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reserved by Campbell-Ewald since the depositor can maintain an interest in the deposited funds and funds can only be withdrawn with permission of the court.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.