Diaz v. First American Home Buyers Protection Corp., 732 F.3d 948

Plaintiff Emily Diaz sued First American Home Buyers Protection Corp. in a putative nationwide class action alleging breach of warranty-related duties and related state-law claims (misrepresentation, concealment, unfair competition, breach of contract, breach of implied covenant of good faith and fair dealing).
The district court dismissed several claims under Rule 12(b)(6) and later denied class certification; only Diaz’s individual claims for misrepresentation, breach of contract, and breach of the implied covenant remained.
First American served a Rule 68 offer of judgment to Diaz for $7,019.32 (plus taxable costs) as full resolution of her individual claims; Diaz did not accept and the offer stated it would be void if not accepted.
First American moved to dismiss for lack of subject-matter jurisdiction, arguing Diaz’s refusal to accept a Rule 68 offer that fully satisfied her demand rendered her individual claims moot.
The district court agreed and dismissed Diaz’s remaining individual claims under Rule 12(b)(1), concluding the unaccepted Rule 68 offer mooted the case; Diaz appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an unaccepted Rule 68 offer that would fully satisfy a plaintiff’s claim renders the claim moot	An unaccepted Rule 68 offer does not moot the claim; an unaccepted offer is a legal nullity and the plaintiff retains a live stake	An unaccepted Rule 68 offer that would fully satisfy the plaintiff’s possible recovery removes any live controversy and thus moots the claim	The Ninth Circuit holds an unaccepted Rule 68 offer that would fully satisfy a claim does not render the claim moot; vacated dismissal and remanded

McCauley v. Trans Union, L.L.C., 402 F.3d 340 (2d Cir. 2005) (rejecting mootness from an unaccepted offer and endorsing entering judgment only with defendant consent)
Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) (Supreme Court declined to decide the split; Justice Kagan dissent argued unaccepted offers cannot moot a case)
Rand v. Monsanto Co., 926 F.2d 596 (7th Cir. 1991) (holding an unaccepted offer of full relief moots the claim)
O’Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567 (6th Cir. 2009) (holding full-offer moots the case but recommending entry of judgment consistent with the offer rather than dismissal)
Thorogood v. Sears, Roebuck & Co., 595 F.3d 750 (7th Cir. 2010) (applied the mootness-by-offer rule where offer exceeded amount in controversy)