Accepted Offer of Judgment Did Not Foreclose Attorney Fees in Discrimination/Hostile Work Environment Case

In Glenn v. Fuji Grill Niagara Falls, LLC, No. 14-CV-380S, 2016 WL 1557751 (W.D.N.Y. Apr. 18, 2016), the court discussed whether and to what extent a party who has accepted an “Offer of Judgment” in a Title VII discrimination suit may thereafter seek costs, including attorney fees. The answer, unsurprisingly, turns on the terms of the offer itself.

In this case, plaintiff alleged that defendant discriminated in favor of employees of Chinese descent, subjected her to a hostile work environment, and fired her shortly after she complained about the harassment.

The court explained the operation of the law:

Federal Rule of Civil Procedure 68 provides that: [a]t 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, the opposing party accepts the offer in writing, either side may file the offer and notice of acceptance, and [t]he clerk must then enter judgment. If the opposing party does not accept the offer, it must pay the costs incurred after the offer was made if it does not obtain a judgment more favorable than the unaccepted offer. …

Whether a Rule 68 judgment encompasses claims for attorneys’ fees authorized to prevailing parties by statute or contract depends on the terms of the accepted offer. Where the language of the contract (i.e., the Rule 68 offer and acceptance thereof) is clear and unambiguous, the contract is to be given effect according to its terms. And, if the terms of a contract are clear, courts must ‚Äútake care not to alter or go beyond the express terms of the agreement, or to impose obligations on the parties that are not mandated by the unambiguous terms of the agreement itself.

Defendant tendered the following to plaintiff, which she accepted:

Pursuant to Rule 68 of the Federal Rules of Civil Procedure, defendant, FUJI GRILL NIAGARA FALLS LLC., hereby offers to allow Judgment to be entered against it in this action in the amount of $12,500.00 including all of Plaintiff’s claims for relief. This offer of judgment is made for the purposes specified in Federal Rule of Civil Procedure 68, and is not to be construed as either an admission that defendant, FUJI GRILL NIAGARA FALLS LLC., is liable in this action, or that the plaintiff, ALEXANDRA GLENN, have [sic] suffered any damage. This Offer of Judgment shall not be filed with the Court unless (a) accepted or (b) in a proceeding to determine costs.


Defendant argued, inter alia, that plaintiff was not entitled to attorney fees because there was no “meeting of the minds” as to the terms of the offer.

Judge Skretny disagreed. Citing and quoting the Second Circuit’s decision in Barbour v. City of White Plains, 700 F.3d 631 (2d Cir. 2012), the court explained that “a party who intends a Rule 68 offer of settlement to cover costs must clearly say so” and that “it is well-settled that a Rule 68 offer of judgment that is silent as to costs allows the accepting party to seek costs after entry of judgment.” Therefore, plaintiff was entitled to costs, including reasonable attorneys’ fees.

He rejected defendant’s attempt to vacate the judgement pursuant to Rule 60(b)(1), which permits relief from a “final judgment, order, or proceeding” due to “mistake, inadvertence, surprise, or excusable neglect.” In light of the well-settled principles governing Rule 68, the court noted that “it would appear that Defendant’s failure to explicitly include costs in the offer is due to counsel’s error in drafting, or his ignorance of the law on this point” which “is not a basis for relief under Rule 60(b)(1).”

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