Article III of the Constitution limits the jurisdiction of federal courts to “cases” and “controversies.” As the Supreme Court recently explained in Genesis HealthCare Corp. v. Symczyk, a lawsuit does not present an Article III case or controversy and “must be dismissed as moot” when “an intervening circumstance deprives the plaintiff of a ‘personal stake in the outcome of the lawsuit,’ at any point during the litigation.” Today, in Campbell-Ewald Co. v. Gomez (pdf), the Supreme Court held that a defendant’s unaccepted offer to satisfy the claims of a named plaintiff in a putative class-action lawsuit is not sufficient to render the suit moot. Continue Reading Supreme Court holds that an unaccepted offer of judgment doesn’t moot a class action
Can a named plaintiff press ahead with a class action if he or she “won’t take ‘yes’ for an answer”? That colorful question, which Chief Justice Roberts asked counsel for the respondent during oral arguments yesterday in Campbell-Ewald Co. v. Gomez, is at the heart of the debate over whether offers of judgment can moot class actions. By the end of the oral argument (pdf), it seemed clear that a number of the Justices were concerned about allowing a plaintiff whose individual claims would be fully satisfied by an offer of judgment to nonetheless invoke the machinery of the federal courts.
Rule 23 may be in for some major changes. The Advisory Committee has commissioned a Rule 23 subcommittee to investigate possible revisions to the class action rules. That subcommittee issued a report (pdf) discussing its progress, and recently has been conducting a “listening tour” of sorts regarding potential rule changes.
Our initial view is that the business community should have serious concerns about the approach that at least some members of the subcommittee appear to be taking, as several proposals are aimed at rolling back judicial decisions—including Supreme Court decisions—that are critical to ensuring that class actions satisfy the requirements of due process.
Here are ten things you need to know from the subcommittee’s report.
Article III of the Constitution limits the jurisdiction of the federal courts to “cases” and “controversies.” The Supreme Court has held that “‘an actual controversy … be extant at all stages of review, not merely at the time the complaint is filed.’” Arizonans for Official English v. Arizona, 520 U.S. 43, 67 (1997). Accordingly, “[i]f an intervening circumstance deprives the plaintiff of a ‘personal stake in the outcome of the lawsuit,’ at any point during litigation, the action can no longer proceed and must be dismissed as moot.” Genesis HealthCare Corp. v. Symczyk, 133 S. Ct. 1523, 1528 (2013). In Genesis, the Court recognized that one “intervening circumstance” may arise under Rule 68 of the Federal Rules of Civil Procedure, which permits a party to offer to allow judgment in favor of its adversary on specified terms. A party who rejects a Rule 68 offer, but obtains a judgment “not more favorable than the unaccepted offer,” must pay the costs accrued by the offering party between the offer and judgment. (We’ve previously blogged about Genesis.)
Today, the Court granted certiorari in Campbell-Ewald Company v. Gomez, No. 14-857, to determine whether a defendant’s unaccepted offer of judgment, made before a class is certified, that would fully satisfy the claim of a would-be class representative renders the plaintiff’s individual and class claims moot. The Court also granted certiorari to decide whether the derivative sovereign immunity doctrine recognized in Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), applies only to claims for property damage caused by public works projects.