LaPierre v. City of Lawrence ( 2016 )

United States Court of Appeals
For the First Circuit
No. 15-1641
COUERDALENE LAPIERRE,
Plaintiff, Appellant,
v.
CITY OF LAWRENCE; JOHN ROMERO,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Thompson, Circuit Judge,
Souter,* Associate Justice,
and Barron, Circuit Judge.
Marsha V. Kazarosian, with whom Kazarosian Costello &
O'Donnell LLP was on brief, for appellant.
Raquel D. Ruano, with whom Charles D. Boddy was on brief, for
appellee City of Lawrence.
Andrew J. Gambaccini for appellee John Romero.
April 26, 2016
* Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
BARRON, Circuit Judge. Federal Rule of Civil Procedure
68 allows a party defending against a claim to make an offer of
judgment that, if accepted within 14 days, must be enforced upon
the filing of the offer, the acceptance, and proof of service.
Fed. R. Civ. P. 68. In so providing, the Rule describes the offer
that may be made under the Rule as one "to allow judgment on
specified terms, with the costs then accrued." Id. The dispute
in this case turns largely on that last phrase -- "with the costs
then accrued" -- and the significance that should be attributed to
it.
The offeror here, the City of Lawrence ("the City"), is
defending in a civil rights action brought by a plaintiff who was
sexually assaulted by one of the City's police officers. Prior to
trial, the City made a Rule 68 offer of judgment for $300,000 that
was silent as to whether that amount was inclusive of the
plaintiff's costs or not. Then, within the 14-day period for
acceptance, the City attempted to clarify its offer by sending an
"amended" offer of judgment that contained the same language as
the first offer with an additional sentence stating that the offer
was "also inclusive of any costs and fees incurred to date,
including attorney's fees." Following this attempted
clarification, but before the 14-day period expired, the plaintiff
purported to accept the unamended version of the offer. In
communicating her acceptance to the City, she informed the City
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that she would be separately moving for fees and costs. The
plaintiff then filed the unamended offer, her purported
acceptance, and proof of service with the District Court.
The City moved to strike that filing on the ground that
the plaintiff's acceptance was invalid. The District Court granted
the motion. In reaching that conclusion, the District Court held
that, in consequence of the City's purported clarification of the
initial offer, there was no meeting of the minds between the
parties as to any offer of judgment. The District Court thus
proceeded to address the merits of the defendants' motion for
summary judgment, which the District Court granted on the ground
that the police officer was not acting "under color of state law"
in committing the assault on the plaintiff.
The plaintiff now appeals. She contends that she was
entitled to accept the City's original Rule 68 offer and to treat
it as a complete offer exclusive of costs. She also contends that
the District Court erred in granting summary judgment on the basis
of its holding that the officer was not acting under color of state
law. Because we agree with the plaintiff's first argument, we
reverse and remand for entry of judgment in accordance with Rule
68.
I.
The plaintiff is Coeurd'Alene LaPierre. Her lawsuit
arose out of an incident in which she was sexually assaulted by
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City Police Officer Kevin Sledge. Sledge was prosecuted for the
incident and, in January 2011, was convicted of rape and three
counts of indecent assault and battery. In September 2011,
LaPierre sued Sledge, the City, and City Police Chief John Romero
in Massachusetts Superior Court. Romero and the City removed the
case to federal court in November of that year. Sledge never
entered an appearance below, and default was entered against him.
On September 5, 2014, after the defendants had moved for
summary judgment but before the District Court had ruled on that
motion, the City sent a letter to LaPierre's counsel. That letter
expressly purported to be an offer of judgment "[p]ursuant to
Fed.R.Civ. P. 68." The letter stated that the City offered
"judgment against the City of Lawrence and dismissal of all claims
against any other Defendant in exchange for $300,000 payable over
three (3) years." The letter contained no mention of whether that
offer was inclusive of LaPierre's litigation costs or attorneys'
fees.
One day later, on September 6, the City sent an e-mail
to LaPierre's counsel purporting to withdraw the September 5 offer
of judgment. Two days after that, on September 8, the City sent
LaPierre's counsel an e-mail explaining that the September 5 offer
had to be "clarified." Attached to that e-mail was what the City
called an "amended offer of judgment." That document included the
exact same language as the prior letter, with one additional
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sentence: "This $300,000.00 figure also inclusive of any costs and
fees incurred to date, including attorney's fees."
The following day, September 9, LaPierre's counsel
notified the City that LaPierre was accepting the September 5
offer. In the e-mail informing the City of that acceptance,
LaPierre's counsel also stated that her client would be moving for
"fees and costs incurred to date." LaPierre then filed the
September 5 offer letter, along with a notice of acceptance and
proof of service, with the District Court.
Before judgment was entered in accordance with that
filing, the City moved to strike LaPierre's filing. In the
memorandum in support of its motion to strike, the City argued,
among other things, that the parties had not reached a meeting of
the minds as to whether costs and fees were included in the Rule
68 offer and thus that there was no accepted offer within the 14-
day period established by the Rule. The City also submitted
correspondence between the parties -- including the attempted
"withdrawal" of the September 5 offer and the "amended" offer --
which the City asked the District Court to consider as extrinsic
evidence that the City had meant to include costs and fees in the
September 5 offer.
The District Court agreed with the City that the
parties had not reached a meeting of the minds, noting that, as a
result of the City's "unilateral clarification" of the September
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5 offer, "plaintiff was on notice of defendant's interpretation of
its offer when she purportedly 'accepted' the offer, though she
understood the terms differently." Shortly thereafter, the
District Court granted summary judgment in favor of the City and
Romero. In granting that motion, the District Court concluded
that LaPierre's civil rights claims under § 1983 could not succeed
because Sledge had not been acting "under color of state law" when
he assaulted and raped LaPierre.1
LaPierre moved for reconsideration of that decision, but
the District Court denied that motion without explanation on May
13, 2015. LaPierre filed this timely appeal five days later,2 and
we now reverse on the ground that the District Court erred in not
1 The District Court found, and LaPierre does not contest,
that LaPierre waived her other claims in open court at the hearing
on the summary judgment motion.
2 On July 10, 2015, the District Court issued an order
certifying its earlier judgment in favor of Romero and the City as
final pursuant to Federal Rule of Civil Procedure 54(b). Such an
order was necessary in order to confer jurisdiction on this Court,
because default judgment had not yet entered against Officer
Sledge. See Spiegel v. Trs. of Tufts College, 843 F.2d 38, 43
(1st Cir. 1988). On August 5, 2015, we issued an order asking for
a statement of reasons in support of the entry of judgment pursuant
to Rule 54(b). Having considered the reasons given by the District
Court in its order of August 12, 2015 -- that the assessment of
damages against Sledge below "can have no impact on the legal
issues" presented in this appeal -- we are satisfied that the
District Court's certification of its judgment as final pursuant
to Rule 54(b) was not "clearly unreasonable" and thus that we have
jurisdiction to consider this appeal. See Kersey v. Dennison Mfg.
Co., 3 F.3d 482, 486 (1st Cir. 1993) (quoting Curtiss–Wright Corp.
v. General Elec. Co., 446 U.S. 1, 10 (1980)).
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entering judgment pursuant to the accepted Rule 68 offer of
judgment.3
II.
The crux of the parties' dispute is whether LaPierre's
purported acceptance of the September 5 offer was valid. In
arguing that it was not, the City contends4 that extrinsic evidence
demonstrates that the parties attached two different meanings to
the offer. Specifically, the City points to the City's "amended"
offer of judgment and the parties' settlement negotiations as
evidence that the City interpreted the September 5 offer, which
the parties agree was silent on its face as to costs and fees, to
be inclusive of costs and fees. And the City directs us to
LaPierre's stated intent to move for "fees and costs incurred to
date" as proof that LaPierre interpreted the September 5 offer to
be exclusive of those sums.
A threshold question, however, is whether we can
consider extrinsic evidence in interpreting the September 5 offer.
3 In deciding the case on this ground, we do not mean to
suggest that the District Court correctly concluded (and we doubt
it did) that Officer Sledge was not acting under color of state
law when he sexually assaulted an intoxicated LaPierre while he
was on duty and in uniform. See Zambrana-Marrero v. Suarez-Cruz,
172 F.3d 122, 128 (1st Cir. 1999) (holding that "a jury could
conclude that [two police officers'] actions were taken under color
of law" where "they were enabled by their status as police
officers").
4 Romero chose not to file a brief in this matter and has made
no argument as to the Rule 68 issue.
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The resolution of that question turns on the proper interpretation
of both Rule 68 and the September 5 offer. As those interpretive
issues are legal ones, our review of the District Court's decision
to consider extrinsic evidence in granting the motion to strike is
de novo. See Garayalde-Rijos v. Municipality of Carolina, 799
F.3d 45, 47 (1st Cir. 2015) (noting that courts interpret Rule 68
offers of judgment according to "ordinary contract principles");
King v. Rivas, 555 F.3d 14, 17 (1st Cir. 2009) ("Rivas has now
appealed, arguing that the district court misconstrued Rule 68,
and our review of such a question is de novo."); Rodriguez-Abreu
v. Chase Manhattan Bank, N.A., 986 F.2d 580, 586 (1st Cir. 1993)
("Determining whether contract language is ambiguous is also a
question of law.").
Ordinarily, courts "must" enter judgment on an accepted
Rule 68 offer of judgment once it has been filed with the court
along with the acceptance and proof of service "regardless of what
took place . . . between the parties in the time between the offer
of judgment and [the offeree's] acceptance" -- that is, without
regard to what such extrinsic evidence might show. Garayalde-
Rijos, 799 F.3d at 48. The City does not challenge that general
proposition.5 The City instead stakes its argument on our prior
5Nor does the City challenge the established rule that Rule
68 offers of judgment, once made, are irrevocable for 14 days.
See Garayalde-Rijos, 799 F.3d at 47. Accordingly, they do not
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statement that "an offeror may in some circumstances clarify an
offer after making it." Id. at 48 n.3 (citing Radecki v. Amoco
Oil Co., 858 F.2d 397, 402-03 (8th Cir. 1988)). And because the
City contends that the "amended" offer it put forth on September
8 was a permissible clarification of the September 5 offer, the
City concludes that we must affirm the District Court's ruling on
the motion to strike in light of what that and the other extrinsic
evidence shows about whether there was a meeting of the minds.
The case we cited for the proposition on which the City
relies, however, limited its holding to cases in which a Rule 68
offer was "incomplete or ambiguous." See Radecki, 858 F.2d at
402-03. And, here, contrary to the City's contention, we conclude
that the September 5 offer was not "incomplete or ambiguous." The
District Court therefore committed an error of law in ruling that
the City was allowed to "clarify" its initial offer in its
"amended" offer that added a new term that addressed costs and
fees.6 Accordingly, we agree with LaPierre that her acceptance of
argue that the City's purported "withdrawal" of the September 5
offer was effective.
6 The City does not appear to contend that its offer was
ambiguous. To the extent the City does mean to argue that it was,
however, we would reject that argument for the reasons expressed
herein.
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the September 5 offer must be enforced, "with the costs then
accrued."7
To be sure, the text of the September 5 offer did not
refer to costs one way or the other. It merely set forth a judgment
amount of $300,000. For that reason, if this offer were made
outside of the context of Rule 68, one would not be able to discern
from the face of the offer whether it was intended to be inclusive
of costs or not. But the offer was made pursuant to Rule 68. We
thus must read the offer in light of the Rule and the precedent
construing the Rule. And a review of the text of the Rule and the
precedent interpreting the Rule convinces us that the City's offer,
by virtue of its silence as to whether it was inclusive of costs,
must be read to be exclusive of costs and thus to be neither
"incomplete [n]or ambiguous" as to that issue.
Rule 68 states that "a party defending against a claim
may serve on an opposing party an offer to allow judgment on
7 Because LaPierre's suit was brought under 42 U.S.C. § 1983,
attorneys' fees -- which are the only "fees" that appear to be in
dispute here -- are a subset of "costs." See 42 U.S.C. § 1988(b)
("In any action or proceeding to enforce a provision of
section[] . . . 1983, . . . the court, in its discretion, may allow
the prevailing party, other than the United States, a reasonable
attorney's fee as part of the costs."); Marek v. Chesny, 473 U.S.
1, 7, 11 (1985) (concluding that "the term 'costs' in Rule 68
includes attorney's fees awardable under 42 U.S.C. § 1988," because
"Congress . . . was well aware of Rule 68 when it enacted § 1988,
and included attorney's fees as part of recoverable costs"). Nor
does the City argue otherwise. Accordingly, in referring to
"costs" in relation to the September 5 offer, we refer to both
litigation costs and attorneys' fees.
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specified terms, with the costs then accrued." Fed. R. Civ. P.
68. The Rule thus makes clear, through its trailing language,
that a Rule 68 offer must be one that allows an offeree to recover
costs.
Moreover, by its terms, Rule 68 separates the "specified
terms" on which a party may offer judgment from the "costs then
accrued." The Rule thus does not specify that "costs" must be a
required "term[]" of the offer. Instead, the Rule separates out
an offer's "terms" from the "costs." The language therefore
suggests that if an accepted offer specifies particular "terms"
without mentioning costs, "the costs then accrued" will be included
by the court in the judgment along "with" those "specified terms"
by operation of the Rule. In other words, the Rule itself renders
unambiguous and complete what otherwise might be ambiguous or
incomplete.
The Supreme Court has read the Rule similarly. In Marek,
the Court considered an offer of judgment that expressly purported
to include "costs now accrued and attorney's fees" within its offer
of $100,000 but did not separately delineate the amount offered
for the substantive claim and the amount offered for costs. 473
U.S. at 3-4. The Court made clear that such "lump-sum offers" are
permissible under Rule 688 because a timely offer is valid under
8At the time Marek was decided, Rule 68 provided that a
defendant "may serve upon the adverse party an offer to allow
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Rule 68 "[a]s long as the offer does not implicitly or explicitly
provide that the judgment not include costs." Id. at 6. For that
reason, according to the Court, "it is immaterial whether the offer
recites that costs are included, whether it specifies the amount
the defendant is allowing for costs, or, for that matter, whether
it refers to costs at all." Id. And the Court went on to state
that "if the offer does not state that costs are included and an
amount for costs is not specified, the court will be obliged by
the terms of the Rule to include in its judgment an additional
amount which in its discretion, it determines to be sufficient to
cover the costs." Id. (citation omitted).
The Marek Court was not considering an offer that was --
like the one at issue here -- silent on the issue of whether the
offer was inclusive of costs. It thus was not faced with a
contention that extrinsic evidence should be consulted to
interpret such an offer. But the Court's statement about how
courts are "obliged by the terms of the Rule" to react to such
offers was stated clearly and without limitation. And we have
made clear that we "are bound by the Supreme Court's considered
dicta almost as firmly as by the Court's outright holdings."
Cuevas v. United States, 778 F.3d 267, 272-73 (1st Cir. 2015)
judgment to be taken against him for the money or property or to
the effect specified in his offer, with costs then accrued."
Marek, 473 U.S. at 5-6.
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(quoting McCoy v. Mass. Inst. of Tech., 950 F.2d 13, 19 (1st Cir.
1991)); see also Igartúa v. United States, 626 F.3d 592, 605 n.15
(1st Cir. 2010) ("Carefully considered Supreme Court dicta, though
not binding, must be accorded great weight and should be treated
as authoritative. Although the Supreme Court may ignore its own
dicta, we are a lower court bound by the Supreme Court." (citation
and internal quotation marks omitted)). Moreover, the circuits
that have addressed the issue appear to have uniformly followed
Marek on this point in determining that they could not consider
extrinsic evidence to interpret a Rule 68 offer that is silent as
to the inclusion of costs.9
9 Steiner v. Lewmar, Inc., ___ F.3d ____ No. 14-3817-CV, 2016
WL 860359, at *8 (2d Cir. Mar. 7, 2016) ("The Offer neither states
that costs are included nor specifies an amount. Under the
circumstances, Marek clearly holds that they be added. Thus, the
district court correctly added costs under the 'costs then accrued'
provision of Rule 68." (citation omitted)); Sanchez v. Prudential
Pizza, Inc., 709 F.3d 689, 691 (7th Cir. 2013) ("Because the Rule
68 offer was silent as to costs and fees, we conclude that costs
and fees were not included. We therefore reverse and remand for a
determination of reasonable costs and fees."); Lima v. Newark
Police Dep't, 658 F.3d 324, 330-31 (3d Cir. 2011) (holding, in a
case governed by 42 U.S.C. § 1988: "When . . . the offer of judgment
is silent as to fees and costs, they must be fixed by the court
after the offer of judgment is accepted. Extrinsic evidence of
the parties' subjective intent is not admissible to determine
whether a Rule 68 offer of judgment includes costs."); Bosley v.
Mineral Cty. Comm'n, 650 F.3d 408, 413-14 (4th Cir. 2011) (stating
that "[i]f a defendant intends to make a lump sum Rule 68 offer
inclusive of awardable costs, Marek makes abundantly clear the
means by which to do so: precise drafting of the offer to recite
that costs are included in the total sum offered" and declining a
request to consider extrinsic evidence "as imprudent, impractical,
and as wholly foreclosed by the reasoning of Marek"). And a number
of other circuits have also followed Marek's statement of how
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Finally, reading the Rule to dictate that an offer that
is silent as to costs is exclusive of costs is consistent with the
purposes of the Rule. Rule 68 contains a "rather finely tuned
balance" that is "designed to encourage the settlement of private
disputes." Garayalde-Rijos, 799 F.3d at 47 (internal quotation
marks omitted). That aim is furthered by construing the Rule,
where supported by its text, to set out a clear interpretation for
offers that might be unclear outside the context of the Rule.
Moreover, allowing preacceptance clarifications always runs the
risk of enabling offerors to send clarifications for the purpose
of reducing the offeree's response period from the 14 days
courts are to treat an offer that is silent as to whether it is
inclusive of costs. See McCain v. Detroit II Auto Fin. Ctr., 378
F.3d 561, 564 (6th Cir. 2004) ("[C]onsistently with th[e] teaching
[of Marek], [the defendant]'s silence on the subject of costs in
its Rule 68 offer means that true costs are recoverable by [the
plaintiff], so that the district court erred in disallowing
them."); Tunison v. Cont'l Airlines Corp., Inc., 162 F.3d 1187,
1192 (D.C. Cir. 1998) (addressing an offer of $1,000 that did not
mention costs and stating that "[h]ad the offer been accepted, a
court would have been compelled by Marek to treat the offer as one
for $1,000 plus costs then accrued"); Arencibia v. Miami Shoes,
Inc., 113 F.3d 1212, 1214 (11th Cir. 1997) ("The Supreme Court has
held that when a Rule 68 offer is silent as to costs, the district
court should award appropriate costs in addition to the amount of
the offer." (citing Marek, 473 U.S. at 6)); O'Brien v. City of
Greers Ferry, 873 F.2d 1115, 1118 (8th Cir. 1989) (concluding, in
a § 1988 case, that "[b]ecause the offer of judgment in this case
did not purport to include attorney's fees, the pre-offer
attorney's fees must be added to the offer of judgment."); see
also Erdman v. Cochise Cty., Ariz., 926 F.2d 877, 880 (9th Cir.
1991) (noting its previous holding that "any waiver or limitation
of attorney fees in settlements of § 1983 cases must be clear and
unambiguous" and extending that holding to the Rule 68 context).
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contemplated by the Rule to the number of days remaining after
such a clarification has been sent. Thus, where, as here, the
text of the Rule supports a reading that would limit the
opportunities for offerors to game the system in that way, the
administration of the Rule is best served by adopting that reading.
Against this interpretation of the Rule's text and the
precedent construing it, the City relies on Radecki, the out-of-
circuit precedent that we favorably cited for the proposition that
"an offeror may in some circumstances clarify an offer after making
it." See Garayalde-Rijos, 799 F.3d at 48 n.3. But Radecki
involved a very different species of claimed ambiguity.
In Radecki, the original Rule 68 offer provided for
judgment "in the amount of $525,000.00, including costs now
accrued." 858 F.2d at 399. The Eighth Circuit held that the
original offer "subsum[ed] within the amount offered any liability
for 'costs.'" Id. at 400. The Eighth Circuit then went on to
state that, because the statute under which the lawsuit was brought
(the Petroleum Marketing Practices Act) did not define attorneys'
fees as part of costs, the original offer had not been clear as to
whether it was inclusive of attorneys' fees. Id. at 400 & n.2.
For that reason, the Eighth Circuit concluded that the
preacceptance clarification in that case was valid and operative
and that the Court would consider extrinsic evidence to determine
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whether the defendant intended the offer to be inclusive of
attorneys' fees. Id. at 400.
Here, by contrast, there is no dispute that 42 U.S.C.
§ 1988 subsumes attorneys' fees within costs. Radecki thus
provides no basis for allowing a preacceptance clarification to
the September 5 offer and thus no basis for examining the extrinsic
evidence that the City contends shows that there was no meeting of
the minds.10 Rather, in accordance with the Rule's text and the
precedent construing it, we conclude that the September 5 offer
was unambiguously exclusive of both costs and, as a subset of
costs, attorneys' fees.
III.
For the reasons set forth above, we vacate the District
Court's July 10, 2015 order granting judgment in favor of Romero
10 The other cases cited by the City are also off point. In
Ducharme v. Rhode Island, No. 93-1675, 1994 WL 390144 (1st Cir.
1994), which the City describes as "upholding in dicta an amended
offer of judgment," the amendment to the offer was mutual, and not
unilateral. Id. at *2, *4. In Stewart v. Prof'l Computer Centers,
Inc., 148 F.3d 937, 938-39 (8th Cir. 1998), it was undisputed that
the offeree had purported to accept only the second offer made by
the offeror. The Eighth Circuit invalidated that acceptance based
on its conclusion that the face of that offer could be read to
affirmatively cover costs. There was thus no dispute in either
Ducharme or Stewart as to whether an offeror could use a second
offer to unilaterally "clarify" the terms of a first offer that
was silent as to costs. And in Atl. Constr. Fabrics, Inc. v. Dandy
Products, Inc., 64 F. App'x 757, 760 (Fed. Cir. 2003), the Federal
Circuit allowed a preacceptance clarification where the original
offer of judgment had not specified which of five possible products
were covered in the judgment of infringement. Ambiguity as to
that type of issue is not presented here.
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and the City and the District Court's October 1, 2014 order
granting the City's motion to strike. We remand to the District
Court with instructions to enter judgment in accordance with the
offer of judgment filed on September 10, 2014. Costs on appeal
are awarded to appellant. See Fed. R. App. P. 39(a)(4).
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