Posted on June 28, 2013 by John A. McKinney Jr
A Third Circuit decision this month determined that offers of judgment pursuant to Fed.R.Civ.P. 68 may be made in attorney fee disputes in RCRA citizen suits (42 USC § 7002). In Interfaith Community Organization v. Honeywell International, Inc., 2013 WL 2397338 (C.A.3 (N.J.) Honeywell International (“Honeywell”) agreed to pay certain fees and costs in connection with Appellees Interfaith Community Organization and Hackensack River keeper’s monitoring costs in connection with Honeywell’s remediation of certain sites. A dispute arose as to Appellees’ counsel’s fee filings, and Honeywell served offers of judgment as to the disputed fees. Appellees contended that the offers were null and void in a RCRA citizen suit and prevailed on the issue below. The Third Circuit overturned the decision below.
The Third Circuit first addressed the argument that Rule 68 is incompatible with Congressional intent allowing RCRA citizen suits and is forbidden by the Rules Enabling Act, 28 US § 2072. That act prohibits the Supreme Court from adopting general rules of practice and procedure for cases in the US courts that abridge, enlarge or modify a substantive right. The Third Circuit found that Rule 68, in facilitating settlements, does not affect a litigant’s substantive rights even though a litigant may be faced with a hard choice. Being forced to make that choice does not abridge, enlarge or modify its substantive rights. The court found unpersuasive the appellees’ arguments attempting to distinguish a Supreme Court case that allowed Rule 68 in civil rights litigation involving fee shifting.
In the case below, the District Court had entered a judgment ordering Honeywell to remediate one area and Honeywell had entered into consent decrees agreeing to remediate additional areas. Appellees contended that Rule 68 cannot apply after a judgment has been rendered on liability. The Third Circuit disagreed and found that liability also included fees and costs, and they had not been determined in this case.
Given this decision (which also addresses issues other than Rule 68), it is likely RCRA citizen suit defense counsel will utilize the offer of judgment rule more often. However, there are numerous cases and articles detailing the perils of using the rule in the wrong case or in the wrong way. Counsel should pay close attention to those.