Yet another court has found that an unaccepted Rule 68 Offer of Judgment will not moot a putative class action, even where the offer purports to satisfy all of plaintiff’s demands. Plaintiffs sued in the Eastern District of Missouri and proposed to represent a class of at least 60 former joint venture general managers of Panera Bread Company whose buyout payments from Panera were allegedly capped at an amount lower than that to which they contractually agreed. Plaintiffs asserted claims for breach of contract and fraud under Missouri law, claiming Panera violated the terms of its buyout agreements with the general managers and made the contractual promises despite having no intention of ever performing them.
Some three months after plaintiffs filed their motion for class certification, Panera served each of the named plaintiffs with an offer of judgment pursuant to Rule 68. The offers proposed judgment in amounts greater than each plaintiff’s individually alleged damages on the breach of contract claims, as well as prejudgment interest and costs. The offers did not address any relief toward putative class members. None of the named plaintiffs accepted the offers.
Panera moved to dismiss the case on the ground of mootness. Panera argued that because the offers of judgment would have provided plaintiffs with complete relief, they no longer had an interest in the litigation and the case was moot under the U.S. Supreme Court’s decision in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013). In the alternative, Panera moved to stay the action until such time as a decision issued from the United States Supreme Court in Campbell-Ewald Co. v. Gomez, No. 14-857. The Campbell case is poised to resolve a split among circuit courts regarding whether an unaccepted offer of complete relief under Rule 68 moots an action (in individual as well as putative class action cases).
The court first denied Panera’s motion to dismiss. The court reiterated the definition of mootness as “when the plaintiff receives all relief requested in the complaint and no longer has a personal stake in the outcome of the lawsuit.” Following this definition, the threshold question addressed by the court was whether the offers actually proposed complete relief. They did not in the court’s eyes because the offers failed to address punitive damages for plaintiffs sufficiently-pled fraud claims. Furthermore, citing Justice Kagan’s dissent in Genesis (as have other courts), the court noted that every district court addressing this issue since Genesis has held that an unaccepted offer of judgment doesnot moot a named plaintiff’s individual or putative class claims.
The court further declined to stay the action pending a decision by the Supreme Court in Campbell-Ewald because it found that a decision on the issue either way would not affect its analysis of Panera’s offers of judgment because the offers here did not offer complete relief. The court went on to certify the class upon finding the class satisfied criteria under Rule 23.