City of Almaty, Kazakhstan v. Sater

Background

The plaintiffs moved for reconsideration of the Court’s June 1, 2022 order. That earlier order had denied as moot the plaintiffs’ motion to strike Felix Sater’s offer of judgment under Federal Rule of Civil Procedure 68. Because the offer was not accepted within the required period, the Court had noted that it was considered withdrawn under Rule 68(b).

The plaintiffs argued that the motion to strike was not moot because an unaccepted offer could still have legal consequences. Under Rule 68(d), if the final judgment obtained by the party receiving the offer is not more favorable than the unaccepted offer, that party may have to pay costs incurred after the offer was made.

Court’s Analysis

The Court explained that a dispute is moot only when the court cannot provide any effective relief. It concluded that the validity of Sater’s offer could affect whether the plaintiffs faced cost shifting under Rule 68(d). The plaintiffs therefore had a concrete interest in determining whether the offer was valid, and the motion to strike was not moot.

The Court also ruled that Sater should not have filed the unaccepted offer on the public docket. Rule 68(a) allows a party defending against a claim to serve an offer on the opposing party. The offer and notice of acceptance may be filed if the opposing party accepts within 14 days. Because Sater’s offer was never accepted, it should not have been filed on the docket.

The Court separately considered whether the offer was valid. It found several independent defects. First, the offer stated that each party would bear its own fees and costs, while a valid Rule 68 offer must allow judgment for both damages caused by the challenged conduct and costs accrued. Second, the offer purported to resolve multiple disputes, although Sater was a party to only one of them. Third, it called for dismissal of the action against all defendants even though Sater made the offer only on his own behalf; Sater had no authority to bind his co-defendants or parties in other cases. The Court also noted that Sater had waived additional opposition arguments by failing to respond to the motion to strike within the time allowed by the local rule.

Ruling

Judge John G. Koeltl held that Sater’s offer was invalid under Rule 68. The Court granted the plaintiffs’ motion for reconsideration and also granted the plaintiffs’ motion to strike. The Clerk was directed to close Docket No. 402 and strike Sater’s purported offer, Docket No. 389. The Court stated that future offers should be filed on the docket only if accepted within 14 days or if an unaccepted offer is submitted in a proceeding to determine costs.