Second Circuit Moots Class Claims Based on Offer of Judgment

The Second Circuit last week confirmed that entries of judgment satisfying an individual plaintiff’s claims moot TCPA class actions.

In Bank v. Alliance Health Networks, LLC, No. 15-cv-4037 (2d Cir. Oct. 20, 2016), the Second Circuit affirmed the dismissal of the class claims after an entry of judgment, pursuant to the defendants’ offer of judgment, rendered the class claims moot. The Second Circuit acknowledged that the Supreme Court held in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) that an unaccepted offer of judgment does not moot a plaintiff’s claims. “But where judgment has been entered and where the plaintiff’s claims have been satisfied, as they were here when [the plaintiff] negotiated the check, any individual claims are rendered moot.” The Second Circuit then held that since the individual plaintiff’s claims were rendered moot, he was no longer in a position to pursue the class claims. The Second Circuit acknowledged that there are certain exceptions to this rule, such as the relation back doctrine, but reasoned that “absent a class certification decision or any other reason to link [the plaintiff’s] once-live claim to the now-independent class claims, that line of cases is simply inapplicable.”

The Second Circuit also rejected the plaintiff’s argument that his ability to obtain an incentive award afforded him a personal stake in the litigation sufficient to confer standing upon him. Noting that a plaintiff must allege a concrete injury to meet standing requirements, the Second Circuit held that “[a] purely hypothetical possibility of recovery is not sufficient to meet the requirements for standing.”

The Alliance decision is a useful clarification on the limits of Campbell-Ewald, which the plaintiffs’ bar has brandished in its efforts to pursue class claims even after the individual claims have been satisfied.

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