To avoid protracted class-action litigation in federal court, defendants sometimes make Rule 68 offers of judgment to the named plaintiff to moot the case or controversy. In Genesis HealthCare Corp. v. Symczyk, 569 U.S. __ (2013), SCOTUS reserved the question of whether an unaccepted offer to satisfy a named plaintiff’s individual claim renders a class-action lawsuit moot. In Campbell-Ewald v. Gomez, Justice Ginsburg, writing for the majority, answered that question with a resounding “no.” “[A]n unaccepted settlement offer has no force.” Campbell-Ewald Co. v Gomez, 577 U.S. __ (2016). Prior to the Campbell, the circuits were split. The First, Second, Fifth, Seventh, Ninth, and Eleventh Circuits held that an unaccepted offer does not render a plaintiff’s claim moot. The Third, Fourth, and Sixth Circuits found that an unaccepted offer can moot a plaintiff’s claim.
While Article III standing requires an actual case and controversy for federal jurisdiction, the majority emphasized that the controversy need not be large: “[a]s long as the parties have a concrete interest, however small, in the outcome of the litigation, the case is not moot.” Campbell, slip. op. at 7 (quoting Chafin v. Chafin, 568 U.S. __ (2013)). Justice Ginsburg, joined by Justices Kennedy, Breyer, Sotomayor, and Kagan, adopted the basic contract law analysis that Justice Kagan had presented in Genesis HealthCare: “An unaccepted settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect.”
Significantly, the majority specifically did not decide whether the case would be mooted if the defendant deposited the full amount of plaintiff’s claim into an account payable to the plaintiff and the court then entered a judgment to the plaintiff in that amount. Campbell-Ewald, slip. op. at 11.
Justice Thomas concurred only in the judgment and stated that a mere offer—without payment and an admission of liability—could not moot the case or controversy.
Justice Roberts dissented (joined by Justices Scalia and Alito) and focused on whether federal courts had the authority to decide a case when one party had capitulated—even though no money exchanged hands and no admission of liability was made. Justice Roberts was not concerned that the defendant had not actually paid the offered settlement or admitted liability because there was no reason to believe the defendant would not pay. Focusing on the question of federal jurisdiction and not contract law, the dissent relied on numerous cases that indicated that acceptance of an offer was not necessary to moot the controversy.
Finally, Justice Alito penned a separate dissent to indicate that defendants would be wise to issue a certified check or make a deposit with the district court in order to moot the controversy.
Going forward, any defendant seeking to moot a class-action lawsuit should make a settlement offer and additionally make the funds available to the plaintiff (possibly by a certified check or depositing the funds with the district court). Reading the legal tea leaves, it appears that there would be at least four votes (Roberts, Scalia, Thomas, and Alito) for mooting the case or controversy if a plaintiff receives payment. Given that the majority opinion specifically reserved that question, there may be another vote (perhaps Kennedy?) to moot the case or controversy if the defendant tenders the offered money, rather than simply promising to pay.