Will the Ninth Circuit Revisit the Issue of Whether an Offer of Judgment to the Named Plaintiff Can Moot a Class Action?

Keywords: Chen v. Allstate Ins. Co., Deposit Guaranty Nat'l Bank v. Roper, Fed. R. Civ. P. 68, Genesis Healthcare Corp. v. Symczyk, Greisz v. Household Bank (Ill.) N.A., Lewis v. Continental Bank Corp., McCauley v. Trans Union L.L.C., mootness, N.D. Cal., Ninth Circuit, O'Brien v. Ed Donnelly Enters. Inc., offer of judgment, Pitts v. Terrible Herbst Inc., Rules Enabling Act, Second Circuit, Seventh Circuit, Sixth Circuit, Supreme Court, Telephone Consumer Protection Act, Third Circuit, Weiss v. Regal Collections

Before the Supreme Court's decision last Term in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), the Ninth Circuit had held that a named plaintiff can continue to pursue a putative class action even after the defendant has extended that plaintiff an offer of judgment for the full individual relief sought in the complaint, including reasonable attorneys' fees and costs. See Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011). In a case that bears watching, a federal district judge in California recently certified for interlocutory review the question whether Pitts's mootness holding remains good law. See Chen v. Allstate Ins. Co., No. 4:13-cv-00685-PJH (N.D. Cal. July 31, 2013).

Chen is a putative class action under the Telephone Consumer Protection Act, 47 U.S.C. §§ 227 et seq. The plaintiffs, Richard Chen and Florencio Pacleb, allege that defendant Allstate Insurance Co. improperly called them (and other members of a putative class) on their cell phones.

At the very outset of the case, Allstate sent each plaintiff an offer of judgment under Federal Rule of Civil Procedure 68 for the full amount of individual damages requested in the complaint, plus "reasonable attorney's fees and costs." Chen accepted the offer, but Pacleb did not. Allstate then moved to dismiss Pacleb's individual claims, and consequently the entire putative class action, for lack of subject-matter jurisdiction. Allstate contended that because its Rule 68 offer would fully satisfy Pacleb's individual claims, those claims are moot, depriving him of any remaining interest in the outcome of the putative class action.

The district court denied Allstate's motion under the Ninth Circuit's decision in Pitts, which held that putative class claims qualify for the exception to mootness for so-called "inherently transitory" claims—not because the claims themselves are inherently transitory, but because the defendant's offer of judgment made them so...