Settling class action lawsuits can be tricky. For example, what happens to a class action when the named plaintiff accepts a Rule 68 offer of judgment? According to a recent Ninth Circuit decision, depending on the language of the settlement agreement, the Rule 68 settlement could moot the entire action, including potential claims of the non-named plaintiff. This recent story explains the Ninth Circuit’s decision:

Rule 68 Offer of Judgment Accepted

Jonathan Sultan filed a proposed labor law class suit against his former employer, Medtronic Inc.

The district court denied class certification and dismissed some of the claims. Sultan entered into a Fed. R. Civ. P. 68 offer of judgment with Medtronic.

Sultan stated in a later appeal of the certification denial that he intended the settlement agreement only to cover his remaining individual claims.

However, the order of judgment said, “[T]he total amount paid by defendant is paid on account of any liability claimed in this action, including all costs of suit, interest, and attorney's fees otherwise recoverable in this action by plaintiff….”

Entire Action Moot

The U.S. Court of Appeals for the Ninth Circuit said that Sultan agreed to this “broad language,” and, as a result, “any individual and class claims Sultan alleged in the action merged into the Rule 68 Judgment and have been exhausted.”

The plaintiff consequently retained no personal stake in the class claims he sought to appeal, and there were no other named plaintiffs to argue for class certification, the appeals court said.

The Ninth Circuit said the case was moot and dismissed it.