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Seventh Circuit Limits Ability to Moot Claims of Class Representative in the Wake of Campbell-Ewald

On June 20, 2017, the Seventh Circuit ruled that a defendant cannot moot the individual claims of a putative class representative by depositing an unaccepted settlement offer with the court covering all relief purportedly owed to that representative. Fulton Dental, LLC, v. Bisco, Inc., No. 16-cv-3574 (7th Cir.).

Plaintiff brought a putative class action lawsuit alleging a violation of the Telephone Consumer Protection Act. Defendant sought to preclude Plaintiff’s ability to serve as a class representative by depositing a payment of all relief available with the district court. The district court treated Defendant’s deposit as the equivalent of giving the money directly to Plaintiff and concluded that the deposit rendered Plaintiff’s individual claim moot.

Plaintiff appealed to the Seventh Circuit, placing front and center a question left open by the U.S. Supreme Court in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). More specifically, the Campbell-Ewald Court ruled that an unaccepted offer of judgment pursuant to Rule 68 to a putative class representative does not moot his or her individual claim, but the Court did not resolve the question of “whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for plaintiff in that amount.”

The Seventh Circuit reversed the district court, finding no principled distinction between attempting to force a settlement on an unwilling party through a Rule 68 offer of judgment and attempting to force a settlement on an unwilling party by depositing payment with the district court. The court reasoned that in both cases all that exists is an unaccepted contract offer and such an unaccepted offer is not binding on the offeree. The court also reasoned that depositing money with the court’s registry is not the kind of account “controlled by the plaintiff” that was contemplated in the question reserved by Campbell-Ewald since the depositor can maintain an interest in the deposited funds and funds can only be withdrawn with permission of the court.

This first-impression decision in the Seventh Circuit makes it more difficult for defendants in that jurisdiction to moot class representatives’ individual claims, but it is certainly possible that courts in other jurisdictions will reach differing conclusions. We previously blogged about the Supreme Court’s decision in Campbell-Ewald and the question it left unresolved here.

© 2020 Proskauer Rose LLP.

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About this Author

Steven J Pearlman, Labor Employment Law Firm, Proskauer Law firm
Partner

Steven Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm's Whistleblowing & Retaliation Group, resident in the Chicago office. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination and harassment, wage-and-hour laws and breaches of restrictive covenants (e.g., non-competition agreements). He has successfully tried cases to verdict before judges and juries in Illinois, Florida and California, and defended what is reported to be the largest Illinois-only class action in the history of the U.S....

312-962-3545
Edward C. Young, Proskauer Rose, Harassment Lawyer, Labor Rights Attorney
Associate

Edward C. Young is an associate in the Labor & Employment Law Department. He represents companies nationwide in a broad range of employment issues, including discrimination, retaliation and harassment claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act and the Family Medical Leave Act, as well as other federal and state employment statutes and various common law torts. In addition, Eddie represents employers in trade secret matters and challenges to the independent contractor status of workers.

Prior to attending law school, Eddie earned his master’s degree in Human Resources and Industrial Relations from Loyola University while working for more than three years in the corporate human resources department of a national professional services firm. Eddie also served as a Coles Fellow with the Illinois Human Rights Commission.

Eddie is a co-author of “Discrimination Law Basics,” which was presented at the Practicing Law Institute’s Understanding Employment Law Conference in 2014. 

312-962-3595