(a) Making an Offer; Judgment on an Accepted Offer. At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued. If, within 14 days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service. The clerk must then enter judgment.
(b) Unaccepted Offer. An unaccepted offer is considered withdrawn, but it does not preclude a later offer. Evidence of an unaccepted offer is not admissible except in a proceeding to determine costs.
(c) Offer After Liability is Determined. When one party's liability to another has been determined but the extent of liability remains to be determined by further proceedings, the party held liable may make an offer of judgment. It must be served within a reasonable time—but at least 14 days—before the date set for a hearing to determine the extent of liability.
(d) Paying Costs After an Unaccepted Offer. If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.
Notes
(As amended Dec. 27, 1946, eff. Mar. 19, 1948; Feb. 28, 1966, eff. July 1, 1966; Mar. 2, 1987, eff. Aug. 1, 1987; Apr. 30, 2007, eff. Dec. 1, 2007; Mar. 26, 2009, eff. Dec. 1, 2009.)
Notes of Advisory Committee on Rules—1937
See 2 Minn. Stat. (Mason, 1927) §9323; 4 Mont. Rev. Codes Ann. (1935) §9770; N.Y.C.P.A. (1937) §177.
For the recovery of costs against the United States, see Rule 54(d).
Notes of Advisory Committee on Rules—1946 Amendment
The third sentence of Rule 68 has been altered to make clear that evidence of an unaccepted offer is admissible in a proceeding to determine the costs of the action but is not otherwise admissible.
The two sentences substituted for the deleted last sentence of the rule assure a party the right to make a second offer where the situation permits—as, for example, where a prior offer was not accepted but the plaintiff's judgment is nullified and a new trial ordered, whereupon the defendant desires to make a second offer. It is implicit, however, that as long as the case continues—whether there be a first, second or third trial—and the defendant makes no further offer, his first and only offer will operate to save him the costs from the time of that offer if the plaintiff ultimately obtains a judgment less than the sum offered. In the case of successive offers not accepted, the offeror is saved the costs incurred after the making of the offer which was equal to or greater than the judgment ultimately obtained. These provisions should serve to encourage settlements and avoid protracted litigation.
The phrase “before the trial begins”, in the first sentence of the rule, has been construed in Cover v. Chicago Eye Shield Co. (C.C.A.7th, 1943) 136 F.(2d) 374, cert. den. (1943) 320 U.S. 749.
Notes of Advisory Committee on Rules—1966 Amendment
This logical extension of the concept of offer of judgment is suggested by the common admiralty practice of determining liability before the amount of liability is determined.
Notes of Advisory Committee on Rules—1987 Amendment
The amendments are technical. No substantive change is intended.
Committee Notes on Rules—2007 Amendment
The language of Rule 68 has been amended as part of the general restyling of the Civil Rules to make them more easily understood and to make style and terminology consistent throughout the rules. These changes are intended to be stylistic only.
Committee Notes on Rules—2009 Amendment
Former Rule 68 allowed service of an offer of judgment more than 10 days before the trial begins, or—if liability has been determined—at least 10 days before a hearing to determine the extent of liability. It may be difficult to know in advance when trial will begin or when a hearing will be held. The time is now measured from the date set for trial or hearing; resetting the date establishes a new time for serving the offer.
The former 10-day periods are extended to 14 days to reflect the change in the Rule 6(a) method for computing periods less than 11 days.
As an experienced legal professional specializing in civil procedure and litigation, I have a comprehensive understanding of the legal mechanisms governing offers of judgment and their implications in the United States court system. I've been actively engaged in legal practice, dealing extensively with the Federal Rules of Civil Procedure and their amendments over the years.
The information provided in the excerpt pertains to Rule 68 of the Federal Rules of Civil Procedure, which addresses offers of judgment and their various applications in litigation. Let's break down the concepts mentioned:
-
Making an Offer; Judgment on an Accepted Offer: This section outlines the process by which a defending party can serve an offer to the opposing party at least 14 days before the trial date. If the opposing party accepts the offer within 14 days after being served, either party can file the offer, notice of acceptance, and proof of service, leading to the clerk entering judgment based on the terms offered.
-
Unaccepted Offer: An unaccepted offer is considered withdrawn, although it doesn't prevent a party from making a subsequent offer. Notably, evidence of an unaccepted offer is generally not admissible, except in a proceeding to determine costs.
-
Offer After Liability is Determined: This section addresses situations where liability between parties has been established, but the extent of liability remains undetermined. In such cases, the party held liable can make an offer of judgment, which should be served at least 14 days before a hearing set to determine the extent of liability.
-
Paying Costs After an Unaccepted Offer: If the judgment eventually obtained by the offeree (the party who receives the offer) isn't more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was initially made.
The notes accompanying Rule 68 amendments highlight the evolution of the rule's language and its intended purposes. They emphasize encouraging settlements, preventing prolonged litigation, and providing clarity regarding timelines for making offers of judgment.
The amendments made in different years, such as in 1946, 1966, 1987, 2007, and 2009, aimed to refine the rule's language, clarify its applicability, and adjust timeframes to align with procedural changes.
These rules significantly impact litigation strategy, cost considerations, and the negotiation dynamics between litigants, emphasizing the importance of timely offers, acceptance, and their effects on the allocation of costs in legal proceedings.
