The Second Circuit Court of Appeals recently confronted (again) a situation where a defendant made an offer of judgment to the putative class representative to provide all of the relief available to the individual plaintiff. How does such an offer affect a putative class representative prior to class certification? May the putative class representative refuse the offer of judgment and avoid a determination of mootness?
In particular, the defendant in this case served the plaintiff with a Rule 68 offer of judgment before the plaintiff moved for class certification (the plaintiff did move for class certification after the offer of judgment). After that, the defendant moved to dismiss the plaintiff’s class action complaint because the plaintiff’s claims had been mooted by its offer of judgment.
The district court entered judgment in plaintiff’s favor on his individual claims, denied his motion for class certification, and dismissed the plaintiff’s putative class action, noting that, “in the absence of a claim against defendant, plaintiff cannot adequately represent the purported class.”
On appeal, the Second Circuit vacated the final judgment and remanded. In determining that an unaccepted offer of judgment of complete relief did not moot the case, the Second Circuit was guided by recent decisions in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), and Radha Geismann, M.D., P.C. v. ZocDoc, Inc., 850 F.3d 507 (2d Cir. 2017).
The Second Circuit acknowledged that the Supreme Court left open one question in Gomez that could have a bearing on defendants’ arguments in these scenarios. That is, the Supreme Court expressly refused to rule on the hypothetical where a defendant deposits the full amount of a plaintiff’s individual claim in an account payable to that plaintiff and the court enters a judgment in that plaintiff’s favor for that amount.
But the Second Circuit said that hypothetical was not implicated in this case because “the district court entered a judgment that should not have been entered in the first place” and the defendant had not deposited the full amount of a plaintiff’s individual claim in an account payable to that plaintiff but rather sent the plaintiff a certified check to satisfy the judgment. (The plaintiff did not accept the certified check and the defendant did not seek leave to deposit the funds in the amount of its offer with the court.) The Gomez hypothetical is “thus not present here. As such, we need not, and do not, decide whether a different outcome would result if the facts here matched this hypothetical.”
By way of comparison, the District Court of Maryland ruled in the wake of Gomez that “a measure which makes absolutely clear that the defendant will pay the complete relief the plaintiff can recover and that the plaintiff will be able to receive that relief will moot the issue in controversy.” See Gray v. Kern, 143 F. Supp. 3d 363, 367 (D. Md. 2016).
Lary v. Rexall Sundown, Inc., et al., No. 15-601-cv, 2017 WL 1314878 (2d Cir. Apr. 10, 2017) (unpublished).