Tag Archives: Rule 68

Rule 68 does not moot case

In Emily Diaz v. First Am. Home Buyers Protection Corp., No. 11-57239 (9th Cir. Oct. 4, 2013), the 9th Circuit Court of Appeals ruled that an offer of judgment (Rule 68) did not make a plaintiff’s case moot.  This is an important case because it provides guidance when considering when to file summary judgment when a Rule 68 offer has been made.

Rule 68 is when a party offers opposing party a judgment for full satisfaction that the opposing party could recover at trial.  In this case, First American offered $7,019.32 plus costs.  Diaz, the plaintiff, declined this offer.  Thereby the issue was whether offering the money made the lawsuit moot.

The 9th Circuit Court of Appeals held that the First American’s offer, even if it fully satisfied the plaintiff’s claim, did not make the case moot.  When reaching this conclusion the 9th Circuit cited Kagan’s dissent in Healthcare Corp. v. Symczyk, 133 S.Ct. 1523, 1528-29 (2013).

‘[A] case becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party.’ By those measures, an unaccepted offer of judgment cannot moot a case.   When a plaintiff rejects such an offer – however good the terms – her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief. An unaccepted settlement offer – like any unaccepted contract offer – is a legal nullity, with no operative effect.”

Id. at 1536 (citation omitted).

via Courthouse News Service.

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Supreme Court and collective action dismissals

The Supreme Court has recently decided a collective action case that affects how the litigation process can be cut promptly by defendants.  In summary of the details below, a plaintiff loses its interest in a collective action when an offer completely satisfies the plaintiff’s claim.  Further, if the plaintiff does not move for certification, even though the lawsuit had already started, the plaintiff’s case ends if the claim is no longer alive.

What this might imply is that plaintiffs in a collective action would need to move promptly when seeking certification.  The question, however, is: would you have enough supporting evidence by then?

In Genesis Healthcare Corp. v. Symczyk, 11-1059 (2013), the Supreme Court held that a collective action (FLSA) is moot when the named plaintiff has no continuing personal interest in the outcome of the lawsuit and no motion for conditional certification has been filed.

The District Court, finding that no other individuals had joined her suit and the Rule 68 offer that was ignored fully satisfied her claim, dismissed the lawsuit for lack of subject matter jurisdiction.  The Third Circuit Court of Appeals dismissed.  However, the Supreme Court agreed with the District Court, and thus reversed the Court of Appeals’ opinion.

The Supreme Court explained that Sosna v. Iowa, 419 US 393 (1975) and United States Parole Comm’n v. Geraghty, 445 US 388 (1980), held that a class action that was erroneously denied relates back to the time of the erroneous denial — as long as the named plaintiff’s claim remains live at the time of the denial of the class certification.

The Supreme Court, here, found that the named plaintiff had not moved for conditional certification and her claim became moot.  Consequently, the relate back provision did not apply in her case.

As to the Rule 68 offer, the Supreme Court held that the purposes of a collective action would not be frustrated by the offer.  The plaintiff alleged that the Rule 68 had the effect to “pick off” the named plaintiffs before the collection action’s process had run its course.  The Supreme Court explained that in Deposit Guaranty Nat. Bank v. Roper, 445 US 326 (1980), when the Rule 68 offer did not provide complete relief, the named plaintiffs could appeal because they retained an ongoing, personal economic stake in the lawsuit.

Here, however, the named plaintiff conceded that the Rule 68 offer offered complete relief, and plaintiff asserted no continuing interest in shifting attorney’s fees and costs.

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