The Latest Developments in Rule 68 Law and Procedure for FLSA Actions

The recent US Supreme Court decision in Campbell-Ewald Co. v. Gomez, No. 14-587 (Jan. 20, 2016) resolved a split in holding that an unaccepted Rule 68 offer of judgment does not moot a class representative's claims or the putative class action. This was the first Supreme Court decision favoring class actions for quite a while. The majority opinion adopted the reasoning from Justice Kagan's dissent in Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523 (2013) (April 16, 2013), i.e., that a rejected offer is a "legal nullity" that leaves a plaintiff's standing intact.

Given that unaccepted Rule 68 offers can no longer moot a case where the plaintiff "remained empty-handed," some have speculated that new forms of "offers plus" could revive the classic pick-off strategy. Indeed, the Campbell-Ewald Court reserved decision as to result "if a defendant deposits the full amount of the plaintiff's individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount."

One court has recently rejected such a strategy, denying a motion to deposit funds with the court under Rule 67 as procedurally improper. Brady v. Basic Research LLC, No. 213CV7169SFJARL, 2016, at *2 (E.D.N.Y. Feb. 3, 2016) (denying motion where defendants sought "to deposit funds into court to moot this case ... not to relieve themselves of the burden of administering an asset") (Law360 subscription required). That court echoed "the Supreme Court directive that 'a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted.'"

But what happens if a class representative accepts a Rule 68 offer precertification that resolves that individual's claims? One district court posited that a named plaintiff could continue to represent a class even after accepting a Rule 68 offer, based on...