Today, the Supreme Court of the United States ruled that unaccepted offers of settlement under Federal Rule of Civil Procedure 68 do not moot a named plaintiff’s claims in a putative class action. In Campbell-Ewald Co. v. Gomez, Justice Ginsburg, writing for the 5-4 majority, held that “an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.”
The majority opinion adopts the reasoning from Justice Kagan’s superbly-written dissent in Genesis HealthCare Corp. v. Symczyk, which all Courts of Appeals have adopted post-Genesis. (If you’ve not read Kagan’s dissent in Genesis, do so now. You’ll be hard pressed to find better legal writing.) Here’s the money quote from Genesis:
When a plaintiff rejects such an offer—however good the terms—her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief. An unaccepted settlement offer— like any unaccepted contract offer—is a legal nullity, with no operative effect. As every first-year law student learns, the recipient’s rejection of an offer ‘leaves the matter as if no offer had ever been made.’ Nothing in Rule 68 alters that basic principle; to the contrary, that rule specifies that ‘[a]n unaccepted offer is considered withdrawn.’ So assuming the case was live before—because the plaintiff had a stake and the court could grant relief—the litigation carries on, unmooted.
Thus, SCOTUS has now made clear that because a named plaintiff’s individual claim cannot be mooted by an expired settlement offer, “that claim would retain vitality during the time involved in determining whether the case could proceed on behalf of a class. While a class lacks independent status until certified,…a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted.”