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In the first federal appellate decision addressing Rule 68 offers of judgment for TCPA claims under the Federal Rule of Civil Procedure since the Supreme Court issued its decision in Campbell-Ewald v. Gomez, the Ninth Circuit has evaluated the potential avenues for defendants to moot a case by making a Rule 68 offer.  In Chen v. Allstate Insurance Co., No. 13-16816, 2016 WL 1425869 (9th Cir. Apr. 12, 2016), the court held that a plaintiff’s individual claims are not moot until the plaintiff actually receives relief, and merely depositing the offered funds into an escrow account for the plaintiff will not satisfy this standard.

The plaintiff’s claims stemmed from alleged violations of the TCPA when Allstate made automated calls to the plaintiff’s phone.  Before any motion for class certification had been made, Allstate made an offer of judgment to the plaintiff under Rule 68.  The funds, totaling the plaintiff’s claims plus reasonable attorneys’ fees and costs, were deposited in an escrow account payable to the plaintiff pending entry of a final district court order that directed the escrow agent to pay the tendered funds, required Allstate to stop contacting the plaintiff, and dismissed the action as moot.  The plaintiff did not accept the offer, and Allstate decided to leave the offer open until the plaintiff accepted.

Allstate’s efforts to tender the funds to the plaintiff were not enough.  The court required that the plaintiff actually receive complete relief – merely tendering or offering relief was insufficient.  As the money was only available in an escrow account pending a court order, the offer had no force, just like any other unaccepted settlement offer.

To satisfy the “actually receive” standard, the court referenced a set of railroad cases from the end of the 19th Century that were cited in Campbell-Ewald.  In the railroad cases, the amounts at issue were “unconditionally paid and satisfied.”  The court emphasized that a deposit of funds into an account could be an unconditional payment so that the plaintiff actually receives the funds if the “defendant unconditionally relinquish[es] its entire interest in the deposited funds.”

The plaintiff in Chen had not been unconditionally paid and, therefore, his individual and class claims had not been satisfied or rendered moot.

We will continue to follow developments in TCPA litigation, as more courts hear cases related to Rule 68 offers.  You can find a recent TCPA case list here.