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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 19-10679 ________________________
D.C. Docket No. 1:17-cv-21765-RNS
ROBERTO VASCONCELO,
Plaintiff-Appellant, versus
MIAMI AUTO MAX, INC., KENNYA QUESADA,
Defendants-Appellees.
________________________
Appeal from the United States District Court for the Northern District of Georgia _______________________
(November 25, 2020)
Before WILLIAM PRYOR, Chief Judge, HULL and MARCUS, Circuit Judges.
WILLIAM PRYOR, Chief Judge:
Roberto Vasconcelo sued his employer, Miami Auto Max, for violating the
Fair Labor Standards Act and sought over $12,000 in unpaid wages and liquidated
damages. He refused an offer of judgment for $3,500 and went to trial, where he USCA11 Case: 19-10679 Date Filed: 11/25/2020 Page: 2 of 19
won a verdict of only $97.20 plus an equal amount in liquidated damages. As the
prevailing party, he then requested about $60,000 in attorney’s fees and costs. But
the district court awarded him only 37 percent of his requested attorney’s fees and
taxed against him the costs incurred by the parties after the offer of judgment.
Vasconcelo appeals both the final judgment and the order awarding fees and taxing
costs. But his appeal of the final judgment is untimely, and his appeal of the order
awarding attorney’s fees and taxing costs has no merit. We dismiss in part and
affirm in part.
I. BACKGROUND
Vasconcelo worked as a sales associate for Miami Auto Max from
November 2016 until July 2017. Miami Auto Max paid its sales associates a “draw
against commission”; associates earned commissions on the cars they sold and
were paid a weekly draw against their commissions of an amount equal to the
minimum wage multiplied by their number of hours worked. To the extent a sales
associate’s draw exceeded his earned commissions, the difference was carried
forward in perpetuity and applied against future commissions. Vasconcelo
struggled to sell enough cars to offset the draws against his commissions, and his
total draws exceeded his commissions by $2,739.21 after his last month on the job.
On May 12, 2017, Vasconcelo sued Miami Auto Max and its owner, Kennya
Quesada, to recover damages for unpaid wages under the Fair Labor Standards
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Act. He alleged that his weekly draws were not wages at all, but a debt owed to
Miami Auto Max. He also alleged that he was required to work off the clock and
not paid a minimum wage for those hours, that Miami Auto Max took unwarranted
deductions from his time logged, and that it did not pay him on time. Based on the
theory that none of his weekly draws counted as minimum-wage payments, he
estimated that he was owed $6,397.65 in unpaid wages plus an equal amount in
liquidated damages under the Fair Labor Standards Act, for a total of $12,795.30.
On December 5, 2017, Miami Auto Max made Vasconcelo an offer of
judgment under Federal Rule of Civil Procedure 68. It offered $3,500 “inclusive of
liquidated damages, plus a reasonable amount of attorney[’s] fees and costs
incurred to date.” The offer specified that “any resulting judgment shall [not] be
construed as an admission by Defendants of any liability in this action, or that
Plaintiff has suffered any damage.” Vasconcelo did not accept the offer.
The case proceeded to a two-day jury trial. Vasconcelo argued that Miami
Auto Max’s entire “draw against commission” plan violated the Fair Labor
Standards Act. He also presented testimony that his manager twice failed to adjust
his time cards to reflect that he had been working since 9:00 a.m. after he forgot to
punch in until around 3:00 p.m., which meant that he was not paid for 12 hours of
work. The jury found that Miami Auto Max had failed to pay Vasconcelo a
minimum wage for all hours worked and awarded him $97.20 in damages, exactly
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12 hours of minimum-wage payments. The district court entered judgment in favor
of Vasconcelo for $97.20.
After trial, Vasconcelo moved to amend the judgment to include an
additional $97.20 in liquidated damages under the Fair Labor Standards Act and a
reservation of jurisdiction for the district court to enter an award of fees and costs
as required under the Act. He also moved for judgment as a matter of law on one
alleged violation of the Act, and he moved alternatively for a new trial based on
improper jury instructions.
The district court denied Vasconcelo’s motion for judgment as a matter of
law or a new trial, but it granted in part his motion to amend the judgment. It
vacated the final judgment, reserved jurisdiction over the issue of attorney’s fees,
and agreed that the new final judgment should include an award of $97.20 in
liquidated damages. The district court made clear that it was not entering a new
final judgment, but that it would do so after the issue of fees and costs had been
resolved.
Meanwhile, Miami Auto Max moved to tax its $1,340 in post-offer costs
against Vasconcelo under Rule 68. And Vasconcelo moved to tax all $3,951.29 of
his costs against Miami Auto Max, as well as for $55,990 in attorney’s fees, both
as provided in the Fair Labor Standards Act. The district court referred the motions
for fees and costs to a magistrate judge.
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The magistrate judge recommended taxing Miami Auto Max’s post-offer
costs against Vasconcelo under Rule 68. He reviewed Vasconcelo’s request for
attorney’s fees line by line and recommended excluding roughly 40 hours of work
from the lodestar calculation. And he recommended further reducing Vasconcelo’s
fee request by 70 percent based on his limited success at trial. The parties filed a
flurry of objections and responses, and the district court announced it would enter a
final judgment on the merits while the parties continued to litigate attorney’s fees
and costs.
On October 30, 2018, the district court entered a final judgment for $194.40
in damages. On January 22, 2019, it adopted the magistrate judge’s
recommendations in full. It explained that the magistrate judge’s lodestar
calculation was no longer correct in the light of a later-revealed scrivener’s error,
but it corrected the error and adopted the originally recommended $13,083 fee
award as a 63 percent (instead of 70 percent) reduction to the lodestar. And it
agreed that Miami Auto Max’s post-offer costs should be taxed against Vasconcelo
under Rule 68. On February 21, 2019, Vasconcelo appealed both the final
judgment and the order awarding fees and costs.
II. STANDARD OF REVIEW
We review for abuse of discretion an award of attorney’s fees under the Fair
Labor Standards Act. Kreager v. Solomon & Flanagan, P.A., 775 F.2d 1541, 1543
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(11th Cir. 1985). We review an interpretation of Rule 68 de novo, but we review
any disputed facts about an offer of judgment under that rule for clear error. Jordan
v. Time, Inc., 111 F.3d 102, 105 (11th Cir. 1997).
III. DISCUSSION
We divide our discussion in three parts. First, we explain that Vasconcelo’s
appeal of the final judgment is untimely. Second, we address the award of
attorney’s fees. And third, we address the application of Rule 68.
A. We Lack Jurisdiction Over Vasconcelo’s Untimely Appeal of the Final Judgment. The Federal Rules of Appellate Procedure require that a notice of appeal in a
civil case be filed within 30 days after the entry of judgment. Fed. R. App. P.
4(a)(1)(A). That rule has a statutory basis, see 28 U.S.C. § 2107(a), and it is
jurisdictional, Bowles v. Russell, 551 U.S. 205, 213 (2007). The district court
entered its final judgment on October 30, 2018, and Vasconcelo did not file his
notice of appeal until February 21, 2019. Because he waited more than 30 days to
appeal the final judgment, we lack jurisdiction over that portion of the appeal.
Vasconcelo argues that, under our precedents, a special rule applies in
appeals involving the Fair Labor Standards Act. He says that the judgment was not
final and appealable until the district court entered an order awarding attorney’s
fees on January 22, 2019, and that his appeal is timely. But the decision on which
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Vasconcelo relies, Shelton v. Ervin, 830 F.2d 182 (11th Cir. 1987), has been
abrogated by a decision of the Supreme Court.
To be sure, we held in Shelton that “attorney[’s] fees are an integral part of
the merits of [Fair Labor Standards Act] cases and part of the relief sought
therein.” Id. at 184. And, we concluded, “a final determination as to the award of
attorney[’s] fees is required as part of the final appealable judgment.” Id. But we
based our analysis on two decisions that the Supreme Court expressly abrogated
soon afterward. See id. at 183 (relying on McQurter v. City of Atlanta, 724 F.2d
881 (11th Cir. 1984), abrogated by Budinich v. Becton Dickinson & Co., 486 U.S.
196 (1988), and Holmes v. J. Ray McDermott & Co., 682 F.2d 1143 (5th Cir.
1982), abrogated by 486 U.S. 196).
In Budinich v. Becton Dickinson and Company, the Supreme Court granted a
writ of certiorari to resolve a circuit split about “whether a decision on the merits is
a ‘final decision’ as a matter of federal law under [section] 1291 when the
recoverability or amount of attorney’s fees for the litigation remains to be
determined.” 486 U.S. at 199. The Supreme Court explained that “[s]ome Courts
of Appeals have held that . . . statutes creating liability for attorney’s fees can
cause them to be part of the merits relief for purposes of [section] 1291,” and it
cited McQurter and Holmes as examples. Id. at 201. The Supreme Court rejected
that approach and adopted “a uniform rule that an unresolved issue of attorney’s
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fees for the litigation in question does not prevent judgment on the merits from
being final.” Id. at 202. So Budinich abrogated Shelton’s contrary holding that “a
final determination as to the award of attorney[’s] fees is required as part of the
final appealable judgment.” 830 F.2d at 184.
Vasconcelo argues that Shelton remains good law after Budinich because
neither the Supreme Court nor this Court has ever extended Budinich to cases
involving the Fair Labor Standards Act. In doing so, he suggests that the
importance of attorney’s fees under the Fair Labor Standards Act insulates Shelton
from the holding in Budinich. We disagree.
Budinich did not turn on statutory context; the Court rejected a statute-by-
statute approach in favor of “a uniform rule.” 486 U.S. at 201–02. And the import
of Budinich is apparent from the decisions it abrogated: McQurter involved
attorney’s fees in civil-rights actions, see 42 U.S.C. § 1988, 724 F.2d at 882, and
Holmes involved attorney’s fees under general maritime law, 682 F.2d at 1144,
1147 n.7. Budinich itself involved a diversity-jurisdiction suit based on a Colorado
employment statute. 486 U.S. at 197.
The Supreme Court has explained that “complex variations in . . . fee-
shifting provisions” make exceptions to this uniform rule unworkable. Ray Haluch
Gravel Co. v. Cent. Pension Fund of Int’l Union of Operating Eng’rs &
Participating Emps., 571 U.S. 177, 188 (2014). And it has rejected the notion that
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courts should consider whether “[s]ome fee-shifting provisions treat the fees as
part of the merits . . . [and] some do not.” Id. “The rule adopted in Budinich
ignores these distinctions in favor of an approach that looks solely to the character
of the issue that remains open after the court has otherwise ruled on the merits of
the case.” Id. Setting up Shelton as a one-off exception to Budinich would not be a
faithful application of Supreme Court precedent.
Because Budinich abrogated Shelton, Vasconcelo’s appeal of the final
judgment is untimely. We have no choice but to dismiss that portion of his appeal.
But Vasconcelo’s appeal was timely as to the order awarding attorney’s fees and
taxing costs, so we have jurisdiction over those portions of his appeal.
B. The District Court Did Not Abuse Its Discretion by Reducing Vasconcelo’s Request for Attorney’s Fees. The district court acted within its discretion to award a reasonable fee in the
light of Vasconcelo’s limited success at trial, where he recovered only $194.40
after demanding $12,795.30. “The determination of a reasonable fee pursuant to
section 216(b) of the Fair Labor Standards Act is left to the sound discretion of the
trial judge and will not be set aside absent a clear abuse of discretion.” Kreager,
775 F.2d at 1543. Vasconcelo’s scattershot arguments that the district court abused
its discretion by reducing his request for a fee award of $55,990 to an award of
$13,083 all fail.
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Vasconcelo argues that the district court erred by reducing his fee because
he rejected Miami Auto Max’s offer of judgment. But he cites no authority to
explain why such an adjustment would be erroneous. And his assertion is
inconsistent with the record. Vasconcelo contends that the magistrate judge’s
report and recommendation “specifically provided that a material reason for the
downward adjustment [was] ‘that this case was indisputably not settled at any
point prior to trial,’” and he implies that the Rule 68 offer was the only settlement
to which the magistrate judge could have been referring. But the magistrate judge
made clear—in the very sentence of the report and recommendation quoted by
Vasconcelo—that Vasconcelo not only rejected Miami Auto Max’s Rule 68 offer,
but also “multiple settlement efforts by counsel informally, at mediation, and at a
court-supervised settlement conference.” The district court did not abuse its
discretion by accounting for Vasconcelo’s refusal to settle the case before trial. See
Vocca v. Playboy Hotel of Chi., Inc., 686 F.2d 605, 608 (7th Cir. 1982) (holding
that failing to accept a reasonable settlement offer and thereby prolonging litigation
justified a reduced fee award).
Vasconcelo also argues that the district court erroneously double-counted
some factors in its determination of a reasonable fee by applying an across-the-
board reduction to the lodestar based on factors already considered in excluding
hours from the lodestar. See Bivins v. Wrap it Up, Inc., 548 F.3d 1348, 1352 (11th
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Cir. 2008). Specifically, he alleges that the magistrate judge’s report and
recommendation “consider[ed] the supposed failure to settle when arriving at the
lodestar calculation, and then ma[de] further adjustment downward based upon the
failure to settle.” But the record tells a different story.
The magistrate judge performed a line-by-line review of Vasconcelo’s
attorney’s time log. Based on that review, the magistrate judge recommended
excluding from the lodestar roughly 40 hours of work that included “excessive use
of time preparing for settlement conferences (which were unsuccessful given
[Vasconcelo’s] and his counsel’s inflated view of their case).” Vasconcelo
emphasizes the magistrate judge’s frustrated comment about his and his counsel’s
stubbornness—a theme that runs throughout the report and recommendation—but
this aside does not change the fact that the hours were excluded because the
preparation time was excessive, not because the settlement conferences were
unsuccessful.
Vasconcelo argues that the district court erred by reducing his attorney’s
fees based on his limited success at trial. He argues that the success of lawsuits for
unpaid wages cannot be judged solely based on dollars and cents and that
attorney’s fee awards should not be reduced based only on modest judgments. But
Vasconcelo’s argument again involves a misreading of the record.
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The district court did not conclude that Vasconcelo’s success at trial was
limited because he recovered only a modest judgment. It instead explained that
Vasconcelo’s success was limited when compared to his own demand: “[I]n his
underlying claim, Vasconcelo sought to recover $12,795.30 in unpaid wages and
liquidated damages. In contrast, after trial, the Court entered judgment in
Vasconcelo’s favor for only $194.40 . . . . This represents 1.5[ percent] of the total
amount sought.” Vasconcelo’s success was limited; he alleged that Miami Auto
Max’s entire payment plan was illegal but prevailed only on a minor timekeeping
violation. The district court did not abuse its discretion by reducing his fee award
based on limited success.
Vasconcelo argues that the district court failed to account for the public
benefit of vindicating an employee’s rights under the Fair Labor Standards Act.
See Villano v. City of Boynton Beach, 254 F.3d 1302, 1306–07 (11th Cir. 2001).
But the magistrate judge and the district court did consider the public interest. The
magistrate judge said that “[c]ontrary to the immediate need to enforce his rights
and protect the public interest, [Vasconcelo] had other factors in mind [i.e.
attorney’s fees] in refusing to settle the case and in pursuing the case in the manner
that he did. The public interest factor in this case thus tilts heavily in favor of
[Miami Auto Max’s] position, not [Vasconcelo’s].” And the district court
acknowledged Vasconcelo’s public-interest argument before agreeing with the
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magistrate judge’s analysis. The district court did not abuse its discretion by failing
to account for the public interest.
Vasconcelo argues that the district court erroneously premised the reduction
of the lodestar on the fact that he did not prove “abuse.” But the failure to show
“abuse” was not an independent reason for the lodestar reduction. In its full
context, the “abuse” language that Vasconcelo finds objectionable is part of the
magistrate judge’s discussion of the fact that his fee request was unreasonable in
the light of his limited success on a minor timekeeping violation:
[C]ontrary to [Vasconcelo’s] aggrandized view of this case, the [Fair Labor Standards Act] is not designed to merely reward attorneys billing time. The statute was enacted to prevent employees from abuse in the work place. The jury found here that no such abuse existed and that only a modest sum was required to remedy a minor minimum wage violation. The entire statutory scheme, however, is undermined when parties go to litigation war over such minor violations.
A passing comment that a violation was small potatoes compared to the ensuing
litigation is not an abuse of discretion.
And finally, Vasconcelo argues that because enhancements of the lodestar
should be reserved for exceptional cases, reductions of the lodestar should be rare
too, but even if that argument were true, it would not mean that Vasconcelo should
have been awarded the entire fee he requested. The district court did not abuse its
discretion when it declined to award nearly $60,000 in fees for litigating a $200
case.
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C. The District Court Correctly Applied Rule 68 to Tax the Parties’ Post- Offer Costs Against Vasconcelo.
Rule 68 allows defendants to “serve on an opposing party an offer to allow
judgment on specified terms, with the costs then accrued.” Fed. R. Civ. P. 68(a).
And it compels plaintiffs to give offers serious consideration by providing that “[i]f
the judgment that the offeree finally obtains is not more favorable than the
unaccepted offer, the offeree must pay the costs incurred after the offer was made.”
Fed. R. Civ. P. 68(d). The district court concluded that Miami Auto Max made a
valid offer of judgment that proved to be more favorable than the damages
awarded, and it applied Rule 68 to tax against Vasconcelo the costs incurred by
Miami Auto Max after the offer.
Vasconcelo raises three arguments. He argues that Rule 68 cannot prevent a
mandatory award of costs to a prevailing plaintiff under the Fair Labor Standards
Act, that Miami Auto Max’s offer of judgment was ambiguous and, as a result,
invalid, and that Miami Auto Max’s offer of judgment was less favorable than the
jury verdict. None of these arguments has any merit.
Vasconcelo argues that Rule 68 cannot prevent prevailing plaintiffs from
recovering costs under the Fair Labor Standards Act, but Rule 68 applies in actions
brought under the Fair Labor Standards Act no less than in any other case. See Fed.
R. Civ. P. 1 (“These rules govern the procedure in all civil actions . . . .” (emphasis
added)). Vasconcelo argues that because the “[Fair Labor Standards Act’s]
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statutory design makes an award of costs mandatory to prevailing Plaintiffs to
further the underlying public policy,” “Rule 68 is unavailable as a means of
shifting cost[s]” in cases brought under the Act. But he ignores the fact that, by
statute, any conflict between Rule 68 and the Fair Labor Standards Act must be
resolved the other way. The Rules Enabling Act provides that after the effective
date of any rule of procedure “all laws in conflict therewith shall be of no further
force or effect.” Pub. L. No. 73-415, § 1, 48 Stat. 1064. Under the terms of section
2 of the Rules Enabling Act, the Federal Rules of Civil Procedure—including Rule
68—took effect on September 16, 1938, at the end of the congressional session at
which they were first transmitted to Congress. 4 Charles A. Wright, Arthur R.
Miller & Adam N. Steinman, Federal Practice and Procedure § 1004, at 28
(2015). The Fair Labor Standards Act was enacted three months earlier, on June
25, 1938. Pub. L. No. 75-718, 52 Stat. 1060. Because the Fair Labor Standards Act
was enacted before the effective date of Rule 68, the Rules Enabling Act
establishes that Rule 68 applies in any conflict between the two. The Fair Labor
Standards Act does not create an exception to the normal application of Rule 68.
Vasconcelo argues that Miami Auto Max’s offer of judgment was invalid
because it was ambiguous as to whether the $3,500 settlement included fees and
costs, but an ambiguous offer of judgment is not necessarily invalid—such an offer
is construed against its drafter, not ignored entirely. See Util. Automation 2000,
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Inc. v. Choctawhatchee Elec. Co-op., Inc., 298 F.3d 1238, 1243 (11th Cir. 2002).
Rule 68 offers are governed by normal principles of contract law. See Johnson v.
Univ. Coll. of Univ. of Ala. in Birmingham, 706 F.2d 1205, 1209 (11th Cir. 1983).
“A contract is ambiguous where it is susceptible to two different interpretations,
each one of which is reasonably inferred from the terms of the contract.” F.T.C. v.
Leshin, 618 F.3d 1221, 1231 (11th Cir. 2010) (internal quotation marks omitted).
Miami Auto Max’s offer was not susceptible to multiple interpretations. The
offer provided that Miami Auto Max would allow a judgment to be taken against it
“in the amount of Three Thousand Five Hundred Dollars ($3,500.00), inclusive of
liquidated damages, plus a reasonable amount of attorney[’s] fees and costs
incurred to date by Plaintiff, including attorney[’s] fees and costs incurred in
establishing the amount of fees and costs, to be determined by the Court.”
Vasconcelo argues that it is ambiguous whether the $3,500 offer included fees and
costs. He is correct only if it is reasonable to read the phrase “inclusive of
liquidated damages, plus a reasonable amount of attorney[’s] fees and costs” as if
the comma after “damages” was not there, and as if the word “plus” was used
synonymously with the word “and.” But that reading is unreasonable. The word
“inclusive” is set off from the word “plus” with a comma, clearly
contradistinguishing “liquidated damages,” which are included in the $3,500, and
“a reasonable amount of attorney[’s] fees and costs,” which is to be added
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separately. Miami Auto Max’s offer is susceptible to only one reasonable reading:
that the offer is for $3,500 plus reasonable fees and costs as determined later by the
court.
Vasconcelo argues that a $194.40 judgment and a finding of liability is
“more favorable” for purposes of Rule 68 than a $3,500 settlement and a denial of
liability. Vasconcelo seizes on the fact that Miami Auto Max’s offer included
language that “neither it nor any resulting judgment shall be construed as an
admission by [Miami Auto Max] of any liability in this action, or that
[Vasconcelo] has suffered any damage . . . .” He suggests that the jury verdict had
substantial non-pecuniary value because it vindicated his mistreatment by Miami
Auto Max and that the jury’s finding of liability created public benefits that must
be considered in the Rule 68 analysis.
Vasconcelo is correct that the non-monetary elements of a judgment should
be considered when comparing it to a Rule 68 offer. See Reiter v. MTA New York
City Transit Auth., 457 F.3d 224, 231 (2d Cir. 2006); Andretti v. Borla
Performance Indus., Inc., 426 F.3d 824, 837–38 (6th Cir. 2005). But the district
court did not clearly err in its implicit factual finding that Vasconcelo’s non-
pecuniary interest in establishing Miami Auto Max’s liability was not worth more
than the $3,305.60 difference between the jury verdict and the offer. Jordan, 111
F.3d at 105; see also Reiter, 457 F.3d at 229 (holding that a district court’s
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conclusion that a Rule 68 offer was more favorable than a judgment including
substantial equitable relief was “clearly erroneous . . . [because it] draws
indefensible conclusions about the worthlessness of the equitable
relief . . . obtained”). The magistrate judge’s report and recommendation aptly put
it this way: “contrary to [Vasconcelo’s] aggrandized view of this case, the [Fair
Labor Standards Act] is not designed to merely reward attorneys billing time.”
Vasconcelo also suggests that jury verdicts establishing liability under the
Fair Labor Standards Act create several public benefits that must weigh in the Rule
68 favorability analysis. Public benefits include “society’s interest in vindication of
rights created by remedial statutes,” the fact that a jury verdict exposes the guilty
employer to civil penalties for future violations, and the fact that the verdict may
create a precedential decision in the jurisdiction for future plaintiffs to rely on. We
disagree.
Vasconcelo cites no decision in which any court has taken such a holistic
approach. Rule 68 instead directs courts to compare the offer of judgment to “the
judgment . . . finally obtain[ed].” Fed. R. Civ. P. 68(d). The factors Vasconcelo
identifies are not part of the judgment and are not germane to the analysis required
by Rule 68. See, e.g., Spencer v. Gen. Elec. Co., 894 F.2d 651, 663 (4th Cir. 1990)
(“A court’s task under the Rule is to compare the offer of ‘judgment’ to the
‘judgment finally obtained’ by the offeree and determine if the latter is more
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favorable than the former. In making this comparison, the court below strayed
from this plain mandate, seeing fit to include the non-judgment relief Spencer
acquired as part of her ‘judgment finally obtained.’”), abrogated on other grounds
by Farrar v. Hobby, 506 U.S. 103 (1992); Johnston v. Penrod Drilling Co., 803
F.2d 867, 870 (5th Cir. 1986) (“Rule 68’s description of the sum to be compared to
the offer is clear: ‘the judgment finally obtained.’”). So the conclusion that the
$194.40 judgment was not more favorable than the $3,500 offer of judgment was
not reversible error. The district court correctly applied Rule 68 to tax the parties’
post-offer costs against Vasconcelo.
IV. CONCLUSION
We DISMISS the appeal of the final judgment and AFFIRM the order
awarding attorney’s fees and taxing costs.