Posted by: Jordan Brunner, Stephen Best, Griffin Brown, Jeff Cappellini, John Burnett, Mike Calvanico, Sean Briscoe
Friday, September 18, 2015, was the day that changed everything for Martin Winterkorn, the former C.E.O. of Volkswagen AG. On that day, the Environmental Protection Agency (EPA) and California issued a Notice of Violation of the Clean Air Act, based on their findings that Volkswagen had developed software that detected when the vehicles were being tested, and activated equipment that reduced the emissions, in order to circumvent emissions requirements.
Before it was all over, Winterkorn would resign as CEO, and Volkswagen would be the subject of a class action by both the Justice Department and private individuals who had been affected by the scandal. The action brought by these individuals claimed relief either because the resale value of their cars had severely diminished or because their property was “illegally spilling toxic diesel emissions into California’s air,” and designated Alex Barkaloff as a named plaintiff.
But in bringing his class action, what if something were to happen to Barkaloff? What if Volkswagen were to settle separately with him, or he was to figure out that his car really didn’t have the technology that he thought it did? Or what if someone was to offer him money to buy his car at the retail value and this issue was to be resolved?
While these may seem like unrealistic scenarios in light of the seriousness of the scandal facing Volkswagen, they all go to the heart of one question: mootness of a class action when the named plaintiff loses their personal stake in the outcome. While there are exceptions to the general rules of mootness, particularly when it comes to class actions, these are not set in stone.
This is why the Advisory Committee, the Supreme Court, and Congress should adopt amendments to Rule 23 in order to ensure that the constitutional rights of American citizens and corporations are not violated, and to ensure that people understand when exceptions to the doctrine of mootness apply. But in order to discuss the future of Rule 23, it is necessary to look to its past and why it was created in the first place.
As the United States rebuilt from the ashes of the Civil War through the technological upheaval that was the Industrial Revolution, the common law as it existed demonstrated that it was woefully inadequate to handle the new claims that followed. With a geographically diverse population, bigger machines, and increasing layers of economic complexity, it was no longer feasible to follow the traditional standard of one plaintiff against one defendant. So in 1934, Congress passed the Rules Enabling Act, giving the Supreme Court power to promulgate the Federal Rules of Civil Procedure (“FRCPs”). In 1938, Congress approved the FRCPs, which introduced the class action mechanism.
Eventually, after some revision in the 1960s, the class action mechanism was codified in Rule 23 of the FRCPs. The rule allows a single plaintiff to proceed on behalf of an entire class who have been harmed by the same conduct and by the same defendants. This plaintiff may serve as the class representative when (1) the number of plaintiffs means having each party as a plaintiff is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the named plaintiff are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.
Class actions did more than just solve the “too many plaintiffs” problem. As the Supreme Court explained in United States Parole Commission v. Geraghty, citing the Advisory Committee’s Note on Rule 23, some of the other justifications for creating the rule included the protection of the defendant from inconsistent obligations, the protection of the interests of those who hadn’t joined the lawsuit, efficiency in resolving similar lawsuits, and the spreading of litigation costs among plaintiffs with similar claims.
But there are some drawbacks to a class action. Specifically, the claims of the plaintiffs may become moot while the case is pending. The representative may have their claim dismissed, might settle early, or may “grow out of” the class they represent. For example, a college student serving as a class representative for college athletes may graduate, or a plaintiff representing non-residents of a state may become a resident after a certain time period has passed. When something like this occurs, two separate issues arise: (1) the named plaintiff’s mootness and (2) representative adequacy.
First, if the named party no longer has a personal stake in the outcome of a class action, the court must determine if there still remains a live controversy. The defendant, for example, may argue that since the named representative’s claims have become moot, there no longer exists a case or controversy for the purposes of Article III under the Constitution, and then seek dismissal. The general rule is that an actual case or controversy within the meaning of Article III must exist not only on the date the action is initiated, but at every stage of the trial and appellate proceedings (See Trotter v. Klincar). The solution, then, is to decide if the class has obtained a legally cognizable interest independent of the named plaintiff, once the class becomes certified.
Second, if the action continues, someone will have to represent the legal rights and interests of others. In other words, the requirement of Rule 23(a)(4) that there be a proper and adequate class representative must be met. Will a representative who no longer has a claim themselves still be able to adequately represent the remaining class members? And, even assuming they are fit to continue as a representative, is this even permitted? Or must other unnamed members of the class intervene? In order to understand the ramifications of each of these issues, it is necessary to understand what mootness is and how it has been interpreted by Article III federal courts.
In 1964, mootness shifted from a more abstract, prudential doctrine to one mandated by Article III of the Constitution based on the decision in Liner v. Jafco, Inc. In a footnote, the Supreme Court declared that mootness was a jurisdictional rule espoused in the Case or Controversy clause in Article III of the Constitution. The footnote reads, “Our lack of jurisdiction to review moot cases derives from the requirement of Article III of the Constitution under which the exercise of judicial power depends upon the existence of a case or controversy.” A case therefore becomes “moot” when there is no issue left for the Court to decide, and therefore no “case,” or “controversy.” Most subsequent cases have followed the rationale espoused in Liner v. Jafco, asserting that the dismissal of moot claims was constitutionally mandated.
However, this sudden shift in doctrine has not gone wholly undisputed. Even on the Supreme Court, there have been disagreements about whether mootness is derived from Article III of the Constitution, or simply a prudential doctrine adopted by the courts (See Honig v. Doe). Regardless of the source of the doctrine, however, the distinction or test used to determine whether a case is moot fundamentally remains the same as before 1964. Courts seeking to dismiss a case for being moot will still look to see whether a there is an actual controversy present, along with adverse interests. As one scholar has explained, there are four reasons why there may be no actual controversy: “…there is no real dispute…either because the suit is seen to have been collusive from its inception, or through subsequent events an originally extant controversy has been extinguished, or where the questions sought to be reviewed are totally abstract, or the happening of events has rendered it impossible for the court to grant any effectual relief…”
The most likely reason why a class action under Rule 23 would be mooted after certification of the class comes down to the category of subsequent events. Article III federal courts have been particularly wary about dismissing class actions just because of such subsequent events, and have used a number of techniques to evade the mootness doctrine altogether.
Techniques for Avoiding Mootness of Class Actions
Federal courts have developed four types of techniques to prevent the mooting of a class action despite the absence of a personal stake in the outcome by the representative plaintiff: (1) establishing the competency of the representative plaintiff at the commencement of the suit; (2) continuing to hear the case because the suit is “capable of repetition, yet evading review”; and (3) preventing peremptory challenges to the class action; and (4) substitution of the named representative.
Establishing the Competency of the Representative Plaintiff
A somewhat logically and legally tenuous yet popular way that federal courts have avoided dismissing class actions based on the mootness doctrine has been to simply declare that if the representative plaintiff was competent to represent the class at the commencement of the suit, then he remains competent throughout the suit, regardless of the circumstances that arise afterwards.
The Fourth Circuit decisively established this exception to the mootness doctrine in Moss v. Lane Co., Inc. in 1973. Fred Moss had filed a class action in federal district court under Title VII of the Civil Rights Act, claiming that he and many other African-Americans were fired because of their race. The Virginia district court dismissed the action on the grounds that since the named plaintiff had not established that he had been personally discriminated against, the suit could not move forward. On appeal, the Fourth Circuit reversed the district court, reasoning that if the plaintiff was “a member of the class at the commencement of the action and his competency as a representative of the class then determined and assumed, the subsequent dismissal or mootness of his individual claim . . . will not operate as a dismissal or render moot the action of the class, or destroy the plaintiff’s right to litigate the issues on behalf of the class” (emphasis supplied).
In the 1969 case of Gaddis v. Wyman, a plaintiff brought suit against section 139(a) of the New York Social Services Law – which required social service officials to deny public assistance to any person who applied for such assistance within their arrival in the state. When the named plaintiff started to receive assistance, the defendant moved for summary judgement on the basis of mootness. The federal district court for Southern District of New York denied their motion, reasoning that Gaddis was a proper representative at the time the case was instituted. Similar rulings were given in district courts in Connecticut (Gatling v. Butler, 1971) and Minnesota (Thomas v. Clarke, 1971). This exception to the mootness doctrine has been generally followed by other jurisdictions up until the present day.
In some ways, this particular concept is not unheard of in other constitutional jurisprudence: It is similar to the concept of jeopardy attaching to a jury once it has been empaneled and sworn in by the judge. In Crist v. Bretz, the Supreme Court reasoned that, in order to protect the defendant’s guarantee against double jeopardy as per the Fifth Amendment, it was necessary to ensure that jeopardy attached as soon as possible. In a similar manner, federal courts seek to protect the class of plaintiffs who have allegedly been injured from the possibility that the named plaintiff will not have a personal stake in the outcome in the interests of fairness to all those involved.
“Capable of Repetition, Yet Evading Review”
Perhaps one of the most controversial and (in)famous class action cases in constitutional history illustrates the second exception to the mootness doctrine: Roe v. Wade. Decided in 1973, Roe v. Wade found criminal abortion laws in Texas to be unconstitutional. But before reaching the merits of the complaint, one of the first questions Justice Blackmun reached was that of jurisdiction through the standing of the plaintiff to sue, based on whether Roe had a “personal stake” in the litigation.
Roe was no longer pregnant by the time her case reached the Supreme Court – her pregnancy had ended sometime in 1970. So how could the Supreme Court decide this question when Roe was no longer pregnant? By relying on a judicial exception to mootness that the action was “capable of repetition, yet evading review.”
The Court reasoned that if “pregnancy is a significant fact in the litigation, the normal 266-day human gestation period is so short that the pregnancy will come to term before the usual appellate process is complete. If that termination makes a case moot, pregnancy litigation seldom will survive much beyond the trial stage, and appellate review will be effectively denied.”
Roe v. Wade, a pregnancy case, presents a uniquely relevant example of this particular exception to the mootness doctrine. But the exception did not spring from Roe v. Wade. Rather, it sprang from an early 20th-century Supreme Court decision, Southern Pacific Terminal Co. v. International Commerce Commission. In that case, Justice McKenna explained that there were broader policy implications in bringing a class action besides the resolution of the case itself. Often times the object of the class action is for declaratory as well as injunctive relief – that is, to decide on the legality of the action, not simply resolving it for the particular people actually named in the action.
With this in mind, federal courts have recognized that if an issue is “capable of repetition, yet evading review,” then it is acceptable to decide the question even if the personal stake in the case by the representative plaintiff becomes moot. This exception is particularly relevant to class actions, which companies are eager to conclude quite quickly. Other types of class actions have been decided similarly to Roe v. Wade under this exception: Dunn v. Blumstein (1972) is one, where the court rejected the contention of mootness due to an administrative voting restriction simply because the vote itself had passed.
But more importantly, the Supreme Court has gone far beyond this exception as it was described in Roe v. Wade and U.S. Parole Commission v. Geraghty in granting review to cases that have been challenged based on the mootness doctrine. In 1976, Harold Franks and Johnnie Lee brought suit as the named plaintiffs in a class action against the Bowman Transportation Company alleging that they had been discriminated against based on their race. Franks v. Bowman Transportation Co., Inc. The defendant, relying on Sosna v. Iowa (which dealt with a durational residency requirement for divorce and had again confirmed this exception to the mootness doctrine), argued that the case was moot because the named plaintiff did not have a personal stake in the outcome and the issue case was not “capable of repetition, yet evading review.” The Court, in a blatant departure from its previous limiting principle, pointed out that “nothing in our . . . opinions holds or even intimates that the fact that the named plaintiff no longer has a personal stake in the outcome of certified class action renders the class action moot unless there remains an issue ‘capable of repetition, yet evading review.’” Instead, Justice Brennan in his opinion for the Court, focused on whether a “live controversy,” still existed at the time that review took place. Seeing that such an issue existed, the court rejected the charge of mootness.
Preventing Avoidance of Review
Defendants in class actions have often tried to moot cases by correcting their challenged actions in a particular instance in order to avoid review of the larger issue at stake. This particular technique, which we will call avoidance or review, focuses more on the actions of the defendant than the status of the named representative, though the status of the named representative is important. This approach is especially common in regards to civil rights violations, where the company may continue to engage in systematic discrimination because the courts cannot review their actions due to mootness, and collateral estoppel may prevent further review when the problem keeps recurring. Courts have typically handled these problems by relying on a statement made by Justice Clark in United States v. W.T. Grant Co. Justice Clark wrote in 1953 that “voluntary cessation of allegedly illegal conduct does not deprive the tribunal of power to hear and determine the case, i.e., does not make the case moot.”
The Fourth and Fifth Circuit Courts of Appeals have written the seminal cases in this regard. The Fifth Circuit decided Jenkins v. United Gas Corp., a class action suit regarding racial discrimination in hiring practices in violation of Title VIII of the Civil Rights Act, in 1968. In it, the defendant tried to dismiss by offering the named plaintiff a promotion, which he accepted. The court held that the acceptance of the promotion did not render the case moot to either the employee or the class he represented condemning the employers “resist and withdraw tactics” as a way to continue its discriminatory practices.
In 1972, the Fifth Circuit decided Smith v. YMCA of Montgomery, Inc., a class action with plaintiffs who had allegedly been denied admission to a YMCA park, only to be admitted when the class action against the YMCA began. The Fourth Circuit decided Cypress v. Newport News General and Nonsectarian Hospital Association in 1967, dealing with a claim by a black doctor against a hospital for alleged discriminatory practices; the hospital granted him acting staff privileges while the appeal was pending, but the appellate court upheld review.
All of these cases, besides dealing with alleged civil rights violations, offered the same reasoning behind their decisions not to dismiss: The activity which had prompted the class action to begin in the first place was the primary issue, not simply the resolution of the particular suit in the court’s docket. Justice Clark commented on this when he explained that a controversy “may remain to be settled in . . . a dispute over the legality of challenged practices” (See United States v. W.T. Grant Co.).
Substitution of the Named Representative
This technique is perhaps the most obvious of all of them, but it is quite narrow because it can only be used when there is both timing and judicial discretion on the side of the class. Substitution of the named representative is typically accomplished through a motion to substitute or a motion to amend the complaint, with the latter being the most common. This is done using FRCP Rule 15.
Motions to amend in this manner is done in a timely fashion, and must not be done in bad faith or in an effort to prejudice the plaintiff, as elucidated by a Kansas federal district court in 2014 in Hull v. Viega, Inc. If this is the case, not allowing the motion is generally frowned upon by the courts as an abuse of discretion. For example, in 2003, the Eleventh Circuit reversed the northern Alabama federal district court in its decision in Birmingham Steel Corp. v. Tennessee Valley Authority to decertify a class because it had not allowed the class counsel a reasonable amount of time to find a new class representative from amongst the class itself.
Cases Adhering to the Mootness Doctrine in Class Actions
While the majority of federal courts in recent years, including the Supreme Court, have created larger and more numerous exceptions to the mootness doctrine on terms of post-certification, the Supreme Court has actually ruled in the opposite direction on this same issue.
The primary case that falls in this category is Hall v. Beals, decided in 1969 per curiam based on the votes of six justices. The plaintiffs had just moved to Colorado five months prior to the presidential election, and could not vote because of a statute which required that citizens have lived in the state at least six months before they could vote. On appeal of the class action suit to the Supreme Court, the Colorado legislature changed the requirement from six months to two. Since under the new law the plaintiffs could have voted in the election, the Supreme Court held that the suit was mooted.
Decided in the same year was Watkins v. Chicago Housing Authority, which involved a class action against the Chicago Housing Authority for its standard lease, which allowed it to evict tenants at any time whether there was cause or not, just by giving notice of five days. The Seventh Circuit, through Senior Circuit Judge Major, announced that since the case was moot with respect to the named plaintiffs, it was moot with respect to the other unnamed plaintiffs as well. Another case in which Supreme Court has come to a different conclusion than Sosna v. Iowa was in Kremens v. Bartley, decided in 1977, where the Court ruled that a class action by individuals ages 15-18 was mooted by the actions of the Pennsylvania legislature affording due process rights to those 14 years and above.
Yet even though these cases seem to fly in the face of the major exceptions to the mootness doctrine, they can be seen as the minority view for three primary reasons. Firstly, Hall v. Beals and Kremens v. Bartley are distinguishable from the previous cases in that in Sosna v. Iowa only the named representative’s claim had been mooted, while in Hall v. Beals and Kremens v. Bartley, arguably the personal stake in the outcome of all the plaintiffs was mooted.
It is evident from the jurisprudence on this subject that, as a general rule, Article III federal courts have evolved to become more and more lenient in granting exceptions to the mootness doctrine over the years when it relates to post-certification cases. Even so, there is a dichotomy between complaints that are mooted before the class is certified (pre-certification) and complaints that mooted after the class is certified (post-certification). The general rule on post-class representative’s claim somehow becomes moot, as long a live controversy still exists between the defendant and the rest of the class. As we will see, the pre-certification types of complaints have much more complicated jurisprudence than this
The seminal case dealing with pre-certification class actions is U.S. Parole Commission v. Geraghty, decided in 1980. In that case, the Supreme Court ruled, with reasoning similar to that justifying review of issues which are “capable of repetition, yet evading review,” that when a plaintiff’s claim is “inherently transitory” to the extent that the trial court would not have enough time to rule on the motion for class certification before the named representative’s interest expired, that the court could bypass the concern of mootness to reach the merits.
Even so, there are cases where a class representative’s mooted claim is not “inherently transitory,” and this has generated splits among the federal circuit courts. Pre-certification mootness is also an issue the Supreme Court has only just recently addressed. Issues of mootness pre-class certification usually arise when a defendant offers to settle with the named plaintiff prior to a court certifying the class.
In 2009, the Tenth Circuit suggested in Clark v. State Farm Mutual Auto Insurance Co. that the same substantive exceptions that apply to post-certification class action suits may apply to pre-certification mootness issues as well. Nine years earlier, the Third Circuit had similarly afforded proposed class members a full blown exception prior to a ruling on certification in Holmes v. Pension Plan of Bethlehem Steel Corp., allowing members of a proposed class to proceed so long as the named representative’s claim was live at the time he or she moved for certification.
The Ninth Circuit also followed along in a similar vein with Pitts v. Terrible Herbst, Inc., decided in 2011 and focusing on defendant’s actions to moot out the case. In this case, the Ninth Circuit ruled that if the defendant made an offer of judgement under FRCP Rule 68, and the named plaintiff did not accept it, this did not moot the action as long as the named plaintiff could still file a timely motion for certification. This was to prevent defendants from being able to “pick off” named plaintiffs with a Rule 68 strategy, and thus moot the whole action, a sentiment expressed in Deposit Guaranty National Bank v. Roper by the Supreme Court in 1980.
However, in 2011, the Seventh Circuit upset this general consensus among the circuit courts of appeals in Damasco v. Clearwire Corp. It stated that if the named plaintiff did not certify before the Rule 68 offer was made, then the entire class action would be mooted. The Fifth Circuit had ruled this way as well, in Sandoz v. Cingular Wireless LLC, decided in 2008; it held that as long as the Rule 68 offer had been made, the case is moot, even if the offer was rejected. The Supreme Court seemed to definitely answer the pre-certification split in 2013 with its decision in Genesis Healthcare Corp. v. Symczyk, holding, in a pre-certification situation, that the refusal of any offer of judgment by the named putative class representative mooted out the case. But in reality it did not resolve the split between the circuits.
Genesis Healthcare Corp. v. Symczyk involved an alleged violation of Fair Labor Standards Act of 1938 (FLSA), because the employee in question claimed that she was not paid for 30 minute breaks mandated by her employer, even if she worked during that time period. The defendant employer gave the plaintiff an offer of judgement under FRCP Rule 68, agreeing to give her back unpaid wages and pay her attorneys’ fees. But the Court did not definitively decide the issue of whether the unaccepted offer in the case fully mooted the claim; rather, the Court decided that the case was no longer justiciable “based on the collective-action allegations in her complaint.”
The Court ruled that since no one else had joined her suit, and since the collective-action allegations were based on a statutory grant (FLSA allows an individual to bring a suit on behalf of “similarly situated” employees), then the cases used by the plaintiff because they allowed a case to go forward (including Sosna v. Iowa and U.S. Parole Commission v. Geraghty) were factually and legally distinguishable. One important reason was that while this case was brought under FLSA’s collective action provision, while the distinguishable cases were brought under Rule 23. Finally, while the Court did assume that the Rule 68 offer of judgement mooted the plaintiff’s claim, the Court did not actually decide this.
SHOULD RULE 23 OF THE FRCP BE AMENDED TO ADDRESS ISSUES ASSOCIATED WITH MOOTNESS OF CLASS ACTION LAWSUITS?
Rule 23 should be amended to specifically enumerate the judicially created exceptions declared by federal judiciary surrounding class action suits and the mootness doctrine. Such amendments would promote uniformity among the federal courts, give certainty to both defendants and plaintiffs, and streamline the class action litigation process.
The initial split of decisions and the very narrow decision by the Supreme Court in Genesis Healthcare Corp. v. Symczyk that did not completely address it prompted calls for amendments to be made to Rule 23 addressing what type of procedural requirements or remedies class members should be afforded, which were taken up by the Advisory Committee. The proper amendments will help achieve uniformity among the circuits, and to allow litigants the benefit from stability in the law before undertaking costly class action proceedings. These are suggestions based on the already existing common law exceptions:
Proposed Amendments to Rule 23:
(x) Mootness of a Class Action Prior to Class Certification: If a plaintiff’s claim is mooted before class certification then the class action is rendered moot, unless:
(1) The only basis for rendering the plaintiff’s claim moot is an unaccepted offer under Rule 68 of this section; or,
(2) The court determines the issue or issues involved is/are of such importance that the best interest of justice will be substantially served by allowing the proceedings to continue.
(x) Mootness of a Class Action after Class Certification: A court shall determine that a class action lawsuit is not mooted when the named plaintiff’s controversy ceases to exist if any of the following apply:
(1) If the named class representative is competent to represent a certified class at the time of certification, then any subsequent action that renders the suit moot as to the plaintiff will not moot the action as a whole so long as:
(A) The plaintiff remains able to represent the certified class; and
(B) Controversy still exists between the defendant and the remaining class;
(2) The case is of the type that is so inherently transitory that it is capable of repetition but rendering it moot would result in evading review of this type of claim;
(3) Mere cessation of a defendant’s illegal activity which otherwise ends the controversy as to the named plaintiff; or,
(4) The court determines the issue or issues involved is/are of such importance that the best interest of justice will be served by allowing proceedings to continue.
But these amendments have more at stake than simply judicial economy and uniformity in federal law. They also implicate constitutional rights based on the subset of standing that is mootness.
The Rules Enabling Act, which Congress passed to allow the Advisory Committee and the Supreme Court to amend the Federal Rules of Civil Procedure and other federal rules, instructs that the rules “shall not abridge, enlarge or modify any substantive right.” But would it abridge someone’s rights to let another individual have standing by not mooting the case, even if they arguably don’t have any personal stake in the outcome?
One of the substantive rights which this might violate are the due process rights given under the Due Process Clauses of the Fifth Amendment and Fourteenth Amendment. It is arguably against the due process rights of defendant corporations to allow class actions to move forward when the named plaintiff has no personal stake in the outcome due to subsequent events, whether those events are manufactured by the defendant or not. However, the policy interests that are inherent in allowing suits to go forward regardless have two intersecting justifications:
(1) Since many of these types of class actions involve civil rights violations, it is necessary to review these cases based on two of the exceptions. Since the civil rights violations will arguably keep happening if there is no review, then the behavior is repeatable yet evades review. It is therefore unfair to allow peremptory challenges to moot the case in order to avoid review of the behavior (See United States v. W.T. Grant Co.)
(2) On top of this, the due process rights of the plaintiffs are themselves being violated within this context, since without review the allegedly illegal behavior will continue to happen. Therefore, for the defendant to claim a violation of due process rights is hypocritical and perhaps even wrong-headed. By the very fact that the defendant can use Rule 68 and other procedural mechanisms to settle, their due process rights have not been violated at all, but scrupulously observed.
It should be noted however, that even if the proposed amendments to Rule 23 do not violate or abridge anyone’s substantive rights, it may not even matter. The Seventh Circuit overruled Damasco v. Clearwire Corp. in its recent case, Chapman v. First Index, Inc., ruling that to the extent that Damasco and its progeny had held that a defendant’s offer of compensation “moots the litigation or otherwise ends Article III case or controversy,” those previous cases were invalid.
Also, the Supreme Court recently granted certiorari and decided Gomez v. Campbell-Ewald Co. involving pre-class certification mootness, the disposition of which might moot any need for amendments at all, at least from the pre-certification standpoint. In Gomez v. Campbell-Ewald Co., the Supreme Court in essence upheld the Ninth Circuit’s decision in Pitts v. Terrible Herbst, Inc. regarding Rule 68 offers of settlement.
Individual claims against large corporations are frequently small, cost prohibitive, and incapable of matching a corporation’s legal resources. Class actions provide individuals like Alex Barkaloff the necessary resources and incentives to take on a large international corporation like Volkswagen when they and others have been similarly wronged. Rule 23 prescribes the federal procedure for class actions, yet within an otherwise exhaustively outlined rule, there is broad discretion and variance for jurisdictions to approve or deny review of a claim for mootness. This potential for uncertainty means that classes may not bother seeking damages for fear that they’ll be easily undermined and dissolved by settlements with a single representative. Additionally, corporations will have trouble gauging their legal liability if settlements do not resolve the claims against them and they can be sued in perpetuity over the same issue.
Mootness is a relatively simple doctrine when applied to a single, or small number of plaintiffs, but becomes infinitely more complex when applied to class actions and class representatives. When one or several plaintiffs are representing the interests of possibly thousands, the need for a more structured approach becomes clear. Despite common law guidance on the issue of mootness, the cases discussed throughout have shown that courts may apply or withhold mootness with broad discretion and variance across jurisdictions. Nearly every FRCP represents the codification of a formerly exclusive common law doctrine. Amending the rules would not diminish judicial discretion, but rather would add rigor, clarity, uniformity, and guidance for both litigants and judges.
One of the essential features of class actions are that they allow for the many to adjudicate a single claim even when all may not realize that they have suffered a shared, legally actionable injury. Adding structure to the doctrine of mootness for class actions reduces the chance of defendant’s successfully undermining a class action by preemptively settling with the representative. Additionally, defendants will save time and resources if they know which actions on their part will readily resolve a class action against them. By adopting the proposed amendments to Rule 23, the Advisory Committee, the Supreme Court, and Congress can bring clarity of law to the currently amorphous and opaque determination of mootness in class actions.