The U.S. Supreme Court recently ruled in Campbell-Ewald v. Gomez that an unaccepted offer of judgment cannot moot a class action. The decision followed at least a decade of uncertainty and contrary rulings by the lower courts, and dashed the hopes of defendants eager to rid themselves of class actions by offering to pay the named plaintiff in full. But the decision doesn’t mean that offers of judgment don’t matter in defense tactics. (For the sake of full disclosure, my firm and I represented an amicus on the side of petitioner in Campbell-Ewald).
To begin with, mootness is an Article III concept. Under Article III, courts have jurisdiction only to decide “cases or controversies.” If an offer of judgment is accepted by a plaintiff, there is no case or controversy, and accordingly, the court does not have jurisdiction to hear the matter. But if the plaintiff — either in an individual action or a class action — decides not to accept the offer, the case is still live, and the court can decide the dispute. That’s really all that Campbell-Ewald says.
Campbell-Ewald does not end the offer of judgment dispute. If a defendant makes an offer of complete relief and the plaintiff decides not to take it, the plaintiff’s refusal to take the offer may nevertheless provide a defense, or the basis of a motion for summary judgment. Even if mootness is not the doctrinal answer, it remains the case that plaintiffs cannot continue to litigate when there is nothing left to fight about. And that’s what a complete offer means — there is nothing left to fight about. Even if it takes a few more procedures to arrive there, dismissing the case is still the right answer.
Or is it? There are likely two more battles to be had in the world of offers of judgment in the class action context. First, in the decision itself, the Court suggests that payment of full relief to a named plaintiff may moot a case, as opposed to merely making the offer. But how can someone be paid who does not want to be paid? In that scenario, doesn’t the named plaintiff simply not cash the check?
So, second, the question — and perhaps the more fundamental one — is whether there is something about the class nature of the conflict that prevents dismissing the named plaintiff’s claims. That is the question that has animated the offer of judgment dispute in the class action context, and that is the question that remains even after Campbell-Ewald.
Some courts prior to Campbell-Ewald rejected the notion that an unaccepted offer of judgment could moot a putative class action because allowing that tactic would render the class action vehicle ineffective as it would allow defendants to “pick off” successive named plaintiffs. But even if the “picking off the named plaintiff” tactic is a real concern from a public policy perspective, to eviscerate the meaning of an offer of judgment in the class action context is contrary to the Rules Enabling Act, which dictates that named plaintiffs don’t have a “right” to bring a case as a class action. If named plaintiffs are capable of full recovery but don’t want that recovery just so they can bring a class action, their case must be dismissed, and with it, the allegations of the putative class.