799 F.3d 45
1st Cir.2015Background
- Waleska Garayalde-Rijos sued the Municipality of Carolina for gender-based employment discrimination and retaliation; trial was set for December 1, 2014.
- On November 24, 2014 at 12:48 PM Carolina served a document labeled a Rule 68 offer of judgment for $25,000.
- Later that day Carolina electronically told the district court no settlement had been reached; at 5:38 PM Garayalde-Rijos filed a notice accepting the Rule 68 offer.
- Carolina moved to clarify and then for reconsideration, arguing Garayalde-Rijos had earlier rejected the offer (and thus it was withdrawn) or that the offer was not a valid Rule 68 offer.
- The district court entered judgment for Garayalde-Rijos and denied Carolina’s motions; this appeal challenges whether Garayalde-Rijos validly accepted the Rule 68 offer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an offeree who purportedly rejected or countered a Rule 68 offer can later accept within 14 days | Garayalde-Rijos: a timely written acceptance was filed; any earlier exchanges did not terminate acceptance power | Carolina: earlier rejection/counteroffer withdrew the offer before acceptance | The court held Rule 68 offers function as irrevocable 14-day option contracts; a rejection or counteroffer within the period does not terminate the offeree's power to accept within 14 days |
| Whether Rule 68(b)’s "unaccepted offer is considered withdrawn" language forecloses treating offers as irrevocable during the 14 days | Garayalde-Rijos: Rule 68 contemplates only accepted within 14 days or unaccepted after 14 days; interim rejection doesn't alter that scheme | Carolina: the text means an offer is withdrawn upon rejection | Held: The textual argument fails—the rule contemplates withdrawal only after the 14-day window; intermediate rejection does not contradict that reading |
| Whether Carolina waived any challenge that the offer was not made at least 14 days before trial | Garayalde-Rijos: Carolina did not raise the timing/formal-validity objection below | Carolina: the offer was made fewer than 14 days before trial, so it was not a proper Rule 68 offer | Held: Court found the timing/formal-validity argument waived because it was not raised in district court |
| Whether any equitable exceptions (detrimental reliance, fraud) defeat irrevocability | Garayalde-Rijos: no applicable equitable facts were established | Carolina: suggested other communications and conduct altered the agreement | Held: Court noted equitable exceptions exist in theory, but none applied on the record; acceptance controlled |
Key Cases Cited
- Marek v. Chesny, 473 U.S. 1 (U.S. 1985) (describing Rule 68’s settlement-promoting, cost-shifting purpose)
- Richardson v. Nat'l R.R. Passenger Corp., 49 F.3d 760 (D.C. Cir. 1995) (treating Rule 68 offers like 14-day irrevocable option contracts)
- Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236 (4th Cir. 1989) (same)
- Andretti v. Borla Performance Indus., Inc., 426 F.3d 824 (6th Cir. 2005) (applying ordinary contract principles to Rule 68 acceptance)
- Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (U.S. 2013) (quoted by defendant but court explained the cited language was from a dissent addressing a different issue)