Steiner v. Lewmar, Inc.
816 F.3d 26
2d Cir.2016Background
- Steiner (plaintiff) and Lewmar (defendant) had a 2005 exclusive manufacturing/sales Agreement that contained a prevailing-party clause entitling the prevailing party to reasonable attorneys’ fees and costs.
- Litigation began in 2009 asserting Lanham Act, contract, CUTPA, and related claims; Lewmar counterclaimed.
- In December 2013, ten days before a prejudgment-remedy hearing, Lewmar served a Rule 68 offer: $175,000 plus a permanent injunction and dismissal with prejudice of “all claims that have been made or could have been made concerning the LiteTouch trademark, winch handles sold under the LiteTouch trademark, or the Agreement.” The Offer did not mention attorneys’ fees or specify costs.
- Steiner accepted; the clerk entered judgment per Rule 68. Steiner then moved for attorneys’ fees ($383,804 claimed) and costs ($41,470 originally; later narrowed to $2,926.95 verified).
- The district court denied attorneys’ fees under the Agreement and under CUTPA (stating judgment by agreement without findings and fees not warranted), but awarded costs in a reduced amount. Both sides appealed; Second Circuit affirmed in part, vacated in part, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 68 offer/acceptance precludes contractual attorneys’ fees under the Agreement | Steiner: Offer did not expressly mention fees; contractual fee claim survives | Lewmar: Offer dismissed all claims concerning the Agreement, so contractual fee claim is included and extinguished | Held: Offer unambiguously encompassed contractual fee claim; Steiner barred from seeking fees under the Agreement |
| Whether Rule 68 offer/acceptance precludes statutory attorneys’ fees under CUTPA | Steiner: CUTPA fees are separate statutory entitlement; not extinguished because Offer did not mention fees | Lewmar: Offer dismissed all claims and thus bars fee claims including CUTPA fees | Held: Ambiguous as to CUTPA fees; ambiguity construed against offeror; Steiner not precluded from seeking CUTPA fees; remand for district court to consider fees on the merits |
| Whether costs must be added to a Rule 68 judgment when unspecified | Steiner: Rule 68 allows addition of costs then accrued; sought taxable costs | Lewmar: Offer’s language (dismissal plus retention for enforcement) encompassed post-judgment remedies and perhaps costs | Held: Under Marek, a valid Rule 68 offer includes costs then accrued even if not specified; district court correctly added costs (and taxed taxable items per local rules) |
| Whether district court abused discretion by denying CUTPA fees without merits analysis | Steiner: District court failed to decide fees on the merits | Lewmar: Denial appropriate given judgment by agreement and lack of findings | Held: Unclear whether district court assessed merits; remand to clarify and, if necessary, decide CUTPA fee request on the merits |
Key Cases Cited
- Marek v. Chesny, 473 U.S. 1 (Rule 68 offers include costs then accrued; encourages settlement)
- Goodheart Clothing Co. v. Laura Goodman Enters., Inc., 962 F.2d 268 (Rule 68 offers are contracts; interpret under ordinary contract principles)
- Sanchez v. Prudential Pizza, Inc., 709 F.3d 689 (ambiguities in Rule 68 offers construed against offeror as to attorney fees)
- Nordby v. Anchor Hocking Packaging Co., 199 F.3d 390 (an offer that unambiguously includes fees can bar fee claims even without the magic words)
- Barbour v. City of White Plains, 700 F.3d 631 (applying Marek: unspecified costs in Rule 68 offers are to be added by the court)