First Circuit Court Of Appeals Interprets Rule 68 In Favor Of PD&P Clients


First Circuit Court Of Appeals Interprets Rule 68 In Favor Of PD&P Clients: King v. Rivas, 555 F.3d 14 (1st Cir. 2009)

In an appeal successfully handled by PD&P, the First Circuit Court of Appeals (Boudin, J.) recently reversed a ruling of the United States District Court for the District of New Hampshire and, in so doing, interpreted Rule 68 of the Federal Rules of Civil Procedure in a manner favorable to civil rights defendants. The King v. Rivas appeal raised the issue of whether multiple defendants who extend a joint offer of judgment must apportion that offer among them so as to inform the plaintiff precisely how much of the total offer applies to the case against each individual defendant. The District Court held that such apportionment was required, otherwise a joint offer is “ambiguous” and “unenforceable.” King v. Rivas, 2008 WL 822236, *6 (D. N.H.).

In the circumstances presented, seven defendants (officials and employees of the Hillsborough County House of Correction) made a joint unapportioned Rule 68 offer of $10,000 to the plaintiff (a former inmate seeking recovery under 42 U.S.C. § 1983) at an early stage of the litigation. Three years later, concluding it was “very difficult,” if not “impossible,” to compare the judgment finally obtained by the plaintiff against only one of the seven defendants – $5,500 – with the amount of the offer – $10,000 – without knowing how much the liable defendant contributed toward the total, the District Court refused to enforce the offer and the cost-shifting provisions of Rule 68. According to the District Court, without such apportionment, an accurate comparison cannot be made between the final judgment and the individual defendant’s offer. The effect of the District Court decision, of course, was to deny the liable defendant recovery of his post-offer costs and, instead, subject him to plaintiff’s post-offer attorney’s fees.

On appeal, the First Circuit ruled that the District Court erred in refusing to enforce the joint offer of judgment. The joint offer (which the First Circuit labeled a “package offer”) “was hardly ‘ambiguous’: by its terms it was an offer to settle the whole case, and only the whole case, for $10,000 – plus costs and attorney’s fees to date.” Thus, the District Court should have followed the “straightforward” language of Rule 68 and applied the cost-shifting provisions in favor of the sole remaining defendant. Citing the “grim and unsanitary” conditions of plaintiff’s confinement in the Hillsborough County House of Correction, the First Circuit admitted its decision was “not entirely welcome.” Nonetheless, the phrasing of the cost-shifting provision was “mandatory”: “If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer.” The First Circuit therefore reversed and remanded the case to the District Court for further proceedings consistent with its decision.

The King decision is significant, in part because the First Circuit reached a result previously rejected by both the Fifth and Seventh Circuit Courts of Appeals. More importantly, however, the King decision breathes new life into the Rule 68 mechanism. A Rule 68 offer of judgment can be a useful tool for resolving civil rights actions early, preferably before both sides begin to incur substantial attorney’s fees. The First Circuit’s recognition and specific endorsement of “package offers” made by multiple defendants effectively warns future plaintiffs to weigh offers of judgment with great care. If a civil rights plaintiff should reject an offer of judgment, but eventually recover less than the amount offered against any or all defendants, he will not be entitled to recover any post-offer attorney’s fees, and will also be on the hook for the defendant’s post-offer costs.