Russell v. United States, 661 F.3d 1371

Background

Russell filed a class action against the United States for improper interest charges on DPP balances issued by the Exchange.
The district court dismissed the individual claim as moot after the government paid Russell $149.78 while class certification was pending.
Audits in Feb. 2010 and May 2010 adjusted tens of thousands of accounts, yielding refunds to many class members.
Russell appealed and challenged the mootness ruling, as well as the district court’s handling of the class-certification issue and fees.
The court vacated the dismissal and remanded for further proceedings in light of Pitts and subsequent refunds, with Rule 60(b) issues addressed separately.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was the individual claim properly moot by the $149.78 payment?	Russell should not be mooted; the payment might not fully compensate him, including fees.	The payment exceeded Russell's claimed amount and sufficed to moot the individual claim.	Yes, the individual claim was moot; the payment exceeded what Russell claimed and satisfied the underlying relief.
Should the class claim be adjudicated when the class representative’s claim is moot?	A government offer to a representative should not moot the class before class certification; procedures should allow certification determination.	The government’s refunds to many members and lack of unilateral mooting of the class should not bar dismissal if the representative’s claim is moot.	Remanded for further consideration in light of Pitts and the later refunds to determine if the class relief has been fully granted.
Does Pitts control whether a named plaintiff may pursue class certification after a partial or full settlement offer?	Pitts supports continuing to pursue class certification despite partial/full offers to named plaintiffs.	Pitts may limit mootness analysis and supports dismissal where the class would not be fully vindicated.	Remanded; Pitts applies to determine if the entire class has received relief.
Whether Rule 60(b)(2) relief was properly denied for newly discovered evidence of underpayment.	New accounting analysis showed more due; could warrant relief for new evidence.	Delay and diligence undermine the claim of new evidence; earlier analysis could have uncovered it.	upheld the denial of Rule 60(b) relief; no due diligence showing of new evidence.

Key Cases Cited

Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598 (Supreme Court 2001) (prevailing-party concept for EAJA; not a party where relief is not judicially granted)
Lewis v. Continental Bank Corp., 494 U.S. 472 (Supreme Court 1990) (attorney's fees insufficient to create Article III case when merits resolved)
Diamond v. Charles, 476 U.S. 54 (Supreme Court 1986) (legacy of mootness when injury is only a byproduct of suit)
United States v. Anchor Coal Co., 279 U.S. 812 (Supreme Court 1929) (proper disposition of moot cases)
Holstein v. City of Chicago, 29 F.3d 1145 (7th Cir. 1994) (payment of damages may moot a case; spurning settlement does not prevent mootness)
Zeidman v. McDermott & Co., 651 F.2d 1030 (5th Cir. 1981) (analysis of class-action mootness and settlements)
Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011) (unaccepted offer of judgment does not moot class action before certification)
Chattler v. United States, 632 F.3d 1324 (Fed. Cir. 2011) (applies regional circuit law to procedural issues under 28 U.S.C. § 1346(a)(2))