On March 6th, in Silva v. Todisco Services, Inc., Judge Kenneth Salinger, sitting in the Business Litigation Session of the Massachusetts Superior Court, held that a defendant’s tendering of the maximum amount of damages a plaintiff might recover in a putative class action did not moot either the plaintiff’s individual claims or the claims of putative class members. In rejecting defendant’s “pick-off” attempt, Judge Salinger aligned Massachusetts state court practice with federal case law, including the United States Supreme Court’s decision in Campbell-Ewald v. Gomez, and subsequent federal decisions. His reasons for doing so, while perhaps consistent with Massachusetts precedent, were somewhat different from the federal court rationale and could have unintended consequences.
In Campbell-Ewald, the Supreme Court held that an unaccepted offer of judgment does not moot a named plaintiff’s claim, and therefore cannot prevent a putative class action from moving forward. The Court based its decision on principles of contract law (once rejected, an offer becomes a nullity), which are echoed in the language of Fed. R. Civ. P. 68(b). The focus of the decision was on the viability of the plaintiff’s individual claims; the Court did not rely on the nature of the case as a putative class action.
Campbell-Ewald expressly did not address whether the outcome would be different had the defendant actually tendered the money to the plaintiff rather than simply offered to do so. After the decision, defendants in other cases attempted to test the potential loophole by tendering the funds, but a number of lower federal courts, in cases cited in Judge Salinger’s opinion, have rejected that stratagem. The defendant in Silva sent plaintiff’s counsel a check for three times the actual damages the plaintiff alleged to have incurred (incorporating an amount for treble damages under G.L. c. 93A), but Judge Salinger, consistent with the federal case law, held that doing so did not moot the plaintiff’s claim.
Judge Salinger reasoned, in part, that because the named plaintiff sought not just monetary relief, but also injunctive and declaratory relief, his claim was not mooted by the defendant’s tender of payment. By focusing on the status of the named plaintiff’s claim, he stayed within the lines of Campbell-Ewald, and he might have stopped there. A similar approach was followed by Boston federal district judge Allison Burroughs in a case Judge Salinger cites. In that case, Judge Burroughs rejected a mootness argument based on a third-party defendant’s payment of the full amount of plaintiff’s claimed damages into an escrow account. The court expressly avoided deciding whether there were “sound policy reasons for not allowing defendants or third-party defendants to stave off class litigation by picking off the named plaintiffs,” and instead focused on the third-party defendant’s failure to provide the plaintiff with all the relief the plaintiff sought. Judge Salinger’s reasoning diverged from the Supreme Court decision and Judge Burroughs’ decision, however, by focusing not just on the interests of the named plaintiff, but also on the interests of putative absent class members, in determining whether the case was moot.
Judge Salinger held that “[t]he tender of payment of the full amount of damages to Silva individually cannot moot claims for injunctive and declaratory relief either on behalf of Silva or, more importantly, on behalf of the putative class.” (Emphasis added.) The highlighted language, and other language in the opinion, suggests that, even if Silva’s claim had become entirely moot, the case could proceed with Silva acting as the class representative. Such reasoning contradicts the fundamental concept inherent in class action practice generally that, unless and until a class is certified, the case is to be treated as an individual case, and the only parties in interest are the defendant and the named plaintiffs.
Judge Salinger found support for his decision in SJC precedent. He cited the 2016 decision of the SJC in Cantell v. Comm’r of Correction, a prisoners’ civil rights case challenging conditions of confinement. The Appeals Court had held that the case should have been dismissed as moot because the named plaintiffs were released from the segregated unit in which they claimed they were unconstitutionally held. The SJC reversed, holding that, because the case was a putative class action, and the challenged conditions continued to exist for other putative class members, the case remained viable. This was especially so, the court said, because the defendant could always render an individual prisoner’s claim moot by releasing him from confinement, thereby shielding its conduct from effective review.
The SJC in Cantell might have reached the same outcome by applying the principle that a claim will not be dismissed as moot if it is capable of repetition yet evading review. That “inherently transitory” exception to the mootness doctrine, as described in the 2016 Supreme Court decision of Kingdomware Technologies, Inc. v. United States, and referenced in Judge Burroughs’ decision as well, focuses on the possibility that the same named plaintiff who seeks injunctive relief against conduct that the defendant ceased after the claim was filed might be harmed if he or she were subjected to the same challenged conduct again. The principles underlying that exception, however, which focus on the continued interests of the named plaintiff, are fundamentally different from the Massachusetts courts’ conclusion that mooting a named plaintiff’s claim in a putative class action does not moot the lawsuit because of the interests of absent putative class members who are not before the court.
Massachusetts courts, of course, are not bound by federal procedural precedent, and Judge Salinger’s reasoning may well be correct under existing Massachusetts law. And, because the court found that Silva retained a viable individual claim for prospective relief, the court’s focus on the putative class members’ interests may have been inconsequential. But courts should be careful not to extend such reasoning to cases where named plaintiffs’ claims prove to be non-viable, whether on grounds of mootness or for other reasons. Doing so would transform class litigation from representative litigation to private attorney general litigation, which is inconsistent with the terms of both the federal and state versions of Rule 23, and would constitute an unwarranted expansion of the class action procedure contemplated by chapter 93A. Not only would it be unfair to businesses to subject them to suit by private citizens somehow deputized to prosecute the claims of unrelated parties, but it would be unfair to such absent parties to place their legal interests in the hands of strangers whose incentives to pursue the claims may be different from their own.
Written by former litigation partner, Donald R. Frederico.