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Eastern District of Virginia: Rule 68 Offer of Judgment Did Not Moot Class Action Claims
Practical Law Legal Update 6-524-0935 (Approx. 3 pages)
Eastern District of Virginia: Rule 68 Offer of Judgment Did Not Moot Class Action Claims
by PLC Litigation
| Published on 12 Feb 2013 • USA (National/Federal) |
In Klein v. Verizon Communications, Inc., the US District Court for the Eastern District of Virginia held that a Rule 68 offer of judgment tendered a month after the class action was filed did not moot the lead plaintiff's claims.
Key Litigated Issue
The key litigated issue in Klein v. Verizon Communications, Inc. is whether a defendant's Rule 68 offer of judgment, tendered a month after a plaintiff's class action complaint was filed, moots the lead plaintiff's claims.
Background
In Klein, the plaintiff was a customer of defendant Verizon's bundled internet and telephone service. Verizon's standard service agreement contained an early termination fee, which applied when a customer terminated the service agreement before the end of its one-year term. The plaintiff cancelled Verizon's services before his contract ended and was charged a $135 early termination fee.
The plaintiff filed a class action complaint against Verizon on the grounds that the early termination fee violated Virginia's Consumer Protection Act. Just over a month after the complaint was filed, Verizon refunded the termination fee to the plaintiff and served the plaintiff's attorney with an offer of judgment which, according to Verizon, provided the plaintiff with all available remedies. The plaintiff declined the offer.
Verizon moved to dismiss the case for lack of subject matter jurisdiction because, among other reasons, the plaintiff's claims were mooted by the offer of judgment.
Outcome
In its January 31, 2013 decision, the district court determined that the case was not moot because the "relation back" doctrine applied, permitting the plaintiff to continue with his class action despite not having filed for class certification before the offer of judgment. The court found the "relation back" doctrine applicable because:
- So little time had passed between the plaintiff's filing of the class action complaint and Verizon's Rule 68 offer of judgment that the plaintiff had not moved for class certification.
- The maximum statutory fine at issue was relatively small, making the claim susceptible to "pick-off" attempts, which are attempts by the defendant to avoid a class action by intentionally mooting the claims of class representatives through Rule 68 offers of judgment.
The district court noted that the Fourth Circuit has not previously addressed this issue, but that the majority of other circuits had applied the "relation back" doctrine.
Practical Implications
Attorneys should be aware that a party's Rule 68 offer of judgment may not moot a class action lawsuit if the offer is made before a motion for class certification has been made or ruled on. A party may not "pick off" class representatives by intentionally mooting the lead plaintiff's claims through a Rule 68 offer of judgment.