Central District Holds in a “Pick-Off” Case That an Unaccepted Rule 68 Offer of Judgment Cannot Moot Plaintiff’s Claims or Class Claims

by charlesjung

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Judge Dolly M. Gee of the Central District of California held that a Rule 68 offer that was not accepted by a lead plaintiff cannot moot either plaintiff’s claim or the putative class claim.  Gomez v. Campbell-Ewald Company, 2011 WL 3664354, No. CV 10-2007 (C.D. Cal. Apr. 6, 2011).


Plaintiff filed a class action complaint alleging violation of the Telephone Consumer Protection Act alleging that Defendant directed the mass transmission of wireless spam to the cellular telephones of consumers across the nation to advertise on behalf of the U.S. Navy. Id. *1. Plaintiff received several text messages regarding pursuing a career in the Navy and did not consent to receiving such text messages from the Defendant. Id. Plaintiff sought damages, treble damages, injunctive relief, and attorneys’ fees and costs. Id.  Plaintiff also sought to certify a nationwide class of “all persons in the United States and its Territories who received one or more unauthorized text message advertisements from Defendant.” Id.

The Parties’ Stipulation

The parties stipulated that they agreed that the deadline for Plaintiff to file his motion for class certification would be extended until after the Defendant answered or otherwise responded to the complaint and conducted pre-certification discovery. Id. Defendant agreed that not waiting would be inefficient. Id. The Court approved the stipulation and extended the deadline until after all parties answered and a proposed discovery schedule was set forth to the Court. Id. *2.

Defendant filed its first motion to dismiss on May 19, 2010 and the Court denied it on November 5, 2010. Id. Defendant filed its Answer on November 19, 2010. Id. The Defendant then moved for reconsideration of its motion to dismiss on November 22, 2010 which the Court denied on December 9, 2010. Id. Plaintiff filed his motion for class certification on January 19, 2011. Id. The Court issued its Scheduling and Case Management Order on February 1, 2011. Id.

Defendant’s Rule 68 Offer and Offer of Settlement

Defendants filed a notice of offer of judgment pursuant to Federal Rule of Civil Procedure 68 on January 5, 2011. Id. Defendant offered to allow judgment to be entered against it (1) in the amount of $1503 for each unsolicited text messages, which was $501 trebeled, (2) pay any and all reasonable attorneys’ fees and costs, and (3) allow the court to enter an injunction against it. Id.

Defendant also made a settlement offer to the plaintiff on the same day with the same conditions. Id.

Plaintiff moved to strike and quash Defendant’s Rule 68 Offer and moved for class certification. Id. Defendant opposed both motions and filed a second motion to dismiss. Id.

Defendant’s Motion to Dismiss

The Court addressed the question of whether an offer of judgment made to a named plaintiff prior to class certification moots a putative class action. Id. *3. The parties did not dispute that the Rule 68 would have fully satisfied the original claims asserted by the Plaintiff or that an offer of judgment cannot moot a case once a class has been certified. Id.

Defendants argued that the Rule 68 offer mooted Plaintiff’s claim because there was no longer anything left for the Court to adjudicate. Id. Plaintiff argued that the Rule 68 offer was an improper attempt to “pick off Plaintiff’s claim” because he had no opportunity to file a class certification motion prior to such offer. Id.

The court noted that a case is moot when the issues presented are no longer live or the parties lack a legally cognizable interest in the outcome. Id. In other words, the parties must have a personal stake that continues throughout the existence of the litigation. Id.

The court also noted that in the class action context, the U.S. Supreme Court has allowed named plaintiffs whose individual claims were mooted to appeal a denial of class certification. Id. (citing Commission v. Geraghty, 445 U.S. 388, 395, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980) and Rosemere Neighborhood Ass’n v. U.S. Environmental Protection Agency, 581 F.3d 1169, 1172-73 (9th Cir.2009)). Plaintiffs who had a personal stake at the beginning of the action may continue to litigate where the claim is capable of repetition while evading review and where the claim is so inherently transitory that the trial could would not have enough time to rule on a motion for class certification before the proposed named plaintiff’s individual interest expires. Id.

Whether a Rule 68 Offer of Judgment Moots Plaintiff’s Class Claims

The Court reasoned that under the “relation back” doctrine, the court can consider a a motion for class certification as relating back to the time the original class complaint was filed so the named plaintiff retains standing to litigation the action even though his individual claims may have become moot otherwise. Id. *4.

The Court looked to the Ninth Circuit to determine how it should apply the “relation back” doctrine. Id. There was no direct case on point but the court noted the Ninth Circuit’s in  Smith v. T-Mobile USA, Inc., 570 F.3d 1119 (9th Cir. 2009) held that that because the plaintiffs voluntarily settled all of their FLSA claims after the district court’s denial of class certification, the plaintiffs failed to retain a personal stake in the litigation and their claims were moot. Id. (See Smith, 570 F.3d at 1123). The Ninth Circuit also held in Narouz v. Charter Communications, LLC, 591 F.3d 1261 (9th Cir. 2010) that even if a named plaintiff voluntarily settles his individual claims but specifically retains a personal stake, the plaintiff may appeal the denial of class certification. Id.

Other Circuits (Third, Fifth, and Tenth) have held that unaccepted offers of judgment will not moot a class action for monetary relief when the offer was received before the court could reasonably be expected to rule on the named plaintiff’s class certification motion. Id.

Defendant argued that the “relation back” doctrine cannot be applied, since Plaintiff did not seek to appeal a denial of class certification but rather sought to obtain a new ruling on the class certification issue. Id. *5. Defendant cited Lusardi v. Xerox Corp.,

975 F.2d 964 (3d Cir. 1992) to argue that the plaintiffs did not retain a requisite personal stake to pursue class certification after they voluntarily settled their claims. Id. The Court found defendant’s reliance on Lusardi misplaced, stating that in Lusardi the named plaintiffs settled their individual claims before filing their motion to certify and that Lusardi was not a case where the trial court lacked a reasonable opportunity to rule on the merits of a class certification or where the class-action defendant successfully prevented effective resolution of a class certification issue. Id.

The Court found that the relation back doctrine was the proper approach in this case:

“This Court rejects the notion that Defendant can make an end-run around a class

action simply by virtue of a facile procedural “gotcha,” i.e., the conveyance of a

Rule 68 offer of judgment to “pick off” the named plaintiff prior to the filing of

a class certification motion.” Id. *6.

The “Relation Back” Doctrine

The court found that plaintiff was not dilatory in filing his motion for class certification.  Defendant had asked Plaintiff to agree not to initiate discovery while its first motion was pending and stipulated that the Plaintiff could wait for Defendant to answer before filing the motion for class certification. Id. The Court thus extended Plaintiff’s deadline. Id. Plaintiff argued that he had no reasonable opportunity to move for class certification which the Court agreed with because the Defendant had filed its offer of judgment only one month after the Court had denied its motion for reconsideration on their first motion to dismiss. Id. *7. Plaintiff filed his motion for class certification without discovery within two months after Defendant filed its Answer. Id.

Additionally, the Defendants argued that Congress did not intend for TCPA claims to be litigated as class actions in federal court. Id. However, the Court reasoned that since TCPA was silent on the subject of class relief: thus the Court “must presume its availability.” Id.

Defendant further argued that its separate offer of settlement mooted Plaintiff’s case. Id. But the court concluded that the unaccepted Rule 68 offer did not moot Plaintiff’s putative class claim and also found that Defendant’s unaccepted settlement offer did not moot Plaintiff’s claim:

“In this case, Plaintiff has not accepted either the Rule 68 Offer or the Settlement Offer. In light of the Court’s ruling that Defendant’s unaccepted Rule 68 offer of judgment does not moot Plaintiff’s putative class claim, the Court also finds that Defendant’s unaccepted Settlement Offer does not moot Plaintiff’s claim.” Id.

Plaintiff’s Motion to Strike Defendant’s Rule 68 Offer

The Court also held that the Defendant was not entitled under Rule 68 to file the offer of judgment because Plaintiff did not accept Defendant’s offer of judgment. Id. Therefore, the Court struck the Rule 68 Offer. Id.

Plaintiff’s Motion for Class Certification

The Court found that the Plaintiff was pushed to file his Motion for Class Certification before the parties filed their Joint Rule 26(f) report, contrary to the spirit of their stipulation. Id. Therefore, the Court deferred its ruling on the Plaintiff’s Motion for Class Certification until after the parties had an opportunity to engage in class discovery and held that Defendant’s evidentiary objections were denied as moot. Id. *8.

Judges and Attorneys

District Judge Dolly M. Gee.

Evan M. Meyers, Michael J. McMorrow, Rafey S. Balabanian, Ryan D. Andrews, Edelson McGuire LLC, Chicago, IL, Sean Patrick Reis, Edelson McGuire LLP, Rancho Santa Margarita, CA, for Plaintiff.

Laura A. Wytsma, Christine M. Reilly, Michael L. Mallow, Loeb & Loeb LLP, Los Angeles, CA, for Defendant.



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