Class Actions
| Citation | Vol. 66 No. 4 |
| Publication year | 2015 |
Class Actions
Thomas M. Byrne
Stacey McGavin Mohr
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After an uneventful 2013 on the class action front, the United States Court of Appeals for the Eleventh Circuit tackled an assortment of class action issues during 2014, which often required the court to navigate around a recent wave of Supreme Court precedents affecting that area.
I. MOOTNESS: PONDERING SYMCZYK
Courts have struggled for decades with the intersection of Article III1 mootness and class actions. The Supreme Court of the United States recently seemed poised to resolve one long-festering issue in Genesis HealthCare Corp. v. Symczyk2 but ultimately demurred.3 A sharply divided Court instead held that if an unaccepted offer of judgment does moot an individual claim, then the individual's would-be collective action under the federal Fair Labor Standards Act of 1938 (FLSA)4 is also moot.5 The narrowly framed, 5-4 majority opinion by Justice Thomas dodged what had seemed to be the central question presented by the case: does an unaccepted offer pursuant to Rule 68 of the Federal Rules of Civil Procedure6 moot an individual claim?7 The Court acknowledged
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the circuit split on this question but noted that all parties had assumed in the lower courts that the answer to the question was yes.8 So the Court assumed, without deciding, that Symczyk's individual claim was mooted by an offer of judgment to which she did not reply.9
From that premise, the Court stated that whether the action remained justiciable turned on "[a] straightforward application of well-settled mootness principles."10 The Court held that Symczyk lacked any cognizable personal interest in representing others in the action.11 The Court distinguished United States Parole Commission v. Geraghty,12 which held that a named plaintiff, whose claim became moot after denial of class certification, could still appeal the denial because there was a decision on class certification to which the appeal could relate back while the named plaintiff's claim was alive.13 In Symczyk, there was not even a conditional certification under FLSA to which to relate back.14 Moreover, the Court held that "a putative class acquires an independent legal status once it is certified under Rule 23."15 FLSA conditional certification confers no such status, the Court explained, and only authorizes the sending of notice to employees.16 The Court also held that Symczyk's claim was not of an "inherently transitory" nature, like pretrial detention challenges, which warrant relating back to the filing of the complaint.17 Finally, the Court distinguished its decision in Deposit Guaranty National Bank v. Roper,18 which held that named plaintiffs who prevailed by offer of judgment (over their objection) could still appeal the denial of certification.19 The Court saw Roper both as turning on its specific facts-in which the plaintiffs retained an economic interest in shifting attorneys' fees and expenses to successful class litigants-and as "tethered to the unique significance of certification
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decisions in class-action proceedings."20 Justice Kagan's notably brusque dissent, joined by Justices Ginsburg, Breyer, and Sotomayor, took the majority to task for not deciding whether an unaccepted offer of a full-relief judgment renders a claim moot.21
The Eleventh Circuit answered Symczyk's undecided question in 2014 as Justice Kagan advocated. The case was Stein v. Buccaneers Limited Partnership.22 The six named plaintiffs brought a proposed nationwide class action against the Tampa Bay National Football League team alleging that they had received unsolicited faxes in violation of the federal Telephone Consumer Protection Act of 1991.23 After removal of the case to federal district court, the defendant served each named plaintiff with a Rule 6824 offer of judgment.25 The defendant promptly moved to dismiss the case for lack of jurisdiction on the ground of mootness. The plaintiffs responded by filing a motion for class certification, which the district court denied as premature. The plaintiffs did not accept the offers of judgment, and the stated deadline for acceptance passed. The district court then dismissed the case as moot.26
On appeal, the Eleventh Circuit identified two issues of first impression in the circuit: (1) whether an unaccepted offer of judgment that would provide full relief to the plaintiff moots his individual claim; (2) if so, and if the offer precedes a motion for class certification, whether the plaintiff may go forward with class certification.27 The court concluded that to give controlling effect to an unaccepted Rule 68 offer of judgment would be "flatly inconsistent with the rule."28 The text of the rule, the court reasoned, states its effect: An offer not accepted is deemed withdrawn, and the plaintiff may proceed with the case.29 The court noted that the four justices in Symczyk who reached the issue "adopted precisely this analysis."30 The court went on to note that dismissal of the named plaintiffs' claims was entirely improper anyway,
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since Rule 68 would call for entry of judgment in accordance with the offer, not dismissal.31
The court held, alternatively, that even if the offer of judgment somehow rendered the individual claims moot, the class action claims would remain live and the named plaintiffs would be permitted to pursue them.32 The timing of the motion for class certification was irrelevant.33 The court relied on a series of Supreme Court decisions, beginning with Sosna v. Iowa34 and Gerstein v. Pugh,35 for the principle that a class action may not be moot when individual claims become moot before certification.36 In the court's view, whether the motion to certify is filed first was not significant:37
What matters is that the named plaintiff acts diligently to pursue the class claims . . . . [A] named plaintiff need not file a class-certification motion with the complaint or prematurely; it is enough that the named plaintiff diligently takes any necessary discovery, complies with any applicable local rules and scheduling orders, and acts without undue delay.38
In this respect, the court found there was no deficit in the Stein plaintiffs' performance.39 It further noted a circuit split on this issue and sided with the majority of circuits reaching the question.40 Finally, the court distinguished the Symczyk holding as applicable only to FLSA
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collective actions and not to Rule 2341 class actions, though it did note some tension between its own holding and dicta in the majority opinion.42
Stein's approach sweeps a bit too broadly. Simply applying the text of Rule 68 does not necessarily answer the Article III question posed by an offer of complete surrender that a plaintiff rejects, as even the Symczyk dissenters acknowledged.43 Litigating in federal district court is a privilege not afforded to a plaintiff who will not take yes for an answer. The court's alternative holding tackled the more difficult issues of whether, assuming that an unaccepted offer of judgment can moot a plaintiff's claim does it moot his putative class action and does the answer depend on when the plaintiff moves for class certification?44 Here, the court acknowledged that its holding could be at odds with Symczyk but concluded that the tension was not direct enough to warrant the different result suggested by a former Fifth Circuit precedent.45 The court's failure to cite, much less discuss, the Supreme Court's decision in Roper-the decision seemingly most supportive of its alternative holding-is intriguing. Nonetheless, whatever its blemishes, Stein definitively resolves the Rule 68 mootness issue within the Eleventh Circuit, at least until the Supreme Court returns to the issue.46 That return may be imminent, given that the Court recently granted certiorari in a case that affords the Court an opportunity to revisit the Symczyk mootness issue.47 The case will be argued during the Court's October 2015 Term.
The Eleventh Circuit faced another class action mootness issue in Lakeland Regional Medical Center, Inc. v. Astellas US, LLC.48 The plaintiff, a medical center, brought a putative Sherman Antitrust Act49 class action against the manufacturer of a pharmaceutical product, charging that the defendant unlawfully tied a patented right to perform
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a cardiac test to the purchase of an unpatented drug.50 The would-be class was defined to include all healthcare providers who purchased the drug during a four-year period.51 The district court denied class certification on the grounds that the plaintiff lacked antitrust standing because of the direct purchaser requirement52 to bring a damages claim and because the declaratory and injunctive relief claims were both moot or insufficiently articulated.53 The Eleventh Circuit affirmed the antitrust standing holding and reasoned that, given that the plaintiff lacked standing, there was no abuse of discretion in denying the plaintiff's bid to represent a damages class.54 Turning to the injunctive and declaratory relief claims, the court, after noting that the direct purchaser requirement did not preclude these claims, rejected the district court's view that the claims became moot as a result of the Food and Drug Administration's approval of a generic version of the drug.55 First, the court pointed out that the generic drug did not become available during the time the case remained pending in the district court and that there was nothing in the record to demonstrate that it had become available subsequently.56 Second, the court found nothing in the record to demonstrate what effect the generic drug's presence might have in the marketplace.57 But the court nevertheless concluded that the district court had not abused its discretion in denying class certification of the declaratory and injunctive relief claims.58 Noting it was the plaintiff's burden to...
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