August 17, 2022

Volume XII, Number 229

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Seventh Circuit Agrees That Defendants May Not “Pick Off” Class Representatives with Full Settlement Offers

On August 6, 2015, in Chapman v. First Index, Inc., the Seventh Circuit reversed its own precedent, agreed with decisions from the Third, Fifth, Ninth, Tenth and Eleventh Circuits, and concluded that an unaccepted full settlement offer to a class representative does not moot the named plaintiff’s individual claims or the class action. The Supreme Court will definitively decide the issue this term in Gomez v. Campbell-Ewald Company.

In Chapman, plaintiff sought to assert claims under the Telephone Consumer Protection Act on behalf of a class. While the Northern District Court of Illinois considered plaintiff’s motion for class certification, defendant made a full-compensation settlement offer to plaintiff that would expire fourteen days after the court ruled on the class certification motion. The court denied plaintiff’s request for class certification. Plaintiff then requested certification of a different class and allowed the settlement offer to lapse. The District Court granted defendant’s motion to dismiss plaintiff’s individual claims as moot because of the declined full-compensation settlement offer.

On appeal, the Seventh Circuit overruled its own precedent, reversed the district court’s decision, and joined decisions from the Third, Fifth, Ninth, Tenth and Eleventh Circuits. The court held that an unaccepted full-compensation settlement offer to the named plaintiff does not moot that plaintiff’s individual claims or those of the class. The court, however, questioned whether a failure to accept a fully compensatory offer suggests that the plaintiff is a bad class representative. The court further implied that it may allow defendants to assert a rejected full-compensation offer as an affirmative defense.

This issue is currently before the Supreme Court in Gomez. Given the Seventh Circuit’s discussion, it is possible that even if the Supreme Court rules that individual and class claims do not become moot under these circumstances, the Seventh Circuit will provide defendants with an affirmative defense against surviving individual and class claims. 

© 2022 BARNES & THORNBURG LLPNational Law Review, Volume V, Number 225
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About this Author

Adeyemi Adenrele White Collar Litigator
Associate

Adey O. Adenrele is an associate in Barnes & Thornburg's Washington D.C., office and a member of the firm's Litigation Department and the White Collar and Investigations Practice Group. He concentrates his practice on white collar defense, internal investigations, corporate compliance and ethics, antitrust matters, and complex civil litigation. Adey also litigates general commercial and product liability cases.

 

Adey represents clients in investigations by several government agencies, including the U.S. Department of Justice (DOJ), the Securities and Exchange Commission...

317-231-7365
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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