988 authorizes courts to award only 'reasonable' attorney's fees to prevailing parties. ... In a case where a rejected settlement offer exceeds the ultimate recovery, the plaintiff -- although technically the prevailing party -- has not received any monetary benefits from the postoffer services of his attorney. This case presents a good example: the $ 139,692 in postoffer legal services resulted in a recovery $ 8,000 less than petitioners' settlement offer." (Id. at pp. 3017.)