Rule 68 offers of judgment have been controversial in class action practice for quite some time. Proponents of the tactic believe that it offers a valuable means of limiting frivolous lawsuits: where there are really only a few affected claimants, an offer of judgment can force them to face up to the costs of meritless class allegations. Opponents believe that corporate defendants would rather buy off potential claimants one by one than face a class-action lawsuit. Circuit courts of appeal had split on whether the tactic could actually moot a class action.
Genesis Healthcare Corp. v. Symczyk, in which a nurse appealed the dismissal of her FLSA collective action after the defendant made an offer of judgment and then moved to dismiss her case as moot, seemed to offer a solution to the longstanding question of whether the offer of judgment is a valid defense tactic in class actions. In the opinion that came out last week, Justice Thomas, writing for a 5-Justice majority, allowed the tactic in the case before the Court, but seemingly limited it for the time being. Specifically, he held that
In the absence of any claimant’s opting in [to the proposed collective action], respondent’s suit became moot when her individual claim became moot, because she lacked any personal interest in representing others in this action.
If you believe that reasoning sounds like the Court did not intend its opinion to reach Rule 23 class actions, you are correct. The Court immediately rejected any attempt to use Rule 23 cases to support a wider ruling in Symczyk:
But these cases are inapposite, both because Rule 23 actions are fundamentally different from collective actions under the FLSA, see Hoffmann-La Roche Inc., 493 U. S., at 177-178, 110 S. Ct. 482, 107 L. Ed. 2d 480 (SCALIA, J., dissenting), and because these cases are, by their own terms, inapplicable to these facts.
(Emphasis added.) The Court did, however, include some language that suggests it might find Rule 68 offers of judgment appropriate when made to Rule 23 named plaintiffs. First, it pointed out that settling a collective action early does not deprive additional claimants of any rights to bring lawsuits:
While settlement may have the collateral effect of foreclosing unjoined claimants from having their rights vindicated in respondent’s suit, such putative plaintiffs remain free to vindicate their rights in their own suits.
Second, Justice Thomas responded to Symczyk’s argument that "picking off" a named plaintiff in a collective action would frustrate the efficiency justifications for a collective action, as they had been articulated for class actions in Depsoit Guaranty National Bank v. Roper. In general, he rejected the argument on its logic, but he also include a footnote that implied Roper may no longer be good law:
Because Roper is distinguishable on the facts, we need not consider its continuing validity in light of our subsequent decision in Lewis v. Continental Bank Corp., 494 U. S. 472, 110 S. Ct. 1249, 108 L. Ed. 2d 400 (1990).
That footnote sounds like an invitation to revisit the issue. Based on Justice Kagan’s spirited dissent, it will likely be another contentious debate.