Lary v. Rexall Sundown, Inc.
686 F. App'x 63
| 2d Cir. | 2017Background
- Plaintiff John H. Lary, Jr. sued Rexall-related defendants and CCG under the TCPA alleging unsolicited calls/texts and sought class certification.
- CCG served a Rule 68 offer of judgment to Lary on June 26, 2014, before class certification was decided.
- Lary moved for class certification on July 9, 2014; CCG moved to dismiss on July 21, 2014 arguing the Rule 68 offer mooted his claims and divested the court of jurisdiction.
- The district court granted CCG’s motion, holding the unaccepted Rule 68 offer mooted Lary’s claims, entered judgment in Lary’s favor on his individual claims, and denied class certification.
- On appeal the Second Circuit considered intervening Supreme Court and Second Circuit decisions bearing on whether an unaccepted Rule 68 offer renders a case moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an unaccepted Rule 68 offer of full relief moots the plaintiff's claim | Lary: Offer did not deprive the court of jurisdiction; case should proceed and class claims remain viable | CCG: Offer provided all relief; plaintiff’s claim is moot and the court lacks Article III jurisdiction | The Second Circuit held the offer did not moot the claim under controlling precedent (vacating dismissal) |
| Whether a district court may enter judgment based on a pre-certification Rule 68 offer | Lary: Judgment based on an unaccepted offer was improper | CCG: District court acted properly in treating offer as ending controversy | Court held entry of judgment was erroneous because unaccepted offer is a legal nullity per Supreme Court authority |
| Effect on class certification when individual claim is purportedly mooted by an offer | Lary: Class claims should not be dismissed; offer cannot defeat class action before certification | CCG: Offer eliminates plaintiff’s claim so he cannot represent the class | Court vacated denial of class certification as it rested on the erroneous mootness conclusion |
Key Cases Cited
- Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) (an unaccepted Rule 68 offer does not moot a plaintiff's case because it is a legal nullity)
- Radha Geissmann, M.D., P.C. v. ZocDoc, Inc., 850 F.3d 507 (2d Cir. 2017) (applies Campbell-Ewald to vacate dismissal based on an unaccepted Rule 68 offer)
- Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) (discussed in Campbell-Ewald regarding settlement-offer jurisprudence)