Applying Fed. R. Civ. P. 68 in the context of a 42 U.S.C.S. § 1983 action is consistent with the policies and objectives of 42 U.S.C.S. § 1988. Section 1988 encourages plaintiffs to bring meritorious civil rights suits; Fed. R. Civ. P. 68 simply encourages settlements.
Petitioner police officers sought review of the judgment of the United States Court of Appeals for the Seventh Circuit awarding postoffer costs to respondent administrator pursuant to Fed. R. Civ. P. 68 after the administrator recovered a judgment less than the rejected settlement offer in his action under 42 U.S.C.S. § 1983 and state law. The administrator did not accept the police officers' timely settlement offer of $100,000 and received an award of $60,000. He then filed a request for $171,692 in costs, including attorney's fees and costs incurred after the settlement offer.
Did Rule 68 of Federal Rules of Civil Procedure preclude a civil rights plaintiff from recovering under 42 U.S.C.S. § 1988 attorney's fees incurred subsequent to defendant's offer of settlement where he recovers a judgment less than the offer?
The Court reversed the judgment of the court of appeals. The U.S. Supreme Court held that Fed. R. Civ. P. 68 did not require that a settlement offer itemize the respective amounts being tendered for settlement of the underlying substantive claim and for costs. The term "costs" in Rule 68 was intended to refer to all costs properly awardable under the relevant substantive statute or other authority. Thus, absent contrary congressional expressions, where the underlying statute defined "costs" to include attorney's fees, such fees were to be included as costs for purposes of Rule 68. The administrator, as a prevailing party in a 42 U.S.C.S. § 1983 action, was entitled to be awarded attorney's fees as part of the costs pursuant to the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C.S. § 1988. Because Congress expressly included attorney's fees as "costs" available to a plaintiff in a 42 U.S.C.S. § 1983 suit, such fees were subject to the cost-shifting provision of Fed. R. Civ. P. 68.