Utility Automation 2000, Inc. v. Choctawhatchee Electric Cooperative, Inc.

“Emmanuel” to hundreds of licen- licensed

sees, up assigns whom make 28 of assigns have invested

this case. McGee’s money amount of time and substantial “Emmanuel” on licensing relying validity copyright. Accordingly, of its able to

McGee/Assigns are demonstrate showing they suffered

prejudice by have, they would not

consequences promptly. acted

had Calhoun analysis foregoing

While the is not re-

quired dispute, for a resolution my rumination be useful to

perhaps intriguing copy- confronted with this

those

right scenario the future. 2000, INC.,

UTILITY AUTOMATION

Plaintiff-Counter-Defendant-

Appellant,

CHOCTAWHATCHEE ELECTRIC CO-

OPERATIVE, INC., corporation, Services, Inc., corporation,

Cheleo

Defendants-Counter-Claimants-Ap-

pellees,

Geographic Services, Inc., Information corporation,

an Alabama Movant-

Appellee, Gipson, Defendant-Appellee,

Tom Engineers,

Patterson & Dewar corporation, Defendant.

No. 01-16265.

United Appeals, States Court of

Eleventh Circuit.

July

1239 MARCUS, BARKETT and Before SCHLESINGER*, Judges, Circuit Judge. District BARKETT, Judge: Circuit (“UA 2000, Inc. Utility Automation 2000”) court’s denial of appeals district following its motion for a Rule entry court’s of 68 Coopera- against Choctawhatchee Electric Services, Inc., tive, Inc., and Tom- Cheleo “Defendants”). (collectively, Gipson mie Defendants1 for originally sued UA 2000’s trade of UA misappropriation Trade in violation of the Alabama secrets seq. et Act, Ala.Code 8-27-1 Secrets (1975), contract, and intentional of breach or contractual with business interference complaint, In its UA relationship. recovery of its sought also Act and the con- the Trade Secrets UA 2000 and Cheleo. tract between trial, upon served Prior to Defendants judgment pursuant of offer UA of Pro- the Federal Rules Civil Rule 68 of cedure, authorizes a defendant which money judgment “for make an offer of offer, then costs specified ... 68. Defendants’ accrued.” Fed.R.Civ.P. provided: the follow- hereby make Defendants Permutt, PC, Rich, Jeffery Sirote J. to Fed- pursuant ing Judgment of Offer AL, Huntsville, for Plaintiff-Counter-De- 68; that Procedure eral Rule Civil fendant-Appellant. [UA to Plaintiff pay shall Defendants thousand Arant, Forty-five sum of Rose & 2000] the Smith, Bradley, B. Scott ($45,000) with costs AL, Dollars White, Birmingham, John David Wat- 00/100 Defendant, accrued, Cheleo AL, and that Huntsville, son, III, for Defendants- Services, Inc., compet- refrain from shall Counter-Claimants-Appellees. * original- were defendants who Schlesinger, Dis- 1. Several E. U.S. Harvey Honorable Florida, pursuant ly parties the suit were dismissed Judge Middle District trict for the agreements. to settlement designation. sitting by period thirty with Plaintiff for a

ing DISCUSSION (30) days acceptance from the date of question presented appeal in this this Offer. whether, simply having accepted Defen- offer, dants’ Rule 68 recover UA accepted judgment, the offer of UA fees in addition to the Final and the district court entered a $45,000 judgment pro- award. Rule 68 ordering that Judgment vides: 2000, Utility Plaintiff Automation Inc. days At time more than 10 before have and recover of Defendants Chocta- begins, the trial a party defending Cooperative, whatchee Electric against upon a claim serve ad- Services, Inc. Gip- Cheleo and Tommie verse an offer to allow $45,000, son the sum of with ac- costs against defending party to be taken crued, and that Defendant Cheleo Ser- money property for the or to the vices, Inc. from competing shall refrain offer, specified effect in the with costs 2000, Utility with Automation Inc. for a If days then accrued. within 10 after period days August of 30 from par- the service of the offer the adverse ORDERED, ty It is further serves written notice that the offer is ADJUDGED accepted, party may either then file the DECREED Defendants Choe- acceptance together offer and notice of Cooperative, tawhatchee Electric Inc. proof with of service thereof and Services, there- nothing and Cheleo Inc. take upon the judgment. clerk shall enter regard to their counterclaims asserted An accepted offer not shall be against Utility Plaintiff deemed Automation withdrawn and evidence thereof is not Inc. and that said claims are here- except proceeding admissible to de- by dismissed prejudice. termine If judgment finally costs. Following entry the court’s of the Final obtained the offeree is not more fa- Judgment, UA 2000 submitted a motion offer, than vorable the offeree must fees, costs, for the expenses pay the making costs incurred after the prior incurred to the service of the Rule 68 of the offer. judgment. offer of The district court Fed.R.CivJP. 68. granted request UA 2000’s for the recov- Supreme As the Court has ex ery $5,220.50, of costs in the amount of plained, plain “The purpose of Rule 68 fees, denied its motion for hold- encourage settlement and avoid litiga ing: tion.” Marek v. Chesny, Estate Because the underlying statute does not 1, 5, U.S. 105 S.Ct. 87 L.Ed.2d 1 define “costs” to include (1985). objec The rule accomplishes this Plaintiffs motion an award of attor- two-part First, tive with a approach. Rule neys’ hereby fees is DENIED. See Ma- firm, 68 allows a defendant to make a non 1, 9, rek v. Chesny, 473 U.S. 105 S.Ct. negotiable offer of judgment. Unlike tra (1985); 87 L.Ed.2d 1 Arencibia v. negotiations, ditional settlement in which a Shoes, Inc., Miami plaintiff may seek clarification or make a (11th Cir.1997). counteroffer, a plaintiff faced with a Rule appeals. interpretation UA 2000 may only of 68 offer accept or refuse. If he legal question Rule 68 is a accepts, that we decide automatically the court enters Time, Inc., de favor; refuses, novo. See Jordan v. 111 judgment if his he 102, 105 Cir.1997). Second, proceeds. case the Rule encour- cost-shifting provision. of Rule 68’s poses offers reasonable accept ages plaintiffs “cost- that the term “costs” to as its Marek held is referred through what forces which shifting” provision, proper- to refer to all costs was intended ultimately then an offer who refuses relevant sub- under the ly awardable amount than the offer at trial recovers less authority. or other stantive statute time of from the incurred pay the costs words, all awarda- properly costs prompts Rule Thereby, “[t]he the offer. considered action are to be ble the risks a suit to evaluate parties both scope of Rule 68 “costs.” within the balance them and to litigation, and costs congressional expressions absent trial upon of success the likelihood against underlying contrary, where the merits.” Id. on the “costs” to include statute defines places constraint fees, The sole such fees are ney’s we are satisfied that its mandate judgment is on offers of purposes be included as costs for accrued.” “costs then include an offer Rule 68. every offer must mean that does not This 9, The Marek at 105 S.Ct. 3012. Marek “If costs: that it includes state explicitly in a under 42 prevailed suit U.S.C. plaintiff included or that costs are recites an offer 1983, § an amount less than but recovered costs, the and amount for specifies an Al prior Rule 68 offer. the defendant’s offer, judgment accepts the plaintiff not attorneys’ generally fees are though costs; if the offer include necessarily will costs under what is known as recoverable and costs are included that does not state Rule,”2 Supreme as the “American specified, costs is not an amount for that, because the relevant au Court held by the terms of obliged be court will attorneys’ part fees as thority included an addi judgment in its Rule to include prevailing plain to a the “costs” available in its discretion.” amount which is tional tiff, subject to the cost- fees were those 5, long as 8012. at 105 S.Ct. Marek the de of Rule and shifting provision exclude explicitly an offer does for responsible therefore not fendant was costs, the Rule. under proper it is them.3 meaning of not define the Rule 68 does Shoes, Inc., 113 v. Miami In Arencibia “costs,” however, and conse- the term (11th Cir.1997), was this Court F.3d 1212 whether frequently dispute quently parties Marek also rationale asked whether Marek, In are included. attorneys’ fees accepted has applies when one such considered Supreme Court sum, judgment but for Rule 68 offer addressing when dispute, not mention costs the offer does pur- where as costs for might be included may be prevailing party §. in a 1983 action England costs often included recoverable In costs,” fees; attorneys’ part Rule” of the attorneys’ the "American fees "as under awarded traditionally required to been request each has costs and plaintiffs then filed a' at attorney's See Marek fees. bear own totaling approximately attorneys' 105 S.Ct. 3012. $171,000 ($32,000 in- plaintiffs had of which and prior the Rule 68 offer curred were as follows. specific facts in Marek 3. The $139,000 after). opposed the The defendants § suing 42 U.S.C. plaintiff, The costs, $139,000 rely- post-offer claim for the "for a rejected of an offer of settlement had provision cost-shifting ing 68’s on Rule [$100,000], including accrued costs now sum part of the fees were arguing that at S.Ct. attorneys’ fees.” Marek § 1988 by 68 because Rule "costs” covered plaintiffs case went to trial 3012. The Court Supreme as such. defines them $57,000’. Relying ultimately awarded were agreed. provides that 42 U.S.C. which on deciding ques- that fees' have been included the offer of fees.4 tion, that under explained first this Court or whether the has oth- Marek, Rule offer is silent when a right erwise waived the to seek them. costs, the district the amount regarding This issue has been addressed the Sev- appropriate award an amount court must enth and the Ninth circuits. sum. specified in addition to the for costs James, 147 F.3d 617 Webb costs,” authority to award we ex- “This Cir.1998), a plaintiff suing under ‘with phrase from the costs plained, “arises (“ADA”) Americans Disabilities Act in Rule 68.” Arencibia at accrued’ then accepted a Rule 68 offer of 3012). 5-6, (citing Marek S.Ct. only: hereby stated “The Defendants the Marek rationale then held We make offer of the above- cost-shifting provision of (interpreting captioned Fifty matter in the amount of Rule) equally phrase applies ($50,000.00)pursuant Thousand Dollars an ac- applicable then accrued” “costs Federal Rule of Civil Procedure 68.” Id. explained offer. cepted Rule 68 We ADA at .619. The allows the although properly the district court had to recover does costs, jurisdiction to award it retained part not define those fees as attorneys’ could not include an award of “ the costs. as this did in Aren- Court fees, by awarded virtue because ‘costs’ cibia, explained the Webb court that under only attorney’s if include fees Marek, plaintiffs the could not recover fees underlying the statute defines ‘costs’ to as “costs then accrued” under Rule 68 attorney’s fees.” include Id. underlying because the statute did not de- added).5 attorneys’ fine fees as costs. The Webb in Ar- only The issue before this Court Court, however, went on to the address encibia was whether the district court issue not discussed in Arencibia: whether grant attorneys’ “by could fees as costs plaintiff attorneys’ the could recover fees Arencibia, virtue of Rule 68.” As did the ADA). (i.e., directly under the statute the offer, present accepted case deals with an in The Seventh Circuit answered the affir- and cost-shifting thus does not involve the mative, that, explaining “the ADA because provision of Rule 68 that was at issue in provides for an award of fees to Marek. But this presents case another prevailing party,” and because the court

variation ques- on the Rule 68 theme. The plaintiff prevailed determined the had only attorneys’ tion here is not whether claim, ADA his therefore he could re- may fees be Rule included as 68 “costs attorneys’ cover fees under the ADA. accrued,” plaintiff then also whether The Ninth Circuit addressed a recover fees authorized statute or similar Woodburn, question contract when Nusom v. judgment the offer of Comh Cir.1997). silent or ambiguous as to whether such 833-34 accepted Specifically, plaintiff 4. The offer of in Arencibia 5. the in Arencibia sued fees, 16(b) did not mention either costs or but sim- § of the Fair Labor Standards ply offered "in the amount of (FLSA), 216(b). § Act 29 U.S.C. Because accepted, $4000.00.” Arencibia and attached 16(b) of FLSA does not define "costs” to acceptance proposed entering to his order fees, attorneys’ include this Court held that $4,000 judgment in favor of Arencibia for and by reserving juris- the district court had erred reserving jurisdiction to award costs and at- plaintiff attorneys' diction to award the fees torneys’ objected, fees. The defendant-offeror as Rule 68 "costs.” contending only provid- that the Rule 68 offer ed for costs and not fees. drafter, accepting and therefore the the offer accepted Nusom concerned seeking from accrued was barred “$15,000, with costs together (Thus, the Among like neys’ this offer.” fees. Id. date of here, in- Nusom offer things, at issue Webb and Nusom therefore offer both did not costs but mention of specific cluded that where an proposition stand for the fees.) underlying Both attorneys’ mention respect offer is whether ambiguous brought plaintiff which statutes under fees, be ambiguity it will includes (TILA) (the Lending Act suit Truth the drafter. against construed statute) pro- racketeering Oregon’s civil in- unambiguously An that does attorneys’ fees award of vide for an hand, on the other clude costs. from party, separate prevailing accepts who it from plaintiff bar the will that, party, Nusom held attorneys’ fees under seeking additional was entitled plaintiff (or then relevant statute as “costs relevant statutes. under the accrued”). example, Nordby For v. An- Nusom, defen- Webb both Co., 199 Hocking Packaging chor were dants claimed (7th Cir.1999), sued under sums, thus to included in Act, Representative which Illinois Sales would to the statute pursuant them award provides for an award of reason- expressly double grant plaintiffs be to effectively fees to a “whose able (Dick Webb, the defendant recovery. under the Act have been violated.” rights James) argued that Webb’s Accordingly, plaintiffs Id. at 391. $50,000 sum. included in the been had ad- attorneys’ fees in complaint requested rejected this asser- Circuit Seventh trial, damages. going Before dition to tion, explaining that a Rule 68 offer for plaintiff accepted the bear the burden should defendants 56,003.00 the amount of “judgment $ by created their silence ambiguity the 1,000 as in costs as one total sum to plus $ ADA for provides on fees. complaint” the amended all counts of and prevailing party the neys’ fees for supplied), then moved and the of- nothing in their the said defendants for an award of district court statutory liabili- terminate that fer to Id. to the Act. Nord- pursuant fees Illinois always free to The defendant is ty.... obtain plaintiff the could not by held that liabili- in settlement of lump offer a sum offer had unarm accepted because the fees not what and that is ty, costs attorneys’ fees. biguously included Dick offer did here. James’ Dick James appropri- that in the show costs, These cases and and as to fees was silent may be enti- circumstances, ate court circumstances under these the “costs attorneys’ fees under to tled to additional may award an amount then itself, Rule 68 from phrase then accrued” and fees. cover costs and, the statute or independently, likewise The Nusom Court Id. at 623. the suit. rise to authority gave other examining the by the assertion addressed case, 2000 claims both of these UA In this judgment, language in the offer specific Thus, questions recovery. for bases that the conclusion: and reached similar first, accepted whether the presented are: attorneys’ fees regarding offer’s silence $45,000 included attor- unambiguously sum respect to whether ambiguity created with the offeree otherwise or whether neys’ fees $15,000 attorneys’ fees. sum included them; second, right to seek waived the ambiguity that such Nusom held in this are available case whether fees against resolved terms of an offer must be 68; third, mercy and offeree is at the of the offeror’s under Rule accrued” “costs willingness to con- language choice of pur- otherwise available fees are whether understanding par- it to the of both form authority. other relevant any to suant Only ties. the offeror can ensure that the in the Attorney Fees Included 1. Were clearly or excludes fees. includes or Otherwise Waived UA Offer Here, language in the nothing there is 2000? “$45,000 bare offer of Defendants’ that, $45,000 accrued” to indicate costs contend Defendants accepting sum includes fees or that $45,000 amount included UA . ability offer otherwise waives UA 2000’s to assessing this attorneys’ fees. 2000’s any them under Rule or recover other claim, says note that the offer we first authority. ambiguity be must fees; way or the other about one nothing Defendants, against and we con- construed at all. mentioned they clude that the offer made to UA 2000 Moreover, Nordby, the offer in unlike did not include fees. Conse- any language not contain offer here does question we turn quently, next to inclusiveness of all sums suggesting the whether UA 2000 is entitled to fees either language contain due. Nor does the offer pursuant as costs to Rule 68 or as attor- any for claim. It excluding payment neys’ pursuant other relevant simply offers an amount with costs. So authority. we—much as the offerees—are left speculate whether offer was intended Attorneys’ as Costs Pursuant attorneys’ fees or to include not. above, however, Rule As discussed Arencibia, explained we that a requires responsibility clarity that the accepts who a Rule' 68 offer in the offer reside with precision must recover fees as “costs then ac explained, any the offeror. As Nusom crued” if the “relevant substantive statute ambiguity in the terms of an offer must be authority” defines costs include drafter, therefore, against resolved fees. Arencibia 1214. It is contrary absent a clear indication clear to us that the relevant statute in this cannot be deemed to accepting party attorneys’ case does not define fees as right have received its fees or waived the “costs.” The Alabama Trade Act Secrets to seek them. Nusom at 835. There is recovery attorneys’ authorizes the of fees good reason for this stricture: when a a' claim under bringing the puts plaintiffs Because Rule 68 at their proves Act “willful malicious misap peril they accept whether or not the propriation” of a trade secret. Ala.Code offer, the defendant must make clear (1975). However, § 8-27-4 there no is whether or not the offer inclusive is of in language the Trade Act to indi Secrets costs, fees.... As with attorneys’ cate that fees should be consid position should be left in the of not contrast, part ered of costs. In where a guessing what court will later hold the attorneys’ courts have found that fees offer means. costs, it were defined as was because the Indeed, Webb at places 623. clearly. example, statute stated so For in posture offerree a most unusual explained attorneys’ Marek that fees are landscape of settlement contracts. While costs under section 407 of the Communica respond ordinary an offeree can to an set- tions Act of 1934 because under that act tlement through finally counteroffer or petitioner prevail, shall he “[i]f terms, clarify modify to attorney’s seek or Rule shall be allowed a reasonable contracts). case, however, lying this we part as a fee, and collected to be taxed of in fact suit,” agree cannot that the contract does similarly under costs of Act, clearly unambiguously define costs as that stat- Railway Labor because pre- “award to the fees. a court to ute allowed attorney’s fee as a reasonable

vailing party provisions The three relevant contract 105 S.Ct. the costs.” 473 U.S. part of are as follows: added). Similarly, in Jor- agreed 5. It further that disclosure (11th Cir.1997), Time, 111 F.3d 102 dan v. proprietary information, such wheth- of are costs fees we found directly indirectly, or of er UA that statute 505 because under U.S.C. written consent except express with the a court award reasonable states that of be deemed material UA would party “as prevailing fee to the irrepa- and would result material and part of the costs.” injury to or properly rable UA 2000 examples, the Trade Se- Unlike those completely compensable by damages in Act not award law; crets does provisions an action at and that the costs; part of rath- Agreement necessary of this are for the er, an additional it makes any protection of UA 2000 and misappropriation. for willful penalty Agreement by [Cheleo breach of this Marek rule. satisfy it does not any Services] [Cheleo Serviees]’s Oates, See also Oates 2000, in representatives shall entitle UA Cir.1989) (holding that legal addition to other remedies avail- speaks of where the statute not costs apply competent to a court of able damages, and “costs” in the context of enjoin any violation of this jurisdiction to the absence of unam- explaining that “[i]n damages to recover Agreement and/or statutory language defining attor- biguous and to any Agreement, breach of component of fees as an additional ney’s action, recover all costs such includ- costs, by Congress expression and a clear ing reasonable fee. exception an intent to carve out attorney’s fees are American Rule ... 68”). purposes Rule not ‘costs’for hereby agreed by parties It is provision any hereto that breach of this Alternatively, argues UA non-breaching party, shall entitle the Rule 68 costs it is entitled to fees as legal remedies addition to if defines accrued its contract Cheleo compe- to a court of apply available to Marek, Supreme fees as costs. jurisdiction enjoin any violation tent that the term “costs” Rule Court held to recover agreement of this and/or prop to all costs 68 “was intended to refer agree- any for breach of this damages the relevant substan erly awardable under ment, and to recover all costs such authority.” Marek at of tive statute or other action, a reasonable attor- including supplied). 3012 We (emphasis 105 S.Ct. neys’fee. to UA 2000 that this reference agree with authority” means that Rule 68 costs

“other which a

can be awarded if a contract under par- In the event either Legal Fees. attorneys’ fees plaintiff brings suit defines expenses to enforce Superior ty legal v. incurs See also Kessler as costs. (N.D.Ill., Agree- of this Care, interpret any provision 127 F.R.D. 518 1989) ment, be enti- prevailing party shall reference (suggesting that Marek’s legal expenses, in- tled to recover such authority” might refer to under- to “other 1246 limitation, are distinct from costs gest legal reasonable that fees

eluding, without by subsuming all relat- certain delineated “costs” fees, court costs and attorney’s fees,” among any “legal in addition to additional the rubric of expenses, ed party attorneys’ relief to which such which are fees: “the and other to recover such party be entitled. shall be entitled shall limita- including, without legal expenses, supplied). fees, tion, attorney’s court costs reasonable clearly define costs to 5 and 6 Provisions to expenses, and all related addition attorneys’ fees. Provision 5 en- include and relief to which such additional legal equitable 2000 to seek ables UA argue party shall be entitled.” Defendants proprietary of for disclosure remedies ambiguity by provision that the created information, recover all costs of and “to trumps expression whatever clear is found action, including reasonable such 5 and and that we must provisions Likewise, neys’ provision fee.” 6 allows parties that the did not therefore conclude non-breaching party breaching to sue a intend to treat fees as costs. relief, and legal equitable action, also “to recover all costs of such think have the better of We Defendants including a reasonable fee.” argument, primarily because the straightforward interpretation The most a strong pre- American Rule establishes including “costs ... a reason- phrase be awarded sumption that fees are contracting that able fee” is light presumption, as costs. of that we part to be parties consider fees interpret require Marek to that the under- See, e.g., Marek at 105 S.Ct. costs. lying authority unequivocally indicate that (explaining Clay- that Section of the carving it out an to the Ameri- exception Act, (1976), § ton makes at- U.S.C. can Rule. Provision 19 of the contract torneys’ pro- of costs because it part fees differentiates between fees and other suit, recovery vides for of “the cost of costs; unwilling say thus we are that fee”). including reasonable part the contract a whole makes fees as However, out, Accordingly, costs. UA 2000 is not enti- point pro- as Defendants appears sug- vision 19 of the contract tled to fees as Rule 68 “costs accrued.”6 Samson, 1993) (table); 6. Because we conclude that the relevant au 8 F.3d 820 Cir. costs, thority (2d part does not define Lyte Corp., v. Sara Lee reach, context, Laurenitis, Cir.1991); we do not in this the defen 889 F.2d 363 Stefan argument dant’s alternative that even if costs (1st Cir.1989). fees, were deemed to include UA 2000 would However, Time, in Jordan v. 111 F.3d 102 still not be entitled to fees as Rule 68 "costs (11th Cir.1997), that a this Court held then accrued" because the Trade Secrets Act prevailed, who but for less than the Rule 68 only plaintiff proves provides for them if the amount, automatically pay had to misappropriation" "willful and malicious of a underlying defendant's because the stat- secret, provides trade and the contract them Act, (the 505) Copyright de- ute 17 U.S.C. only prevails or shows some costs, notwithstanding fined fees as form of disclosure or breach. Consistent with Copyright grants attorneys’ only Act argument, some have determined courts contrast, "prevailing party.” automatically that a is not entitled to D.C., First, Fourth, Fifth, Seventh, Eighth, accrued,” fees as "costs then and Ninth Circuits have held that when a satisfy must also is at whatever condition plaintiff rejects ultimately an offer and re- tached to a fee award in the relevant statute See, the offer amount in a suit ceives less than authority. e.g., City or other Fletcher v. of (7th Cir.1998); brought Wayne, under a statute that awards attor- 162 Fort F.3d 975 350, (7th Kelly, neys' part prevailing of Fisher v. 105 F.3d 352 Cir. fees as costs to 1997); Management party, cost-shifting provision Group, Tri-Star Ltd. v. Rule 68’s will

1247 against them when there nothing Pursuant to Statute is Attorneys’ 3. fees Defendants’ offer of that would Authority Relevant Other suggest even admission. whether UA 2000 We next consider directly fees entitled to is do, however, find We that UA 2000 As Act or the contract. the Trade Secrets is entitled to fees under its con costs, above, although part not as noted tract with Cheleo. Clause 19 of the con Trade Act does au the Alabama Secrets tract states: fees recovery

thorize Legal party Fees. the event either the “willful and malicious upon proof of legal expenses incurs to enforce or inter- Ala. of a trade secret. misappropriation” any provision of pret Agreement, this (1975). § 2000 asks us 8-27-4 UA prevailing party Code shall be entitled to as an ad legal expenses, including, to construe the offer of recover such limitation, misappro of willful and malicious without reasonable mission ney’s fees, court costs and related not find this to be a all priation. We do expenses, any addition to additional finding is proposition. Such a tenable relief and other to which such vastly simple different from the conclusion shall be entitled. prevailed against that one has anoth er, unwilling impute spe to and we grants attorneys’ the contract to “willful and malicious cific admission “prevailing party” any action to misappropriation” interpret any provision on the basis “enforce or of this suit, Agreement.”7 brought have had a entered UA 2000 Defendants often, here, post-offer attorneys' sure to what are substantial not shift the defendant's fees”). attorney's claims of plaintiff because the defendant has fees to the criticisms, however, persua Those are less (although "prevailed" under the statute question sive when the has to do with cost-shifting provision will shift defen plaintiff’s automatic entitlement to plaintiff). post-offer costs to the dant's other 68, fees under Rule because the defendant See, e.g., Company, Motor Inc. v. Amell Harbor always protect against will be able to itself Chevrolet-Geo, Inc., (7th 265 638 Cir. F.3d paying by making in the its intent clear Inc., 2001); Capital Engineering, v. Poteete discern, we are offer. As far as able 804, (7th Cir.1999); 807 Tunison v. 185 F.3d appears agree, automatically Ninth Circuit Inc., Corp., Airlines 162 F.3d Continental awarding fees as costs accrued to a 1187, (D.C.Cir.1998); States v. 1190 United accepts an when the relevant au who (9th Corp., Cir. Trident 92 855 Seafoods thority the Marek test. See Erdman v. satisfies 1996); Ford, Bailey 26 F.3d E.E.O.C. (9th County, 926 F.2d 879 Cir. Cochise Hinton, 1994); (5th Lawrence v. Cir. " 1991) (holding that because ‘costs' in ac (4th Cir.1991); City F.2d 603 O’Brien v. automatically § 42 U.S.C. tions under Ferry, Greers 873 F.2d attorney 42 U.S.C. include fees under Marcoccio, Cir.1989); Crossman v. 1988,” plaintiff rely entitled to on the “was Indeed, (1st 1986). 333-334 Cir. Jordan accepted, plain language the offer he See, e.g., been criticized. Harbor Motor has '$7,500 accrued,’ which [un with costs now not, view, ("[Jordan] does in our ade him to a reasonable attor ] der Marek entitles Copyright quately address the Act's mandate lump ney’s in addition to the sum fee award only prevailing party permitted added). offer”) (emphasis named in the fees.”); Weekly attorney's Bruce v. recover its News, Inc., (criticiz addition, World 203 F.R.D. provision contract 5 of the interpreting pro ing Jordan for "Rule 68 as grants attorneys' fees to UA 2000 if Defen- viding gloss provisions of proprietary a substantive on the informa- disclose UA 2000’s dants Act,” "virtually Copyright com of the Provision 6 states that breach tion. accept non-breaching party pelling] copyright plaintiffs ... contract shall entitle action, including Judgment Offer of no matter how meritorious to recover all costs of such case, resulting expo- fee. be their for fear of reasonable 1248 the merits of upon of the least some relief based provisions to enforce part, in

at least in contract, judgment passes think the also we a claim. Id. A consent decree that UA establish “[although is sufficient test does not [it] this case the because in con its suit. Our “prevailed” has liability by 2000 an of always include admission Supreme from the Court’s derives defendant, clusion ... it is a the nonetheless in Buckhannon Bd. & Care guidance ‘change legal the rela- [in] court-ordered Home, Dep’t. Health Virginia Inc. v. W. tionship plaintiff] between and the [the of ” Res., 598, 121 U.S. S.Ct. Human 532 (quoting defendant.’ Id. Texas State (2001). 1835, 149L.Ed.2d 855 1486). 792,109 at S.Ct. Teachers Buckhannon, attempted courts Prior specifi- not Although Buckhannon does a party “pre- whether a was to determine judgment, of cally mention offers purpose recover- for the vailing party” applicable in equally we find its rationale by weighing primarily ing attorneys’ an present Admittedly, context. against the relief obtained the relief a falls somewhere between See, City Fletcher v. Fort sought. e.g., decree and the minimalist “cata- consent Cir.1998) (7th Wayne, 976 162 theory” rejected in Buck- lyst the Court (“A only recovers nominal plaintiff who decree, a hannon. Unlike consent technically ‘prevails,’ but a damages little review court exercises substantive judge has discretion to withhold fees when offer; upon over a Rule 68 notification that tiny in relation to the damages offer, accepted the plaintiff has words, claim.... In other for trivial re- mechanically judgment. court enters only reasonable award of fees coveries However, the court does ensure that the Buckhannon, however, zero.”). is (it with the Rule must in- offer conforms party a Supreme prevailing Court defined costs). importantly, accept- clude More in a is whose favor “[a] “necessary judicial impri- ed offer has the rendered, regardless of the amount of court, at matur” of the Buckhannon awarded.” 532 121 damages U.S. 121 in in original), S.Ct. 1835 (quoting Black’s Law Dictio- S.Ct. 1835 that it the crucial sense is an enforceable 1999)). In nary holding ed. judgment against the defendant. was not- entitled to an award of voluntary change unlike a “defendant’s the lawsuit had when been purely private conduct” or a settlement moot, though ap- dismissed as even it dismissal, resulting judg- in a a Rule 68 legis- that the had peared suit induced ' represents “judicially ment sanctioned that, moot, rendered the action lation change relationship between the explained Court “material alteration Indeed, parties.” recently Id. this Court legal relationship parties” of the of the approval held that a district court’s of a necessary permit the award. Id. at private along explicit settlement with its (quoting Texas Teach- S.Ct. State jurisdiction retention of to enforce the set- Dist., Indep. ers Ass’n Garland Sch. terms, tlement made the settlement 782, 792-793, U.S. S.Ct. equivalent functional of a consent decree (1989)). gave L.Ed.2d 866 The Court two Buckhannon, as described and thus ren- judicial examples satisfy outcomes that plaintiff prevailing party dered requirement: judg- an enforceable Ass’n, Disability the ADA. American See agree- ment on the or a settlement merits Chmielarz, (2002). Inc. v. 289 F.3d 1315 through ment enforced a court-ordered case, present In the included judg- consent decree. Id. An enforceable $45,000 only damages, but also a a plaintiff ment establishes as a (a injunction thirty-day non-competition because the has received at remedy specifically contemplated provi- in vailing party.” question Because this need contract). 6 of sions 5 and As. in not be addressed on the peculiar facts of Chmielarz, the terms of here case, this I do not believe majority’s subject power to the court’s to enforce. opinion should be read to resolve it. prevail- We conclude that UA 2000 was the At in appeal issue is whether a ing party in its suit to enforce the contract. plaintiff who has accepted a Rule 68 offer prevailing party, As the UA 2000 is enti- including costs but silent on its face about tled to fees under the contract. attorney’s may recover its attorney’s fees either through of the Rule operation CONCLUSION 68 offer itself or through other means note, courts, We have other that de- when the authorities underlying the suit easily preempt dispute fendants can are ambiguous about whether the term here, others, exemplified by as well as “costs” is defined to include attorney’s clearly stating their intent in the offer of holds, fees. The majority correctly my judgment. We echo the Seventh Circuit view, that such a plaintiff may rely on cautioning prudent that defendant “[t]he itself, the Rule 68 offer be entitled [attorneys’ will mention explicit- fees] to recover its attorney’s fees through inde- ly, in order to head type appeal off the pendently means, available such as a con- wrestling we with here.” Nord- [are] tractual or statutory provision awarding Co., by Hocking Packaging v. Anchor fees to a “prevailing party.” (7th Cir.1999). In determining that the in this Lastly, we have not had occasion to de- case, (“UA Utility 2000, Inc., Automation termine whether the amount UA 2000 re- 2000”) is entitled to quests approximately fees— under such a “prevailing party” provision, $61,000 in fact a reasonable sum. —is majority appears to conclude that the Therefore, in remanding to the district acceptance Rule 68 offer renders a court, we do so with the expectation plaintiff a I “prevailing party.” am con- the district court will determine a suitable vinced we can resolve this case on narrow- amount of fees. however, grounds, er and surer because The denying district court’s order injunctive relief contained in the Rule neys’ fees is REMAND- REVERSED and 68 offer in plainly this case renders UA ED with instructions to award UA 2000 a a “prevailing party.” I Accordingly, reasonable fee. would reserve for another ease the broader question and more difficult of whether ac- MARCUS, Judge, specially Circuit cepting any Rule 68 offer a plaintiff makes concurring: a “prevailing party.” I concur in majority’s thoughtful difficulty question broader thorough opinion separately but write judicial arises from the lack of review ordi stress what I take to be its limits. Insofar narily afforded the terms of a Rule 68 majority’s opinion as the determines that a majority, offer. As noted the Su plaintiff accepting a Rule 68 offer that that, preme recently Court has determined injunctive “prevailing includes relief is a “prevailing party,” to be a think, however, party must party,” I concur. I judicially change obtain “a sanctioned majority’s opinion may aim to resolve question legal relationship parties.” of whether of the accepting any Home, Rule 68 offer—even Bd. including one not in- Buckhannon & Care Inc. v. W. junctive Res., relief —renders a a “pre- Dep’t Va. Health & Human 1835, 1840, by Buckhannon? 605, 149 term has been construed 598, 121 S.Ct.

U.S. added).1 (2001) ques- It answer to this I am uncertain of the L.Ed.2d 855 however, to me that not, altogether only clear us that tion. Buckhannon instructs is can be said judgment 68 ordinary Rule on the merits” and judgments an “enforceable While a Rule sanctioned.” “judicially be a consent decrees” bear “court-ordered is, judgment like judgment 68 a judicial imprimatur to render sufficient to con pursuant entered including those Buckhannon, 532 U.S. “prevailing,” decrees, directly by the sent 604, 1840, private while a enforceable at- 121 S.Ct. at court,2 judgment Rule 68 is entry of a id., not, at see 532 U.S. settlement does than “ministerial rather discre generally (“A 605, defendant’s vol- 121 S.Ct. at 1840 617, James, 147 F.3d 621 tionary,” v.Webb conduct, although per- in untary change Cir.1998), (7th no leaving a district court what haps accomplishing of a Rule 68 to review the terms room lawsuit, by the lacks the sought to achieve Time, Ill F.3d Jordan v. offer. See necessary judicial imprimatur on the Cir.1997) (“[T]he 102, mandatory 105 original). in Buck- change.”) (emphasis no room for language of the rule leaves hannon does not describe how much proper When a district court discretion. judicial imprimatur must be what kind the other re Rule 68 offer is made and it renders a stamped on a before met, the district quirements of the rule are a Rule “prevailing.” Because 68 from the court must award costs measured between a con- judgment falls somewhere served.”); v. Mallory was time the offer purely private decree and a- settle- sent (6th Cir.1991) 1278 Eyrich, 922 judicial involvement degree ment (“The district court retains no discretion enforcement, entry in its we would be the rule’s some under Rule 68 to alter navigate unfamiliar and uncer- forced to application. Operation of times severe determining terrain in on which side tain majority mandatory.”). Rule 68 is As fall. judgments of the line Rule 68 notes, thus itself a Rule 68 however, not, judicial required are to resolve imprimatur seems to bear a fainter We than, decree, say, entry a consent the terms of case. question While which a court must review before ordinarily district “ministe- a Rule 68 is (“Admittedly, at entering. See ante Webb, discretionary,” rial rather than judgment falls somewhere be an offer of too general F.3d at “this statement is a decree and the minimalist tween consent encompass broad to all instances which ‘catalyst theory rejected Court made,” 12 Alan Rule 68 offers are Charles Buckhannon.”). L. Wright, Arthur R. Miller & Richard Marcus, Federal Practice and Procedure judicial imprimatur enough

Is this faint (2d 1997). plaintiff “prevailing” myriad a as that ed. There are to render (" 'Prevailing party' interpretation "pre- ring) some newfan- 1. While Buckhannon!& vailing only gled legal invented for use in late-20th- party” applies term “[n]umerous long century fee-shifting By the es- statutes. allow to award [that] federal statutes courts practice universally recognized tablished 'prevailing fees and costs to " law, law, Buckhannon, in actions at rule of the common party,' 532 U.S. at prevailing party judg- is entitled to recover by S.Ct. at and does not its own terms costs.”) (citations quotations ment contracts, apply private statutes or state omitted). term, interpretation in- is of a common law corporated, by legisla- into statute numerous tures, See, long e.g., Mallory Eyrich, which has been in use both in id., (district (6th Cir.1991) court entered federal and state courts. See 532 U.S. 610-11, J., (Scalia, enforcing judgment). order 121 S.Ct. at 1843 concur- remedial terms, indepen- a court has an tion to enforce its settings in which the functional duty decree....”). much like the created duty, dent equivalent of a consent decree, to review the proposed consent Notably, the Rule 68 offer in this case settlement-offer; Rule 68’s terms of included, $45,000, in addition offer of not relieve the court of that operation does promise by the defendants to “refrain duty: from with Plaintiff competing period for a court class actions the has inde- [I]n (30) thirty days from the date of accep- 23(e) Rule pendent duty under to decide presence tance of this Offer.” The of this acceptable, is and whether settlement injunctive proposed provided relief the dis- authority cannot remove that authority, trict court with the indeed im- that, Beyond duty. court must posed obligation, to review its terms authority proposed retain to evaluate conclude, then, entry. before We should judgment injunctive The relief that the pursuant entered to this any injunction decision whether to enter prevailing party. renders UA 2000 a ultimately within the court’s discre- It grounds is on these that I would reverse Certainly, may.not tion. ... the court the district court’s denial of injunction that enter an calls for an ille- leaving day while for another gal simply parties act because the have matter, general question more of whether all Rule agreed general to it.... As a present peculiar judgments satisfy consent decrees difficul- 68 Buckhannon. courts, they particu-

ties for create regarding possible impact

lar risks resulting injunction nonparties.

or a on added). Thus, “[a]t

Id. least seeking injunctions judg- or similar

cases therefore,

ments, the court cannot com- be agreed judgment to enter the even

pelled ATLANTA JOURNAL AND CONSTITU though emerged it from a Rule 68 offer Id; TION, Today, acceptance.” see also Martin v. USA a division of Gan (S.D.Miss. Mabus, F.Supp. nett Satellite Information Network 1990) (“[Tjhe prescribed by procedures (“GANSAT”), Inc., Plaintiffs-Appel making rule 68 for an offer of lees, 23(e) literally inapplicable because rule Company, New York Times d.b.a. The

requires be approval that court obtained Times, New York Intervenor- order for case be dismissed or com- Plaintiff, Appellee, promised.”). then, Essentially, presence injunc

tive in a Rule 68 offer it relief renders ATLANTA DEPART CITY OF of a equivalent proposed functional consent AVIATION, Benjamin MENT R. OF requiring decree court to review the Decosta, capacity as his official Consequently, terms a Rule of the offer. City Manager, Aviation of At General including injunctive relief lanta, Diaz, ca Mario his official judicial clearly imprima bears a sufficient Deputy pacity as Aviation General satisfy tur to Buckhannon. Am. Dis Cf. Atlanta, Shirley Manager, City of Ass’n, Chmielarz, ability Inc. v. n„ Franklin, capacity (11th Cir.2002) (“[T]he in her official Mayor, City Atlanta, Defendants- explicit approval district court’s of the set express jurisdic- tlement and retention of Appellants.

Case Details

Case Name: Utility Automation 2000, Inc. v. Choctawhatchee Electric Cooperative, Inc.

Court Name: Court of Appeals for the Eleventh Circuit

Date Published: Jul 24, 2002

Citation: 298 F.3d 1238

Docket Number: 01-16265

Court Abbreviation: 11th Cir.