The scene: Plaintiff brings a class action against a defendant. Defendant offers to pay the full amount of the individual plaintiff’s claim. Plaintiff does not respond, and the offer lapses by its own terms. Defendant then argues that the individual plaintiff’s case is moot, and the class’ claims are also moot. The 9th Circuit sides with the plaintiff.
Circuit courts are divided on how to answer this. The 3rd, 4th, 5th, 6th, and 7th Circuits say that if a defendant makes a Rule 68 offer that would fully satisfy the individual plaintiff’s claim, and plaintiff allows that offer to lapse, then the individual plaintiff’s claim becomes moot, and the class claims also become moot. The 2nd, 9th, and 11th say the claim is not moot because the plaintiff did not accept the offer.
The US Supreme Court granted certiorari in Campbell-Ewald Company v. Gomez (US Supreme Court 05/18/2015) to resolve this dispute, and will schedule oral arguments for some time in the Fall of 2015.
We saw a similar case in 2013: Genesis HealthCare v. Symczyk, 133 SCt 1523 (2013). In that case the parties stipulated that an unaccepted offer mooted the plaintiff’s individual action, and the Court held that this also mooted the class action. The difference in the new case is that there is disagreement on whether the unaccepted offer moots the plaintiff’s individual case.
I favor the rule that an unaccepted offer does not render a case moot. I can’t imagine a better explanation for this than the one articulated by four Justices in the dissent in Genesis HealthCare:
By those measures, an unaccepted offer of judgment cannot moot a case. When a plaintiff rejects such an offer — however good the terms — her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief. An unaccepted settlement offer — like any unaccepted contract offer — is a legal nullity, with no operative effect. As every first-year law student learns, the recipient’s rejection of an offer “leaves the matter as if no offer had ever been made.”