What is a Rule 68 offer of judgment?
Federal Rule of Civil Procedure 68 lets a defending party serve an offer to allow judgment on specified terms at least 14 days before trial. If the plaintiff rejects it and the final judgment is not more favorable than the offer, the plaintiff must pay the costs the defendant incurred after the offer was made.
Does Rule 68 shift attorney fees?
Usually not. Rule 68 shifts 'costs,' which are ordinarily the narrow statutory costs under 28 U.S.C. 1920, not attorney fees. However, under Marek v. Chesny, where the underlying fee-shifting statute defines attorney fees as part of 'costs' (as in some civil rights claims), Rule 68 can also cut off or shift attorney fees, making it a powerful tool.
How is Rule 68 different from a Canadian Rule 49 offer?
Rule 68 is one-sided: only a defending party can invoke it, and it only penalizes a plaintiff who fails to beat the offer. Canada's Rule 49 is two-sided and, because Canada is loser-pays, it shifts a much larger share of actual attorney fees. Rule 68's practical bite is limited by the American Rule.
Should a plaintiff ever reject a Rule 68 offer?
Only after carefully weighing the downside. If the plaintiff rejects and then recovers less than the offer, it loses its own post-offer costs and must pay the defendant's post-offer costs, and possibly attorney fees in fee-shifting cases. The offer sets a benchmark the plaintiff must exceed at trial to avoid the penalty.