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Federal Rule 68 "Pick Off" Loophole; Not So Fast, My Friend.

As we recently wrote about, in January the U.S. Supreme Court rejected the Rule 68 ‘pick off’ strategy in its Campbell-Edwald decision.  The ‘pick off’ strategy’ occurs when defense counsel offers the plaintiff full relief through a Rule 68 offer of judgment.  If that offer is rejected, then the defense argues the fact that the plaintiff was offered complete relief which, even if it was rejected, moots the case and requires dismissal.  While the U.S. Supreme Court rejected the ‘pick off’ strategy it left unanswered whether defendants could moot a class action by making an actual payment of full relief to named plaintiffs into a Court’s escrow.

On February 3rd, 2016, Judge Sandra J. Feuerstein of the U.S. Eastern District Court of New York dispelled any doubts about whether the decision in Campbell-Edwald left a Federal Rule 68 ‘pick off’ loophole by denying a Rule 67(a) motion to deposit the full payment with the court filed by diet pill maker, Basic Research LLC and its spokesperson, “Jersey Shore” star, Nicole “Snooki” Polizzi.  Judge Feuerstein closed the door on the actual payment option ruling that the purpose of Rule 67 is for safekeeping disputed funds pending resolution of a legal dispute and is not a means of altering contractual relationships and legal duties.  This ruling changes the landscape for companies looking to intercept class actions before they occur and likely quashes the ‘pick off’ strategy for good.

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About this Author

Daniel Herling, product liability, attorney, Mintz Levin, Consumer Product Safety Privacy & Cybersecurity Class Action Health Care Enforcement & Investigations Product Liability & Complex Tort Complex Commercial Litigation

Dan is highly regarded for his defense of product liability cases involving consumer products and deep knowledge of California’s consumer protection regulations and laws. He skillfully handles litigation, including class actions, around California’s Unfair Competition Law, Consumer Legal Remedies Act, and Safe Drinking Water and Toxic Enforcement Act (Prop 65), among others. He has served as a defense counsel in over 3,000 product liability cases involving pharmaceuticals, medical devices, food, cosmetics, over-the-counter drugs, and food and products marketed as containing natural...