"The Seventh Circuit recently clarified an important distinction between offers of judgment under Federal Rule of Civil Procedure 68 and non-Rule 68 offers of settlement, and explained the role rejection of such offers plays in reducing statutory attorney fee awards. . . .
The defendant in Cooper v. Retrieval‐Masters Creditors Bureau, Inc., shortly after filing its answer, made an oral offer to settle the matter for $500 in damages plus reasonable attorney fees and costs incurred up to that point. The plaintiff rejected this offer, and the case proceeded. The district court eventually granted summary judgment to the plaintiff on liability, and a jury later awarded him a total of $500 in damages. The plaintiff then sought $65,357.90 in attorney fees, which the district court largely denied, awarding only $6,845.76, or about one tenth of the fees sought. In cutting down the fee award, the district court noted that the plaintiff was only eligible to receive attorney fees incurred up to the rejection of the defendant’s early settlement offer, as if the defendant had made a Rule 68 offer. . . .
The Seventh Circuit . . . held that Rule 68 was not applicable to the offer made by the defendant, and the district court was not permitted to apply Rule 68’s automatic and mandatory bar in denying fees for the post-offer work the plaintiff’s attorneys did. Rather, the question was whether the district court abused its discretion in lowering the fees in light of the totality of the circumstances." Click here to read the Proskauer Rose article.
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