Ellen J. Messing Published in Massachusetts Lawyers Weekly

Massachusetts Lawyers Weekly recently published MRW Partner Ellen J. Messing’s article explaining the legal standard for court awards of attorneys’ fees in civil rights cases, correcting an earlier article by a management-side lawyer.  Attorney Messing’s article explains why survivors of civil rights violations should not have their fee awards unfairly reduced.

Commentary on rejected settlement offers, fee awards missed key 1st Circuit decisions

Ellen J. Messing//May 22, 2025

I read with interest Anthony DeProspo Jr.’s commentary in the March 31 issue (“Evidence of rejected settlement offer can reduce fee award for prevailing party”), which discussed the effect of defendants’ pretrial settlement offers on attorneys’ fee awards in fee-shifting cases — often cases in which plaintiffs seek to vindicate their civil rights.

Relying almost exclusively on out-of-state case law, the author posited that if a plaintiff wins at trial but recovers less than the defense offered in settlement pretrial, then the court can and should reduce the plaintiff’s attorneys’ fee award, even if the settlement offer was not made via a Rule 68 offer of judgment.

But the thesis of the commentary is wrong, at least in the 1st Circuit, given the influential 2012 decision in Diaz v. Jiten Hotel Management, Inc., 704 F. 3d 150 (1st Cir.), appeal after remand, 741 F. 3d 170 (1st Cir. 2013).

In that case, I, along with attorneys Anne Jacobson, Jonathan Margolis, James Weliky and the late Sarah Wunsch proudly co-authored an amicus curiae brief on behalf of seven civil rights organizations.

The Diaz decision held that a plaintiff’s rejection of a defense settlement offer is not properly a factor in a trial court’s fee award decision, because making it a factor would undercut the overall goals of the civil rights laws.

Non-Massachusetts courts

It is certainly true, as the article observes, that in cases in which plaintiffs achieve limited success, they can anticipate being rewarded only with fees “reasonable in relation to the results,” Hensley v. Eckerhart, 461 U.S. 424, 436 (1983).

It is also accurate that some circuit courts have (mis)interpreted this stricture as authorizing the incorporation of pretrial settlement discussions into the “reasonableness” analysis.

But such an approach does violence to animating principles of applicable Massachusetts and 1st Circuit law.

Fee awards in Massachusetts

Massachusetts courts, like the federal courts, generally utilize the “lodestar” method of calculating fees. Joyce v. Town of Dennis, 720 F. 3d 12, 26 (1st Cir. 2013), citing Fontaine v. Ebtec Corp., 415 Mass. 309 (1993).

The lodestar method multiplies the number of hours the lawyer reasonably spent by a reasonable fee, then adjusts for several factors, including “results obtained.” However, “results obtained” is not measured narrowly: It can include not only the relief achieved in the case, but also the societal importance of the rights protected by the lawsuit. Id. at 26-27, citing, inter alia, Killeen v. Westban Hotel Venture, LP, 69 Mass. App. Ct. 784 (2007).

In Joyce, the 1st Circuit expanded upon that point, explaining that “the public as a whole has an interest in the vindication of the rights conferred” by civil rights laws, and an appropriate fee award should promote the public policy of ensuring that private attorneys bring anti-discrimination suits. Joyce, 720 F. 3d at 31 (internal citations omitted).

‘Diaz’ case in District Court

In the Diaz case, Carmen Llerena Diaz, an executive housekeeper at a Holiday Inn Express, sued her employer for age discrimination and prevailed at trial after three years of vigorous litigation.

Before trial, the defendants made a settlement offer (not a Rule 68 offer of judgment) of $75,000, which was rejected. A jury awarded Diaz $7,650, and her counsel sought a fee award.

The District Court acknowledged that Diaz was statutorily entitled to a fee award and applied the lodestar method to begin the calculation. However, the court capped the award at $25,000, one-third the amount of the earlier settlement offer, on the grounds that (1) the plaintiff would have received more money than the verdict under the proposed offer while (2) her lawyer would (the court speculated) have received less, or a presumed one-third of the offer or $25,000, and (3) a low award should be issued to remove the “strong financial incentive” that plaintiffs’ lawyers assertedly have to take “low value claims” to trial and “get rich on the backs of their clients.” Diaz v. Jiten Hotel Mgmt., 822 F. Supp. 2d 74, 82-83 (D. Mass. 2011).

‘Diaz’ amicus brief

Many civil rights organizations viewed the District Court attorneys’ fees decision in Diaz with great concern and were gratified for the opportunity to participate in the 1st Circuit appeal.

In our amicus brief, we argued that the guidelines for determining fee awards were well established under both federal and Massachusetts law and should not be upended by hindsight comparisons between settlement offers and ultimate verdicts.

We explained that fee-shifting statutes are designed to encourage competent lawyers to accept civil rights cases, even when such suits are not likely to pay for themselves. That is true not only for famous cases establishing important legal principles, but also cases in which an everyday plaintiff seeks modest damages only to vindicate her own rights.

The lodestar method was established because other methods for paying lawyers (such as hourly or contingent fees) were not viable means to attract competent counsel. It requires multiplying the hours “reasonably” spent by the reasonable hourly rate. The court may eliminate excessive hours and adjust based on factually severable unsuccessful claims and the “results obtained.”

As noted above, “results obtained” includes the broad societal benefits of the litigation, not only dollars awarded. Our amicus brief argued that fee awards need not be proportionate to the amount of the recovery and, indeed, may greatly exceed it. In this analysis, although a low recovery may be a consideration in determining a fee award, it is only one element. Whether a settlement offer has been rejected, and its amount, should have no place.

Rule 68 offers of judgment

Our amicus brief also observed that the pretrial settlement offer to Diaz was made outside the confines of the Rule 68 process, which provides a mechanism for defendants to make a formal offer of judgment, on specified terms, before trial. If final judgment is not better for the plaintiff than the Rule 68 offer, then post-offer attorneys’ fees are unavailable.

We argued that the District Court fee order in Diaz placed the defendant in a better position than it would have achieved had it invoked Rule 68, in effect substituting a reformulated rule dramatically more favorable to losing defendants, with little other justification than the perceived recalcitrance of plaintiff’s counsel.

That, we argued, should not be allowed to stand.

Are all plaintiffs’ lawyers unethical?

Our amicus brief also argued that the District Court’s fee award method assumed, without evidence, unethical behavior among a large swath of civil rights lawyers who allegedly sacrifice their clients’ interests routinely by forcing high-reward trials on their clients.

We noted that there was no basis for that assumption. In fact, most civil rights cases settle. Further, most civil rights trials are high risk for plaintiffs’ lawyers: Trials require significant investment of time and effort, and most plaintiffs face adversaries with vastly greater resources who control most relevant evidence.

Our brief also argued that courts should not assume that lawyers, rather than their clients, make the decision to settle a case or go to trial, given that ethics rules place that decision squarely in the hands of the client. See Mass. R. Prof. Resp. 1.2 (“[a] lawyer shall abide by a client’s decision whether to accept an offer of settlement of a matter”).

Nor is client control an empty formality. Lawyers are obliged to provide honest and accurate information to clients about settlement negotiations and the risks and benefits of settlement versus continued litigation. Mass. R. Prof. Cond. 1.4, 1.4 cmt. [1].

Our brief noted that there is no data, and the District Court pointed to none, to support the harsh proposition that civil rights lawyers routinely, or even occasionally, pressure clients to go to trial in order to maximize fees.

There were no such reported cases found. Indeed, a general survey of Massachusetts disciplinary cases in this area showed that, if anything, lawyers in general erred on the side of pressuring clients to settle, not to go to trial.

1st Circuit’s ‘Diaz’ decision

The 1st Circuit’s 2012 decision in Diaz emphasized, first, that contingent fee percentages, presumed or actual, do not provide a ceiling on fee awards, given the societal basis for fee-shifting in civil rights cases. (This point was more deeply elaborated in a later decision in the same case. See Diaz v. Jiten Hotel Mgmt., 741 F. 3d 170, 176-80 (1st Cir. 2013)).

Second, the decision pointed out that lawyers for civil rights plaintiffs “already have incentives to encourage their clients to take reasonable settlement offers” (original emphasis) because of the risks and extra investment required to go to trial, and they have no need of the further incentive of post-trial fee cuts. Diaz v. Jitel Hotel Mgmt., 704 F. 3d 150, 154 (1st Cir. 2012).

Third, the court observed that the District Court’s rationale presumed the presence of routine attorney ethical misconduct, in that it assumed that lawyers, not clients, make decisions about settlement versus trial.

Finally, the decision rejected the use of settlement offers, other than those made under Rule 68, to limit the recovery of attorneys’ fees. The 1st Circuit remanded the fee issue for reconsideration and recalculation to the District Court (for this reason and other reasons).

Although DeProspo’s article does not cite Diaz or Joyce, it does cite an unreported order in a case in which he represented the defendant, Dantowitz v. Dexter Southfield, Inc., 1:20-cv-10540-AK, Order on Report and Recommendation, May 7, 2024). That order authorized consideration of the amount of a rejected settlement offer as one among numerous factors in determining the plaintiff’s success. However, the order relied on the view that the 1st Circuit had never ruled that a settlement offer above the amount recovered is irrelevant to degree of success. But that is exactly what Diaz did rule.

Bottom line

As the 1st Circuit noted in both Joyce and Diaz, there are many factors that a trial court may legitimately consider in awarding attorneys’ fees and in deciding to limit a fee award. See Joyce, 720 F. 3d at 31-32; Diaz, 704 F. 3d at 154.

But according to the 1st Circuit, a plaintiff’s decision to reject a settlement offer, and the amount of a settlement offer in relation to the amount recovered, are not among those factors.

Ellen J. Messing practices at Messing, Rudavsky & Weliky in Newton.