          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


                                      - 2 -
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


                                    - 3 -
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


                                   - 4 -
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


                                    - 5 -
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)).


                                    - 6 -
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.


                                      - 7 -
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


                                 - 8 -
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.


                                         - 9 -
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.


                                  - 10 -
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


                                  - 11 -
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.


                                   - 12 -
(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


                                 - 13 -
             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).


                                     - 14 -
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




                                             - 15 -
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.


                                  - 16 -
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).




                                 - 17 -
