U.S. Supreme Court rules that unaccepted offer of settlement does not moot class action case

Posted on: January 21st, 2016 by Keith Dubanevich
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US Supreme CourtYesterday the U.S. Supreme Court ruled that an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case.  Campbell-Ewald Co. v Gomez, 577 U.S. ___ (January 20, 2016).  As a consequence the District Court retained jurisdiction to adjudicate Gomez’s complaint. 

In a 5-4 decision written by Justice Ginsburg, the Court ruled that Article III’s “cases” and “controversies” limitation requires that “an actual controversy . . . be extant at all stages of review, not merely at the time the complaint is filed,” but a case does not become moot as “long as the parties have a concrete interest, however small,” in the litigation’s outcome.  The Court ruled that Gomez’s complaint was not effaced by Campbell’s unaccepted offer to satisfy his individual claim.

Under basic principles of contract law, Campbell’s settlement bid and Rule 68 offer of judgment, once rejected, had no continuing efficacy.  With no settlement offer operative, the parties remained adverse; both retained the same stake in the litigation they had at the outset.  Neither Federal Rule of Civil Procedure 68 nor the 19th-century railroad tax cases support the argument that an unaccepted settlement offer can moot a complaint.