Presenting a live 90-minute webinar with interactive Q&A Offers of Judgment in Employment Litigation After Campbell-Ewald and Fulton Dental Analyzing the Viability of Rule 68 or Rule 67 as a Strategic Tool for Employers to Moot Individual, Class and Collective Claims THURSDAY, SEPTEMBER 28, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Stephen E. Fox, Shareholder, Polsinelli , Dallas Gabrielle Levin, Partner, Gibson Dunn & Crutcher , New York Abigail Pessen, Mediator and Arbitrator , Abigail Pessen Dispute Resolution Services , New York The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Offers of Judgment in Employment Litigation After Campbell-Ewald and Fulton Dental Analyzing the Viability of Rule 68 or Rule 67 as a Strategic Tool for Employers to Moot Individual, Class and Collective Claims PRESENTED BY Stephen Fox, Polsinelli PC Gabrielle Levin, Gibson, Dunn & Crutcher LLP Abigail Pessen, Abigail Pessen Dispute Resolution Services September 2017
Fed. R. Civ. P . 68. Offer of Judgment (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 An unaccepted offer is considered withdrawn, but it does not preclude a later offer.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. 5
Offers of Judgment - Overview • R.68 permits a “party defending against a claim” to make an “offer of judgment” to the party prosecuting the claim • R.68 offer of judgment is a risk-shifting tool: If the plaintiff rejects the offer and ultimately obtains a less favorable judgment, plaintiff must pay for defendant’s costs incurred after making of offer • R.68 provides cost certainty to offeree 6
Offers of Judgment - Purpose R.68 offers of judgment: • “encourage settlements and avoid protracted litigation.” Advisory Committee’s Notes on Fed. R. Civ. P . 68 • “ provide[] an additional inducement to settle in those cases in which there is a strong probability that the plaintiff will obtain a judgment but the amount of recovery is uncertain.” Delta Airlines, Inc. v. August , 450 U.S. 346, 352 (1981) • “require plaintiffs to ‘think very hard’ about whether continued litigation is worthwhile.” Marek v. Chesny , 473 U.S. 1, 11 (1985) 7
Offers of Judgment – Scope Rule 68: • is not restricted to use by defendants; it also applies to counterclaims, cross-claims, or third-party claims • does not apply if the defendant prevails (i.e., the defendant is not entitled to payment from the plaintiff for defendant’s post-offer costs) • does not apply when the defendant makes a settlement offer • does not eliminate the plaintiff’s pre -offer costs (regardless of whether the plaintiff accepts or rejects the Rule 68 offer) 8
Offers of Judgment - Cost Shifting 3 possible scenarios (assuming a rejected Rule 68 offer): 1. Defendant wins: R.68 does not apply, because plaintiff did not obtain a favorable judgment. Defendant can seek costs under Rule 54. 2. Plaintiffs wins and judgment is less than the Rule 68 offer: R.68’s cost- shifting applies. Plaintiff pays defendant’s costs from date of offer. As prevailing party, plaintiff may seek costs up to date of R.68 offer, but pays its own post-offer costs. 3. Plaintiff wins and judgment is greater than R.68 offer: R.68 does not apply; Defendant pays for all of its own costs; Plaintiff may seek costs under Rule 54 for the entire suit. 9
Offers of Judgment – How it works • Timing of Offer: The offer of judgment must be made at least 14 days prior to the date set for trial. o Alternatively, if liability has been determined, but the amount is unresolved, the defendant may serve the offer of judgment within “a reasonable time,” but at least 14 days, before any hearing scheduled to determine liability. Fed. R. Civ. P. 68(c). 10
Offers of Judgment – How it works, cont’d. • Timing for Response: P laintiff has 14 days to decide whether to accept o Unaccepted offer is considered withdrawn (Fed. R. Civ. P . 68(b)) o Multiple offers are permissible (Fed. R. Civ. P . 68(b)) o Some courts, including 7 th Circuit, have held that offers are irrevocable during 14-day period, while others have held that offers may be revoked in limited circumstances. See Sanchez v. Prudential Pizza, Inc ., 709 F .3d 689, 692 (7th Cir. 2013) (“Rule 68 offers may not be revoked during the 14 –day period established by the Rule.”); Cesar v. Rubie’s Costume Co. , 219 F .R.D. 257, 259 (E.D.N.Y . 2004) (holding that R.68 offer was revocable because it contained material mistake). 11
Offers of Judgment – How it works, cont’d. • Form: Offer must specify terms on which defendant will consent to judgment, and it must provide for plaintiff’s “costs then accrued.” o Precision matters. Be specific and clear in offer. Ambiguities will be resolved against offerer/drafter. Sanchez v. Prudential Pizza, Inc ., 709 F .3d 689, 690 (7th Cir. 2013). • Negotiability: Rule 68 offers are non-negotiable. • No Discretion by District Court: o If offer is accepted, court must enter judgment. Fed. R. Civ. P . 68(a). o If offer is rejected, cost-shifting goes into effect. 12
Offers of Judgment – How it works, cont’d. • Types of Offers: Lump sum: Costs do not need to be itemized; offer may specify instead that offered judgment includes damages, costs, attorney’s fees, and interest incurred through date of offer Itemized: Specify $X amount for damages and interest and $Y amount for costs and attorney’s fees Lump sum for damages only: Specify $X amount for damages and interest and permit court to determine costs and attorney’s fees o N.B. : If offer does not mention costs, still considered valid (if timely); trial court should deem costs to be included in offer and should conduct appropriate proceedings to determine amount (to be added to offered lump-sum judgment. Marek v. Chesny , 473 U.S. 1, 6 (1985). 13
Offers of Judgment –Attorneys’ Fees One complication … are attorneys’ fees included as part of “Costs” o Need to look to the governing s tatute’s definition of “costs” o “All costs properly awardable in an action are to be considered within the scope of Rule 68 ‘costs.’” Marek , 473 U.S. at 9. 14
Offers of Judgment – Attorneys’ Fees • If “the underlying statute defines ‘costs’ to include attorney’s fees, . . . such fees are to be included as costs for purposes of Rule 68.” Marek , 473 U.S. at 9 • If underlying statute defines attorneys’ fees separately from costs, attorneys’ fees are not covered by R.68 Statute Defines Costs to Statute Defines Costs Include Attorneys’ Fees Separately from Attorneys’ Fees Section 1983, Title VII FLSA, ADA, ADEA 15
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