Supreme Court to Address Mootness Doctrine in Class Action Litigation

November 15, 2012
This article was co-authored by Rhonda Coleman, a law clerk at Wexler Wallace. Rhonda is a third year law student at Loyola University Chicago School of Law.

This term, the Supreme Court of the United States is likely to resolve a procedural tangle that has vexed lawyers and judges for years in class action cases. On December 3, 2012, the Supreme Court is scheduled to hear argument in Genesis Healthcare v. Symczyk, which involves the question of whether a defendant may defeat a class action by making a Rule 68 Offer of Judgment to the named plaintiff, in an effort to moot the named plaintiff’s claims before a class action is certified. The problem is especially acute when the defendant serves its Rule 68 Offer of Judgment before the plaintiff has even moved for class certification, which raises a question: can the plaintiff then preserve her class-wide claims by filing a certification motion after receiving a Rule 68 Offer of Judgment?

That was precisely the problem in Genesis Healthcare, which was a collective action filed under §216(b) of the Fair Labor Standards Act. Symczyk, a Genesis nurse, claimed that Genesis had a policy that disallowed compensation for time that employees worked during their lunches, in violation of FLSA . Before she could file for § 216(b) certification, and before any other plaintiff had joined the lawsuit, Genesis offered her a settlement of $7,500 that covered her lost wages and attorney’s fees. The defendant then moved to dismiss arguing that the Rule 68 Offer of Judgment had rendered the plaintiff’s claim moot, and the trial court granted the motion to dismiss. See Symczyk v. Genesis Healthcare Corp., 2010 U.S. Dist. LEXIS 49599 (E.D. Pa. May 19, 2010).

The Third Circuit Court of Appeals disagreed, ruling that a defendant cannot simply “pick off” the lead plaintiff and then argue that the case has become moot. The Court of Appeals stated that a party should not be able to use Rule 68 to deny the trial court the opportunity to evaluate the class certification issues posed by a class claim. Instead, when a plaintiff receives a Rule 68 Offer of Judgment that satisfies her claims in full before she has moved for class certification, she can avoid mootness if: (i) she files a motion for class certification ‘without undue delay’; (ii) she makes the required “modest factual showing” to support her certification motion under §216(b); and (iii) someone else opts into the suit. If those three events occur, then the trial court should apply the relation back doctrine, and deem the motion for class certification to have been filed with the initial complaint, the Court held. See Symczyk v. Genesis Healthcare Corp., 656 F.3d 189 (3rd Cir. 2011).

The Third Circuit’s Genesis Healthcare decision highlights a difference in opinion among the Courts of Appeals that have considered the problem. In some Circuits, a plaintiff cannot avoid mootness by moving for class certification after an Offer of Judgment has been extended. See Gates v. City of Chicago, 623 F.3d 389 (7th Cir. 2010), and Holstein v. City of Chicago, 29 F.3d 1145 (7th Cir. 1994); see also Cameron-Grant v. Maxim Healthcare Services, Inc., 347 F.3d 1240 (11th Cir. 2003). But in other Circuits, the Courts of Appeals have expressed concern about buy-offs, and have used the “relation back” doctrine (usually used in connection with timeliness arguments on amended complaints) to permit a plaintiff to defeat a mootness argument by moving for class certification in a timely manner after he or she receives a Rule 68 Offer of Judgment. See, e.g., Sandoz v. Cingular Wireless LLC, 553 F.3d 913 (5th Cir. 2008); Lucero v. Bureau of Collection, 639 F.3d 1239 (10th Cir. 2011); and Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011).

In dicta in one case, the Seventh Circuit  offered a “simple solution” for plaintiffs who wish to avoid this dilemma: a class plaintiff can file a motion for class certification at the time the   class action complaint is filed and, when filing that motion, ask the trial court to defer ruling until the plaintiff has had enough time to conduct class discovery or other necessary investigation. See Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011). The pendency of the certification motion precludes a defendant from serving an individual Rule 68 Offer of Judgment to moot the claims. Primax Recoveries Inc. v. Sevilla, 324 F.3d 544 (7th Cir. 2003).

To address the varying approaches to this issue, the Supreme Court issued a writ of certiorari to review the decision in Genesis Healthcare (see Supreme Court Docket No. 11-1059). The Question Presented in the Supreme Court is as follows:

Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff’s claims.

After the Supreme Court issues its decision on that question in Genesis Healthcare, we will know more about how mootness works in class cases. We may even know whether the Seventh Circuit’s “simple solution” from Damasco is still necessary.


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