McGraw-Hill Global Education, LLC v. Jones

714 F. App'x 500
CourtCourt of Appeals for the Sixth Circuit
DecidedOctober 26, 2017
Docket17-5335
StatusUnpublished
Cited by2 cases

This text of 714 F. App'x 500 (McGraw-Hill Global Education, LLC v. Jones) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McGraw-Hill Global Education, LLC v. Jones, 714 F. App'x 500 (6th Cir. 2017).

Opinion

COOK, Circuit Judge.

This appeal asks whether an accepted Federal Rule of Civil Procedure 68 offer of judgment made to end years of litigation over a fraudulent book-discounting scheme entitled plaintiffs to attorneys’ fees in their cost award. For the reasons that follow, we answer yes.

I.

The underlying litigation dates back to 2012. Plaintiffs, several educational publishers (collectively, “Publishers”), allege defendants David Griffin and Charles A. Jones participated in a “chop shop” scheme whereby defendants acquired foreign-edition textbooks at substantially lower prices than equivalent U.S. editions. Defendants allegedly ordered their employees to modify the international editions to make them appear to be genuine U.S. editions, which defendants then sold to students in this country for a profit in violation of Publishers’ copyrights and trademarks, This appeal concerns a near-final phase of the case—construing the meaning of this offer of judgment.

In June 2016, Griffin gave Publishers a Federal Rule of Civil Procedure 68 offer of judgment (“the Offer”). The Offer reads in relevant part:

Pursuant to Rule 68 of the Federal Rules of Civil Procedure, the defendant, David Griffin, offers to allow judgment to be entered against him on the following terms:
1. Judgment will be entered in favor of all the plaintiffs as follows:
McGraw-Hill Global Education Holdings, LLC
Pearson Education, Inc,
Cengage Learning, Inc.
John Wiley & Sons, Inc,
Total Judgment
plus costs accrued through the date of this offer as may be allowed by the Court based on the submission of a bill of costs pursuant to Fed. R. Civ. Proc [sic] 54(d)(1).
2. Apart from a subsequent bill of costs, the judgment entered hereon resolves all issues between the plaintiffs and the defendant David Griffin and his counsel of record at the time of this offer.

Publishers filed a notice of acceptance of Griffin’s Offer with the district court on June 28, 2016. The same day, Publishers filed a proposed order of judgment that differed from the Offer itself. It eliminated any reference to Rule 54, substituting: “IT IS FURTHER ORDERED that [Publishers] shall recover from [Griffin] damages in the amount of $359,254.00, plus costs to be determined by the Court upon application submitted by the Plaintiffs within thirty (30) days of entry of this Judgment.”

After entertaining arguments from both parties, the district court entered a judgment consistent with the terms set forth in the Offer, backdating it (nunc pro tunc) to the date Publishers filed their notice of acceptance.

Publishers later filed a form “Bill of Costs” together with a “Motion for an Award of Costs,” seeking “an order granting [Publishers’] costs, including attorney’s fees.” They attached a proposed order with blank spaces for the court to decide the amount of costs to award, including a space for the portion of costs- representing attorneys’ fees.

$186,001,00
$100,501.00
$65,251.00
_$7,501,00_
$359,254.00

Griffin objected, arguing the Offer precluded an award of attorneys’ fees. Neither party, however, sought to invalidate the offer or to obtain relief from the judgment.

Nevertheless, deciding the fees issue, the district court invalidated the Offer and vacated the judgment on the theory that the terms of the Offer—specifically, the requirement that costs be submitted pursuant to Rule 54(d)(1)—impermissibly precluded the award of attorneys’ fees.

Publishers timely appealed.

II.

Both parties disagree with the district court’s sua sponte voiding of their agreement. The court reasoned that:

• Because a party prevailing in a copyright action has a right to recover its attorneys’ fees as part of costs; and,
• Because Federal Rule of Civil Procedure 68(a) (as interpreted by Marek v. Chesny, 473 U.S. 1, 6, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985)) forbids a party from excluding costs in its offer; and,
• Because Griffin’s offer attempted to exclude an award of attorneys’ fees— a subset of costs—from the Offer; therefore,
• The Offer was invalid under Rule 68; and,
• With no valid offer of judgment for Publishers to accept, the judgment nunc pro tunc was void.

We interpret the district court’s order as a ruling pursuant to Federal Rule of Civil Procedure 60(b)(4), which provides for relief from final judgments that are void, as this is the authority that “most nearly describes the district court’s action.” United States v. Pauley, 321 F.3d 578, 580 (6th Cir. 2003). In this circuit, “a district court may not sua sponte grant relief pursuant to Rule 60(b),” because Rule 60(b) only authorizes relief “on motion,” Id. at 581; Fed. R. Civ. P. 60(b); see also Eaton v. Jamrog, 984 F.2d 760, 762 (6th Cir. 1993) (holding courts may not grant Rule 60(b) relief absent “a motion from the affected party”); accord Lewis v. Alexander, 987 F.2d 392, 396 (6th Cir. 1993) (“[A] district court may not act sua sponte to grant relief from judgment through Rule 60(b).”).

Here, each party asked the district court to enforce the judgment and interpret the terms of the accepted Offer. The district court erred by vacating the judgment.

III.

The court nullified the Offer because Griffin attempted to exclude attorneys’ fees as part of “costs.”

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Bluebook (online)
714 F. App'x 500, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcgraw-hill-global-education-llc-v-jones-ca6-2017.