IN THE UNITED STATES COURT OF APPEALS
`
`[PUBLISH]
`
`FOR THE ELEVENTH CIRCUIT
`
`________________________
`
`No. 01-16265
`________________________
`D. C. Docket No. 99-01289-CV-C-NE
`
` FILED
`U.S. COURT OF APPEALS
`ELEVENTH CIRCUIT
`JULY 24, 2002
`THOMAS K. KAHN
`CLERK
`
`UTILITY AUTOMATION 2000, INC.,
`
` Plaintiff-Counter-
` Defendant-Appellant,
`
`versus
`
`CHOCTAWHATCHEE ELECTRIC COOPERATIVE, INC.,
`a corporation,
`CHELCO SERVICES, INC., a corporation,
`
` Defendants-Counter-
` Claimants-Appellees,
`
`
`GEOGRAPHIC INFORMATION SERVICES, INC.,
`an Alabama corporation,
`
`TOM GIPSON,
`
` Movant-Appellee,
`
` Defendant-Appellee,
`
`PATTERSON & DEWAR ENGINEERS, INC.,
`a corporation,
`
` Defendant.
`
`

`
`________________________
`
`Appeal from the United States District Court
`for the Northern District of Alabama
`________________________
`(July 24, 2002)
`
`Before BARKETT and MARCUS, Circuit Judges, and SCHLESINGER*, District
`Judge.
`
`BARKETT, Circuit Judge:
`
`Utility Automation 2000, Inc. (“UA 2000”) appeals the district court’s
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`denial of its motion for attorneys’ fees following the court’s entry of a Rule 68
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`judgment against Choctawhatchee Electric Cooperative, Inc., Chelco Services,
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`Inc., and Tommie Gipson (collectively, “Defendants”). UA 2000 originally sued
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`Defendants1 for the misappropriation of UA 2000’s trade secrets in violation of the
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`Alabama Trade Secrets Act, Ala. Code § 8-27-1 et seq. (1975), breach of contract,
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`and intentional interference with a business or contractual relationship. In its
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`complaint, UA 2000 also sought recovery of its attorneys’ fees under the Trade
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`Secrets Act and the contract between UA 2000 and Chelco.
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`Prior to trial, Defendants served upon UA 2000 an offer of judgment
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`*Honorable Harvey E. Schlesinger, U.S. District Judge for the Middle District of Florida,
`sitting by designation.
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`1Several other defendants who were originally parties to the suit were dismissed pursuant
`to settlement agreements.
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`2
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`pursuant to Rule 68 of the Federal Rules of Civil Procedure, which authorizes a
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`defendant to make an offer of judgment “for the money . . . specified in the offer,
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`with costs then accrued.” Fed. R. Civ. P. 68. Defendants’ offer provided:
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`Defendants . . . hereby make the following Offer of Judgment
`pursuant to Federal Rule of Civil Procedure 68; that Defendants shall
`pay to Plaintiff [UA 2000] the sum of Forty-five thousand and 00/100
`Dollars ($45,000) with costs accrued, and that Defendant, Chelco
`Services, Inc., shall refrain from competing with Plaintiff for a period
`of thirty (30) days from the date of acceptance of this Offer.
`
`UA 2000 accepted the offer of judgment, and the district court entered a Final
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`Judgment ordering that
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`Plaintiff Utility Automation 2000, Inc. have and recover of
`Defendants Choctawhatchee Electric Cooperative, Inc., Chelco
`Services, Inc. and Tommie Gipson the sum of $45,000, with costs
`accrued, and that Defendant Chelco Services, Inc. shall refrain from
`competing with Utility Automation 2000, Inc. for a period of 30 days
`from August 25, 2000.
`
`It is further ORDERED, ADJUDGED and DECREED that
`Defendants Choctawhatchee Electric Cooperative, Inc. and Chelco
`Services, Inc. take nothing in regard to their counterclaims asserted
`against Plaintiff Utility Automation 2000, Inc. and that said claims are
`hereby dismissed with prejudice.
`
`Following the court’s entry of the Final Judgment, UA 2000 submitted a
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`motion for the attorneys’ fees, costs, and expenses incurred prior to the service of
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`the Rule 68 offer of judgment. The district court granted UA 2000’s request for
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`the recovery of costs in the amount of $5,220.50, but denied its motion for
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`3
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`attorneys’ fees, holding:
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`Because the underlying statute does not define “costs” to include
`attorneys’ fees, Plaintiff’s motion for an award of attorneys’ fees is
`hereby DENIED. See Marek v. Chesny, 473 U.S. 1, 9 (1973);
`Arencibia v. Miami Shoes, Inc., 113 F.3d 1212, 1214 (11th Cir.
`1997).
`
`UA 2000 appeals. The interpretation of Rule 68 is a legal question that we decide
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`de novo. See Jordan v. Time, Inc., 111 F.3d 102, 105 (11th Cir. 1997).
`
`DISCUSSION
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`The question presented in this appeal is simply whether, having accepted
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`Defendants’ Rule 68 offer, UA 2000 may recover its attorneys’ fees in addition to
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`the $45,000 judgment award. Rule 68 provides:
`
`At any time more than 10 days before the trial begins, a party
`defending against a claim may serve upon the adverse party an offer
`to allow judgment to be taken against the defending party for the
`money or property or to the effect specified in the offer, with costs
`then accrued. If within 10 days after the service of the offer the
`adverse party serves written notice that the offer is accepted, either
`party may then file the offer and notice of acceptance together with
`proof of service thereof and thereupon the clerk shall enter judgment.
`An offer not accepted shall be deemed withdrawn and evidence
`thereof is not admissible except in a proceeding to determine costs. If
`the judgment finally obtained by the offeree is not more favorable
`than the offer, the offeree must pay the costs incurred after the making
`of the offer.
`
`Fed. R. Civ. P. 68.
`
`As the Supreme Court has explained, “The plain purpose of Rule 68 is to
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`4
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`encourage settlement and avoid litigation.” Marek v. Chesney, 473 U.S. 1, 5
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`(1985). The rule accomplishes this objective with a two-part approach. First, Rule
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`68 allows a defendant to make a firm, non-negotiable offer of judgment. Unlike
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`traditional settlement negotiations, in which a plaintiff may seek clarification or
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`make a counteroffer, a plaintiff faced with a Rule 68 offer may only accept or
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`refuse. If he accepts, the court automatically enters judgment in his favor; if he
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`refuses, the case proceeds. Second, the Rule encourages plaintiffs to accept
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`reasonable offers through what is referred to as its “cost-shifting” provision, which
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`forces a plaintiff who refuses an offer and then ultimately recovers less at trial than
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`the offer amount to pay the costs incurred from the time of the offer. Thereby,
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`“[t]he Rule prompts both parties to a suit to evaluate the risks and costs of
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`litigation, and to balance them against the likelihood of success upon trial on the
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`merits.” Id.
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`The sole constraint Rule 68 places on offers of judgment is its mandate that
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`an offer include “costs then accrued.” This does not mean that every offer must
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`explicitly state that it includes costs: “If an offer recites that costs are included or
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`specifies an amount for costs, and the plaintiff accepts the offer, the judgment will
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`necessarily include costs; if the offer does not state that costs are included and an
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`amount for costs is not specified, the court will be obliged by the terms of the Rule
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`5
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`to include in its judgment an additional amount which is in its discretion.” Marek
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`at 5. Thus, as long as an offer does not explicitly exclude costs, it is proper under
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`the Rule.
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`Rule 68 does not define the meaning of the term “costs,” however, and
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`consequently parties frequently dispute whether attorneys’ fees are included. In
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`Marek, the Supreme Court considered one such dispute, addressing when
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`attorneys’ fees might be included as costs for the purposes of Rule 68’s cost-
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`shifting provision. Marek held that the term “costs”
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`was intended to refer to all costs properly awardable under the
`relevant substantive statute or other authority. In other words, all
`costs properly awardable in an action are to be considered within the
`scope of Rule 68 “costs.” Thus, absent congressional expressions to
`the contrary, where the underlying statute defines “costs” to include
`attorney’s fees, we are satisfied such fees are to be included as costs
`for purposes of Rule 68.
`
`Marek at 9. The Marek plaintiff prevailed in a suit under 42 U.S.C. § 1983, but
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`recovered an amount less than the defendant’s prior Rule 68 offer. Although
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`attorneys’ fees are generally not recoverable as costs under what is known as the
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`“American Rule,”2 the Supreme Court held that, because the relevant authority
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`included attorneys’ fees as part of the “costs” available to a prevailing plaintiff,
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`2In England recoverable costs often included attorneys’ fees; under the “American Rule”
`each party has traditionally been required to bear its own attorney’s fees. See Marek at 8.
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`6
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`those fees were subject to the cost-shifting provision of Rule 68, and the defendant
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`was therefore not responsible for them.3
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`In Arencibia v. Miami Shoes, Inc., 113 F.3d 1212 (11th Cir. 1997), this
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`Court was asked whether the Marek rationale also applies when a plaintiff has
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`accepted a Rule 68 offer for a judgment sum, but where the offer does not mention
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`costs or attorneys’ fees.4 In deciding that question, this Court first explained that
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`under Marek, when a Rule 68 offer is silent regarding the amount of costs, the
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`district court must award an appropriate amount for costs in addition to the
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`specified sum. “This authority to award costs,” we explained, “arises from the
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`phrase ‘with costs then accrued’ in Rule 68.” Arencibia at 1214 (citing Marek at
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`5–6). We then held that the Marek rationale (interpreting the cost-shifting
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`provision of the Rule) applies equally to the phrase “costs then accrued” applicable
`
`3The specific facts in Marek were as follows. The plaintiff, suing under 42 U.S.C.
`§ 1983, had rejected of an offer of settlement “for a sum [$100,000], including costs now
`accrued and attorneys’ fees.” Marek at 9. The case went to trial and the plaintiffs were
`ultimately awarded $57,000. Relying on 42 U. S. C. § 1988, which provides that a prevailing
`party in a § 1983 action may be awarded attorneys’ fees “as part of the costs,” the plaintiffs then
`filed a request for costs and attorneys’ fees totaling approximately $171,000 ($32,000 of which
`plaintiffs had incurred prior to the Rule 68 offer and $139,000 after). The defendants opposed
`the claim for the $139,000 post-offer costs, relying on Rule 68’s cost-shifting provision and
`arguing that attorneys’ fees were part of the “costs” covered by Rule 68 because § 1988 defines
`them as such. The Supreme Court agreed.
`
`4 The accepted offer of judgment in Arencibia did not mention either costs or fees, but
`simply offered judgment “in the amount of $4000.00.” Arencibia accepted, and attached to his
`acceptance a proposed order entering judgment in favor of Arencibia for $ 4,000 and reserving
`jurisdiction to award costs and attorneys’ fees. The defendant-offeror objected, contending that
`the Rule 68 offer only provided for costs and not fees.
`
`7
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`

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`to an accepted Rule 68 offer. We explained that although the district court had
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`properly retained jurisdiction to award costs, it could not include an award of
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`attorneys’ fees, because “‘costs’ awarded by virtue of Rule 68 . . . only include
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`attorney’s fees if the underlying statute defines ‘costs’ to include attorney’s fees.”
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`Id. (emphasis added).5
`
`The only issue before this Court in Arencibia was whether the district court
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`could grant attorneys’ fees as costs “by virtue of Rule 68.” As did Arencibia, the
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`present case deals with an accepted offer, and thus does not involve the cost-
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`shifting provision of Rule 68 that was at issue in Marek. But this case presents
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`another variation on the Rule 68 theme. The question here is not only whether
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`attorneys’ fees may be included as Rule 68 “costs then acccrued,” but also whether
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`a plaintiff may recover fees authorized by statute or contract when the offer of
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`judgment is silent or ambiguous as to whether such fees have been included in the
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`offer of judgment or whether the plaintiff has otherwise waived the right to seek
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`them. This issue has been addressed by the Seventh and the Ninth circuits.
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`In Webb v. James, 147 F.3d 617 (7th Cir. 1998), a plaintiff suing under the
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`Americans with Disabilities Act (“ADA”) accepted a Rule 68 offer of judgment
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`5Specifically, the plaintiff in Arencibia sued under § 16(b) of the Fair Labor Standards
`Act (FLSA), 29 U.S.C. § 216(b). Because § 16(b) of FLSA does not define “costs” to include
`attorneys’ fees, this Court held that the district court had erred by reserving jurisdiction to award
`the plaintiff attorneys’ fees as Rule 68 “costs.”
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`that stated only: “The Defendants . . . hereby make an offer of judgment in the
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`above-captioned matter in the amount of Fifty Thousand Dollars ($50,000.00)
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`pursuant to Federal Rule of Civil Procedure 68.” Id. at 619. The ADA allows the
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`prevailing party to recover attorneys’ fees, but does not define those attorneys’ fees
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`as part of the costs. Thus, as this Court did in Arencibia, the Webb court explained
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`that under Marek, the plaintiffs could not recover fees as “costs then accrued”
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`under Rule 68 because the underlying statute did not define attorneys’ fees as
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`costs. The Webb Court, however, went on to address the issue not discussed in
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`Arencibia: whether the plaintiff could recover attorneys’ fees directly under the
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`statute (i.e., the ADA). The Seventh Circuit answered in the affirmative,
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`explaining that, because “the ADA provides for an award of attorney’s fees to a
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`prevailing party,” and because the court determined that the plaintiff had prevailed
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`in his ADA claim, therefore he could recover attorneys’ fees under the ADA.
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`The Ninth Circuit addressed a similar question in Nusom v. Comh
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`Woodburn, Inc., 122 F.3d 830, 833–34 (9th Cir. 1997). Nusom concerned an
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`accepted offer of “$15,000, together with costs accrued to the date of this offer.”
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`(Thus, like the offer at issue here, the Nusom offer included specific mention of
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`costs but did not mention attorneys’ fees.) Both underlying statutes under which
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`the plaintiff brought suit (the Truth in Lending Act (TILA) and Oregon’s civil
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`racketeering statute) provide for an award of attorneys’ fees to the prevailing party,
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`separate from costs. Nusom held that, as the prevailing party, the plaintiff was
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`entitled to attorneys’ fees under the relevant statutes.
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`In both Webb and Nusom, the defendants claimed that attorneys’ fees were
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`included in the judgment sums, and thus to award them pursuant to the statute
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`would effectively be to grant the plaintiffs double recovery. In Webb, the
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`defendant (Dick James) argued that Webb’s attorneys’ fees had been included in
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`the $50,000 sum. The Seventh Circuit rejected this assertion, explaining that
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`defendants should bear the burden of the ambiguity created by their
`silence on fees. The ADA provides for attorneys’ fees for the
`prevailing party and the defendants said nothing in their offer to
`terminate that statutory liability . . . . The defendant is always free to
`offer a lump sum in settlement of liability, costs and fees, but that is
`not what Dick James did here. Dick James’ offer was silent as to fees
`and costs, and under these circumstances, the court may then award an
`additional amount to cover costs and fees.
`
`Id. at 623. The Nusom Court likewise addressed the assertion by examining the
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`specific language in the offer of judgment, and reached a similar conclusion: that
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`the offer’s silence regarding attorneys’ fees created ambiguity with respect to
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`whether the $15,000 sum included attorneys’ fees. Nusom held that such
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`ambiguity in the terms of an offer must be resolved against the drafter, and
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`therefore the accepting party was not barred from seeking attorneys’ fees. Id. at
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`835. Among other things, both Webb and Nusom therefore stand for the
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`proposition that where an offer is ambiguous with respect to whether it includes
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`fees, that ambiguity will be construed against the drafter.
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`An offer that does unambiguously include attorneys’ fees, on the other hand,
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`will bar the plaintiff who accepts it from seeking additional attorneys’ fees under
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`the relevant statute (or as “costs then accrued”). For example, in Nordby v.
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`Anchor Hocking Packaging Co., 199 F.3d 390 (7th Cir. 1999), the plaintiff sued
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`under the Illinois Sales Representative Act, which expressly provides for an award
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`of reasonable attorneys’ fees to a plaintiff “whose rights under the Act have been
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`violated.” Id. at 391. Accordingly, the plaintiff’s complaint requested attorneys’
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`fees in addition to damages. Before going to trial, the plaintiff accepted a Rule 68
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`offer for “judgment in the amount of $ 56,003.00 plus $ 1,000 in costs as one total
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`sum as to all counts of the amended complaint” (emphasis supplied), and then
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`moved the district court for an award of attorneys’ fees pursuant to the Illinois Act.
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`Id. Nordby held that the plaintiff could not obtain fees because the accepted offer
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`had unambiguously included attorneys’ fees.
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`These cases show that in the appropriate circumstances a plaintiff may be
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`entitled to attorneys’ fees under the “costs then accrued” phrase from Rule 68
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`itself, and, independently, under the statute or other authority that gave rise to the
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`suit. In this case, UA 2000 claims both of these bases for recovery. Thus, the
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`11
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`questions presented are: first, whether the accepted $45,000 sum unambiguously
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`included attorneys’ fees or whether the offeree otherwise waived the right to seek
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`them; second, whether fees are available in this case as “costs accrued” under Rule
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`68; and third, whether fees are otherwise available pursuant to any other relevant
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`authority.
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`1 . Were Attorney Fees Included in the Offer or Otherwise Waived
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`by UA 2000?
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`Defendants contend that the $45,000 judgment amount included UA 2000’s
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`attorneys’ fees. In assessing this claim, we first note that the offer says nothing
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`one way or the other about fees; attorneys’ fees are not mentioned at all.
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`Moreover, unlike the offer in Nordby, the offer here does not contain any language
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`suggesting the inclusiveness of all sums due. Nor does the offer contain language
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`excluding the payment for any claim. It simply offers an amount with costs. So
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`we—much as the offerees—are left to speculate whether the offer was intended to
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`include attorneys’ fees or not.
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`As discussed above, however, Rule 68 requires that the responsibility for
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`clarity and precision in the offer must reside with the offeror. As Nusom
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`explained, any ambiguity in the terms of an offer must be resolved against its
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`drafter, and therefore, absent a clear indication to the contrary the accepting party
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`cannot be deemed to have received its fees or waived the right to seek them.
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`Nusom at 835. There is good reason for this stricture:
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`Because Rule 68 puts plaintiffs at their peril whether or not they
`accept the offer, the defendant must make clear whether or not the
`offer is inclusive of fees . . . . As with costs, the plaintiff should not
`be left in the position of guessing what a court will later hold the offer
`means.
`
`Webb at 623. Indeed, Rule 68 places the offerree in a most unusual posture in the
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`landscape of settlement contracts. While an offeree can respond to an ordinary
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`settlement offer through a counteroffer or seek to clarify or modify its terms, a
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`Rule 68 offeree is at the mercy of the offeror’s choice of language and willingness
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`to conform it to the understanding of both parties. Only the offeror can ensure that
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`the offer clearly includes or excludes fees.
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`Here, there is nothing in the language of Defendants’ bare offer of “$45,000
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`with costs accrued” to indicate that the $45,000 sum includes fees or that accepting
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`the offer otherwise waives UA 2000’s ability to recover them under Rule 68 or any
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`other authority. Thus, this ambiguity must be construed against Defendants, and
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`we conclude that the offer they made to UA 2000 did not include attorneys’ fees.
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`Consequently, we next turn to the question of whether UA 2000 is entitled to fees
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`either as costs pursuant to Rule 68 or as attorneys’ fees pursuant to any other
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`relevant authority.
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`2. Attorneys’ fees as Costs Pursuant to Rule 68
`
`In Arencibia, we explained that a plaintiff who accepts a Rule 68 offer may
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`recover attorneys’ fees as “costs then accrued” if the “relevant substantive statute
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`or other authority” defines costs to include attorneys’ fees. Arencibia at 1214. It is
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`clear to us that the relevant statute in this case does not define attorneys’ fees as
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`“costs.” The Alabama Trade Secrets Act authorizes the recovery of attorneys’ fees
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`when a party bringing a claim under the Act proves “willful and malicious
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`misappropriation” of a trade secret. Ala. Code § 8-27-4 (1975). However, there is
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`no language in the Trade Secrets Act to indicate that attorneys’ fees should be
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`considered part of costs. In contrast, where courts have found that attorneys’ fees
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`were defined as costs, it was because the statute stated so clearly. For example,
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`Marek explained that attorneys’ fees are costs under section 407 of the
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`Communications Act of 1934 because under that act “[i]f the petitioner shall
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`finally prevail, he shall be allowed a reasonable attorney’s fee, to be taxed and
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`collected as a part of the costs of the suit,” and similarly under the Railway Labor
`
`Act, because that statute allowed a court to “award to the prevailing party a
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`reasonable attorney’s fee as part of the costs.” 473 U.S. at 8 (emphasis added).
`
`Similarly, in Jordan v. Time, 111 F.3d 102 (11th Cir. 1997), we found that
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`attorneys’ fees are costs under 17 U.S.C. § 505 because that statute states that a
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`court may award a reasonable attorney’s fee to the prevailing party “as part of the
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`costs.”
`
`Unlike those examples, the Trade Secrets Act does not award attorneys’ fees
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`to the prevailing party as part of costs; rather, it makes attorneys’ fees an additional
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`penalty for willful misappropriation. Thus, it does not satisfy the Marek rule. See
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`also Oates v. Oates, 866 F.2d 203 (6th Cir. 1989) (holding that attorneys’ fees are
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`not costs where the statute speaks of “costs” in the context of damages, and
`
`explaining that “[i]n the absence of unambiguous statutory language defining
`
`attorney’s fees as an additional component of costs, and a clear expression by
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`Congress of an intent to carve out an exception to the American Rule . . .
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`attorney’s fees are not ‘costs’ for purposes of Rule 68”).
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`Alternatively, UA 2000 argues that it is entitled to fees as Rule 68 costs
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`accrued if its contract with Chelco defines fees as costs. In Marek, the Supreme
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`Court held that the term “costs” in Rule 68 “was intended to refer to all costs
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`properly awardable under the relevant substantive statute or other authority.”
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`Marek at 9 (emphasis supplied). We agree with UA 2000 that this reference to
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`“other authority” means that Rule 68 costs can be awarded if a contract under
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`which a plaintiff brings suit defines attorneys’ fees as costs. See also Kessler v.
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`Superior Care, Inc., 127 F.R.D. 513, 518 (N.D. Ill., 1989) (suggesting that Marek’s
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`reference to “other authority” might refer to underlying contracts). In this case,
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`however, we cannot agree that the contract does in fact clearly and unambiguously
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`define costs as fees.
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`The three relevant contract provisions are as follows:
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`5. It is further agreed that disclosure of such proprietary information,
`whether directly or indirectly, of UA 2000, except with the express
`written consent of UA 2000, would be deemed material and would
`result in material and irreparable injury to UA 2000 not properly or
`completely compensable by damages in an action at law; and that the
`provisions of this Agreement are necessary for the protection of UA
`2000 and that any breach of this Agreement by [Chelco Services] or
`any of [Chelco Services]’s representatives shall entitle UA 2000, in
`addition to other legal remedies available to apply to a court of
`competent jurisdiction to enjoin any violation of this Agreement
`and/or to recover damages for any breach of this Agreement, and to
`recover all costs of such action, including a reasonable attorneys’ fee.
`* * *
`6. It is hereby agreed by the parties hereto that any breach of this
`provision shall entitle the non-breaching party, in addition to any
`other legal remedies available to apply to a court of competent
`jurisdiction to enjoin any violation of this agreement and/or to recover
`damages for any breach of this agreement, and to recover all costs of
`such action, including a reasonable attorneys’ fee.
`* * *
`19. Legal Fees. In the event either party incurs legal expenses to
`enforce or interpret any provision of this Agreement, the prevailing
`party shall be entitled to recover such legal expenses, including,
`without limitation, reasonable attorney’s fees, court costs and all
`related expenses, in addition to any additional and other relief to
`which such party shall be entitled.
`
`(emphasis supplied).
`
`Provisions 5 and 6 clearly define costs to include attorneys’ fees. Provision
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`5 enables UA 2000 to seek legal and equitable remedies for disclosure of its
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`proprietary information, and “to recover all costs of such action, including a
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`reasonable attorneys’ fee.” Likewise, provision 6 allows a non-breaching party to
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`sue a breaching party for legal and equitable relief, and also “to recover all costs of
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`such action, including a reasonable attorneys’ fee.” The most straightforward
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`interpretation of the phrase “costs . . . including a reasonable attorneys’ fee” is that
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`the contracting parties consider attorneys’ fees to be part of costs. See, e.g., Marek
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`at 8 (explaining that Section 4 of the Clayton Act, 15 U.S.C. § 15 (1976), makes
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`attorneys’ fees part of costs because it provides for recovery of “the cost of suit,
`
`including a reasonable attorney’s fee”).
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`However, as Defendants point out, provision 19 of the contract appears to
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`suggest that legal fees are distinct from costs by subsuming certain delineated
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`“costs” under the rubric of “legal fees,” among which are attorneys’ fees: “the
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`prevailing party shall be entitled to recover such legal expenses, including, without
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`limitation, reasonable attorney’s fees, court costs and all related expenses, in
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`addition to any additional and other relief to which such party shall be entitled.”
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`Defendants argue that the ambiguity created by provision 19 trumps whatever clear
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`expression is found in provisions 5 and 6, and that we must therefore conclude that
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`the parties did not intend to treat attorneys’ fees as costs.
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`We think Defendants have the better of this argument, primarily because the
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`American Rule establishes a strong presumption that fees are not to be awarded as
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`costs. In light of that presumption, we interpret Marek to require that the
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`underlying authority unequivocally indicate that it is carving out an exception to
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`the American Rule. Provision 19 of the contract differentiates between fees and
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`other costs; thus we are unwilling to say that the contract as a whole makes fees
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`part of costs. Accordingly, UA 2000 is not entitled to fees as Rule 68 “costs
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`accrued.”6
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`6Because we conclude that the relevant authority does not define fees as part of costs, we
`do not reach, in this context, the defendant’s alternative argument that even if costs were deemed
`to include fees, UA 2000 would still not be entitled to fees as Rule 68 “costs then accrued”
`because the Trade Secrets Act provides for them only if the plaintiff proves “willful and
`malicious misappropriation” of a trade secret, and the contract provides them only to party that
`prevails or shows some form of disclosure or breach. Consistent with that argument, some
`courts have determined that a plaintiff is not automatically entitled to fees as Rule 68 “costs then
`accrued,” but must also satisfy whatever condition is attached to a fee award in the relevant
`statute or other authority. See, e.g., Fletcher v. City of Fort Wayne, 162 F.3d 975 (7th Cir.
`1998); Fisher v. Kelly, 105 F.3d 350, 352 (7th Cir. 1997); Tristar Management Group, Ltd. v.
`Samson, 8 F.3d 820 (4th Cir. 1993) (table); Lyte v. Sara Lee Corp., 950 F.2d 101, 103 (2d Cir.
`1991); Stefan v. Laurenitis, 889 F.2d 363 (1st Cir. 1989).
`However, in Jordan v. Time, 111 F.3d 102 (11th Cir. 1997), this Court held that a
`plaintiff who prevailed, but for less than the Rule 68 offer amount, automatically had to pay the
`defendant’s fees, because the underlying statute (the Copyright Act, 17 U.S.C. § 505) defined
`fees as costs, and notwithstanding that the Copyright Act grants attorneys’ fees only to the
`“prevailing party.” In contrast, the D.C., First, Fourth, Fifth, Seventh, Eighth, and Ninth Circuits
`have held that when a plaintiff rejects an offer and ultimately receives less than the offer amount
`in a suit brought under a statute that awards attorneys’ fees as part of costs to a prevailing party,
`Rule 68’s cost-shifting provision will not shift the defendant’s post-offer attorneys’ fees to the
`plaintiff because the defendant has not “prevailed” under the statute (although the cost-shifting
`provision will shift the defendant’s other post-offer costs to the plaintiff). See, e.g., Harbor
`Motor Company, Inc. v. Arnell Chevrolet-GEO, Inc., 265 F.3d 638 (7th Cir. 2001); Poteete v.
`Capital Engineering, Inc., 185 F.3d 804, 807 (7th Cir. 1999); Tunison v. Continental Airlines
`Corp., Inc., 162 F.3d 1187, 1190 (D.C. Cir. 1998); United States v. Trident Seafoods Corp., 92
`
`18
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`

`
`3. Attorneys’ fees Pursuant to Statute or Other Relevant Authority
`
`We next consider whether UA 2000 is entitled to attorneys’ fees directly
`
`under the Trade Secrets Act or the contract. As noted above, although not as part
`
`of costs, the Alabama Trade Secrets Act does authorize the recovery of attorneys’
`
`fees upon proof of the “willful and malicious misappropriation” of a trade secret.
`
`Ala. Code § 8-27-4 (1975). UA 2000 asks us to construe the offer of judgment as
`
`an admission of willful and malicious misappropriation. We do not find this to be
`
`a tenable proposition. Such a finding is vastly different from the simple conclusion
`
`that one party has prevailed against another, and we are unwilling to impute a
`
`specific admission to “willful and malicious misappropriation” on the basis that the
`
`F.3d 855 (9th Cir. 1996); E.E.O.C. v. Bailey Ford, Inc., 26 F.3d 570, 571 (5th Cir. 1994);
`Lawrence v. Hinton, 937 F.2d 603 (4th Cir. 1991); O’Brien v. City of Greers Ferry, 873 F.2d
`1115, 1120 (8th Cir. 1989); Crossman v. Marcoccio, 806 F.2d 329, 333-334 (1st Cir. 1986).
`Indeed, Jordan has been criticized. See, e.g., Harbor Motor at 647 (“[Jordan] does not, in our
`view, adequately address the Copyright Act’s mandate that only the prevailing party is permitted
`to recover its attorney’s fees.”); Bruce v. Weekly World News, Inc., 203 F.R.D. 51, 56
`(criticizing Jordan for interpreting “Rule 68 as providing a substantive gloss on the provisions of
`the Copyright Act,” and “virtually compel[ling] copyright plaintiffs . . . to accept an Offer of
`Judgment no matter how meritorious may be their case, for fear of resulting exposure to what are
`often, as here, substantial claims of attorney’s fees”).
`Those criticisms, however, are less persuasive when the question has to do with the
`prevailing plaintiff’s automatic entitlement to fees under Rule 68, because the defendant will
`always be able to protect itself against paying fees by making its intent clear in the offer. As far
`as we are able to discern, the Ninth Circuit appears to agree, automatically awarding fees as costs
`accrued to a plaintiff who accepts an offer when the relevant authority satisfies the Marek test.
`See Erdman v. Cochise County, 926 F.2d 877, 879 (9th Cir. 1991) (holding that because “‘costs’
`in actions under 42 U.S.C. § 1983 automatically include attorney fees under 42 U.S.C. § 1988,”
`plaintiff “was entitled to rely on the plain language of the offer he accepted, ‘$7,500 with costs
`now accrued,’ which [under Marek] entitles him to a reasonable attorney’s fee award in addition
`to the lump sum named in the offer”) (emphasis added).
`
`19
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`

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`Defendants have had a judgment entered against them when there is nothing in
`
`Defendants’ offer of judgment that would even suggest that admission.
`
`We do, however, find that UA 2000 is entitled to attorneys’ fees under its
`
`contract with Chelco. Clause 19 of the contract states:
`
`Legal Fees. In the event either party incurs legal expenses to enforce
`or interpret any provision of this Agreement, the prevailing party shall
`be entitled to recover such legal expenses, including, without
`limitation, reasonable attorney’s fees, court costs and all related
`expenses, in additio