One of the hottest topics in class action litigation is whether a defendant’s offer of judgment providing complete relief to a plaintiff under Rule 68 of the Federal Rules of Civil Procedure moots the plaintiff’s individual and uncertified class action claims. In just a few weeks, the U.S. Supreme Court will take up this question in Campbell-Ewald Co. v. Gomez, and the Court could settle broad disagreement among lower courts on the issue.
The use of Rule 68 offers is especially prevalent in so-called “no injury” statutory damage class action lawsuits filed under federal statutes such as the Fair Credit Reporting Act, the Telephone Consumer Protection Act, and the Fair Debt Collection Practices Act. In those suits, plaintiffs often seek the specific damages provided for by statute, but not actual damages. As a result, a plaintiff’s maximum recovery can be predetermined. And, where a defendant makes an offer of judgment in the statutory amount plus attorneys’ fees, the plaintiff is afforded complete relief.
Until recently, most courts agreed that a Rule 68 offer of complete relief moots a plaintiff’s individual claims because it eliminates genuine adversity between the parties and any legitimate basis for calling on courts to exercise their dispute-resolution function. Courts were divided, though, on whether the mootness of a plaintiff’s individual claims also mooted his uncertified claims brought on behalf of a class. In 2013, in the case of Genesis HealthCare, Inc. v. Symczyk, the Supreme Court ruled that where a plaintiff’s individual claims were mooted by a Rule 68 offer (which it assumed), that likewise mooted her claims on behalf of others (there, “collective” action claims under the Federal Labor Standards Act). In dissent, Justice Kagan challenged the majority’s assumption that the plaintiff’s individual claims were moot. She reasoned that a rejected or unaccepted offer of judgment couldn’t possibly moot a claim because it is a “legal nullity” and, if plaintiff persisted with her claims after rejecting the offer, the district court could still grant her relief. Justice Kagan’s dissent turned the tide in the lower courts, leading numerous circuits—including several just last month—to adopt her reasoning and find that a rejected or unaccepted Rule 68 offer does not moot a plaintiff’s individual claims (or, hence, his claims on behalf of a putative class).
That sets the stage for next month’s argument before the Supreme Court in Campbell-Ewald. Both sides are supported by numerous amici, including TransUnion, which filed a brief authored by Reed Smith lawyers in Chicago, Pittsburgh, and New York; and the United States itself. The mootness question presented is challenging and complex and it is difficult to predict how the Court will resolve it. But one thing is certain—the Court’s decision will have a far-reaching impact on the way putative class actions are litigated and defended.
If you are interested in a more in-depth treatment of the Campbell-Ewald case and the Rule 68 mootness issues discussed above, please see “Do Rule 68 Offers of Judgment Moot Individual and Uncertified Class Claims? As Circuits Issue Flurry of Rulings, Supreme Court Is Poised to Decide” written by our colleagues Jim Martin, Colin Wrabley, Casey Laffey and Nana Japaridze, and published earlier this week in Bloomberg BNA’s U.S. Law Week and Class Action Litigation Report.