Grissom v. the Mills Corp.

549 F.3d 313, 72 Fed. R. Serv. 3d 216, 28 I.E.R. Cas. (BNA) 781, 2009 CCH OSHD 32,981, 2008 U.S. App. LEXIS 24377, 91 Empl. Prac. Dec. (CCH) 43,399, 2008 WL 5077824
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 3, 2008
Docket07-1777
StatusPublished
Cited by300 cases

This text of 549 F.3d 313 (Grissom v. the Mills Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grissom v. the Mills Corp., 549 F.3d 313, 72 Fed. R. Serv. 3d 216, 28 I.E.R. Cas. (BNA) 781, 2009 CCH OSHD 32,981, 2008 U.S. App. LEXIS 24377, 91 Empl. Prac. Dec. (CCH) 43,399, 2008 WL 5077824 (4th Cir. 2008).

Opinion

Vacated and remanded by published opinion. Senior Judge HAMILTON wrote the opinion, in which Judge TRAXLER and Judge DEVER joined.

OPINION

HAMILTON, Senior Circuit Judge:

In this appeal, the Mills Corporation (Defendant or Mills) challenges, on several grounds, the district court’s entry of a judgment awarding its former employee Kenneth Grissom (Plaintiff) $325,484.08 in attorneys’ fees and costs (the Fee Award). The Fee Award followed Plaintiffs acceptance of Defendant’s $130,000.00 offer of judgment made pursuant to Federal Rule of Civil Procedure 68 (Rule 68). For reasons that follow, we vacate the Fee Award and remand for further proceedings consistent with this opinion.

I.

Defendant, a publicly traded corporation in the business of developing large commercial real estate projects such as shopping malls, employed Plaintiff as a vice president and project manager from January 2000 until it discharged him on August 16, 2005, on the asserted ground of poor job performance. At the time of his discharge, Plaintiff was the project manager for a redevelopment/expansion project of a retail mall called the Shops at Riverside Square, in Hackensack, New Jersey (the Riverside Project). Plaintiff not only disputed Defendant’s assertion of poor job performance, but he also claimed that Defendant illegally discharged him in retaliation for engaging in whistleblower activity protected by the Sarbanes-Oxley Act of 2002(SOX), 18 U.S.C. § 1514A.

In relevant part, § 1514A provides “whistleblower protection” for employees of publicly traded companies who are “discharge[d], ... harassed], or in any other manner discriminate^] against ... in the terms and conditions of employment because of any lawful act done by the employee”:

(1) to provide information ... which the employee reasonably believes constitutes a violation of ... any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders, when the information or assistance is provided to ...
(C) a person'with supervisory authority over the employee (or such other person working for the employer who *316 has the authority to investigate, discover, or terminate misconduct);....

Id. § 1514A(a)(l)(C).

On August 18, 2006, Plaintiff filed the present civil action against Defendant, alleging four claims. After voluntarily dismissing one such claim, Plaintiff filed an amended complaint alleging the following three claims: (1) common law breach of contract; (2) common law defamation per se; and (3) violation of SOX’s whistleblower provision. 1 In his breach of contract claim, Plaintiff alleged that Defendant failed to pay him certain promised bonuses. In his defamation per se claim, Plaintiff alleged that Defendant, “through its representative, Nicholas Sharr, made false and defamatory statements concerning [Plaintiff] and portrayed him in a light to suggest he was unfit, inept, lacked integrity, and/or was unable [to] perform his duties of employment, which constituted defamation per se.” (J.A. 34). In his SOX whistleblower claim, Plaintiff alleged that Defendant discharged and defamed him (by falsely accusing him of misappropriating confidential company documents) in retaliation for his expressing concern to his direct supervisor, Nicholas Sharr, and other specifically named high-level company executives that, in two consecutive Form 8-K Reports that Defendant had filed with the Securities and Exchange Commission, see 17 C.F.R. § 240.13a-ll, Defendant had knowingly underreported the actual projected cost of the Riverside Project by approximately eighteen percent and twelve percent respectively.

Approximately one month prior to the close of discovery, on May 11, 2007, Defendant made a Rule 68 offer of judgment in the amount of $130,000.00 (Defendant’s Rule 68 Offer of Judgment). At all times relevant to the present case, Rule 68 provided, in relevant part:

At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the clerk shall enter judgment. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer.

Fed.R.Civ.P. 68 (emphasis added). 2 In Marek v. Chesny, 473 U.S. 1, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985), “the Supreme Court held that costs which are shifted under Rule 68 include all costs properly awardable under relevant substantive statutes, including statutes which define costs *317 to include attorney’s fees.” Marryshow v. Flynn, 986 F.2d 689, 691 (4th Cir.1993).

Significantly, Defendant’s Rule 68 Offer of Judgment specified:

This Offer of Judgment does not cover any attorneys’ fees and costs [Plaintiff] has incurred. Rather, the issue of attorneys’ fees and costs shall be resolved in a separate proceeding through a petition to the Court, where the Court shall determine the extent to which [Plaintiff] and/or his attorney are entitled to fees and costs, if any.

(J.A. 72).

On May 22, 2007, Plaintiff accepted Defendant’s Rule 68 Offer of Judgment, and the Clerk of Court entered judgment in favor of Plaintiff in the amount of $130,000.00. On the same day, Plaintiff also filed a petition for an award of attorneys’ fees and costs (the Petition or Plaintiffs Petition) with respect to his SOX whistleblower claim. The Petition, along with a supplemental petition for an award of attorneys’ fees and costs filed by Plaintiff (Plaintiffs Supplemental Petition), sought “attorneys’ fees related to Plaintiffs counsel work done since the initial complaint filed with [DOL].” (J.A. 1007). As summarized by the district court:

In Plaintiffs Petition, he seeks $370,305.00 in attorneys’ fees, $38,790.15 in non-taxable costs, and $6,934.01 in taxable costs. In Plaintiffs Supplemental Petition, he seeks an additional $27,280.00 in attorneys’ fees and $3,922.95 in non-taxable costs.

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549 F.3d 313, 72 Fed. R. Serv. 3d 216, 28 I.E.R. Cas. (BNA) 781, 2009 CCH OSHD 32,981, 2008 U.S. App. LEXIS 24377, 91 Empl. Prac. Dec. (CCH) 43,399, 2008 WL 5077824, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grissom-v-the-mills-corp-ca4-2008.