Does an offer of complete relief moot out a plaintiff’s claims such that there can be no case under the federal court’s judicial power under the Constitution?
That question left unanswered by the U.S. Supreme Court’s 2013 decision in Genesis Healthcare Corp. v. Symczyk – in which the court found a settlement offer of full relief mooted an FLSA collective action – will now be addressed by the high court in Campbell-Ewald Company v. Gomez following the Court’s grant of review on May 18. And that decision could have much broader implications for employment class actions in federal court.
Campbell-Ewald involves claims under the Telephone Consumer Protection Act, but the case will address a defendant’s ability to settle individual and class claims by a Rule 68 offer of judgment of full relief made before the plaintiff seeks class certification under Rule 23. Following its own earlier precedent, the Ninth Circuit ruled that an unaccepted Rule 68 offer that would fully satisfy a plaintiff’s claim does not render the claim moot — the claim remains a live controversy. The circuit court also ruled similarly that such an offer did not moot out plaintiff’s putative class claims. The Supreme Court now will review those rulings.
In Genesis Healthcare, the Supreme Court assumed without deciding that an employer’s Rule 68 offer of full relief mooted out the plaintiff’s claims for unpaid wages under the Fair Labor Standards Act. But the Supreme Court extended that mootness to the plaintiff’s ability to serve as representative plaintiff in an FLSA collective action. According to the Supreme Court, “[i]n the absence of any claimant’s opting in, respondent’s suit became moot when her individual claim became moot, because she lacked any personal interest in representing others in this action. While the FLSA authorizes an aggrieved employee to bring an action on behalf of himself and ‘other employees similarly situated,’ 29 U. S. C. §216(b), the mere presence of collective-action allegations in the complaint cannot save the suit from mootness once the individual claim is satisfied.”
The Genesis Healthcare decision carefully noted that Rule 23 class actions are “fundamentally different from collective actions under the FLSA.” A favorable ruling in Campbell-Ewald creates the possibility in employment cases that a full-relief Rule 68 offer could moot out a plaintiff’s ability to serve as a class representative in a Rule 23 putative class action. We will continue to monitor the progress of the Campbell-Ewald case.