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January 26, 2016 by Joseph J. DePalmaDownload PDF

Picking Off Class Plaintiffs, Or Whac-A- Mole And Castles In The SandJoseph J. DePalma

What do a boardwalk arcade game and sand castles have to do with the most recent US Supreme Court’s decision involving class actions? Plenty, it seems.  In Campbell-Ewald Co. v. Gomez, No. 14-857, the issue presented was whether, in a class action, a defendant’s unaccepted offer to settle renders the case moot.  This device is commonly referred in class action parlance as “picking off” a plaintiff.  “Whac- a-Mole” is a boardwalk arcade game where players use a mallet to hit toy moles, which appear at random from holes in the game board,  much like the game a wrongdoing defendant plays when it picks off named plaintiffs- one after the other- to try to block the case.

At its core, the purpose of a class action is to allow claims to proceed en masse because any single claim is too small to pursue.  Think of a company overcharging thousands of its customers, say, $20.00 and in so doing it adds millions to its bottom line.  Should that company be able to sidestep a class action and pocket ill-gotten gains simply by offering a twenty dollar bill to the named representative? 

In Gomez, Justice Ginsburg’s majority opinion held that an unaccepted offer to a named plaintiff has no force.  The Court focused on the language of the offer of judgment rule, noting that Rule 68 provides an offer is considered withdrawn if not accepted within 14 days of service.  Although touching on the fringes of the public policy implications of frustrating Rule 23 by picking off class plaintiffs, the Court’s ruling was based on its interpretation of Rule 68.  Thus, the majority left open the issue whether a different result would obtain under Rule 68 if the defendant deposits the full amount of the plaintiff’s individual claim into court. 

Pouncing on this open question, Chief Justice Roberts, in his dissent said, “The good news is that this case is limited to its facts.  The majority holds that an offer of complete relief is insufficient to moot a case. The majority does not say that payment of complete relief leads to the same result.”  Similarly, Justice Alito, joining the Chief Justice’s dissent and writing in a separate dissent, remarked, “Today’s decision thus does not prevent a defendant who actually pays complete relief- either directly to the plaintiff or to a trusted intermediary- from seeking dismissal on mootness rounds.”

These two dissenting opinions have provided defense counsel with a road map to the next certiorari petition, one that Rand McNally couldn’t have plotted any more clearly.  Plaintiff’s victory in Gomez may have a life span akin to that of the sand castle.  Will the next wave level it?

For an enlightened view of the dangers of picking off class plaintiffs, Hon. Travis Francis authored an unpublished opinion  in a case of first impression in New Jersey, analyzing the tension between New Jersey’s  offer of judgment rule (R. 4:58-1) and its class action rule (R. 4:32). In Gambrell v. Hess Corp., 2013 N.J. Super. Unpub. LEXIS 2995 (Law Div. 2013), the court observed, “While Rule 4:58-1 alone is sufficient to strike Hess’s offers of judgment; (sic) there exists an even more compelling reason for doing so. Allowing defendants to engage in the judicial equivalent of ‘Whac-A-Mole’ by tendering offers of judgment to successive named representatives of a putative class undermines the [Consumer Fraud Act.]”  The court thus struck Hess’s offer of judgment, ruling that offers of judgments undercut the salutary purposes of class actions. 

When the next pick off case comes before our highest court, we can hope that the majority will be guided by the same well-reasoned analysis Judge Francis employed in Hess.