The class plaintiff “pick off”: Timing is everything

Federal courts continue to seek resolution of the tension between Federal Rule 23’s support of the class action and Federal Rule 68’s offer of judgment, a mechanism that class action defendants have increasingly used to “pick off” class plaintiffs. It is generally accepted throughout the federal circuits that a Rule 68 offer of judgment to a plaintiff for the entirety of the relief to which the individual would be entitled moots the plaintiff’s case. Article III standing cannot survive an offer of judgment that entitles the plaintiff to all the relief he or she could possibly obtain through litigation. But questions remain as to when such an offer must be made to moot a putative class action, in light of the interest (or potential interest) of putative class members in the action.

Some courts, like the United States Court of Appeals for the Seventh Circuit, have held that an offer of judgment moots the entire case if made prior to the plaintiff’s filing of a certification motion. Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2012). Others, like the Third Circuit, have held that “absent undue delay in filing a motion for class certification,” the certification motion relates back to the filing of the complaint and prevents an offer of judgment from mooting possible class relief. Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004). The Sixth Circuit’s statement in Brunet v. City of Columbus, 1 F.3d 390, 399 (6th Cir. 1993) that when a “named plaintiff’s claim becomes moot before certification, dismissal of the action is required” has created some confusion within the circuit as to whether an offer of judgment might be effective even after a motion to certify is filed, but is not yet granted. Although, most district courts within the circuit have not interpreted it to require dismissal in those circumstances, with some even embracing the Weiss court’s approach despite Brunet’s seemingly stricter language.

On Tuesday, in Neurocare Institute of Central Florida, P.A. v. Healthtap, Inc., Case No. 6:13-cv-1228-GAP-GJK (M.D. Fla. March 25, 2014), the Florida district court joined the Third Circuit’s line of reasoning and held that absent undue delay on the part of the plaintiff in seeking certification, an offer of judgment will not moot the class action because a timely filed motion for certification will relate back to the filing of the complaint. But the Florida court added a bit of Damasco by holding that the question of undue delay is to be measured against the hard deadline for certification motions of 90 days from the filing of the complaint, as set forth in the court’s local rules. Another M.D. Florida decision (Stein v. Buccaneers Ltd. P’ship, No. 8:13-cv-2136 (M.D. Fla. Oct. 24, 2013)), which embraces the Damasco approach in full, is currently on appeal to the Eleventh Circuit.

However the Eleventh Circuit ultimately rules on the issue, it would seem that two things are clear: (1) courts will continue to struggle with the tension between Rules 23 and 68 for some time, and with enough variance among the circuits, may ultimately present an issue for the United States Supreme Court to decide; and (2) if you’re a defendant and you want to try and “pick off” a class plaintiff, it’s better to make your offer of judgment (or settlement) as early as possible, including before the commencement of the action itself, if possible.

Civil Rule 23 Requirements, Pre-Certification Motions, Standing