In a decision issued on August 21, 2015, the First Circuit added its voice to the recent chorus of federal appellate courts holding that an unaccepted Rule 68 offer of judgment, served before a motion for class certification and offering the named plaintiff all the relief it could potentially recover on its individual claim, did not render the plaintiff’s claim moot, and therefore did not moot the putative class action.
Bais Yaakov of Spring Valley v. ACT, Inc. involved a claim under the Telephone Consumer Protection Act (TCPA). Before the named plaintiff filed a motion for class certification, the defendant offered the plaintiff the maximum statutory damages it could possibly recover, offered to be enjoined from sending any additional unsolicited faxes to the plaintiff, and offered to pay plaintiff’s attorneys’ fees and costs. The plaintiff quickly filed a motion for class certification and allowed the Rule 68 offer to expire. The district court denied defendant’s motion to dismiss the plaintiff’s claims as moot, and plaintiff was permitted to file an interlocutory appeal under 28 U.S.C. Section 1292(b).
After analyzing Supreme Court and First Circuit precedent, the panel focused on the question whether a plaintiff who has refused a Rule 68 offer has “received complete relief” so that no Article III case or controversy remains. The court characterized the unaccepted Rule 68 offer as “a red herring,” because it does not provide any relief, but is simply deemed withdrawn once it has expired, and is not admissible except to determine costs. It pointed out that all five Circuits that have considered this issue after the Supreme Court’s 2013 decision in Genesis Healthcare Corp. v. Symczyk (including the three 2015 decisions of the Second, Fifth and Seventh Circuits referenced in our most recent post) have held that an unaccepted Rule 68 offer does not moot the plaintiff’s claim. The court further noted that the other six Circuits “have either held, assumed, or expressly avoided deciding that a Rule 68 offer of all relief requested can, at least sometimes, moot an individual claim,” but noted that none of those decisions resulted in a putative class action being declared moot. And it recognized that a definitive answer to the question before it may be forthcoming next term when the Supreme Court decides Campbell-Ewald Co. v. Gomez. “In the meantime,” the court held, the defendant’s unaccepted and withdrawn Rule 68 offer did not moot the litigation because the plaintiff had not “received complete relief.”
Written by former litigation partner, Donald R. Frederico.