Please join us Monday, April 15, 2024 at noon where we will discuss Federal Rule of Civil Procedure 68 (Rule 68) and the “open question” of whether post-offer attorney’s fees are part of the recoverable “costs” for a defendant, in particular, in copyright cases.

I think defendants should be able to use the Rule 68 offer of judgment to attempt to settle a case by leveraging attorney’s fees and costs as pressure against plaintiffs, especially in cases involving “copyright troll” plaintiffs.  But let us explore this “open question” at the upcoming MCLE talk.  I mean, aren’t such offers supposed to be “actively supported by courts”. See Latshaw v. Trainer Wortham & Co., 452 F. 3d 1097, 1103 (9th Cir. 2021), available here. The very purpose of Rule 68 is to encourage the termination of unmerited and wasteful litigation. When a plaintiff in a copyright case recovers less than the defendant’s Rule 68 offer of judgment, should the plaintiff be required to pay the defendant’s post-offer attorney’s fees?

Section 505 provides that a court “may . . . award a reasonable attorney’s fee to the prevailing party as part of the costs.” (emphasis added).  The Supreme Court discussed the standard for awarding attorney’s fees in copyright infringement cases under § 505 in 2016 in Kirtsaeng v. John Wiley & Sons Inc. 136 S. Ct. 1979 (2016)

A U.S. District Court in the Southern District of California recently held in  Lardizabal v. Am. Express Natl Bank that a Federal Rule of Civil Procedure 68 offer of judgment must clearly state that attorneys’ fees and costs are limited or waived. This case was not a copyright case, but it does provide guidance on how to structure an effective Rule 68 offer.

Circuit courts and district courts are split on the instant “open question.” The Seventh and Ninth Circuit have each denied post-offer attorney’s fees to copyright defendants under Rule 68 (See Harbor Motor Co. v. Arnell Chevrolet-Geo, Inc., 265 F.3d 638 (7th Cir. 2001 available here) & UMG Recordings, Inc. v. Shelter Cap. Partners LLC, 718 F.3d 1006 (9th Cir. 2013) available here, whereas the Eleventh Circuit has awarded post-offer attorney’s fees to defendants in copyright cases under Rule 68, such as in Jordan v. Time, Inc., 111 F.3d 102 (11th Cir. 1997) available here, and so too have district courts located in the Second Circuit, such as in Wilson v. D’Apostrophe Design Inc., No. 20-CV-0003 (S.D.N.Y. Aug. 20, 2020), available here.

Marina L. Lang, Partner at at SoCal IP, will lead the discussion.