David Hooks v. Landmark Industries, Inc.
797 F.3d 309
| 5th Cir. | 2015Background
- Plaintiff David Hooks sued Landmark Industries under the Electronic Funds Transfer Act (EFTA) after being charged a $2.95 ATM "terminal fee" without required notice; he sought statutory damages and moved for class certification.
- Landmark served a Rule 68 offer of judgment to Hooks for $1,000 (the statutory maximum for his individual claim) plus costs and "reasonable and necessary attorney fees, through the date of acceptance of the offer." Hooks did not accept.
- Hooks filed for class certification (deadline extended); the district court initially certified the class and denied Landmark’s first jurisdictional dismissal. Landmark later moved again, arguing Hooks’s individual claim and the class were mooted by the unaccepted Rule 68 offer.
- The district court granted the later motion, dismissing for lack of subject-matter jurisdiction on mootness grounds; Hooks appealed.
- The Fifth Circuit considered (1) whether a Rule 68 offer that includes only pre-offer fees is a "complete" offer and (2) whether an unaccepted Rule 68 offer can moot a named plaintiff’s individual claim and thereby moot class claims.
- The court reversed: it held an unaccepted Rule 68 offer is a legal nullity that cannot moot the named plaintiff’s claim in a putative class action; accordingly the class claims remained live.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an unaccepted Rule 68 offer can moot the named plaintiff’s individual claim in a putative class action | Hooks: an unaccepted offer does not extinguish his personal stake; Rule 68 unaccepted offers are withdrawn and thus null | Landmark: a complete Rule 68 offer satisfying the individual claim renders the claim moot even if not accepted | Held: An unaccepted Rule 68 offer is a legal nullity and cannot moot the named plaintiff’s claim in a putative class action |
| Whether an unaccepted Rule 68 offer moots the class claims when individual claim is (arguably) satisfied | Hooks: class claims must survive because individual claim not mooted by unaccepted offer | Landmark: if the individual claim is mooted, the class action is moot absent prior certification | Held: Because the individual claim remains live, class claims are not mooted |
| Whether an offer that limits attorney’s fees to those "then accrued" is a "complete" offer of full relief | Hooks: limiting fees to pre-offer fees may be incomplete because post-offer fees (e.g., to litigate fee reasonableness) could leave plaintiff uncompensated | Landmark: Rule 68 requires only costs "then accrued," so offer can be complete without post-offer fees | Held: Court did not decide; assumed arguendo the offer could be complete but ruled unaccepted offers still cannot moot the claim |
| Whether Rule 68 or common-law contract principles treat unaccepted offers as withdrawn/null | Hooks: unaccepted offers are withdrawn and have no operative effect | Landmark: attempted to treat its unaccepted offer as dispositive of the claim | Held: The court agreed with the view that unaccepted offers are withdrawn under Rule 68 and are legal nullities for mootness purposes |
Key Cases Cited
- Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) (Supreme Court opinion addressing related mootness question; majority assumed individual claim mooted but did not decide; dissent argued unaccepted offers cannot moot claims)
- Payne v. Progressive Fin. Servs., Inc., 748 F.3d 605 (5th Cir. 2014) (incomplete Rule 68 offers do not moot plaintiff’s claims)
- Diaz v. First Am. Home Buyers Prot. Corp., 732 F.3d 948 (9th Cir. 2013) (court held unaccepted Rule 68 offers do not moot individual claims; persuasive rationale cited)
- Stein v. Buccaneers Ltd. P’ship, 772 F.3d 698 (11th Cir. 2014) (held unaccepted Rule 68 offers cannot moot individual claims)
- McCauley v. Trans Union, L.L.C., 402 F.3d 340 (2d Cir. 2005) (held unaccepted Rule 68 offer cannot moot claim)
- Krim v. pcOrder.com, Inc., 402 F.3d 489 (5th Cir. 2005) (discussed Rule 68 offers in class context; did not decide mootness-by-offer issue)
- W.T. Grant Co. v. United States, 345 U.S. 629 (1953) (warning against defendant-induced mootness and recurrence of violations)