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As the name suggests, a Rule 68 Offer of Judgment is, in fact, an offer permitting a plaintiff to accept and enter a judgment against a defendant on specified terms, subject to the court's approval of the settlement via Rule 68.
If the plaintiff either (1) declines the offer; or (2) fails to respond to the offer by the deadline, then the offer is considered withdrawn. A withdrawn offer does not preclude the defendant from making a subsequent offer.
An offer of judgment must remain effective for 30 days after it is served, except: (A) an offer made within 60 days after service of the summons and complaint must remain effective for 60 days after the offer is served; (B) an offer made within 45 days of trial must remain effective for 15 days after it is served; and ...
(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 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.
The plaintiff has 14 days to accept the offer after it is served. If the plaintiff accepts the offer, he must file the offer along with a notice of acceptance with the court. The clerk must then enter the agreed-upon judgment. If the plaintiff does not accept the offer within the requisite time, it is deemed withdrawn.
Federal Rule of Civil Procedure 68 allows a defendant to make an offer of judgment at any point at least 14 days before trial. After receiving the offer, the plaintiff then has a 14-day window to serve written notice accepting the offer.
For example, if a defendant issues a written offer of judgment of $30,000 and the plaintiff chooses to let that offer lapse and to go to trial, the plaintiff must receive a judgment in excess of $30,000 to avoid having to pay the defendant's court costs.