Hunton Employment & Labor Perspectives

On August 12, 2015, the Fifth Circuit held that an unaccepted Rule 68 offer of judgment to a named plaintiff in a class action does not render the plaintiff’s claim moot. In Hooks v. Landmark Indus., Inc., No. 14-20496 (5th Cir. 2015), the Fifth Circuit joined the minority of Circuit Courts—Second, Ninth, and Eleventh Circuits—and held that an unaccepted Rule 68 offer is a legal nullity, with no operative effect. The majority of the Circuit Courts to decide this issue —Third, Fourth, Sixth, Seventh, Tenth, and Federal Circuits—have all held that a complete Rule 68 offer moots an individual’s claim.

On August 9, 2011, the Ninth Circuit Court of Appeals ruled that a putative class action cannot be rendered moot by a defendant’s Rule 68 offer of judgment to the named plaintiff, even when the offer of judgment fully satisfies the named plaintiffs claim.  In doing so, the Ninth Circuit joined the other three circuits that have considered the pre-certification effect of an offer of judgment on the mootness of a class action.  The other three circuits (Second, Third, and Fifth) have similarly held that a defendant cannot “pick off” lead plaintiffs with an offer of judgment in order to avoid a class action.