Co-authored by: Erica L. Cook
As we reported earlier this year in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 672 (2016), the Supreme Court held that a putative class action does not become moot when a defendant merely offers a named plaintiff full relief on his or her individual claims under Fed. R. Civ. P. 68. Left unanswered was the question whether the outcome would be different if a defendant deposited “the full amount of the plaintiff’s individual claims into an account payable to the plaintiff, and the court then entered judgment for the plaintiff in that amount.” Id. The Ninth Circuit is the first circuit court to examine the use of Rule 68 to moot a putative class action post-Campbell-Ewald.
In Chen v. Allstate Insurance Co., 819 F.3d 1136 (9th Cir. 2016), two plaintiffs brought a class action complaint against Allstate Insurance Company (Allstate), alleging violations of the Telephone Consumer Protection Act (TCPA). Allstate tendered an offer of judgment of $25,000 plus attorney fees and injunctive relief to the plaintiffs before the plaintiffs moved for class certification. When the plaintiffs did not accept the offer, Allstate moved to dismiss the plaintiffs’ complaints for lack of subject matter jurisdiction, arguing that the claims were rendered moot by the offer. Id. While the motion to dismiss was pending, one of the plaintiffs accepted Allstate’s Rule 68 offer; the other did not. Id. The district court denied Allstate’s motion to dismiss, holding that even if the Rule 68 offer fully satisfied a plaintiff’s individual claims, a plaintiff still had the opportunity to move for class certification when the action as a whole remained a justiciable controversy. Id. The district court relied on the Ninth Circuit’s decision in Pitts v. Terrible Herbst, Inc., 653 F. 3d 1091 (9th Cir. 2011), which held that an unaccepted Rule 68 offer that was made before class certification and fully satisfied a named plaintiff’s individual claims did not moot a class action claim when the defendant used tactics to “pick off” named plaintiffs to avoid a class action. Continue Reading