In Franco v. Allied Interstate LLC, No. 13 Civ. 4503, 2014 U.S. Dist. LEXIS 47077 (S.D.N.Y. Apr. 2, 2014), the named plaintiff sued the defendant for sending him a debt collection letter that implied he could face garnishment of his wages if he did not pay his debt. He did not allege any actual damages, relying instead on the FDCPA’s statutory damages provision.
In response, the defendant made a Rule 68 offer of judgment of $1,501 plus reasonable costs and attorneys’ fees as allowed by the court, one dollar more than the statutory maximum damages the plaintiff could receive. The plaintiff refused the offer, and the defendant moved to dismiss the complaint as moot.
This kind of case has come up before, with varied results. This time, the Southern District of New York found the claims moot. It acknowledged that offer of judgment cases are controversial, but pointed out that the case before it was more clear-cut than most. In particular, because the case involved statutory damages, it held that neither the relation-back doctrine (often used to preserve injunctive-relief claims) nor the traditional concern about mooting classwide injunctive relief applied. Instead, because the plaintiff had sought only statutory damages:
here as in Genesis Healthcare Corp., defendant’s offer of judgment offered plaintiff complete relief on his individual claims, and plaintiff ‘failed to assert any continuing economic interest in shifting attorney’s fees and costs to others.’
The takeaway in this case is fairly simple: even as Rule 68 remains controversial, it may work particularly well in statutory damages class actions.