State high court to hear settlement offer fee-shifting arguments


If a plaintiff makes a reasonable settlement offer, and it expires by operation of law, and then makes a second offer, does the latter extinguish the first for purpose of cost shifting provisions of section 998 sub-divison? On May 8th, the state high court will hear arguments in a case that will try to answer this very question. ”The swing in cost shifting between an early offer and a later offer can be substantial.”

The court’s decision could go either way. “In Wilson v. Wal-Mart Stores, Inc., 72 Cal.App.4th 382 (1999), the 3rd District Court of Appeal announced the rule that only the last valid offer can shift fees.”  According to Wilson, “a plaintiff might be encouraged to maintain a higher settlement demand on the eve of trial and refuse to settle a case that should otherwise be settled…”  But then again, why should the “evolutionary aspect” of lawsuit limit fee shifting? If a reasonable offer was made at the time, the plaintiff should have accepted it, or “accept the potential consequences of refusal.” Also, the case may result “in subsequent lower offers, not just higher ones – meaning that the pressure tactics Wilson articulated might not even occur.” Moreover, the purpose of the Legislature is to encourage settlement and Wilson holding creates incentives that work against the Legislature. So, “how will the high court decide this issue?”

A certified appellate specialist, law professor and Archer Norris partner, Gary A. Watt handles writs and appeals in all California appellate courts, including the Supreme Court, and the United States Court of Appeals for the Ninth Circuit. He is also director of the Hastings Appellate Project

This article was originally published in the Daily Journal and subscription-based Daily Journal website at

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Archer Norris PLC | Attorney Advertising

Written by:


Archer Norris PLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.