Court Opinion

ID: 3013785
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Date Created: 2015-10-13 21:58:45.267297+00
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Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

9-29-2004

Weiss v. Regal Collections
Precedential or Non-Precedential: Precedential

Docket No. 03-4033

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Recommended Citation
"Weiss v. Regal Collections" (2004). 2004 Decisions. Paper 264.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/264

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                         PRECEDENTIAL       William J. Pinilis, Esquire (Argued)
                                            Gabriel H. Halpern, Esquire
           UNITED STATES                    PinilisHalpern, LLP
          COURT OF APPEALS                  237 South Street
        FOR THE THIRD CIRCUIT               Morristown, New Jersey 07960
                                                   Attorneys for Appellant

               No. 03-4033                  Bruce D. Greenberg, Esquire (Argued)
                                            Lite DePalma Greenberg & Rivas, LLC
                                            Two Gateway Center, 12th Floor
RICHARD WEISS, on behalf of himself         Newark, New Jersey 07102
   and all others similarly situated,             Attorney for Appellees
                                Appellant

                    v.                             OPINION OF THE COURT

     REGAL COLLECTIONS;
   LANCER INVESTMENTS, INC.                 SCIRICA, Chief Judge.
                                                    At issue is whether a putative class
                                            representative’s claim is mooted by a Rule
          On Appeal from the
                                            68 offer of judgment so as to defeat federal
   United States District Court for the
                                            subject matter jurisdiction in a suit
         District of New Jersey
                                            requesting class-wide relief. This appeal
   D.C. Civil Action No. 01-cv-00881
                                            reflects the tension between two rules of
     (Honorable Alfred M. Wolin)
                                            civil procedure—Fed. R. Civ. P. 23 and
                                            Fed. R. Civ. P. 68—and whether they can
                                            be harmonized when the only individual
          Argued May 28, 2004
                                            relief requested by the representative
                                            plaintiff has been satisfied through an
    Before: SCIRICA, Chief Judge,
                                            offer of judgment.1 The District Court
      FISHER and ALARCÓN* ,
                                            granted defendants’ motion to dismiss on
            Circuit Judges
                                            grounds of mootness. We will reverse and
                                            remand.
        (Filed: September 29, 2004)

                                               1
                                                Our Court addressed a similar issue in
                                            Colbert v. Dymacol., Inc., 302 F.3d 155
                                            (3d Cir. 2002). That case was vacated and
                                            reheard by the Court en banc, 305 F.3d
    *
      The Honorable Arthur L. Alarcón,      1256 (3d Cir. 2002), which then dismissed
United States Circuit Judge for the Ninth   the appeal as improvidently granted. 344
Judicial Circuit, sitting by designation.   F.3d 334 (3d Cir. 2003).
                    I. Facts                      amount of $1000 plus attorney fees and
                                                  expenses—the maximum amount an
       On October 25, 2000, defendant bill
                                                  individual may recover under the FDCPA.
collector Regal Collections mailed a letter
                                                  The offer of judgment provided no relief
to Richard Weiss demanding payment of a
                                                  to the class and offered neither injunctive
debt allegedly owed to Citibank.
                                                  nor declaratory relief. Weiss declined to
Contending that certain statements in the
                                                  accept the offer of judgment. Defendants
letter constituted unfair debt collection
                                                  then filed a motion to dismiss under Fed.
practice in violation of the Fair Debt
                                                  R. Civ. P. 12(b)(1), arguing Weiss’s claim
Collections Practices Act (“FDCPA”), 15
                                                  was rendered moot because the Rule 68
U.S.C. § 1692, Weiss filed a federal class
                                                  offer provided him the maximum damages
action complaint on February 21, 2001,
                                                  available under the statute.3 For this
seeking statutory damages on behalf of
himself and a putative nationwide class.
On March 2, 2001, Weiss filed an                          is accepted, either party may
amended complaint seeking declaratory                     then file the offer and notice
and injunctive relief under the FDCPA,                    of acceptance together with
and adding Lancer Investments as a co-                    proof of service thereof and
defendant.                                                thereupon the clerk shall
        On April 16, 2001, before filing an               enter judgment. An offer
answer, and before Weiss moved to certify                 not accepted shall be
a class, defendants made a Fed. R. Civ. P.                deemed withdrawn and
68 2 offer of judgment to Weiss in the                    evidence thereof is not
                                                          admissible except in a
                                                          proceeding to determine
                                                          costs.     If the judgment
   2
       Fed. R. Civ. P. 68 provides:                       finally obtained by the
         At any time more than 10                         offeree is not more
         days before the trial begins,                    favorable than the offer, the
         a party defending against a                      offeree must pay the costs
         claim may serve upon the                         incurred after the making of
         adverse party an offer to                        the offer.
         allow judgment to be taken
                                                      3
         against the defending party                    The FDCPA sets a $1000 statutory
         for the money or property or             limit on damages awarded in a private
         to the effect specified in the           actions. 15 U.S.C. § 1692k(a). The statute
         offer, with costs then                   also limits the amount of damages
         accrued. If within 10 days               recoverable in a class action to the “lesser
         after the service of the offer           of $500,000 or 1 per centum of the net
         the adverse party serves                 wo rth of the debt collector.” §
         written notice that the offer            1692k(a)(2)(B).

                                              2
reason, defendants contended the District           moot the plaintiff’s claim, as at that point
Court no longer had subject matter                  the plaintiff retains no personal interest in
jurisdiction over Weiss’s claims. The               the outcome of the litigation. Rand v.
District Court agreed and dismissed the             Monsanto Co., 926 F.2d 596, 598 (7th Cir.
class action complaint.                             1991) (“Once the defendant offers to
                                                    satisfy the plaintiff's entire demand, there
              II. Discussion
                                                    is no dispute over which to litigate and a
       On appeal, Weiss asserts the Rule            plaintiff who refuses to acknowledge this
68 offer did not provide the maximum                loses outright, under Fed. R. Civ. P.
possible recovery because the complaint             12(b)(1), because he has no remaining
requested declaratory and injunctive relief,        stake.”) (internal citation omitted); see
and sought recovery for a putative                  also 13A Charles Alan Wright & Arthur
nationwide class. As such, Weiss argues             R. Miller, Fed. Practice and Procedure:
his claim was not rendered moot by the              Jurisdiction 2d § 3533.2, at 236 (2d ed.
Rule 68 offer, and the District Court erred         1984) (“Even when one party wishes to
in dismissing the class action complaint. 4         persist to judgment, an offer to accord all
Despite Weiss’s assertion, the FDCPA                of the relief demanded may moot the
does not permit private actions for                 case.”).
declaratory or injunctive relief. The
                                                                         A.
principal question, therefore, is whether
defendants’ Rule 68 offer mooted the                        As a threshold matter, we hold
claim.                                              defendant’s Rule 68 offer of judgment, in
                                                    the amount of $1,000 plus reasonable costs
       Article III of the United States
                                                    and fees provided the maximum statutory
Constitution limits the jurisdiction of the
                                                    relief available to Weiss individually under
federal courts to “cases and controversies.”
                                                    the FDCPA.         The FDCPA allows a
U.S. Const. art. III § 2; Flast v. Cohen, 392
                                                    plaintiff to recover “any actual damage
U.S. 83, 94 (1968). When the issues
                                                    sustained” 5 as a result of the debt
presented in a case are no longer “live” or
                                                    collector’s violation of the FDCPA, as
the parties lack a legally cognizable
                                                    well as “such additional damages as the
interest in the outcome, the case becomes
                                                    court may allow, but not exceeding
moot and the court no longer has subject
                                                    $1,000,” and “the costs of the action,
matter jurisdiction. County of Los Angeles
v. Davis, 440 U.S. 625, 631 (1979). An
offer of complete relief will generally
                                                          5
                                                          Weiss does not allege any actual
                                                    damages. Cf. Colbert, 344 F.3d 334 (3d
   4
    We exercise plenary review over the             Cir. 2003) (en banc) (reversing order of
District Court’s dismissal of a complaint.          dismissal because all relief requested in
Oran v. Stafford, 226 F.3d 275, 281 n.2             complaint not included in Fed. R. Civ. P.
(3d Cir. 2000).                                     68 offer).

                                                3
together with a reasonable attorney’s fees                      The remedies under the FDCPA
determined by the court.” 15 U.S.C. §                differ depending on who brings the
1692k(a)(1), (2)(A), (3).                            action.8 Compare 15 U.S.C. § 1692k(a)
                                                     (damage remedies for private litigants)
        The FDCPA contains no express
                                                     with 15 U.S.C. § 1692l (administrative
provision for injunctive or declaratory
                                                     e n f o r c e m e n t b y F e d e ra l T r a d e
relief in private actions. See 15 U.S.C. §
                                                     Commission).          The statute authorizes
1692k (listing damages and counsel fees as
                                                     damages for civil liability, but permits only
remedies, but not declaratory or injunctive
                                                     the Federal Trade Commission to pursue
relief).6 Most courts have found equitable
                                                     injunctive or declaratory relief. See 15
relief unavailable under the statute, at least
with respect to private actions. See
Crawford v. Equifax Payment Servs., Inc.,
201 F.3d 877, 882 (7th Cir. 2000) (noting
that all private actions under the FDCPA
are for damages); Bolin v. Sears Roebuck
& Co., 231 F.3d 970, 977 n.39 (5th Cir.
2000) (“[A]lthough this circuit has not
definitively ruled on the issue, courts              have found declaratory relief is available
uniformly hold that the FDCPA does not               to a certified class. See, e.g., Ballard v.
authorize equitable relief.”); Sibley v.             Equifax Check Servs., 158 F. Supp. 2d
Fulton Dekalb Collection Servs., 677 F.2d            1163, 1177 (E.D . Cal. 2001) (allowing
830, 834 (11th Cir. 1982) (holding in dicta          declaratory relief in a class action);
that equitable relief is not available to an         Woodard v. Online Info. Servs., 191
individual under the Act.) 7                         F.R.D. 502, 507 (E.D.N.C. 2000) (same);
                                                     Gammon v. GC Servs. Ltd. P’ship, 162
                                                     F.R.D. 313, 319-20 (N.D. Ill. 1995)
   6
    The language of the FDCPA provides               (same).
that a debt collector who fails to comply
                                                        8
with the Act shall be liable for an                       The legislative history of the Act also
“amount.” 15 U.S.C. § 1692k(a).                      suggests two categories of penalties
                                                     depending on who brings the action. See
       7
      As noted, most courts have found               95 S. Rep. 382, at 5 (discussing “civil
declaratory or equitable relief is not               lia bi lity” a n d “ a dm inistr ativ e
available to private litigants under the             enforcement” under separate sub-
FDCPA. See, e.g., In re Risk Mgmt.                   headings); see also Zanni v. Lippold, 119
Alternatives, Inc. Fair Debt Collection              F.R.D. 32, 34 (C.D. Ill. 1988) (relying on
Practices Litig., 208 F.R.D. 493, 503                dual penalty schemes in legislative history
(S.D.N.Y. 2002); Goldberg v. Winston &               of FDCPA to support conclusion that
Morrone, 1997 U.S. Dist. LEXIS 3521                  equitable relief is unavailable to private
(S.D.N.Y. Mar. 26, 1997). Some courts                litigants).

                                                 4
U.S.C. § 1692l. 9 Some trial courts have           injunctive relief, coupled with the absence
interpreted this statutory structure to            of a similar grant to private litigants, when
preclude injunctive or declaratory relief in       they are expressly granted the right to
private actions. See Zanni v. Lippold, 119         obtain damages and other relief,
F.R.D. 32, 33-34 (C.D. Ill. 1988) (“‘The           persuasively demonstrates that Congress
FDCPA specifically authorizes the Federal          vested the power to obtain injunctive relief
Trade Commission (FTC) to seek                     solely with the FTC.”). Because the
injunctive relief . . . and defendant              statute explicitly provides declaratory and
persuasively argues that this is a strong          equitable relief only through action by the
indication of Congress' intent to limit            Federal Trade Commission, we believe the
private actions to damage claims.’”)               different penalty structure demonstrates
(quoting Strong v. Nat’l Credit Mgmt. Co.,         Congress’s intent to preclude equitable
600 F. Supp. 46 (E.D. Ark. 1984)); see             relief in private actions.
also Washington v. CSC Credit Servs., 199
                                                          For these reasons, we hold
F.3d 263, 268 (5th Cir. 2000) (“[Under the
                                                   injunctive and declaratory relief are not
Fair Credit Reporting Act, the] affirmative
                                                   available to litigants acting in an
grant of power to the FTC to pursue
                                                   individual capacity under the FDCPA.
                                                   Therefore, the Rule 68 offer provided all
                                                   the relief available to Weiss as an
   9
       Section 1692l provides, in part:            individual plaintiff acting in his personal
                                                   capacity.
          Administrative enforcement
                                                          Of course, the Rule 68 offer did not
          (a)       Federal        Trade
                                                   provide the maximum damages to the
          Commission. Compliance
                                                   putative class. For class actions, the
          with this title shall be
                                                   maximum relief under the FDCPA is
          enforced             by     the
                                                   greater. The FDCPA authorizes additional
          Commission, except to the
                                                   recovery for non-named class members
          extent that enforcement of
                                                   “without regard to a minimum individual
          the requirements imposed
                                                   recovery, not to exceed the lesser of
          under this title is specifically
                                                   $500,000 or 1 per centum of the net worth
          c o mmitted to an o ther
                                                   of the debt collector.” 15 U.S.C. §
          agency under subsection (b)
                                                   1692k(a)(2)(B). Because defendants’ Rule
          . . . . All of the functions and
                                                   68 offer included no relief for the putative
          powers of the Commission
                                                   class, either under the provisions of the
          under the Federal Trade
                                                   FDCPA or through the aggregation of
          Commission Act [15 USCS
                                                   class claims, we address the mootness
          §§ 41 et seq.] are available
                                                   question in that context.
          to the Commission to
          enforce compliance by any
          person with this title . . . .

                                               5
                      B.                              extends beyond his own.”). Nonetheless,
                                                      it appears to be settled that once a class has
                      1.
                                                      be e n certified, mooting a class
        The Federal Rules of Civil                    representative’s claim does not moot the
Procedure are de signed to be                         entire action because the class “acquire[s]
interdependent. See Fed. R. Civ. P. 1                 a legal status separate from the interest
(“These rules govern the procedure in . . .           asserted by [the named plaintiff].” Sosna
all suits of a civil nature . . . .”); Canister       v. Iowa, 419 U.S. 393, 399 (1975).
Co. v. Leahy, 182 F.2d 510, 514 (3d Cir.
                                                              In two decisions in 1980, United
1950) (“[The Rules] must be considered in
                                                      States Parole Comm’n v. Geraghty, 445
relation to one another.”). Whenever
                                                      U.S. 388 (1980) and Deposit Guar. Nat’l
possible we should harmonize the rules.
                                                      Bank v. Roper, 445 U.S. 326 (1980), the
In the event of an unreconcilable conflict,
                                                      Supreme Court provided some guidance in
then one rule of procedure may have to
                                                      this area. These cases permitted a named
take precedence over another.
                                                      plaintiff whose individual claims were
        As discussed, under traditional               mooted to appeal a denial of class
mootness principles, an offer for the                 certification.
entirety of a plaintiff’s claim will generally
                                                              In Geraghty, the question presented
moot the claim. We have held a class
                                                      was “whether a trial court’s denial of a
action may be dismissed when the named
                                                      motion for certification of a class may be
plaintiff’s claim is rendered moot before
                                                      reviewed on appeal after the named
filing a motion for class certification. See
                                                      plaintiff’s personal claim has become
Brown v. Phila. Hous. Auth., 350 F.3d
                                                      ‘moot.’” 445 U.S. at 390. The Court
338, 343 (3d Cir. 2003) (“[W]hen claims
                                                      looked beyond the mootness of Geraghty’s
of the named plaintiffs become moot
                                                      substantive claims and focused on his
before class certification, dismissal of the
                                                      distinct “procedural . . . right to represent
action is required.”) (quoting Lusardi v.
                                                      a class.” Id. at 402. The Court held the
Xerox Corp., 975 F.2d 964, 974 (3d Cir.
                                                      action was not moot upon the expiration of
1992)). Defendants argue this action is
                                                      the substantive claim, because the plaintiff
moot because they submitted the Fed. R.
                                                      retained a “personal stake” in the class
Civ. P. 68 offer for complete individual
                                                      certification decision. Id. at 404.
relief before Weiss filed a motion for class
certification.                                                Of special significance to this
                                                      appeal, in Roper , the Supreme Court
       The question of mootness in the
                                                      expressed concern at a defendant’s ability
class action context is not a simple one.
                                                      to “pick off” named plaintiffs by mooting
See Lusardi, 975 F.2d at 974 (“[S]pecial
                                                      their private individual claims. 445 U.S.
mootness rules apply in the class action
                                                      at 339. Credit card holders brought a class
context, where the named plaintiff
                                                      action challenging finance charges levied
purports to represent an interest that

                                                  6
on their accounts and those of similarly                   frustrate the objectives of
situated card holders. Id. at 328-29. After                class actions; moreover it
the district court denied their motion for                 would invite waste of
class certification, the bank tendered to                  j u d i c ia l r e so u r c e s b y
each named plaintiff the maximum                           stimulating successive suits
amount he would have received                              brought by others claiming
individually. Id. at 329. The named                        aggrievement.
plaintiffs refused the offer, but the district
                                                     445 U.S. at 339.
court, over their objections, entered
judgment in their favor and dismissed the                   Then-Associate Justice Rehnquist
action as moot. Id. at 330. The Court of             concurred in the judgment, but wrote
Appeals for the Fifth Circuit reversed,              separately, commenting:
noting: “The notion that a defendant may
                                                           The distinguishing feature
short-circuit a class action by paying off
                                                           here is that the defendant
the class representatives either with their
                                                           has made an unaccepted
acquiescence or, as here, against their will,
                                                           offer of tender in settlement
deserves short shrift. Indeed, were it so
                                                           of the individual putative
easy to end class actions, few would
                                                           representative’s claim. The
survive.” Roper v. Consurve, Inc., 578
                                                           action is moot in the Art. III
F.2d 1106, 1110 (5th Cir. 1978).
                                                           sense only if this Court
        Granting certiorari, the Supreme                   adopts a rule that an
Court considered whether putative class                    individ u a l s e e k i n g to
representatives retained a private interest                p r o c e e d as a c l a ss
in appealing the denial of class                           representative is required to
certification subsequent to the entry of                   accept a tender of only his
judgment in their favor, over their                        individual claims. So long
objections. The bank argued the entire                     as the court does not require
case had been mooted by the individual                     such acce ptanc e, the
offers. The Supreme Court disagreed,                       individual is required to
stating:                                                   prove his case and the
                                                           requisite Art. III adversity
       Requiring multiple plaintiffs
                                                           continues. Acceptance [of
       to bring separate actions,
                                                           defendant’s offer] need not
       which effectively could be
                                                           be mandated under our
       ‘picked off’ by a
                                                           p r e c ed e n t s i n c e th e
       defend ant’s tender o f
                                                           defendant has not offered all
       judgment before an
                                                           that has been requested in
       affirmative ruling on class
                                                           the complaint (i.e. relief for
       c e r tification could be
                                                           the class) . . . .
       obtained, obviously would

                                                 7
Id. at 341 (Rehnquist, J., concurring).              representative.12 As in Roper, allowing
        We recognize Roper addressed a
different issue, whether a putative class
                                                            12
representative retains an individual interest                  Courts have wrestled with the
in appealing the denial of class                     application of Rule 68 in the class action
certification subsequent to an entry of              context, noting Rule 68 offers to
judgment in his favor, to which he                   individual named plaintiffs undercut close
objected.10 But the matters addressed in             court supervision of class action
Roper—particularly a defendant’s ability             settlements, create conflicts of interests for
to “pick off” representative plaintiffs and          named plaintiffs, and encourage premature
thwart a class action—have direct                    class certification motions. See Gibson v.
application to the issue presented by this           Aman Collection Serv. Inc., 2001 U.S.
appeal.11 Of course, plaintiff here was              Dist. LEXIS 10669, at *8 (S.D. Ind. July
only a putative class representative.                23, 2001) (recognizing conflict of interest
Although Weiss filed a class complaint, he           posed by Rule 68 offer to lead plaintiff);
had not yet moved for class certification.           Gay v. Waiter’s and Dairy Lunchmen’s
                                                     Union, 86 F.R.D. 500, 502-03 (N.D. Cal.
        As sound as is Rule 68 when
                                                     1980). Justice Brennan also discussed the
applied to individual plaintiffs, its
                                                     conflict of interests facing named
application is strained when an offer of
                                                     representatives presented with a Rule 68
ju d g m e n t i s m a d e t o a c l a s s
                                                     offer in Marek v. Chesny, 473 U.S. 1, 35
                                                     n.49 (1985) (Brennan, J., dissenting).
                                                             No express statement limits the
         10
           We also acknowledge Roper                 application of Fed. R. Civ. P. 68 in class
specifically limited its holding, stating:           actions. Proposed amendments to make
“Difficult questions arises as to what, if           Rule 68 inapplicable to class actions were
an y, a r e t h e n am e d p l a i n ti f f s’       suggested in 1983 and 1984, and they were
responsibilities to the putative class prior         rejected both times. The proposals read in
to certification; this case does not require         part: “[t]his rule shall not apply to class or
us to reach these questions.” 445 U.S. at            derivative actions under Rules 23, 23.1,
340 n.12 (emphasis in original).                     and 23.2.” See 98 F.R.D. at 363; 102
                                                     F.R.D. at 433. In support of the proposals,
    11
      One court considering the identical            the Advisory Committee wrote: “An
issue to ours in a FDCPA class action                offeree’s rejection would burden a named
commented: “The rationale animating the              representative-offeree with the risk of
Court’s determination [in Roper] . . .               exposure to heavy liability [for costs and
speaks directly to the concerns present              expenses] that could not be recouped from
here.” White v. OSI Collection Servs., Inc.,         unnamed class members. . . . [This] could
2001 U.S. Dist. LEXIS 19879, at *12                  lead to a conflict of interest between the
(E.D.N.Y. Nov. 5, 2001).                             named representatives and other members

                                                 8
the defendants here to “pick off” a                benefit to claimants who choose to litigate
representative plaintiff with an offer of          their individual claims in a class-action
judgment less than two months after the            context is the prospect of reducing their
complaint is filed may undercut the                costs of litigation, particularly attorney’s
viability of the class action procedure, and       fees, by allocating such costs among all
frustrate the objectives of this procedural        members of the class who benefit from the
mechanism for aggregating small claims,            recovery.” Roper, 445 U.S. at 338 n.9.
like those brought under the FDCPA.                The Supreme Court also commented that
                                                   “[c]lass actions . . . may permit the
       The purposes behind Fed. R. Civ.
                                                   plaintiffs to pool claims which would be
P. 23 are well-recognized. “A significant
                                                   uneconomical to litigate individually. For
                                                   example, this lawsuit involves claims
of the class.” Advisory Committee’s Note
                                                   averaging about $100 per plaintiff; most
to Proposed Amendment to Rule 68, 102
                                                   of the plaintiffs would have no realistic
F.R.D. at 436. See also Roy D. Simon, Jr.,
                                                   day in Court if a class action were not
The Riddle of Rule 68, 54 Geo. W ash. L.
                                                   available.” Phillips Petroleum v. Shutts,
Rev. 1, 52 (1985) (discussing rule changes
                                                   472 U.S. 797, 809 (1985). This “[c]ost-
and rationale for rejecting changes).
                                                   spreading can also enhance the means for
        The leading treatises recognize the
                                                   private attorney general enforcement and
tension between these two procedural
                                                   the resulting deterrence of wrongdoing.”
rules. See, e.g., 12 Charles Alan Wright &
                                                   In re Gen’l Motors Corp., Pick-up Truck
Arthur R. Miller, Fed. Practice and
                                                   Fuel Tank Prods. Liab. Litig., 55 F.3d
Procedure § 3001.1, at 76 (2d ed. 1997)
                                                   768, 784 (3d Cir. 1995). Allowing
(“There is much force to the contention
                                                   defendants to “pick off” putative lead
that, as a matter of policy [Rule 68] should
                                                   plaintiffs contravenes one of the primary
not be employed in class actions.”); 13
                                                   purposes of class actions—the aggregation
James William M oore et. al., Moore’s
                                                   of numerous similar (especially small)
Federal Practice ¶ 68.03[3], at 68-15 (3d
                                                   claims in a single action.
ed. 2004) (“policy and practicality                       Moreover, a rule allowing plaintiffs
considerations make application of the             to be “picked off” at an early stage in a
offer of judgment rule to class and                putative class action may waste judicial
derivative actions questionable.”); 5              resources by “stimulating successive suits
Newberg on Class Actions § 15.36, at 115           brought by others claiming aggrievement.”
(4th ed.) (“[B]y denying the mandatory             Roper, 445 U.S. at 339. This result is
imposition of Rule 68 in class actions,            contrary to the purpose of Fed. R. Civ. P.
class representatives will not be forced to        68 as well. See 13 Moore’s Federal
abandon their litigation posture each time         Practice § 68.02[2], at 68-7 (3d ed. 2004)
they are threatened with the possibility of        (“The primary purpose of Rule 68 is to
incurring substantial costs for the sake of        promote settlements and avoid protracted
absent class members.”).

                                               9
litigation.”).                                                         2.
       There is another significant                        As the Court in Geraghty stated,
consideration.      Congress explicitly            “mootness . . . can be avoided through
provided for class damages in the FDCPA.           certification of a class prior to expiration
See 15 U.S.C. § 1692k(a)(2)(B )                    of the named plaintiff's personal claim.”
(establishing maximum damages in class             445 U.S. at 398; see also Holstein v. City
actions under the FDCPA). Congress also            of Chi., 29 F.3d 1145, 1147-48 (7th Cir.
intended the FDCPA to be self-enforcing            1994) (finding case moot where plaintiff
by private attorney generals. See S. Rep.          did not move for class certification before
No. 95-382 p.5 (describing FDCPA as                “evaporation of his personal stake”).
“self-enforcing”); see also Graziano v.            Some appellate courts have extended
Harrison, 950 F.2d 107, 113 (3d Cir.               Geraghty and declined to dismiss on
1991) (“[FDCPA] mandates an award of               mootness grounds while class certification
attorney’s fees as a means of fulfilling           was pending. See Susman v. Lincoln Am.
Congress’s intent that the Act should be           Corp., 587 F.2d 866, 869-71 (7th Cir.
enforced by debtors acting as private              1978) (holding case not moot when class
attorneys general.”).      Representative          certification motion was pending before
actions, therefore, appear to be                   district court at the time named plaintiffs
fundamental to the statutory structure of          were tendered damages); Zeidman v. J.
the FDCPA. Lacking this procedural                 Ray McDermott & Co., 651 F.2d 1030,
mechanism, meritorious FDCPA claims                1051 (5th Cir. July 1981) (“conclud[ing]
might go unredressed because the awards            that a suit brought as a class action should
in an individual case might be too small to        not be dismissed for mootness upon tender
prosecute an individual action. For this           to the named plaintiffs of their personal
reason, defendants’ view of the interplay          claims, at least when, as here, there is
between Fed. R. Civ. P. 23 and Fed. R.             pending before the district court a timely
Civ. P. 68 would frustrate Congress’s              filed and diligently pursued motion for
explicit directive that the FDCPA be
enforced by private attorney generals
acting in a representative capacity.               claimant’s damages are capped at $1,000.
Alleged violators of federal law would be           As one trial court commented: “The
allowed to tender the statutory amount of          FDCPA caps individual statutory damages
damages to a named plaintiff, derailing a          at $1,000, so no individual statutory
putative class action and frustrating the          damages claim is very large. Thus, it may
goals and enforcement mechanism of the             be financially feasible for the defendant to
FDCPA.13                                           buy off successive plaintiffs in the hopes
                                                   of preventing class certification.” White v.
                                                   OSI Collection Servs., 2001 U.S. Dist.
    13
    Class actions may be well-suited to            LEXIS 19879, at *16 n.7 (E.D.N.Y. Nov.
the FDCPA, where an individual                     5, 2001).

                                              10
class certification.”); see also Lusardi, 975                              3.
F.2d 964, 975 (3d Cir. 1992) (noting the
                                                             There appears to be considerable
exception to the general mootness rule
                                                     authority that once a motion for class
where a certification motion which district
                                                     certification has been filed, the “relation
court did not have a reasonable
                                                     back” doctrine explained by the Supreme
opportunity to decide was filed before
                                                     Court in Sosna v. Iowa, 419 U.S. 393, 399
plaintiff’s claim expired). As noted,
                                                     (1975) comes into play. In Sosna, the
although plaintiff here filed a class
                                                     Court recognized:
complaint, he never filed a motion for
class certification. His individual claim                   There may be cases in
was allegedly “mooted” by the Rule 68                       which the controv ersy
offer before the court had a reasonable                     i n v o lv i n g t h e n am e d
opportunity to consider class certification                 plaintiffs is such that it
under Fed. R. Civ. P. 23. This situation is                 becomes moot as to them
not uncommon in FDCPA cases and has                         before the district court can
created an unsettled area of law.14                         reasonably be expected to
                                                            rule on a certification
                                                            motion. In such instances,
   14                                                       whether the certification can
     Several courts have found that when
                                                            be said to ‘relate back’ to
a Fed. R. Civ. P. 68 offer of judgment for
                                                            the filing of the complaint
the entire individual claim follows closely
                                                            may depend upon the
on the heels of the filing of an FDCPA
                                                            c i r c u m s ta n c e s o f t h e
class complaint, the case should not be
                                                            p a r t ic u l a r c as e a n d
dismissed. See Nasca v. GC Servs., 2002
                                                            especially the reality of the
U.S. Dist. LEXIS 16992, at *9 (S.D.N.Y.
2002) (“To allow a Rule 68 offer to moot
a named plaintiff’s claim in these
circumstances would en courage                       Corrective Counseling Servs., Inc., 201
defendants to pick off named plaintiffs in           F.R.D. 452, 455 (S.D. Iowa 2001) .
the earliest stage of the case.”); Schaake v.               As another approach, some courts
Risk Mgmt. Alternatives, Inc., 203 F.R.D.            have held a motion to certify the class filed
108, 112 (S.D.N.Y. 2001) (“Here, it is true          within the Rule 68 ten-day offer period
no motion for class certification was                will avoid mootness. See Parker v. Risk
pending at the time defendant made its               Mgmt. Alternatives, Inc., 204 F.R.D. 113,
Rule 68 Offer of Judgment. However, the              115 (N.D. Ill. 2001) (claim not mooted
complaint was filed on May 23 . . . and              where class certification motion filed
the Rule 68 offer was made a mere 32                 before expiration of ten day period);
days later, well before plaintiff could be           Kremnitzer v. Cabrera & Rephen, P.C.,
reasonably expected to file its class                202 F.R.D. 239, 244 (N.D. Ill. 2001)
certification motion.”); Liles v. Am.                (same).

                                                11
       claim that otherwise the                     off” lead plaintiffs with a Rule 68 offer to
       issue would evade review.                    avoid a class action. As noted, this tactic
                                                    may deprive a representative plaintiff the
Id. at 402 n.11. Furthermore, in Geraghty
                                                    opportunity to timely bring a class
the Court held class certification may
                                                    certification motion, and also may deny the
relate back to the filing of the complaint
                                                    court a reasonable opportunity to rule on
where claims are “so inherently transitory
                                                    the motion.15
that the trial court will not have even
enough time to rule on a motion for class                   It bears noting that most of the
certification before the proposed                   cases applying the relation back doctrine
re pr es en tat iv e's individual interest          have done so after a motion to certify the
expires." 445 U.S. at 399 (1980). The               class has been filed. See Zeidman v. J.
mootness exception recognizes that, in              Ray McDermott & Co., 651 F.2d 1030,
certain circumstances, to give effect to the        1048-49 (5th Cir. July1981); Susman v.
purposes of Rule 23, it is necessary to             Lincoln Am. Corp., 587 F.2d 866, 869-71
conceive of the named plaintiff as a part of        (7th Cir, 1978).16 Nonetheless, reference
an indivisible class and not merely a single
adverse party even before the class
certification question has been decided.                  15
                                                            One commentator addressed the
By relating class certification back to the         problems encountered in Riverside, which
filing of a class complaint, the class              are similar to those presented here. David
representative would retain standing to             Hill Koysza, Note, Preventing Defendants
litigate class certification though his             from Mooting Class Actions By Picking off
individual claim is moot. But the question          Named Plaintiffs, 53 Duke L.J. 781, 804-
in this case is whether the “relation back”         805 (2003); see also 13 James William
doctrine should apply only after the filing         Moore, et al., Moore’s Federal Practice §
of a motion for class certification or              68.03[3] (3d ed. 2004) (advocating
whether it may also be employed after the           application of the relation back doctrine to
filing of a class complaint.                        problem of claims being “picked off”).
        The “relation back” doctrine                      16
                                                            At least one case has explicitly
generally has been used for “inherently
                                                    applied the relation back doctrine to Rule
transitory” claims.      See County of
                                                    68 offers made before a class certification
Riverside v. McLaughlin, 500 U.S. 44, 52
                                                    motion is filed. See White, 2001 U.S. Dist.
(1991) (quoting Geraghty, 445 U.S. at
                                                    LEXIS 19879, at *16 n.7 (“[I]t may be
399). Although Weiss’s claims here are
                                                    financially feasible for the defendant to
not “inherently transitory” as a result of
                                                    buy off successive plaintiffs in the hopes
being time sensitive, they are “acutely
                                                    of preventing class certification. It is in
susceptible to mootness,” Comer v.
                                                    this sense that plaintiff’s claim is acutely
Cisneros, 37 F.3d 775, 797 (2d Cir. 1994),
                                                    susceptible to mootness, and thereby fairly
in light of defendants’ tactic of “picking
                                                    characterized as transitory.”); see also

                                               12
to the bright line event of the filing of the        therefore, that the class action process
class certification motion may not always            should be able to “play out” according to
be well-founded. Representative actions              the directives of Rule 23 and should permit
vary according to the substantive claims             due deliberation by the parties and the
and the courses of action. There are at              court on the class certification issues.
least three distinct events on the path to a
                                                             That said, the proper procedure is
certified class: filing the class complaint,
                                                     for the named representative to file a
filing the motion for class certification,
                                                     motion for class certification. That did not
and a decision on the motion. Yet
                                                     occur here. But neither was there undue
plaintiffs may file the class certification
                                                     delay. 18 In circumstances like these, we
motion with the class complaint, and in
                                                     believe the relation back doctrine should
some cases, include a motion for approval
                                                     apply. Absent undue delay in filing a
of an already negotiated settlement. Of
                                                     motion for class certification, therefore,
course, the federal rules do not require
certification motions to be filed with the
class complaint, nor do they require or
e n c o urage prem ature certif icatio n             23(c)(1)(a) Advisory Committee Notes.
determinations.17 It seems appropriate,              Nor do local rules require or envision
                                                     expedited certification decisions. See E.
                                                     Dist. Pa. L.R.C.P. 23.1(c) (requiring the
McDowall, 216 F.R.D. 46, 50 n.4                      filing of the certification motion within 90
(discussing relation back doctrine in                days after filing the complaint).
reaching conclusion that FDCPA case not                      Allowing time for limited discovery
moot). As noted in footnote 12, several              supporting certification motions may also
cases have declined to dismiss the class             be necessary for sound judicial
claims on mootness grounds even when                 administration. See Newton v. Merrill
the Rule 68 offer came before the filing of          Lynch, Pierce, Fenner & Smith, Inc., 259
a motion for class certification, but these          F.3d 154, 166 (3d Cir. 2001) (“[I]t may
cases have not explicitly relied on the              be necessary for the Court to probe behind
relation back doctrine.                              the pleadings before coming to rest on the
                                                     certification question.”) (quoting Gen. Tel.
      17
         Fed. R. Civ. P. 23 directs that             Co. v. Falcon, 457 U.S. 147, 160 (1982));
certification decisions be made “at an               7B Wright and Miller, Fed. Practice and
early practicable time.” Fed. R. Civ. P.             Procedure § 1785, at 107 (“The
23(c)(1)(a).     This recent amendment               [certification] determination usually
replaced the language of the old rule: The           should be predicated on more information
former “‘as soon as practicable’ exaction            than the complaint itself affords.”).
neither reflect[ed] prevailing practice nor
                                                        18
capture[ed] the many valid reasons that                   Defendants made their Rule 68 offer
may justify deferring the initial                    six weeks after plaintiff filed his amended
certification decision.” See Fed. R. Civ. P.         complaint.

                                                13
where a defendant makes a Rule 68 offer               pla intif f s, f o l l o w i n g tw o o r d e rs
to an individual claim that has the effect of         decertifying a class, agreed to a full and
mooting possible class relief asserted in             unconditional release of their individual
the complaint, the appropriate course is to           age discrimination claims, and the court
relate the certification motion back to the           dismissed their individual claims. Id. at
filing of the class complaint. 19 Because in          968-69. Nonetheless, the named plaintiffs
this case, no motion for class certification          filed a de novo motion for class
was made, we will direct the trial court to           certification.       After the trial court
allow Weiss to file the appropriate motion.           dismissed the class claims as moot, we
                                                      affirmed, noting that after the named
                     4.
                                                      plaintiff’s claims had been voluntarily
       We recognize our decision creates              settled, they no longer had justiciable
some tension with our opinion in Lusardi
v. Xerox Corp., 975 F.2d 964 (3d Cir.
1992), but we believe the cases can be
                                                      required.” Id. at 343 (quoting Lusardi,
reconciled.20  In Lusardi, the named
                                                      975 F.2d at 974).           But, Brown is
                                                      distinguishable on its facts.
           19
              To hold otherwise would                         In Brown, the housing authority and
automatically result in a plaintiff seeking           certain tenants entered into a consent
class relief in a consumer representative             decree in 1974. Id. No class was ever
action to file a motion for class                     certified. Upon discovering that the
certification at the time of filing the class         named plaintiffs had not been tenants in
complaint. As one trial court noted:                  1974 nor in 2002, the housing authority
“Hinging the outcome of this motion [to               moved in 2002 to vacate the original 1974
dismiss] on whether or not class                      consent decree. The district court rejected
certification has been filed is not well-             this motion and the housing authority
supported in the law nor sound judicial               appealed to this court. We held that the
practice; it would encourage a ‘race to pay           consent decree should be vacated because
off’ named plaintiffs very early in the               appellees were not housing authority
litigation, before they file motions for class        tenants at the entry of the consent decree in
certification.” Liles v. Am. Corrective               1974 nor in 2002. In so doing, we rejected
Counseling Servs., 201 F.R.D. 452, 455                the appellees argument for “implied class
(S.D. Iowa 2001).                                     certification.” Id. at 343, 346. Therefore,
                                                      lacking representative and individual
      20
        Our decision may also appear to               interests, their claims were clearly moot.
create tension with Brown v. Phila. Hous.             Furthermore, the tenants’ claims in Brown
Auth., 350 F.3d 338 (3d Cir. 2003), where             were not mooted by purposive action of
we noted that “when claims of the named               the housing authority but rather because
plaintiffs become moot before class                   they were not public housing tenants at the
certification, dismissal of the action is             relevant times.

                                                 14
claims when they moved for class                     two motions for class certification had
certification. Id. at 979-80.                        been denied. Indeed, even Lusardi noted,
                                                     in a somewhat different context, that it
        Unlike the case here, Lusardi did
                                                     “simply was not a case where . . . the
not involve an offer of judgment made in
                                                     class-action defendant successfully
response to the filing of a complaint. The
                                                     prevented effective resolution of a class
named plaintiffs voluntarily entered into
                                                     certification issue.” Lusardi, 975 F.2d at
individual settlements subsequent to class
                                                     983. In Lusardi, no unilateral action by
decertification. See id. at 979 (“Here,
                                                     the Defendant rendered the plaintiffs’
there is no dispute that plaintiffs
                                                     claims “inherently transitory.” Defendants
voluntarily settled their individual
                                                     here used the Rule 68 offer to thwart the
claims.”). In this appeal, the “picking off”
                                                     putative class action before the
scenarios described by the Supreme Court
                                                     certification question could be decided.
in Roper are directly implicated. In
Lusardi they were not. The Roper Court                      Under this set of circumstances, we
stressed that “at no time did the named              believe the tension between Fed. R. Civ.
plaintiffs accept the tender in settlement of        P. 23 and Fed. R. Civ. P. 68 should be
the case; instead, judgment was entered in           addressed through the “relation back”
their favor by the court without their               analysis.21
consent.” 445 U.S. at 332. Similarly, in
Zeidman, the Court of Appeals for the
                                                          21
Fifth Circuit wrote:                                        Weiss also argues Fed. R. Civ. P.
                                                     23(e) requires court approval of the Rule
       [P]laintiffs claims have been
                                                     68 offer of judgment before dismissing the
       rendered moot by purposive
                                                     class complaint. Several courts, including
       action of the defendants . . .
                                                     our own, had concluded the supervisory
       . By tendering to the named
                                                     guarantees of the former Rule 23(e)
       plaintiffs the full amount of
                                                     applied in the pre-certification context.
       their personal claims each
                                                     See Kahan v. Rosenstiel, 424 F.2d 161,
       time suit is brought as a
                                                     169 (3d Cir. 1970) (“a suit brought as a
       class action, the defendants
                                                     class action should be treated as such for
       can in each successive case
                                                     purposes of dismissal or compromise, until
       moot the named plaintiffs’
                                                     there is a full determination that the class
       claims before a decision on
                                                     action is not proper”).
       certification is reached.
                                                             These holdings arguably have been
651 F.2d 1030, 1049-50. The tactic at play           superseded by the 2003 Amendments to
here, similar to those described in Roper            the Federal Rules of Civil Procedure
and Zeidman, contrasts with the voluntary            which provide that Fed. R. Civ. P. 23(e)
settlement in Lusardi where the plaintiffs           approval is required only after a class has
agreed to settle with the defendants after           been certified. The rule was revised in
                                                     2003, to provide: “The court must approve

                                                15
                   III.
       For the foregoing reasons, the
judgment of the District Court will be
reversed and the matter will be remanded
for proceedings consistent with our
opinion.

any settlement, voluntary dismissal, or
compromise of the claims, issues, or
defenses of a certified class.” Fed. R. Civ.
P. 23(e)(1)(a) (emphasis added). The
Advisory Committee Notes state the
amendment was designed to remove
ambiguity regarding the application of
Rule 23(e) approvals at the pre-
certification stage:
        Rule 23(e)(1)(A) resolves
        the ambiguity in former
        Rule 23(e)’s reference to
        dismissal or compromise of
        a “class action.”       That
        language could be—and at
        times was— read to require
        court approval of
        settlements with putative
        class representatives that
        resolved only individual
        claims.     The new rule
        requires approval only if the
        claims, issues, or defenses
        of a certified class are
        resolved by settlement,
        voluntary dismissal, or
        compromise.
2003 Adv isory Com mittee N otes
(emphasis added). Nevertheless, given our
holding here, we need not address this
argument.

                                               16