Offer of Judgment Prompts Motion for Class Certification, Which Is Immediately Denied

Fairly or unfairly, plaintiffs are disproportionately leveraged at the outset of a consumer class action case.  The threat of aggregate damages and the power to inflict non-reciprocating discovery costs on a defendant is unsettling enough.  Lately, some defendants have fought back by making offers of judgment under Federal Rule of Civil Procedure 68 at the inception of the case.  In some courts, a prompt offer of judgment can moot the named plaintiff’s claims, leaving him or her without a “personal stake” in the litigation and thus no basis on which to pursue claims on behalf of a putative class.  Cf. Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1528-29 (2013) (noting but not resolving circuit split).  For what may be a relatively small payment to the named plaintiff, a defendant in those courts can avoid engaging in protracted litigation and the risk of class-wide statutory damages awards.

In Stein, et al. v. Buccaneers LP, No. 13-2136 (M.D. Fla.), Judge Merryday recently denied plaintiffs’ motion for class certification in a TCPA case.  In this case, plaintiffs filed a putative class action against the Tampa Bay Buccaneers organization (the “Bucs”) alleging that the Bucs violated the TCPA by, among other things, sending unsolicited faxes offering tickets to the Buccaneers home games.  Plaintiffs alleged that the Bucs sent similar faxes to “more than 100,000 other recipients from a ‘compiled database’” and sought class certification on that basis.

The Bucs responded by promptly making an offer of judgment under Rule 68 to each named plaintiff.  Two days later, and prior to the filing of plaintiffs’ motion for class certification, the Bucs filed a motion to dismiss.  In this motion, the Bucs argued that the offers of judgment rendered the plaintiffs’ claims moot by affording them “complete relief.”  The next day, plaintiffs moved for class certification and sought class discovery.

Just one week later, the Court denied plaintiffs’ motion for class certification sua sponte, finding that it was a “hastily fashioned attempt to preserve a case or controversy,” that the request for discovery was a tacit admission that the motion was “premature,” and that the motion lacked “evidentiary support.”  The Court denied the motion without prejudice, giving the Bucs their first win of the season.

On September 13, 2013, Plaintiffs responded to the motion to dismiss, which remains pending.  They contend that, while the Eleventh Circuit has not addressed the issue, the majority of courts have rejected the notion that a defendant can avoid certification simply by mooting the named plaintiff’s individual claim.  Plaintiffs also argue the motion should be denied as offers of judgment could be accepted within fourteen days after tender and the “filing of a class certification motion within the time frame of acceptance is just as a good as filing the class certification motion before the unsolicited offer is tendered.”

That last argument is interesting, and one some courts have accepted; but if an offer of judgment is done correctly, there should be nothing left for a plaintiff to recover and no reason to reject the offer other than to perpetuate the claims of unnamed third parties.  We will be monitoring this case for interesting developments.

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