Friday, June 12, 2015

Does an Offer of Judgment for Full Relief of the Individual Plaintiff’s Claims Moot a Class Action?

In advance of the Supreme Court’s consideration of the issue, the Southern District of Ohio has weighed in on whether an offer of judgment for full relief of the named plaintiff’s claims can moot a putative class action.  In Charvat v. National Holdings Corporation, a veteran pro se litigant filed a putative TCPA class action for calls made to him while he was on the National Do Not Call Registry.  The defendant served Charvat with an offer of judgment for full relief of his individual claims – specifically, $10,500.00 ($1,500.00 for each of the seven calls Charvat alleged he received) and the entry of an injunction against defendant as requested in the Complaint.  The offer of judgment also stated that its intent was to provide plaintiff with all of the individual relief sought in the Complaint.  Charvat rejected the offer and the defendant moved to dismiss asserting the offer of judgment mooted the plaintiff’s claim. 

The court gave considerable consideration to the concerns raised by Sixth Circuit precedent as to whether Rule 68 offers of judgment should be used to pick off named plaintiffs before the class can be certified.  Additionally, the court paid close attention to Justice Kagan’s dissent in the Supreme Court’s 2013 decision in Genesis Healthcare Corp v. Symjczyk, 133 S. Ct 1523 (2013) where Kagan noted that “[R]ule 68 provides no appropriate mechanism for a court to terminate a lawsuit without the plaintiff’s consent…Nor does a court have inherent authority to enter an unwanted judgment for [a hypothetical plaintiff Smith] on her individual claim, in service of wiping out her proposed collective action.  To be sure, a court has discretion to halt a lawsuit by entering judgment for the plaintiff when the defendant unconditionally surrenders and only the plaintiff’s obstinacy or madness prevents her from accepting total victory.  But the court may not take that tack when the supposed capitulation in fact fails to give the plaintiff all the law authorizes and she has sought.  And a judgment satisfying an individual claim does not give a plaintiff like Smith, exercising her right to sue on behalf of other employees, “all that [she] has…requested in the complaint.” Genesis, 133 S.Ct. at 1536.

Considering all of this, the court determined the ultimate question becomes “under what circumstances is it appropriate to enter judgment in the plaintiff’s favor over his or her objection?”    The court determined that the focus should be on plaintiff’s demand for relief.  Because the demand in the instant case included class action relief and the offer of judgment did not address class action relief, the court determined it was not compelled to enter the judgment in plaintiff’s favor over his objection and denied the motion to dismiss.

As previously noted, the Supreme Court recently granted certiorari in Campbell-Ewald Company v. Gomez,No. 14-857, to determine whether a defendant’s unaccepted offer of judgment prior to class certification renders the plaintiff’s individual and class claims moot.  That case, like Charvat, involves TCPA claims.  One of the issues courts have struggled with under this scenario, in addition to the mooting of the class claims, is that if an unaccepted Rule 68 offer of judgment moots a plaintiff’s claim and deprives the court of subject matter jurisdiction, is the court forced to dismiss the case or can it forcibly enter the judgment in favor of the plaintiff over his objection.  It is likely that Campbell-Ewald will shed some light on that issue, as well.

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