The US Court of Appeals for the Second Circuit issued an opinion on November 14, 2012, in Barbour v. City of White Plains, affirming the district court's award of costs and attorney's fees to the plaintiffs after they accepted the defendants' offer of judgment under Rule 68 of the Federal Rules of Civil Procedure (FRCP).

The plaintiffs, three individuals, sued the City of White Plains and several of its police officers for civil rights violations stemming from an altercation with the White Plains police. Shortly before trial, the defendants made an offer of judgment to the three plaintiffs to settle "all claims pending against the defendants" for a total of $30,000. The plaintiffs accepted. The plaintiffs then moved for, and were awarded, nearly $300,000 in litigation costs and attorney's fees.

The defendants argued to the trial court (and again on appeal) that the offer of judgment, which sought to settle "all claims," precluded a separate award of litigation costs and fees. The Second Circuit disagreed, reasoning that a party who intends an offer of judgment to cover its adversary's litigation costs and fees must clearly say so in the offer itself.

This case serves as an important reminder to counsel that an offer of judgment is not presumed to cover the adversary's litigation costs (which may sometimes also include attorney's fees) unless it expressly says so.