Source: http://thecomplexlitigator.com/?offset=1473289603419&category=Civil+Procedure%3A+Federal
Timestamp: 2019-04-26 07:54:25+00:00

Document:
Romo v. Teva Pharmaceuticals USA, Inc. was described as the end of the world by business interests when the Ninth Circuit held that attorneys could avoid CAFA removal by filing separate cases with fewer than 100 plaintiffs in each case to avoid the mass action provision in CAFA. The Ninth Circuit is going to give those poor business interests a second bite at the apple; today the Ninth Circuit issued an order that the matter be reheard en banc.
A recent guest on the Class Re-Action podcast concluded that Rule 68 claims were underutilized. As it turns out, at least in the Ninth Circuit, that may not be the case, since defendants might not achieve what they would like from unaccepted Rule 68 offers. In Diaz v. First American (9th Cir. Oct. 4, 2013), the Court examined whether an unaccepted Rule 68 offer renders a claim moot. Aware of a split of authority, the Ninth Circuit held that it does not.
The case originated as a putative consumer class action related to a home warranty plan. After several claims for relief were dismissed, the plaintiff moved for class certification. That motion was denied. First American then made an offer of judgment on the plaintiff's remaining individual claims – for misrepresentation, breach of contract and breach of the implied covenant of good faith and fair dealing – pursuant to Rule 68. The offer included an expiration date, and the plaintiff did not accept prior to that date. First American then moved to dismiss the action as moot. The trial court found that the offer would have fully satisfied the remaining individual claims and dismissed.
In Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091–92 (9th Cir. 2011), we held “that an unaccepted Rule 68 offer of judgment – for the full amount of the named plaintiff’s individual claim and made before the named plaintiff files a motion for class certification – does not moot a class action” (emphasis added), but we did not squarely address whether the offer mooted the plaintiff’s individual claim. We assumed that an unaccepted offer for complete relief will moot a claim, but we neither held that to be the case nor analyzed the issue. See id. at 1090–92. In GCB Communications, Inc. v. U.S. South Communications, Inc., 650 F.3d 1257, 1267 (9th Cir. 2011), we noted that a case will “become moot” when “an opposing party has agreed to everything the other party has demanded,” but we did not address the effects of an unaccepted Rule 68 offer, an issue not presented in that case. We therefore treat this as an open question in this circuit.
As noted, the majority in Genesis Healthcare did not reach whether an unaccepted offer that fully satisfies a plaintiff’s claim is sufficient to render the claim moot. See Genesis Healthcare, 133 S. Ct. at 1528–29. In a dissenting opinion, however, Justice Kagan, writing for all four justices who reached the question, agreed with the Second Circuit that “an unaccepted offer of judgment cannot moot a case.” Id. at 1533 (Kagan, J., dissenting); accord Brief for the United States as Amicus Curiae Supporting Affirmance, Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) (No. 11-1059), 2012 WL 4960359, at *10–15.
"We made clear earlier this Term that '[a]s long as the parties have a concrete interest, however small, in the outcome of the litigation, the case is not moot.' Chafin v. Chafin, 133 S. Ct. 1017, 1023 (2012) (internal quotation marks omitted)."
"When a plaintiff rejects such an offer – however good the terms – her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief. An unaccepted settlement offer – like any unaccepted contract offer – is a legal nullity, with no operative effect. As every first-year law student learns, the recipient’s rejection of an offer 'leaves the matter as if no offer had ever been made.' Minneapolis & St. Louis R. Co. v. Columbus Rolling Mill, 119 U.S. 149, 151 (1886). Nothing in Rule 68 alters that basic principle; to the contrary, that rule specifies that '[a]n unaccepted offer is considered withdrawn.' Fed. Rule Civ. Proc. 68(b). So assuming the case was live before – because the plaintiff had a stake and the court could grant relief – the litigation carries on, unmooted."
So a friendly suggestion to the Third Circuit: Rethink your mootness-by-unaccepted-offer theory. And a note to all other courts of appeals: Don’t try this at home.
Slip op., at 13. Concluding that Justice Kagan was correct in her explanation of how unaccepted Rule 68 offers work, the Court then held that the refusal to accept a Rule 68 offer did not moot the case.
It appears that it will take something more than a simple Rule 68 offer to impose mootness on plaintiffs' claims in the Ninth Circuit.

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