United States Court of Appeals 

For the First Circuit 

No. 14-2347 

WALESKA GARAYALDE-RIJOS, 

Plaintiff, Appellee, 

v. 

MUNICIPALITY OF CAROLINA, 

Defendant, Appellant. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

[Hon. Francisco A. Besosa, U.S. District Judge] 

Before 

Lynch, Thompson, and Kayatta, 

Circuit Judges. 

Francisco Medina Medina and Pedro E. Ortiz-Alvarez, LLC, on 

brief for appellant. 

 Juan M. Frontera-Suau, Carlos J. Jimenez-Torres, and Frontera 

Suau Law Offices, PSC, on brief for appellee. 

August 21, 2015 
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LYNCH, Circuit Judge. This case comes to us once again 

from the District of Puerto Rico. Earlier, we reversed the 

dismissal of the action. Garayalde-Rijos v. Municipality of 

Carolina, 747 F.3d 15 (1st Cir. 2014). The issue this time is 

whether the defendant's offer of judgment under Federal Rule of 

Civil Procedure 68 was properly accepted by the plaintiff such 

that the district court did not err in entering judgment for the 

plaintiff. No issue concerning Rule 68(d)'s cost-shifting 

provision is presented. 

I. 

 On September 26, 2011, Waleska Garayalde-Rijos filed a 

complaint against the Municipality of Carolina (Carolina) in the 

federal district court of Puerto Rico, alleging gender-based 

employment discrimination and retaliation. After we remanded the 

case, the trial date was set for December 1, 2014. 

 The key date for the purpose of this appeal is November 

24, 2014. At 12:48 PM that day, Carolina extended to GarayaldeRijos what it explicitly labeled a Rule 68 offer of judgment for 

$25,000.1 At 5:13 PM, Carolina informed the district court by 

 1 The parties allege several subsequent events: Carolina 

offers an email that suggests that Garayalde-Rijos extended a 

counteroffer to Carolina at 2:25 PM. Garayalde-Rijos, for her 

part, offers an email that suggests that Carolina responded to the 

counteroffer by renewing its original offer at 3:54 PM. Carolina 

claims that, in a subsequent phone call at 4:33 PM, GarayaldeRijos rejected the original offer. However, because none of this 
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electronic filing that no settlement had been reached. This was

followed closely by a 5:38 PM motion by Garayalde-Rijos informing 

the district court that she was accepting Carolina's Rule 68 offer 

of judgment. Carolina then made a motion to clarify, which asked 

the district court to withhold judgment on the basis that 

Garayalde-Rijos had not been willing to accept some of its 

conditions and thus no agreement had been reached between the 

parties. The district court denied that motion and entered 

judgment for Garayalde-Rijos on November 25, 2014. Carolina then 

made a motion for reconsideration on December 2, 2014, claiming 

that because Garayalde-Rijos had rejected the offer prior to 

purportedly accepting it, the offer should have been considered 

withdrawn. The district court denied that motion later that same 

day. This appeal followed. 

II. 

 Carolina argues that the district court erred in 

entering judgment because Garayalde-Rijos had already rejected the 

offer of judgment prior to informing the court of her acceptance. 

Meanwhile, Garayalde-Rijos argues that she never rejected the 

offer. We need not wade into this contested factual issue to 

resolve this appeal because even an express rejection does not 

 

information was presented to the district court, we do not consider 

these events in this appeal. 
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terminate a Rule 68 offeree's power to accept the offer within a 

fourteen-day period.2

 Rule 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." Fed. R. Civ. P. 68(a). If the offer 

is accepted, "either party may then file the offer and notice of 

acceptance, plus proof of service," at which time the clerk must 

enter judgment. Id. A party's decision not to accept a Rule 68 

offer of judgment comes with consequences: if the judgment that 

the offeree ultimately obtains is not more favorable than the 

unaccepted offer, the offeree is on the hook for the offeror's 

post-offer costs. Id. 68(d). 

 This rule was designed to encourage the settlement of 

private disputes. Marek v. Chesny, 473 U.S. 1, 5 (1985). Its 

mechanism for doing so is its cost-shifting provision, which 

enables an offeror to put pressure on the offeree to evaluate the 

likely value of her claim and "'think very hard' about whether 

continued litigation is worthwhile." Id. at 11. In return, Rule 

68 guarantees the offeree fourteen days to contemplate the offer, 

as though the offeree had paid for a fourteen-day option. See 

 2 Although it is not clear what standard of review we should 

apply to the district court's entry of judgment, we need not decide 

that question because there was no error by the district court. 
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Richardson v. Nat'l R.R. Passenger Corp., 49 F.3d 760, 765 (D.C. 

Cir. 1995). If the offeror were able to revoke the offer at any 

time, the offeror would be able to exert even greater settlement 

pressure than the Rule contemplates, throwing off the Rule's 

"rather finely tuned" balance. See id. As a result, a number of 

federal courts have suggested that Rule 68 offers should be treated 

as irrevocable fourteen-day option contracts. Id. at 764 ("[T]he 

few federal courts that have considered the revocability of offers 

under Rule 68 . . . have treated Rule 68 offers as at least 

generally irrevocable during the [14]-day period."); see also 

Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236, 1240 (4th Cir. 

1989). Commentators have also endorsed this rule. See, e.g., 12 

C. Alan Wright et al., Federal Practice and Procedure § 3004 (3d 

ed. 2014); Simon, Jr., The Riddle of Rule 68, 54 Geo. Wash. L. 

Rev. 1, 5 n.13 (1985); Udall, May Offers of Judgment Under Rule 68 

Be Revoked Before Acceptance?, 19 F.R.D. 401, 406 (1957). 

Federal courts have applied ordinary contract law 

principles to determine whether there has been a valid offer and 

acceptance under Rule 68. See, e.g., Andretti v. Borla Performance 

Indus., Inc., 426 F.3d 824, 837 (6th Cir. 2005); Arbor Hill 

Concerned Citizens Neighborhood Ass'n v. Cty. of Albany, 369 F.3d 

91, 95 (2d Cir. 2004) (per curiam); Stewart v. Prof'l Computer 

Ctrs., Inc., 148 F.3d 937, 939 (8th Cir. 1998); Radecki v. Amoco 

Oil Co., 858 F.2d 397, 400 (8th Cir. 1988); see also Wright et 
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al., supra, § 3002. Under ordinary contract law principles, the 

irrevocable nature of a Rule 68 offer has particular significance: 

neither a rejection nor a counteroffer terminates the offeree's 

ability to accept a Rule 68 offer within the fourteen-day period. 

Restatement (Second) of Contracts § 37 (Am. Law Inst. 1981); 1 A. 

Linton Corbin, Corbin on Contracts § 3.38 (rev. ed. 1993); 1 E. 

Allan Farnsworth, Farnsworth on Contracts § 3.23 (3d ed. 2004); 

see also Kirkland v. Sunrise Opportunities, 200 F.R.D. 159, 162 

n.3 (D. Me. 2001); Pope v. Lil Abner's Corp., 92 F. Supp. 2d 1327, 

1328 (S.D. Fla. 2000); Butler v. Smithfield Foods, Inc., 179 F.R.D. 

173, 176 (E.D.N.C. 1998); United States v. Hendricks, No. 92 C 

1461, 1993 WL 226291, at *2 (N.D. Ill. June 24, 1993). This 

conclusion is consistent with the language of Rule 68 itself, which 

recognizes only two types of offers -- offers accepted within 

fourteen days and offers not accepted within fourteen days -- and 

does not even contemplate a counteroffer or an affirmative 

rejection within the fourteen-day period. Because Garayalde-Rijos 

filed a timely acceptance, the district court's entry of judgment 

was correct regardless of what took place in the contested series 

of exchanges between the parties in the time between the offer of 

judgment and Garayalde-Rijos's acceptance.3

 3 In certain situations, an offeror's detrimental reliance on 

the offeree's rejection of the offer may terminate the power of 

acceptance, Farnsworth, supra, § 3.23, or an offer should be 

considered revocable because it was induced by fraudulent conduct 
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 Carolina argues that this conclusion is foreclosed by 

the text of Rule 68(b), which says that "[a]n unaccepted offer is 

considered withdrawn." Fed. R. Civ. P. 68(b). However, the rule 

that a rejection or counteroffer does not terminate the offeree's 

power of acceptance does not contravene the text of the Rule, which 

merely says that an offer is considered withdrawn if not accepted 

within the fourteen-day period. Carolina also claims that our 

conclusion is at odds with the Supreme Court's opinion in Genesis 

Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013). Specifically, 

Carolina points to the statement that "the recipient's rejection 

of an offer 'leaves the matter as if no offer had ever been made.'" 

Id. at 1533 (Kagan, J., dissenting) (quoting Minneapolis & St. L. 

Ry. Co. v. Columbus Rolling-Mill Co., 119 U.S. 149, 151 (1886)). 

However, that statement comes from a part of Justice Kagan's 

dissent discussing a completely unrelated issue: an offeree's 

rejection of a Rule 68 offer that would have afforded her complete 

relief and that rejection's effect on the continued existence of 

a live controversy. Id. at 1533–34. A cherry-picked quote, 

particularly from a dissent that does not even remotely address 

the issue at hand, does not persuade us to reach the opposite 

conclusion. 

 

by the offeree, Colonial Penn Ins. Co., 887 F.2d at 1240. Also, 

an offeror may in some circumstances clarify an offer after making 

it. See Radecki, 858 F.2d at 402–03. However, none of those 

exceptions are relevant here. 
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III. 

 In a further attempt to backtrack on its offer, Carolina 

argues that its offer should not have been considered a proper 

Rule 68 offer, despite the fact that it was Carolina itself that 

labeled its November 24, 2014, offer a Rule 68 offer of judgment. 

Specifically, Carolina argues that because its offer was not made 

"[a]t least 14 days before the date set for trial," Fed. R. Civ. 

P. 68(a), the offer should have been considered a garden-variety 

settlement offer that could not have led to entry of judgment 

without a joint request for settlement. However, this argument is 

waived because it was not raised in the district court in any of 

Carolina's motions objecting to Garayalde-Rijos's acceptance of 

the offer, or in its motion for reconsideration of entry of 

judgment. See Curet-Velázquez v. ACEMLA de Puerto Rico, Inc., 656 

F.3d 47, 53 (1st Cir. 2011) ("It is hornbook law that theories not 

raised squarely in the district court cannot be surfaced for the 

first time on appeal." (quoting McCoy v. Mass. Inst. of Tech., 950 

F.2d 13, 22 (1st Cir. 1991))). As a result, Carolina's attempt to 

take back its offer is to no avail. 

IV. 

 For the reasons stated, the judgment is affirmed. Costs 

are awarded against Carolina.