11th Cir. Holds Rule 68 Offers of Judgment Do Not Moot a Class Action

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In December, the Eleventh Circuit ruled that individual, unaccepted offers of judgment under Federal Rule of Civil Procedure 68 do not moot a plaintiff’s ability to represent a putative class. Stein v. Buccaneers Limited Partnership, No. 13-15417 (11th Cir. Dec. 1, 2014) (slip op. available here). The Stein decision is in line with other Circuits on this issue, including the Third, Fifth, Ninth, and Tenth Circuits. See, e.g. Diaz v. First Am. Home Buyers Protection Corp., 732 F.3d 948 (9th Cir. 2013). However, the decision does not align with the Seventh Circuit’s ruling in Damasco, where unaccepted offers of judgment can potentially moot putative class actions, if made prior to the filing of a certification motion. Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011). Note, the Seventh Circuit has also held that an offer of judgment does not moot a plaintiff’s individual or class claims, where the amount needed to satisfy the plaintiff’s claims is disputed. Scott v. Westlake Services LLC, No. 13-2699 (7th Cir. Jan. 23, 2014).

In Stein, the plaintiffs filed a consumer class action in Florida state court, alleging that the Buccaneers violated the Telephone Consumer Protection Act by sending unsolicited faxes advertising tickets to National Football League games. The complaint sought statutory damages and injunctive relief for a nationwide class. Once the case was removed, the defendant issued an offer of judgment to each named plaintiff pursuant to Rule 68. The plaintiffs did not accept the offers and the defendant then moved to dismiss, contending that the unaccepted offers rendered the case moot. The plaintiffs quickly moved to certify the class, a motion which was denied by the district court as being “purposefully . . . premature.” Slip op. at 4. The district court granted the defendant’s motion to dismiss.

On appeal, the Eleventh Circuit reversed. The panel, comprised of Judges Beverly Martin, Richard Keaton, and Robert Hinkle, ruled that an unaccepted offer is withdrawn and not admissible. The plaintiffs still retained their claims; the defendant still had its defenses. No money had been paid, nor any obligation to pay was made; nor was the defendant enjoined from sending out more faxes, so the individual claims were not moot. Slip op. at 7. “After the offers lapsed, and . . . after the district court entered its order dismissing the case, the legal relationship between [the Buccaneers] and the named plaintiffs was precisely the same as before the offers were made[.]” Id. at 10 (emphasis added). Additionally, the court found that even if it assumed the individual claims were moot, the class claims remain live. Id. at 10. Finding the timing of when an offer of judgment is made irrelevant (i.e. before or after a motion for class certification is filed, in contrast with Damasco), the court stated that what matters most was that plaintiffs acted diligently after they received the offers of judgment. Id. at 11-17 (citing Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030, 1041 (5th Cir. 1981)). Simply receiving the offer of judgment did not “without more, disqualify [the plaintiffs] from going forward.” Id. at 18.