Federal Rules of Civil Procedure 68 encourages settlement by a defendant who offers to allow judgment on specified terms. See Felders v. Bairett, 885 F.3d 646, 651-52 (10th Cir. 2018) (quoting Marek v. Chesny, 473 U.S. 1, 5 (1985)).

A Rule 68 offer of judgment does not require an admission of liability. See Childress v. DeSilva Auto. Servs., LLC, 494 F.Supp.3d 1163, 1173 (D.N.M. 2020) (collecting cases holding that a “valid rule 68 offer allows judgment against the defendant, but such an offer does not require an admission of liability”); Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 763 n.6 (4th Cir. 2011) (noting that Rule 68 does not require “an admission of liability by the defendant”).

Thus, a party may disclaim an admission of liability in its offer of judgment. See, e.g., Childress, 494 F.Supp.3d at 1173; Li v. Jewelers Mut. Ins. Co., No. 18-cv-01704-CMA-KLM, 2020 WL 13490511, at *1 (D. Colo. Apr. 28, 2020) (entering judgment where the offer of judgment contained the following condition: “Defendant's offer of judgment is not to be construed in any manner as an admission of liability by Defendant or that Plaintiff has suffered any damage, but rather was made solely for the purpose of compromising disputed claims”); Mite v. Falstaff Brewing Corp., 106 F.R.D. 434, 435 (N.D. Ill. 1985) (holding that an offer of judgment was not defective on account of “no admission of liability” condition)); 12 Wright & Miller, Fed. Prac. & Proc. Civ. § 3002 (3d ed. April 2023) (collecting cases holding that Rule 68 offers of judgment may “disclaim liability”).

If a defendant's offer of judgment expressly disclaims an admission of liability and the plaintiff accepts that offer, the Court's judgment does not constitute a finding of or an admission of liability against the defendant. Childress, 494 F.Supp.3d at 1173.

Offer of Judgment Mischaracterized as Judgment of Infringement

A few weeks before a patent infringement trial was scheduled to begin against Double Diamond and Dawgs (an affiliate of Double Diamond), Crocs received the following offer of judgment:

Pursuant to Rule 68 of the Federal Rules of Civil Procedure (“Rule 68”), Defendant Double Diamond Distribution, Ltd. (“Double Diamond”) hereby offers to allow entry of judgment to be taken against Double Diamond as follows: Judgment in favor of Crocs, Inc. (“Crocs”) against Double Diamond in the total amount of Fifty-Five Thousand Dollars ($55,000.00), which amount is inclusive of all interest, costs, and attorneys' fees otherwise recoverable by Crocs against Double Diamond in this action. This judgment shall be in full and complete satisfaction of all of Crocs' claims against Double Diamond in this action. In no event shall Double Diamond be liable for any claims against U.S.A. Dawgs, Inc. based on a “joint enterprise” theory or otherwise.

This offer is made for the purposes specified in Rule 68 and is not to be construed either as an admission that Double Diamond is liable in this action or that Crocs has suffered any damage.

For the avoidance of doubt, this offer pertains solely to Crocs' claims against Double Diamond and is without prejudice to any of Double Diamonds' claims or counterclaims in this action, including Double Diamonds' counterclaim under the Lanham Act.

This offer is made pursuant to the provisions of Rule 68 and will be deemed withdrawn unless Crocs serves written notice of acceptance within fourteen (14) days of service. If Crocs does not accept this offer, Crocs may become obligated to pay Double Diamonds' costs incurred after the making of this offer pursuant to Rule 68.

Dawgs' offer of judgment contained similar language, except it offered a $6 million judgment that “shall only serve as an offset against any recovery Dawgs may obtain in this action; the judgment is not intended to waive any of Dawgs' rights under the Bankruptcy Code.”

Crocs filed a notice of acceptance of both Rule 68 offers.

Less than a week later, Crocs issued a press release on its website, stating that “Crocs secures long sought-after judgment of infringement against USA Dawgs and Double Diamond Distribution.” 

Double Diamond then sued Crose for defamation, trade libel, and false advertising. Double Diamond Distribution Ltd. v. Crocs, Inc., 2024 WL 1051951No. 23-cv-01790-PAB-KAS (D. Colo. Mar. 11, 2024).

Cros argued that the “gist” of the press release was true. The Court, however, found that it was plausible that the “gist” of the press release was that the Court's judgment determined that Double Diamond sold shoes which infringed Crocs' patents—and the Rule 68 offer of judgment stated that the offer of judgment “is not to be construed either as an admission that Double Diamond is liable in this action or that Crocs has suffered any damage.” Nor did the judgment entered by the Court rule on the validity of Crocs' patent rights or find that Double Diamond was liable for patent infringement

As a result, the substance or gist of the press release is contrary to the Rule 68 offer of judgment and the Court's final judgment. See Brokers' Choice of Am., 861 F.3d at 1107; Colo. Jury Instr., Civil 22:13. Furthermore, the Court finds that Double Diamond has plausibly alleged that the false statements in the press release are material because the statements would likely cause reasonable people to think “significantly less favorably” about Double Diamond than they would if they knew the truth. See Brokers' Choice of Am., 861 F.3d at 1107; Docket No. 1 at 22, ¶ 99 (alleging that the false statements have harmed Double Diamond's reputation, brand, and goodwill). Accordingly, the Court finds that Double Diamond has plausibly established that the press release contains materially false statements, . . .

The Court also found that the complaint plausibly establishes that these statements are false because the statements would have a “different effect on the mind of the reader” from that which the Rule 68 offer of judgment would have produced. See Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1109 (10th Cir. 2017) (statement is not “false” unless it “would have a different effect on the mind of the reader from that which the pleaded truth would have produced” (citation omitted)). 

Thomas P. Howard, LLC litigates nationwide including in Colorado.