As we’ve recently discussed, one of the more interesting developments in class action law as of late is the use of the pick-off play, which occurs when a potential class action defendant settles the case with a named plaintiff, potentially mooting the rest of the class action from going forward. And, as we’ve explained in the past, different circuits have come down on different sides on the issue as to whether a Rule 68 offer (an offer to the named plaintiff to fully settle that plaintiff’s damages) indeed moots the rest of the suit. As this story explains, the Eleventh Circuit recently joined the debate and held that it does not:
On December 2, 2014, the United States Court of Appeals for the Eleventh Circuit reversed a district court order dismissing a putative class action as moot, holding that: (1) an unaccepted Rule 68 offer of judgment does not moot a plaintiff’s individual claims; and (2) even if a Rule 68 offer were to moot individual claims, the putative class action would remain justiciable, irrespective of whether a motion to certify the class had been filed at the time of the offer. See Stein v. Buccaneers Ltd. P’ship, No. 13-15417, -- F.3d --, 2014 WL 6734819 (11th Cir. 2014); see also Keim v. ADF Midatlantic, LLC, No. 13-13619 (11th Cir. Dec. 2, 2014) (unpublished) (reversing dismissal of class action based on decision in Stein).
While Stein provides some much-needed clarity regarding the effect of Rule 68 offers on putative class actions in the Eleventh Circuit and aligns the Circuit with most others that have considered the issue, the court’s decision eliminates a strategic option class-action defendants have used to obtain early dismissals, and it may have the unintended consequence of rendering early resolutions of class actions less likely.
In the opinion, the court addresses whether the timing of the Rule 68 offer makes a difference on the issue of mootness. According to the court, a live controversy could still exist after a Rule 68 offer, regardless of whether the remaining plaintiffs have moved to certify the class:
On the issue of the mootness of the class claims, Zeidman [ed note: a Fifth Circuit case from 1998] is different from our case in only one significant respect: in Zeidman, the plaintiffs moved to certify a class before the individual claims became moot, while here, the plaintiffs moved to certify the class only after BLP served its Rule 68 offers. BLP says this changes the result.
First, it is plain that this case still presents a live controversy. The plaintiffs say BLP violated the Telephone Consumer Protection Act and that all class members are entitled to money damages; BLP denies it. In indistinguishable circumstances, Zeidman held the dispute was still live and said: "The case before us, therefore, rests not on whether there exists a live controversy, but on whether the district court has before it some plaintiff with a personal stake in that controversy." Id. at 1042. The same is true here.