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New York Court Finds Depositing Full Value of Plaintiff’s Claim Under Rule 67 Cannot Moot Plaintiff’s Class Action Claim

On Feb. 3, the U.S. District Court for the Eastern District of New York (EDNY) ruled that depositing funds with the court sufficient to cover the full amount of the plaintiff’s claim under Fed. R. Civ. P. 67 cannot moot a named plaintiff’s class action claim, at least not prior to an opportunity for class certification. Ashley Brady and Stephanie Dalli Cardillo v. Basic Research, LLC et al., No. 2:13-cv-07169, Dkt #81 (EDNY, Feb. 3, 2016).

The court’s ruling came just 14 days after the Supreme Court held an unaccepted settlement offer of complete relief under Rule 68 could not moot a named plaintiff’s claim. Campbell-Ewald Co. v. Gomez, 2016 WL 228345, at *8 (U.S. Jan. 20, 2016). However, in Gomez, the Supreme Court left open whether depositing complete relief into an account or with the court could render the claim moot.

The day after the Supreme Court’s ruling in Gomez, the defendants filed a motion to deposit complete relief with the court under Rule 67. The defendants cited Gomez and argued that “depositing of funds sufficient to cover the full amount of a plaintiff’s individual claims, in an account payable to the plaintiff prior to the Court entering judgment, may provide the basis for mooting a plaintiff’s case.” In response, the plaintiffs stated that the Supreme Court did not make this determination in Gomez, that the defendants were “misus[ing] Rule 67,” and that “depositing monies with the Court does not provide complete relief as ‘it does not address the class claims, it does not admit liability, and it fails to address the Plaintiff’s claims for injunctive relief.’”

In denying the defendants’ motion, the court held that Rule 67 was not the proper mechanism for mooting a named plaintiff’s class claim. Rule 67 was “intended to relieve a depositor of the burden of administering an asset[,]” not to moot a plaintiff’s claim. Furthermore, the court relied upon the Gomez majority opinion stating that “a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted.” (Emphasis in original).

Undaunted by the denial of their motion, the defendants notified the court that they placed the full amount of the plaintiffs’ claim into an Interest on Lawyer Trust Account (IOLTA) “segregated and held for the benefit of the Plaintiffs.” The defendants argued that Chief Justice John Roberts’ dissenting opinion in Gomez “made clear that paying [complete relief] into an account will moot a plaintiff’s claim.” The court has not yet ruled on whether the defendants’ deposit of complete relief into an IOLTA is sufficient to moot the plaintiffs’ individual and class claim.

Although the EDNY is the first court since Gomez to rule whether a motion to deposit complete relief with the court under Rule 67 is permissible, it will likely not be the last.

© 2022 BARNES & THORNBURG LLPNational Law Review, Volume VI, Number 40
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About this Author

David A. Frazee, Barnes Thornburg Law Firm, Washington DC, Corporate and Litigation Law Attorney
Associate

David Frazee is an attorney in Barnes & Thornburg’s Washington, D.C., office and a member of the Litigation Department. Mr. Frazee’s practice primarily concentrates on white collar crime defense, anti-trust litigation, corporate compliance, products liability and other complex business litigation.

Prior to joining Barnes & Thornburg full-time, Mr. Frazee was a summer associate in the firm’s Indianapolis office. He has also gained substantial legal experience as a law clerk in the Monroe Circuit Court for the Hon. Mary Ellen Diekoff, Hon...

317-231-7541
Christine E. Skoczylas, Barnes Thornburg Law Firm, Chicago, Insurance and Litigation Law Attorney
Partner

Christine Skoczylas is a partner in the Chicago office of Barnes & Thornburg and a member of the firm’s Litigation Department and Co-Chair of the Commercial Litigation Practice Group. She is also a member of the Policyholder Insurance Recovery and Counseling Practice Group. She concentrates her practice on resolving corporate and business disputes and has represented clients in a wide range of state and federal litigation, class action litigation, arbitration, and appellate matters, including breach of fiduciary duty, fraud, and tort actions, products liability cases...

312-214-5613
T. Joseph Wendt Litigation lawyer Barnes Thornburg
Partner

Joe Wendt is a partner in the Litigation Department in the Indianapolis office of Barnes & Thornburg and Co-Chairs the Commercial Litigation Practice Group.

Joe's practice focuses on commercial disputes, with experience representing heavy equipment manufacturers, real estate development and construction companies, utilities and entities involved in energy trading.

Representative cases include:

  • Obtained judgment in favor of a global manufacturer on claims that it violated the False Claims Act through purchases from an allegedly sham, minority-owned entity....
317-231-7748
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