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Catalina Yachts v. Pierce1/14/2005
a warranty action, the consumer will generally, if not always, be the plaintiff; the attorney's fee provision does not mention prevailing defendants or parties who do not prevail at trial. Civil Rule 68, on the other hand, allows attorney's fees to defendants who do not prevail at trial. Two provisions are in direct conflict when they cannot both be followed - when complying with one necessarily means violating the other. If Magnuson-Moss, by authorizing awards only to consumers, bars fee awards to defendants, then Rule 68 cannot be followed without violating the federal law. But the Act's failure to authorize awards to defendants is not the same as a bar on such awards when they are allowed by another authority. This silence distinguishes Magnuson-Moss from other federal laws that place limits on the circumstances in which defendants can receive fee awards and that therefore may conflict with state fee provisions. For example, in State v. Golden's Concrete Co., the Colorado Supreme Court found a conflict between a state law mandating fee awards to defendants when the case against them is dismissed before trial and 42 U.S.C. § 1988, which allows fee awards to defendants "only when the plaintiff's suit 'was vexatious, frivolous, or was brought to harass or embarrass the defendant.' " Magnuson-Moss does not authorize awards to defendants, but neither does it limit them as § 1988 does.
A state court rule is presumed valid in the face of a potentially conflicting federal law. In light of this principle, we do not read Magnuson-Moss's silence as a bar on awards to defendants. Therefore, it is possible to follow both the state rule and the federal act without violating either. A court could, as the superior court did after the first trial, award the prevailing plaintiff full fees and costs, then offset that award against the defendant's post-offer fees and costs while also giving the defendant the other benefit of Rule 68, a reduced pre-judgment interest rate. There is no direct conflict between Magnuson-Moss and Rule 68.
2. Rule 68 does not Obstruct Achievement of the Purpose of Magnuson-Moss
The harder question is whether following Rule 68 would obstruct the execution of the federal policy embodied in the Magnuson-Moss attorney's fee provisions. The federal policy is to encourage consumers with meritorious claims to bring them, even when a plaintiff's recovery would not cover the attorney's fees incurred. Under Rule 68, those plaintiffs may end up obliged to pay part of their adversaries' fees if they turn down an offer of judgment. If this possibility is sufficient to discourage plaintiffs from bringing suits, then following Rule 68 would obstruct achievement of the purposes of Magnuson-Moss.
The United States Supreme Court's decision in Marek v. Chesny makes clear that this conflict does not exist. When a plaintiff rejects an offer of judgment larger than her eventual trial recovery, the federal version of Rule 68 allows post-offer costs to the defendant and bars the plaintiff from recovering such costs. In Marek, the Supreme Court had to decide whether a plaintiff who was barred by the federal Rule 68 from recovering post-offer costs could still receive the full attorney's fees he was allowed under 42 U.S.C § 1988, the fee provision of the substantive statute underlying the suit.
It therefore had to determine whether the rule's term "costs" encompassed attorney's fees. The Court determined that as long as the substantive statute underlying the suit includes attorney's fees in its definition of costs, then the federal Rule 68 does as well.
The plaintiff was thus denied fees that he would have recovered under § 1988.
The Supreme
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