Collector - July 2017 - 25

D

o not abandon the offer of judgment just yet; it may still have a place in the defense
attorney's quiver after all. Those in the credit and collection industry are all too
familiar with the U.S. Supreme Court's January 2016 ruling in Campbell-Ewald v.
Gomez that an unaccepted offer of full relief to individual litigants cannot be used to "pick
off" class representatives.
The court's decision, however, left an unanswered question with which district courts
continue to struggle. That hypothetical stems from language in the court's opinion that "[w]e
need not, and do not, now decide whether the result would be different if a defendant deposits
the full amount of the plaintiff 's individual claim in an account payable to the plaintiff, and
the court then enters judgment for the plaintiff in that account. That question is appropriately
reserved for a case in which it is not hypothetical."
Since the court's ruling in Campbell-Ewald, various appellate courts have declined to end
class actions where defendants directly deposited the full claim amount into an account
payable to the lead plaintiff.
For example, after Campbell-Ewald was remanded, the defendant attempted to deliver
a certified check to the plaintiff 's counsel while simultaneously moving to pay such funds
into court. The trial court rejected this strategy and refused to dismiss the case on mootness
grounds.
This view was adopted by the Ninth Circuit in Chen v. Allstate Insurance Co., where the court
held that a plaintiff in a purported class action "must be accorded a fair opportunity to show
that certification is warranted" before a mootness claim is even entertained on the plaintiff 's
individual claim based on an offer of complete relief.
However, over the past several months, the Second Circuit has been at the forefront of
interpreting the Campbell-Ewald hypothetical as it pertains to offers of judgment. Recent
developments out of the Second Circuit show that it may be taking a slightly different approach
from other circuits regarding the impact of an offer of judgment that includes the deposit of
funds directly with the court.

ANALYZING THE HYPOTHETICAL
On Feb. 15, 2017, in Leyse v. Lifetime Entertainment Services, LLC, the Second Circuit
upheld entry of judgment in a putative class action alleging violations under the Telephone
Consumer Protection Act.
After Leyse's motion for class certification was denied, Lifetime made a Rule 68 offer of
judgment and deposited into court the full amount of damages, including costs, recoverable
by Leyse under the TCPA. Despite Leyse's rejection of the offer, the district court granted
Lifetime's motion to enter judgment. Leyse appealed, arguing that Campbell-Ewald expressly
prohibits such a dismissal.
The Second Circuit affirmed, holding that Campbell-Ewald did not extend to cases where a
defendant "deposits the full amount of the plaintiff 's individual claim in an account payable
to the plaintiff, and the court then enters judgment for the plaintiff in that amount." The court
reasoned that Leyse presented the precise hypothetical scenario discussed in Campbell-Ewald
and did not otherwise overrule controlling Second Circuit precedent.
It should be noted that Leyse is distinct from Chen in that the plaintiff 's motion for class
certification already had been denied. The Second Circuit went so far as to state that "[w]hile
an unaccepted Fed. R. Civ. P. 68 offer for complete relief does not moot a case-that is, it
does not strip the district court of jurisdiction over the case-such an offer, if rejected, may
nonetheless permit a court to enter a judgment in the plaintiff 's favor."
Just a few weeks later on March 9, 2017, the Second Circuit issued another opinion
addressing the applicability of the Campbell-Ewald hypothetical. In Geismann v. ZocDoc Inc.,
the Second Circuit vacated and remanded an order dismissing a putative TCPA class action
based on an unaccepted Rule 68 offer of judgment.

COLLECTOR 07.17

25



Table of Contents for the Digital Edition of Collector - July 2017

Upfront
Industry News
Best Practices
FYI
Collection Tips
What’s in Your Policy?
State Licensing Laws: What’s New and Trending
The Question of Rule 68
Calendar
Honor Roll
Healthcare Data at Risk
ACA Members Meet in D.C. to Advocate on Behalf of Industry
Fixing What’s Broken
Credit Listening Considerations
U.S. Supreme Court Hands Collection Industry a Win in ACA-Supported Case
Compliance
ACA SearchPoint
Last Word
Collector - July 2017 - Cover1
Collector - July 2017 - Cover2
Collector - July 2017 - 1
Collector - July 2017 - 2
Collector - July 2017 - Upfront
Collector - July 2017 - Industry News
Collector - July 2017 - 5
Collector - July 2017 - 6
Collector - July 2017 - 7
Collector - July 2017 - Best Practices
Collector - July 2017 - 9
Collector - July 2017 - FYI
Collector - July 2017 - 11
Collector - July 2017 - Collection Tips
Collector - July 2017 - 13
Collector - July 2017 - What’s in Your Policy?
Collector - July 2017 - 15
Collector - July 2017 - 16
Collector - July 2017 - 17
Collector - July 2017 - 18
Collector - July 2017 - 19
Collector - July 2017 - State Licensing Laws: What’s New and Trending
Collector - July 2017 - 21
Collector - July 2017 - 22
Collector - July 2017 - 23
Collector - July 2017 - The Question of Rule 68
Collector - July 2017 - 25
Collector - July 2017 - 26
Collector - July 2017 - 27
Collector - July 2017 - Calendar
Collector - July 2017 - Honor Roll
Collector - July 2017 - Healthcare Data at Risk
Collector - July 2017 - 31
Collector - July 2017 - ACA Members Meet in D.C. to Advocate on Behalf of Industry
Collector - July 2017 - 33
Collector - July 2017 - 34
Collector - July 2017 - 35
Collector - July 2017 - Fixing What’s Broken
Collector - July 2017 - 37
Collector - July 2017 - 38
Collector - July 2017 - 39
Collector - July 2017 - Credit Listening Considerations
Collector - July 2017 - 41
Collector - July 2017 - U.S. Supreme Court Hands Collection Industry a Win in ACA-Supported Case
Collector - July 2017 - 43
Collector - July 2017 - Compliance
Collector - July 2017 - 45
Collector - July 2017 - ACA SearchPoint
Collector - July 2017 - 47
Collector - July 2017 - Last Word
Collector - July 2017 - Cover3
Collector - July 2017 - Cover4
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