Workplace Class Action Blog

District Court Shuts Down Defense Tactic And Finds That Offer Of Judgment Does Not Moot Class Claims

Posted in Class Action Litigation

wdwas.jpgBy Gerald L. Maatman, Jr. and Jennifer A. Riley

On June 6, 2013, Judge Benjamin H. Settle of the U.S. District Court for the Western District of Washington issued an opinion in Canada v. Meracord, LLC, No. 12-5657 (W.D. Wash. June 6, 2012), and denied defendants’ motion to dismiss plaintiff’s claims. 

In a cursory opinion, Judge Settle held that an unaccepted offer of judgment – even for the full amount of the named plaintiff’s individual claim – did not moot plaintiff’s class action. 

Judge Settle refused to apply the Supreme Court’s recent decision in Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523 (2013), wherein the Supreme Court found that, following an offer of judgment, a plaintiff lacked any interest in an FLSA collective action that would preserve her claims.     

Judge Settle’s decision demonstrates that, notwithstanding Genesis, a Circuit split over the impact of offers of judgment remains intact and the viability of this common defense tactic for eliminating low-value claims remains uncertain in the context of class action litigation.

Background Facts

Plaintiffs Marie Johnson-Peredo, Dinah Canada, and Robert Hewson filed a class action against numerous defendants alleging, among other claims, violations of the Racketeering Influenced and Corrupt Organizations Act, the Washington Debt Adjusting Act, and the Washington Consumer Protection Act. Id. at 1-2.

On April 25, 2013, Defendants served Johnson-Peredo an offer of judgment for $13,058.46, plus attorneys’ fees, costs, and expenses.  Johnson-Peredo did not accept, but the Defendants nevertheless moved to dismiss her claims as moot. Id. at 2.

The District Court’s Opinion

The district court denied Defendants’ motion to dismiss and held that the offer of judgment did not moot the action. 

The district court relied on the Ninth Circuit’s opinion in Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091-92 (9th Cir. 2011), wherein the Ninth Circuit held that an accepted offer of judgment – for the full amount of the named plaintiff’s individual claim – made before a motion for class certification – “does not moot a class action.”  Id.

The court rejected Defendants’ argument that Pitts was abrogated by the Supreme Court’s opinion in Genesis

In Genesis, plaintiff brought a collective action claiming that her employer failed to pay for work performed during meal breaks in violation of the FLSA. Id. at 3. Plaintiff received a full offer of judgment for the amount of her claim but failed to accept the offer within the allotted time. The Supreme Court held that, because no other putative collective action member had opted in, plaintiff “had no personal interest in representing putative, unnamed claimants, nor any other continuing interest that would preserve her suit from mootness.” Id. at 3. Thus, the case as a whole had to be dismissed when her own claim became moot.

The district court declined to apply Genesis because it found “nothing to indicate that the specific holding extends beyond FLSA collective actions.” Id. It also declined to certify its ruling for appeal noting that Defendants failed to meet their burden under the collateral order doctrine.  Id.

Implications

Judge Settle’s opinion demonstrates that, notwithstanding Genesis, the Circuit split regarding whether an unaccepted offer of judgment makes a claim moot remains intact. If other courts follow suit, the effect of this common defense tactic in the class action context will continue to vary by Circuit.