Rule 68 offers of judgment have been controversial in the class action context. Defendants will often use them in an attempt to moot the class claims of the named plaintiff: offering full relief first, and then moving to dismiss the case on jurisdictional grounds should the plaintiff decline the offer.

But there is a second, also controversial, use of the offer of judgment, where the defendant makes the offer as a means of limiting litigation costs. Under Rule 68(d), if the defendant makes an offer for a definite amount, the plaintiff rejects the offer, and then recovers less than the offer, she is responsible for the costs of litigation subsequent to the offer.

As Columbia law student Jack Starcher recognizes in his note, Addressing What Isn't There: How District Courts Manage the Threat of Rule 68's Cost-Shifting Provision in the Context of Class Actions, 114 COLUM. L. REV. 129 (2014), this cost-limiting offer of judgment can be a powerful tool for defendants. And, as he also points out, that means that courts have been conflicted about how to handle the cost-limiting offer.

Starcher reviews much of the case law on these offers (which come up before the court on a plaintiff's motion to strike rather than a defendant's motion to dismiss), and finds three basic responses: courts either (1) strike the offer, relying on a number of different policy and legal grounds, (2) refuse to strike the offer, but declare that Rule 23(e) prohibits enforcing it as a settlement, or (3) refuse to take any action because the offer is not yet ripe.

Starcher analyzes the benefits and costs of each of these approaches, and then argues for a newer approach, one first taken in an unpublished 2012 district court case, Mey v. Monitronics, Int'l (N.D. W. Va. Mar. 22, 2012), which refused to strike an offer of judgment, because the choice it forced was an appropriate one for plaintiffs to consider.

Finally, should this case proceed through class certification, VMS's offer of judgment to Mey will effectively "disappear." The adversary then will have changed from Mey alone to an entire class and the original offer of judgment will no longer be enforceable against the single named plaintiff. Conversely, if this case does not proceed to class certification, VMS's offer of judgment will stand, and, if applicable, Mey will be held to the cost requirements imposed by Rule 68(d). To the extent this possibility requires Mey to make a difficult choice at an early stage of litigation, this merely reflects the strategic nature of our adversary system and in no way indicates a defect in the Federal Rules of Civil Procedure.

(Emphasis added.) As Starcher argues,

the Mey approach recognizes that the Rules Committee considered and refused to adopt exactly such an exception to Rule 68, implying that no such limitation should be read into the rule by federal judges. Additionally, Mey's solution conforms with the language of both Rule 68 (containing no such exception) and Rule 1 (providing that all Rules, unless otherwise specified, shall apply in all federal civil cases) by allowing Rule 68 to apply where class certification does not take place.

Given the unsettled state of the law concerning full offers of judgment (those that can moot a claim), and the tactics plaintiffs had developed to adapt to them, defense counsel should make sure they're also considering using Rule 68 offers as a cost-limitation measure. Given his thorough rehearsal of the case law and strategy involved, Starcher's Note makes an excellent blueprint for doing so.