A magistrate judge in the United States District Court for the Western District of Pennsylvania denied plaintiff's motion to strike a Rule 68 offer of judgment served prior to class certification. The Rule 68 offer in this case – unlike those at issue in numerous conflicting opinions culminating in the United States Supreme Court's 2016 Campbell-Ewald decision – was not an attempt to "pick off" the named plaintiff because it also included the putative class members. Undeterred by the denial of the motion to strike, plaintiff filed a motion for reconsideration.
In the original motion to strike, the magistrate judge rejected plaintiff's argument that a Rule 68 offer made before class certification was premature and incompatible with Rule 23. In the motion for reconsideration, plaintiff argued that the court should strike the Rule 68 offer because: (1) courts have stricken Rule 68 offers of judgment that interfered with Rule 23 safeguards; (2) plaintiff would not be able to accept a Rule 68 offer on behalf of the putative class; and (3) the Rule 68 offer was premature because there had been no discovery of defendant's net worth.
With respect to the first argument, the magistrate judge explained that other cases striking Rule 68 offers served prior to class certification involved instances in which the defendant was trying to "pick-off" the named plaintiff prior to class certification by directing the offer only to the named plaintiff. In such a case, the "pick-off" Rule 68 offer could dampen the efforts of the putative representative to pursue the class action and interject a conflict between the named plaintiff and the class. In this case, however, no "pick-off" issue existed because the Rule 68 offer was made to the named plaintiff and the putative class.
As to the second argument, the magistrate judge rejected the claim that a plaintiff could not accept a Rule 68 offer on behalf of the class prior to class certification. The magistrate judge explained that an accepted Rule 68 offer on behalf of the class would be just like any other pre-certification settlement. In such cases, the standard procedure is for the court to provisionally certify the class so that proper notifications can be disseminated to the members at large, to hold a fairness hearing, and then to issue a final class certification and approve the settlement.
Finally, the magistrate judge rejected the argument that a Rule 68 offer was premature when made prior to discovery of the defendant's net worth. The magistrate judge explained that the purpose of Rule 68 is to encourage early settlements. A defendant does not wish to undergo expensive discovery and be liable for "a runaway train" of the other side's attorney's fees in a case that the defendant believes should be settled early without further litigation.
Accordingly, the magistrate judge denied the plaintiff's motion for reconsideration of its order denying plaintiff's motion to strike.
Dale A. Kaymark v. Udren Law Offices, P.C., (W.D. Pa. March 22, 2017) Case No. 13-419
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