Circuit and District Courts Grapple with Questions Raised in the Wake of Campbell-Ewald v. Gomez

By Joseph C. Wylie II, Molly K. McGinley, Nicole C. Mueller

In the wake of Campbell-Ewald v. Gomez, in which the Supreme Court held that an unaccepted Rule 68 offer of complete relief does not moot a plaintiff’s individual claims, the Third Circuit recently held that an unaccepted settlement offer “has no force” and therefore neither the plaintiffs’ individual claims nor the class claims in the suit were mooted by defendant’s offer of full relief prior to the filing of a motion to certify a class in Weitzner et al. v. Sanofi Pasteur Inc. et al.  (Our previous analysis of Campbell-Ewald can be found here.)

In Weitzner, the plaintiff filed a class action alleging violations of the TCPA.  Before a motion for class certification was filed, defendant Sanofi Pasteur Inc. (“Sanofi”) made a Rule 68 offer of judgement to which Weitzner did not respond.  Sanofi argued that its Rule 68 offer mooted the plaintiffs’ individual claims as well as the class claims because no motion for class certification had been filed at that time of offer.  The district court denied Sanofi’s motion but certified the issue for interlocutory appeal.

While the Third Circuit previously ruled in Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004), that an offer of judgment that satisfies a plaintiff’s entire demand moots the case, the appeals court said that decision no longer stood in the wake of Campbell-Ewald.  Instead, absent a plaintiff’s acceptance, the defendant’s settlement offer remained only a proposal and bound neither party.

The Third Circuit declined to address two issues left open in Campbell-Ewald: (1) whether a case is moot if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff and the court subsequently enters judgment in that amount; and (2) whether a plaintiff’s putative claim on behalf of the class prevents a case from becoming moot.

The Ninth Circuit came to a similar decision in Chen v. Allstate, after the defendant deposited an amount exceeding the value of the plaintiff’s individual TCPA claim in an escrow account with instructions conditioning the payment of the funds on the entry of an order from the district court dismissing the action as moot.  The Ninth Circuit held that, while the plaintiff had been offered complete relief, his claim had not been mooted because plaintiff had not yet received the funds or otherwise obtained relief on the claims.  Notably, this case did not address the scenario specifically identified in Campbell-Ewald, where a defendant provides unconditional tender in full satisfaction of claims.

Federal district courts have split on the question of whether deposit of the full amount of a plaintiff’s individual claim moots his or her case.  In Bais Yaakov of Spring Valley v. Graduation Source, LLC, the Southern District of New York determined that defendant’s efforts to deposit the full statutory damages amount in to the Court’s Finance Unit and assenting to the injunctive relief requested by plaintiff did not moot the case because the district court had not yet entered judgment in favor of plaintiff and had not released the funds.  The Eastern District of New York came to a similar conclusion in Brady v. Basic Research, LLC, declining to dismiss plaintiff’s case as moot despite the deposit of complete individual relief with the Court on the grounds that under Campbell-Ewald, “a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted.”  However, another judge in the Southern District of New York viewed the issue differently in Leyse v. Lifetime Entm’t Servs. LLC, granting defendant’s motion to enter judgment in plaintiff’s favor and holding that Campbell-Ewald did not disrupt “the Second Circuit’s precedent allowing for the entry of judgment for the plaintiff over plaintiff’s objections.”

We expect that there will be considerable additional litigation regarding efforts to moot class claims through individual offers of judgment until the appellate courts, and potentially the Supreme Court, settle this issue.

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