Rule 68 “More Favorable” Comparison Excludes Counterclaim Offsets and Looks Only to the Claim the Offeror Defends

1. Introduction

In Susan Cornelius, as Personal Representative of the Estate of Charles Cornelius v. Rollins Ranches, LLC, the Eleventh Circuit reviewed a post-trial fee award in a “long-running” Fair Labor Standards Act (“FLSA”) overtime dispute. Rollins Ranches, LLC (“Rollins”) appealed the district court’s adoption of a magistrate judge’s report and recommendation awarding $217,532.50 in attorneys’ fees and costs to the plaintiff (Charles Cornelius, later represented by his estate).

The appeal presented two main issues: (1) whether Rollins’s purported Rule 68 offer of judgment cut off post-offer fees and costs because the ultimate result was allegedly not “more favorable” than the offer, and (2) whether the district court abused its discretion in calculating the amount of fees (hourly rates, hours, and reductions for partial success).

2. Summary of the Opinion

The Eleventh Circuit affirmed. It held that Rule 68’s “more favorable” comparison must be made by looking only to the judgment obtained on the claim that the offeror was “defending against,” not by netting (offsetting) the plaintiff’s recovery against the defendant’s counterclaim recovery. Because the jury awarded Cornelius $10,903.63 on the FLSA overtime claim—more than Rollins’s $10,000 offer—Rule 68(d) did not apply.

The court also held that the district court did not abuse its discretion in setting a “South Florida” market rate, trimming hours via an across-the-board reduction for duplicative billing, and then reducing the lodestar by 50% to account for partial success and the litigation’s overall circumstances.

3. Analysis

A. Precedents Cited

  • Circuitronix, LLC v. Kinwong Elec. (Hong Kong) Co., Ltd., 993 F.3d 1299 (11th Cir. 2021) and Mega Life & Health Ins. Co. v. Pieniozek, 585 F.3d 1399 (11th Cir. 2009): cited for de novo review of Federal Rules of Civil Procedure interpretation. This framed the Rule 68 question as one of rule interpretation, not trial-level discretion.
  • Kreager v. Solomon & Flanagan, P.A., 775 F.2d 1541 (11th Cir. 1985): cited for abuse-of-discretion review of attorneys’ fee decisions—setting the deferential posture for Rollins’s fee-calculation challenges.
  • Loranger v. Stierheim, 10 F.3d 776 (11th Cir. 1994): used twice—first to emphasize the district court’s “wide discretion” in fee calculations, and later to confirm that an across-the-board cut is permissible so long as the court gives a “concise but clear explanation.”
  • Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292 (11th Cir. 1988): relied upon for the principle that courts are themselves experts on reasonable fees and may use their own knowledge and experience when setting rates and evaluating hours.
  • Helvering v. Gowran, 302 U.S. 238 (1937) and Alvarez v. Royal Atl. Devs., Inc., 610 F.3d 1253 (11th Cir. 2010): cited for the appellate principle that the court may affirm on any basis supported by the record. This allowed the panel to avoid deciding a broader issue (the “intersection between FLSA and Rule 68”) because the offer failed on the simpler ground that the plaintiff’s FLSA award exceeded $10,000.
  • Delta Air Lines, Inc. v. August, 450 U.S. 346 (1981): the central Rule 68 authority. The opinion used Delta Air Lines to read the text “a party defending against a claim” as limiting Rule 68’s operation to claims the offeror defends. In multi-claim litigation, Delta Air Lines’s footnote 5 was pivotal: Rule 68 comparisons do not sweep in claims the offeror is affirmatively pursuing (such as counterclaims) when determining whether the offeree obtained a “more favorable” judgment.
  • Simon v. Intercontinental Transp. (ICT) B.V., 882 F.2d 1435 (9th Cir. 1989) and Scosche Indus., Inc. v. Visor Gear Inc., 121 F.3d 675 (Fed. Cir. 1997): cited as persuasive authority rejecting a net-recovery approach and emphasizing that Rule 68 does not apply to offers by a party “who brings a claim” when assessing offensively asserted claims.
  • Felders v. Bairett, 885 F.3d 646 (10th Cir. 2018): cited for the proposition that Rule 68 applies in a “very limited context,” reinforcing the panel’s strict, text-driven approach.
  • Marek v. Chesny, 473 U.S. 1 (1985): referenced for the idea that pre-offer “costs” may be added to damages when comparing the ultimate recovery to an offer. The panel found this unnecessary because the damages award alone exceeded the offer.
  • Gilmere v. City of Atlanta, Ga., 864 F.2d 734 (11th Cir. 1989): provided the lodestar formula (reasonable hours × reasonable rate) and the principle that a court may reduce fees if excessive relative to the relief obtained.
  • Am. C.L. Union of Ga. v. Barnes, 168 F.3d 423 (11th Cir. 1999) (quoting Cullens v. Ga. Dep't of Transp., 29 F.3d 1489 (11th Cir. 1994)): relied on to define the “relevant market” for hourly rates as “the place where the case is filed,” supporting the district court’s decision to treat the relevant market as South Florida (within the Southern District of Florida).
  • United States v. Beaufils, 160 F.4th 1147 (11th Cir. 2025) (quoting Rasbury v. IRS (In re Rasbury), 24 F.3d 159 (11th Cir. 1994)): used to describe abuse-of-discretion as allowing a “range of choice,” only reversible for a “clear error of judgment.” This concept anchored the affirmance of the district court’s rate and reduction choices.
  • Bivins v. Wrap It Up, Inc., 548 F.3d 1348 (11th Cir. 2008): cited to validate the method of reducing excessive hours via an across-the-board cut rather than requiring an hour-by-hour accounting.
  • Hensley v. Eckerhart, 461 U.S. 424 (1983): relied upon for the principle that there is “no precise rule or formula” for reductions based on partial success, and that such determinations are equitable and discretionary.
  • Otto v. City of Boca Raton, No. 24-10478, 2025 WL 2952783 (11th Cir. Oct. 20, 2025) (unpublished): cited to illustrate that some reductions can be too steep (in Otto, 33.4% was deemed an abuse of discretion), reinforcing that the propriety of a reduction is case-specific.
  • Cornelius v. Rollins Ranches, LLC, No. 22-12862, 2024 WL 1134566 (11th Cir. Mar. 15, 2024) (unpublished): referenced as the prior stage of the same litigation, underscoring that the dispute was protracted and procedurally complex.

B. Legal Reasoning

1) Rule 68 comparison: no counterclaim offset

Rollins argued that its $10,000 Rule 68 offer foreclosed post-offer recovery of fees and costs because the final outcome, net of Rollins’s counterclaim win, was not better than $10,000. The Eleventh Circuit rejected this framing as inconsistent with Rule 68’s text and the Supreme Court’s interpretation in Delta Air Lines, Inc. v. August.

The court’s reasoning proceeded in three steps:

  1. Textual limitation to defensive posture. Rule 68 applies when “a party defending against a claim” makes an offer. Thus, the rule’s comparison is keyed to the claim the offeror is defending—not to all monetary transfers between the parties in the case.
  2. Multi-claim clarity from Delta Air Lines. In litigation involving multiple claims, the Supreme Court recognized that a party may be defending some claims while prosecuting others (e.g., counterclaims). The Eleventh Circuit read that to mean the Rule 68 benchmark does not incorporate the offeror’s affirmative recoveries.
  3. Application to the numbers here. The jury awarded Cornelius $10,903.63 on the FLSA overtime claim Rollins was defending. Because $10,903.63 > $10,000, Cornelius obtained a “more favorable” judgment than the offer—without needing to consider any offset for Rollins’s $2,959.90 counterclaim recovery.

Notably, the court declined to reach the magistrate judge’s analysis of the “intersection between FLSA and Rule 68,” invoking Helvering v. Gowran and Alvarez v. Royal Atl. Devs., Inc. to affirm on the narrower ground supported by the record.

2) Fee calculation: deferential review and acceptable methodologies

On fees, the opinion emphasized the district court’s wide latitude:

  • Market rate. The district court treated “South Florida” as the relevant market rather than the “Fort Pierce Division.” Citing Am. C.L. Union of Ga. v. Barnes (quoting Cullens v. Ga. Dep't of Transp.), the panel held the relevant market is “the place where the case is filed,” and the case was filed in the Southern District of Florida. The court also credited the magistrate judge’s detailed, experience-based assessment under Norman.
  • Reasonable hours and across-the-board cuts. The district court reduced claimed hours by 15% for duplication. The panel rejected Rollins’s demand for a more granular accounting, citing Bivins v. Wrap It Up, Inc. (permitting across-the-board reductions) and Loranger v. Stierheim (requiring a concise but clear explanation).
  • Partial success reduction. After computing the lodestar, the district court reduced it by 50%, considering Cornelius’s partial success, comparable FLSA cases, rejection of the Rule 68 offer, and Rollins’s “dozens” of substantive motions that increased the litigation burden. The panel deemed this a permissible equitable judgment under Hensley v. Eckerhart and within the “range of choice” described in United States v. Beaufils (quoting Rasbury v. IRS (In re Rasbury)).

C. Impact

The opinion’s most significant doctrinal contribution is its clear rejection of a net-recovery (offset) approach to Rule 68 in cases involving counterclaims. Practically, this has several implications:

  • Rule 68 strategy in counterclaim cases. Defendants cannot improve Rule 68’s cost-shifting leverage by folding their counterclaim value into the “more favorable” comparison. Offers and comparisons will be evaluated claim-by-claim in the defensive posture contemplated by Rule 68.
  • Drafting and valuation discipline. Litigants must draft offers with a clear understanding that the comparison is to the judgment on the claim being defended. Attempts to define an offer as resolving “all claims and compulsory counterclaims” will not change how Rule 68(d) operates if the “more favorable” metric is not satisfied.
  • Fee litigation predictability. On fees, the decision reinforces that district courts in the Eleventh Circuit have broad discretion to select a relevant market within the district, apply across-the-board cuts for duplication, and make substantial—but reasoned—reductions for partial success, with appellate reversal reserved for clear errors of judgment.

4. Complex Concepts Simplified

  • Rule 68 offer of judgment. A procedural tool allowing a defendant (or a party “defending against a claim”) to offer judgment on specified terms. If the plaintiff rejects it and later does not do better, Rule 68 can shift certain post-offer “costs” to the plaintiff.
  • “More favorable” judgment. The comparison required by Rule 68(d). Here, the court held the comparison is between the offer and the judgment on the defended claim, not the plaintiff’s net gain after subtracting the defendant’s counterclaim award.
  • Counterclaim offset / net recovery approach. The idea that the court should subtract the defendant’s counterclaim win from the plaintiff’s award when comparing to an offer. The Eleventh Circuit rejected this approach for Rule 68 in this context.
  • Lodestar. The standard starting point for fee awards: (reasonable hours) × (reasonable hourly rate). Courts may then adjust downward (or, less often, upward) based on case-specific factors, including partial success.
  • Abuse of discretion. A highly deferential appellate standard. The question is not whether the appellate court would have chosen a different number, but whether the district court’s choice falls outside a permissible “range of choice” or reflects a clear error of judgment.
  • Relevant market for rates. Typically the legal community where the case is filed. The court accepted “South Florida” as an appropriate market descriptor for a case filed in the Southern District of Florida.

5. Conclusion

The Eleventh Circuit’s decision affirms a substantial fee award and, more importantly, crystallizes a Rule 68 principle in counterclaim litigation: the “more favorable” comparison focuses on the judgment obtained on the claim the offeror was defending, without offsetting the offeror’s counterclaim recovery. On fees, the opinion underscores the breadth of district-court discretion in setting market rates, trimming hours through across-the-board reductions, and applying meaningful lodestar reductions for partial success—so long as the court explains its reasoning and stays within the permissible range of judgment.