On January 20, 2016, the Supreme Court issued its decision in Campbell-Ewald Co. v. Gomez. Six of the Justices, for differing reasons, held that an unaccepted offer of complete relief does not in and of itself deprive a court of Article III jurisdiction by mooting a plaintiff’s claim. The Court did, however, leave the door open to find that a fully funded offer of judgment could moot a potential class action by depriving the court of jurisdiction.
The Majority Opinion
Justice Ginsburg's majority opinion adopted the reasoning of Justice Kagan’s dissent in Genesis HealthCare Corp. v. Symczyk, reasoning that, under the language of Rule 68(b) and “basic principles of contract law,” an unaccepted offer of judgment, like an unaccepted offer to contract, is a legal nullity that “creates no lasting right or obligation” and has “no continuing efficacy.” The fact that the offer was unaccepted was critical to the majority’s reasoning because it meant that the plaintiff’s claim “stood wholly unsatisfied.” The opinion noted several times that the plaintiff “gained no entitlement to the relief” previously offered and had not received the relief previously sought, and thus retained a personal stake in the outcome of the litigation. See Campbell-Ewald v. Gomez, No. 14-857, slip op. at 8-12 (Jan. 20, 2016).
This is a norrow opinion, however. It does not speak to a situation where a defendant makes an offer of judgment that completely satisfies all of the plaintiff's demands and then make a payment to satisfiy the offer.
A Fair Opportunity to Show Class Certification is Warranted
The court noted that “a would-be class representative with a live claim must be accorded a fair opportunity to show that certification is warranted.” The Court went on to analogize an unaccepted offer of judgment to an unaccepted settlement offer, finding that as is the case of an unaccepted settlement offer, and unaccepted offer of judgment could not kick a plaintiff out of court.
Going Forward
It will be interesting going forward to see how defendants react to this ruling. I predict we will begin to see offers of judgment with payment either accompanying them or paid into court. We most certainly will see the issue of wheter such payment moots a claim litigated in near future.
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