In a recent post, we wrote about the pick-off play, which, in simplified terms, occurs when a prospective class action defendant settles the case with a named plaintiff, potentially mooting the rest of the class action from going forward. A few recent stories provide helpful context on this strategy.
This article, taken from Ogletree Deakins, provides background on the current circuit split in the federal courts of appeal regarding the pick-off play. As it explains, the split came on the heels of Genesis Healthcare Corp. v. Symczyk, 113 S. Ct. 1523 (2013):
In Genesis, the Supreme Court held that a full offer of judgment made pursuant to Rule 68 in the context of an FLSA collective action mooted the claims of the named plaintiff (thereby divesting the court of jurisdiction to adjudicate the claims of the collective) where the offer was made prior to the plaintiff’s motion for conditional certification of a class. The Supreme Court reasoned that because the plaintiff had rejected an offer for full relief, she did not have a personal interest in representing putative, unnamed members of the collective. Although the Supreme Court was careful to limit its holding inGenesis to FLSA cases, practitioners and the courts are taking a new look at Rule 68 offers in traditional class action cases in light of the Genesis decision.
Another article from the Consumer Product Matters blog provides a clear explanation of the nature of federal courts’ circuit split post-Genesis:
The Genesis HealthCare decision left unanswered a critical question: whether a rejected Rule 68 offer that fully satisfies the plaintiff’s claims is sufficient by itself to moot the action? Since Genesis HealthCare, the Circuits Courts have split on the issue:
- The Seventh Circuit allows for the Pick Off, holding that a rejected Rule 68 offer of full relief to the named plaintiff moots the case.
- The Second and Sixth Circuits have held similarly, though they require entry of judgment for the plaintiff in accordance with the rejected offer, so that the plaintiff may obtain full relief upon the case’s dismissal.
- The Third, Fifth, and Tenth Circuits have held that a rejected Rule 68 offer of judgment moots the individual’s claim, but not the class action.
- The Ninth Circuit has come down on the opposite side of the spectrum, holding in the 2013 Diaz v. First American Home Buyers Protection Corp. case that an unaccepted Rule 68 offer that would fully satisfy a plaintiff’s claim is insufficient to render the claim moot.