importance of clarity to avoid potential pitfalls in an offer
under Federal Rule 68
Peter J. Strand.
to Rule 68
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).
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.
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...