June 25, 2019

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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, law firm

Dan’s practice is focused on product liability issues relating to consumer products. 

Specific to consumer class action lawsuits, Dan has successfully defended clients in class actions alleging false or misleading labeling or advertising of foods, cosmetics, over-the-counter drugs, dietary supplements, and homeopathic products. These claims have involved probiotics, “natural” ingredients, “clinically-proven” results, lack of efficacy, lack of substantiation, and failure to disclose.