Class Actions: Massachusetts District Court Holds Defendant Can Moot Named Plaintiff's Claims By Tendering Check

As previous issues have noted, the Supreme Court in Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016), left open the possibility that a defendant might moot a class representative's claim and the claims of the proposed class by paying the class representative and obtaining a court-ordered judgment rather than merely extending a settlement offer. In a remarkable case described by some as an attempt to "pick off" the named plaintiff, the US District Court for the District of Massachusetts recently held that unconditionally tendering a check for an amount in excess of the named plaintiff's claims does not amount to a mere settlement offer, and moots the entire case.

The case, Demmler v. ACH Food Cos., No. 15-13556 (June 9, 2016), involved allegedly false labeling of ACH barbecue sauce bottles. The plaintiff alleged the bottles were prominently labeled "All Natural," but contained caramel color that rendered the products not "All Natural." ACH had stopped using the "All Natural" label nearly a year before the lawsuit was filed. Four months before filing suit, the named plaintiff's attorney sent a letter to ACH demanding compensation for plaintiff and the class. ACH responded by tendering a US$75 check to the named plaintiff, an amount equivalent to approximately 20 bottles of sauce, undisputedly in excess of the named plaintiff's individual damages. Despite the fact that ACH imposed no conditions or restrictions on the check, the named plaintiff's attorney rejected the check on the grounds that it offered relief only to the named plaintiff.

The court granted ACH's motion to dismiss, holding that the unconditional tender of the US$75 check mooted the case. The named plaintiff's refusal to accept the check was "immaterial," and "the mere fact that [the named plaintiff] did not accept unconditionally-provided remediation does not extend the life of the dispute." The named plaintiff's interest in attorney's fees, moreover, was insufficient to "create an Article III case or controversy where none exist[ed] on the merits of the underlying claim." Accordingly, because the individual claim of the lone named plaintiff was fully resolved before a decision on class certification, the claims of the class were no longer viable.