A Brief History and the Future of the Pickoff Strategy

The class representative pickoff strategy is being considered again, this time in the Illinois Supreme Court. The class representative pickoff strategy occurs when the defendant offers or tenders the named class representative(s) full relief, rendering their individual claim moot. Currently, the Illinois Court is set to decide whether a defendant sending full relief renders the individuals’ claims, and therefore the class action moot.

Historically, defendants made these offers either pursuant to Rule 68 of the Federal Rules of Civil Procedure (“Offers as a Judgment”) or as individual settlement offers. When the practice was used in Federal Courts, lower courts routinely split when answering one main question: Does the existence of an offer of relief, accepted or not, moot the plaintiff’s claim by removing the existence of “case or controversy?”

In 2011 the Illinois Supreme Court ruled in Barber v American Airlines, allowing the class action complaint over baggage fee refunds to be dismissed once the airline made a full refund to the class representative. The case was still in discovery, the class action had not been certified yet, and the class representative did not want to drop the lawsuit. But the defendant unilaterally posted a credit to the plaintiff’s credit card for the baggage fee amount. The Illinois Supreme Court decided that because the defendant tendered the requested relief before the plaintiff moved for class certification, the dismissal of the class action was upheld based on mootness.

In a 2013 FLSA collective action that brought the issue to the High Court for the first time, the United States Supreme Court stated in Genesis Health Care Corp. vs. Symczyk that while Courts of Appeal disagree whether an unaccepted Rule 68 offer that fully satisfies a plaintiff’s individual claim is sufficient to render that claim moot, the plaintiff had conceded that issue below, and did not properly raise it in the Supreme Court. Therefore, the Court assumed, without deciding, that the defendant’s offer had mooted the plaintiff’s individual claim. After the plaintiff’s individual claim was moot, the FLSA collective action became moot because she had no personal interest in representing others in the collective action. The plaintiff cited Rule 23 cases to avoid this outcome, but the Court distinguished those cases stating the Rule 23 cases are fundamentally different from FLSA collective actions.

In 2016 Campbell-Ewald Co. v. Gomez, brought the pickoff issue back to the Supreme Court. Campbell-Ewald is a Rule 23 case. The Court stated the plaintiff’s complaint was not defeated by an unaccepted offer to satisfy the plaintiff’s individual claim. The Supreme Court stated that the defendant’s Rule 68 offer of judgment, once rejected, had no continuing efficacy. With no settlement offer being operative, the parties remained adverse. The defendant’s attempt to pick off the class representative failed.

In Chandra Joiner et al. v. SVM Management LLC, the pickoff case currently pending before the Illinois Supreme Court, plaintiffs argued that a 2016 Supreme Court Gomez decision should overrule the 2011 Illinois Supreme Court decision in Barber v. American Airlines. A decision is expected to be released later in 2020.

Experts argue the 2016 U.S. Supreme Court decision leaves one question unanswered: what happens if a defendant doesn’t merely offer monetary relief, but actually pays it by sending a check or depositing it with the court? Dissenting Justices in Gomez argued that approach to the strategy would be effective in rendering the complaint moot. Until SCOTUS takes up the pickoff issue again, it’s up to the lower federal courts to answer that question.

Mark Rapazzini
Mark Rapazzini consults with clients in the consumer, food and beverage, labor and employment, finance and mass tort practice areas. He has over 25 years of legal experience in cases ranging from individual personal injury litigation to class actions and complex mass torts. Mark also has over fourteen years of experience managing complex claims administration matters and has managed and supervised the administration of employment, securities, consumer, property, and various other types of class action settlements.

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