Article, Clear as Crystal, Slippery as Ice, 0219 UTBJ, Vol. 32, No. 1. 22

Author:by Peter J. Strand.
Position:Vol. 32 1 Pg. 22
 
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Article, Clear as Crystal, Slippery as Ice

Vol. 32, No. 1 Pg. 22

Utah Bar Journal

February, 2019

January,

2019

The

importance of clarity to avoid potential pitfalls in an offer

under Federal Rule 68

by

Peter J. Strand.

Introduction

to Rule 68

Under

Federal Rule of Civil Procedure 68, “Offer of

Judgment,” a defendant can make an offer of judgment to

the plaintiff up to fourteen days before trial. The plaintiff

then has fourteen days during which to accept the offer and

serve a written notice of acceptance. See Fed. R.

Civ. P. 68(a). If the plaintiff does, then either side may

request the clerk of the court to enter the judgment, and it

becomes the judgment of the court. Id. If the

plaintiff chooses to reject the offer and eventually obtains

a judgment that is less favorable than the offer, the

plaintiff then must pay the costs incurred after the offer

was made. See Fed. R. Civ. P. 68(d). While initially

thought to mean that the plaintiff would be responsible for

its own costs, the courts have clarified this rule to require

that the plaintiff would be responsible for the

defendant’s costs from the offer forward. Crossman

v. Marcoccio, 806 F.2d 329, 333 (1st Cir. 1986).

It is

widely understood that the principal purpose of Federal Rule

of Civil Procedure 68 is to encourage settlement and avoid

litigation. Lang v. Gates, 36 F.3d 73, 75 (9th Cir.

1994). As tools go, this rule seems poorly built to serve

that function. Its asymmetrical language provides an

advantage to only one party, absent specific provisions to

increase the “costs,” its penalty is too small to

encourage settlement, and the very language of the rule

requires a judgment instead of a settlement agreement. As to

that last point, it is worth noting that, as a general rule,

an accepted offer of admission is not an admission of

responsibility or prima facie evidence of wrongdoing.

Johnson v. Hyatt Hotels Corp., No.

2:15-cv-03175-DCN, 2017 U.S. Dist. LEXIS 165850 (D.S.C. Oct.

6, 2017).

Regardless

of its purpose, in Rule 68, defendants get a powerful tool

with which to beat back aggressive plaintiffs. The rule

demands an exacting analysis of the plaintiff’s

claim’s worth, along with a settlement or the risk of

having to pay costs. In some cases, a plaintiff may use

excessive demands to avoid a settlement in order to put the

burden of costs on the defendant. When faced with such a

case, the defendant can...

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