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Supreme Court Holds Class Action Not Mooted by Unaccepted Offer to Settle Named Plaintiff's Claim

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On January 20, 2016, the United States Supreme Court settled a split among the circuits, answering in the negative the question of whether an unaccepted offer to satisfy the named plaintiff’s individual claim is sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated.  In Campbell-Ewald Co. v. Gomez, No. 14-857, the majority affirmed the Ninth Circuit and held in accord with Federal Rule of Civil Procedure 68, which governs offers of judgment, that an unaccepted settlement offer has no force.  With the offer unaccepted, and the defendant’s continuing denial of liability, adversity between the parties persists. 

In addition to the Ninth Circuit, the First, Second, Fifth, Seventh, and Eleventh Circuits had held that an unaccepted settlement offer does not render a plaintiff’s claim moot.  The Third, Fourth, and Sixth Circuits had held that an unaccepted offer could moot a plaintiff’s claim.  Significantly, the Court reserved opinion on whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.  Thus, there may still be an avenue open to defendants desiring to moot class actions.

On a second issue, the majority further affirmed the Ninth Circuit’s holding that the petitioner’s status as a Government contractor does not entitle it to “derivative sovereign immunity,” i.e., the blanket immunity enjoyed by the sovereign.

Please contact a member of our Class Action and Mass Torts Team to discuss how Campbell-Ewald Co. impacts litigation strategies in your class actions.
 

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