How is Rule 68 used by plaintiffs and why is it rare?
Direct Answer:
Under Fed. R. Civ. P. 68, the "Offer of Judgment" rule allows a defendant—a party defending against a claim—to formally offer to have judgment entered against them on specified terms. The rule’s design is to encourage settlement by shifting post-offer costs to a plaintiff who refuses a reasonable offer and then obtains a less favorable judgment. Plaintiffs rarely use Rule 68 because the rule explicitly states that only defendants may make such offers.[1][2][3]
Rule 68 Overview
Textual Basis. Rule 68(a) provides that “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.” Fed. R. Civ. P. 68(a)[1]. If the plaintiff accepts, the clerk must enter judgment on the agreed terms. Fed. R. Civ. P. 68(b)-(d)[1] govern unaccepted offers and cost implications.
Key Effect: If the plaintiff rejects the defendant’s offer and later obtains a less favorable judgment, the plaintiff must pay the costs incurred after the offer date. Fed. R. Civ. P. 68(d)[1]. This fee- and cost-shifting mechanism discourages plaintiffs from proceeding to trial when a reasonable settlement offer is on the table.
Why Plaintiffs Rarely Use Rule 68
Although the term "offer of judgment" sounds reciprocal, Rule 68 is asymmetrical—only defendants may invoke it. The rule’s cost-shifting provision operates solely against the offeree (the plaintiff in most civil cases), meaning plaintiffs gain no procedural or strategic benefit from using Rule 68.[2][3]
Rationale:
- Textual Limitation: The rule expressly applies to "a party defending against a claim," which courts and commentators uniformly interpret to mean defendants only.[2]
- Strategic Disincentive: Plaintiffs could theoretically create analogous “mirror offers” or use settlement mechanisms outside Rule 68, but the rule provides no cost consequences to nonacceptance of a plaintiff’s offer. Therefore, plaintiffs rely instead on Rule 67 deposits or Rule 41 dismissals if they wish to control litigation exposure.[1][2]
Use in Unique Contexts
- Counterclaims: In rare situations, if a plaintiff becomes a defending party on a defendant’s counterclaim, the plaintiff could use Rule 68 defensively since the rule attaches to “a party defending against a claim.”[1]
- Civil Rights and Fee-Shifting Cases: Courts have analyzed Rule 68’s interaction with statutory attorney’s fee provisions, as seen in Marek v. Chesny, 473 U.S. 1 (1985), which held that a rejected offer exceeding the ultimate recovery limits fee-shifting under 42 U.S.C. § 1988. Thus, Rule 68 has significant consequence in such contexts but always operates from the perspective of a defendant.[2]
Conclusion
Rule 68 is a settlement tool available only to defendants to encourage early resolution and penalize plaintiffs for needlessly prolonging litigation. Plaintiffs rarely, and practically cannot, use it except when defending against a counterclaim. Its purpose is deterrence of excessive litigation rather than mutual settlement leverage.