In 2009, this column reported on the U.S. Court of Appeals for the Third Circuit’s use of a rejected settlement offer as a means of reducing an attorney’s fee award to the prevailing party. In Lohman v. Duryea Borough, 574 F.3d 163 (3rd Cir. 2009), a wrongful discharge case based on First Amendment retaliation, the jury found for the plaintiff, Nicholas Lohman, on one of his three claims. Lohman was granted $12,205 in lost wages and nominal damages. In considering the petition for attorney fees, the trial court went so far as to consider evidence of a $75,000 settlement offer that Lohman previously turned down. In light of the large disparity between the jury award and the settlement offer, the district court reduced the amount of Lohman’s $112,883 costs and fees to $30,000 in fees and $4,251 in costs. The Third Circuit affirmed the trial court’s discretionary decision, agreeing that the rejected settlement offer was probative of “the degree of success obtained by Lohman’s counsel.”
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