Amicus Curiae Brief — Campbell-Ewald Co. v. Gomez, 135 S. Ct. 2311 (2015) (No. 14-857)

Supreme Court, U.S.

FILED

No. 14-857 MS 31 a0

In THE

Supreme Court of the Anited States

CAMPBELL-EWALD COMPANY,

Petitioner,

V.

JOSE GOMEZ,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE AMERICAN FEDERATION OF

LABOR AND CONGRESS OF INDUSTRIAL

ORGANIZATIONS AS AMICUS CURIAE

IN SUPPORT OF RESPONDENT

LYNN K. RHINEHART

HAROLD C. BECKER

JAMES B. COPPESS

MATTHEW J. GINSBURG

Counsel of Record

815 Sixteenth Street, NW

Washington, DC 20006

(202) 637-5397

Peake DeLancey Printers, LLC - (301) 341-4600 - Cheverly MD

TABLE OF CONTENTS

TABLE OF AUTHORITIESG..................cccceseee

INTEREST OF AMICUS CURIAE................-

I. ATENDER OF COMPLETE RELIEF

CAN MOOT A PLAINTIFF'S CASE,

BUT NEITHER CAMPBELL-EWALD’S

RULE 68 OFFER OF JUDGMENT

NOR ITS SETTLEMENT OFFER

I

Il. FOR MOOTNESS PURPOSES, AN

UNACCEPTED RULE 68 OFFER OF

JUDGMENT OR UNACCEPTED

SETTLEMENT OFFER LEAVES

THE PLAINTIFF IN THE SAME

POSITION AS BEFORE THE

OFFER WAS MADE. ............c:ccsecsesees

Ill. ADEFENDANT WHO WISHES TO

MOOT A PLAINTIFF'S CLAIM CAN

EITHER UNCONDITIONALLY

TENDER COMPLETE RELIEF OR

CONSENT TO A DEFAULT

ee adsentniciedinastinnitinsicennncenmenee

aE sasciasvninisennteniiconsanisiisinnsinntaesissinmnesibeeiein

6

13

16

18

ii

TABLE OF AUTHORITIES

CASES: Page

Arizona v. California, 530 U.S. 392 (2000) .. 17

Barron Chiropractic & Rehabilitation, P.C.

v. Norfolk & Dedham Group,

17 N.E.3d 1056 (Mass. 2014) ...........0.ccee i)

California v. San Pablo & Tulare R.R. Co.,

ope ff eee 9, 11, 12, 13

Chathas v. Local 134 IBEW,

233 F.3d 508 (7th Cir. 2000) ..............ceceees 17

City of Erie v. Pap’s A.M..,

att Sf enero 13

Colby v. Reed, 99 U.S. 560 (1879) .......ccccceeeees 6, 9

Collins v. Kingsberry Homes Corp.,

243 F. Supp. 741 (N.D. Ala. 1963) .............. 7

Delta Air Lines v. August,

a ey ET cinditstnittaiccnicecisictccseneseseias 14, 15

Diaz v. First Am. Home Buyers Prot. Corp.,

732 F.3d 948 (9th Cir. 2013) .0...... eee 3, 16

Genesis Healthcare Corp. v. Symczyk,

ey le EE iditksnsiniscciinistnicsensdcessens l

Gomez v. Campbell-Ewald Co.,

768 F.3d 871 (9th Cir. 2014) .0..... cece 2, 3, 16

Gomez v. Campbell-Ewald Co.,

805 F. Supp. 2d 923 (C.D. Cal. 2011).......... 2,3

Knox v. Serv. Employees Int'l Union,

bf Re eg 13, 16

iii

TABLE OF AUTHORITIES—C ontinued

Page

McCauley v. Trans Union, LLC,

402 F.3d 340 (2d Cir. 200B)............csccceccseees 17

Mondello v. Hanover Trust Co.,

148 N.E. 136 (Mass. 1925) ............cccccsssseees 7, 11

Peugh v. Davis, 113 U.S. 542 (1885) .............. 7, 8,9

Poteete v. Capital Engineering, Inc.,

185 F.3d 804 (7th Cir. 1999) .0.0.......ccceceeees 8, 11

Riley-Stabler Constr. Co. v. Westinghouse

Electric Corp., 396 F.2d 274 (5th Cir. 1968) 10

Rothe Development Corp. v. Department

of Defense, 413 F.3d 1327 (Fed. Cir. 2005) 10

STATUTES AND RULES:

Telephone Consumer Protection Act,

47 U.S.C. § 227

Be Ces 0 RID ccricccttcsesicsceescesscens 2

IEE SaaS Tene OA fm)

Fep. R. Civ. P.:

io 2, 16

a al 18

STITT chectiensinesiaheiiehciabeeainaninaelnidilanhidiniaiiadinnien Y

ESTER IR eereatere nae Ceres SEN ae RE roe passim

iv

TABLE OF AUTHORITIES—Continued

Page

MISCELLANEOUS:

BLACk’s Law Dictionary (6th ed. 1990)............ 6, 7

CORBIN ON CONTRACTS (Joseph M. Perillo ed.,

ESRC Re en cea aD 8

RESTATEMENT (SECOND) OF JUDGMENTS (1982).. 17

SAMUEL WILLISTON, A TREATISE ON THE LAW

OF CONTRACTS (4th ed. 2003) .0........cccccceseees 6, 8, 10

12 CHARLES ALAN WRIGHT & ARTHUR R. MILLER,

FEDERAL PRACTICE AND PROCEDURE § 2991

i i)

l

BRIEF OF THE AMERICAN FEDERATION OF

LABOR AND CONGRESS OF INDUSTRIAL

ORGANIZATIONS AS AMICUS CURIAE

IN SUPPORT OF RESPONDENT

INTEREST OF AMICUS CURIAE

The American Federation of Labor and Congress

of Industrial Organizations (AFL-CIO) is a federation

of 56 national and international labor organizations

with a total membership of approximately 12 million

working men and women.' The AFL-CIO submits this

brief to address the first question presented by this

case: “Whether a case becomes moot, and thus be-

yond the judicial power of Article III, when the plain-

tiff receives an offer of complete relief on his claim.”

Pet. Br. i. That is the same question that was pre-

sented, but not decided, in Genesis Healthcare Corp.

v. Symczyk, 133 S. Ct. 1523 (2013), which involved a

Rule 68 offer of judgment made in the context of a suit

for unpaid overtime under the Fair Labor Standards

Act (FLSA). Although this case involves’ a federal

statute regarding unsolicited telephone calls and text

messages, rather than unpaid wages and overtime, the

mootness question presented is the same. As we ex-

plained in our brief in Genesis Healthcare, the AFL-

CIO has a strong interest in the correct understanding

of Article III's case and controversy requirement as it

bears on effective enforcement of basic workplace

' Counsel for the petitioner and counsel for the respondent

have filed letters with the Court consenting to the filing of am-

icus briefs on either side. No counsel for a party authored this

brief amicus curiae in whole or in part, and no person or entity,

other than the amicus, made a monetary contribution to the

preparation or submission of this brief.

2

rights because Rule 68 offers of judgment are com-

monplace in suits brought under the FLSA and other

labor and employment laws.

STATEMENT

Campbell-Ewald Company, which is engaged in the

business of providing marketing consulting services,

entered inte a contract with the U.S. Navy to develop

and implement a multimedia recruitment campaign

that included sending text messages to the cell phones

of targeted individuals between the ages of 18 and 24

who consented to receive such messages. Gomez v.

Campbell-Ewald Co., 768 F.3d 871, 873 (9th Cir. 2014).

Acting through a third-party vendor, Campbell-Ewald

sent one such Navy recruitment text message to Jose

Gomez. Ibid. Gomez, who was 40 years old at the

time, was not within the targeted age range of the

Navy’s recruitment campaign and did not consent to

receive text messages from the Navy. I/d. at 874.

Gomez filed this class-action lawsuit against Camp-

bell-Ewald under a provision of the Telephone Con-

sumer Protection Act of 1991 (TCPA), 47 U.S.C. § 227,

which makes certain text messages unlawful absent

“the prior express consent of the called party.” 47

U.S.C. § 227(b)(1)(B).

Campbell-Ewald extended a Rule 68 offer of judg-

ment in the amount of $1,503 per violation plus costs

to Gomez, as well as a traditional settlement offer for

the same amount. Gomez v. Campbell-Ewald Co., 805

F. Supp. 2d 923, 926 (C.D. Cal. 2011). Gomez did not

accept either offer and, by its express terms, the Rule

68 offer of judgment expired after fourteen days.

Gomez, 768 F.3d at 874. Campbell-Ewald then moved

to dismiss the case under Rule 12(b)(1), contending

3

that the Rule 68 offer of judgment and settlement offer

for complete relief mooted Gomez's case. [bid.

Focusing largely on the class action rather than

Gomez's individual claim, the district court nevertheless

held that neither the unaccepted Rule 68 offer nor the

unaccepted settlement offer mooted Gomez's claim.

Gomez, 805 F. Supp. 2d at 931. Campbell-Ewald ap-

pealed and the court of appeals reached the same con-

clusion, relying on recent circuit precedent to hold that

“an unaccepted Rule 68 offer of judgment that would

fully satisfy a plaintiff's claim is insufficient to render

the claim moot.” Gomez, 768 F.3d at 875 (quoting Diaz

v. First Am. Home Buyers Prot. Corp., 732 F.3d 948,

950 (9th Cir. 2013)). Defendant then filed a petition for

a writ of certiorari, which this Court granted.

SUMMARY OF ARGUMENT

A defendant's tender of complete relief to a plain-

tiff can moot a plaintiff's claim. A tender requires the

defendant to actually provide money to the plaintiff

or deposit money with the court in the plaintiff's name

without condition or stipulation. A tender is thus an

irrevocable transfer of title to funds from the defen-

dant to the plaintiff made without regard to the out-

come of the lawsuit and without requiring any

reciprocal action by the plaintiff. If the amount of the

tender is sufficient to satisfy any claim the plaintiff

could make for relief, the plaintiff is left without any

concrete interest in the litigation and the case is moot.

In contrast, a defendant’s offer of complete relief —

whether made pursuant to Rule 68 or as a traditional

settlement offer — has no bearing on mootness if it is

not accepted by the plaintiff. An unaccepted offer is

4

a nullity, leaving the plaintiff in the same position as

before the offer was made. Nothing in Rule 68

changes this basic principle of contract law. To the

contrary, Rule 68 states on its face that an offer of

judgment that is not accepted within 14 days is con-

sidered withdrawn and that evidence of an unac-

cepted offer is inadmissible except for determining

costs. The only effect of an unaccepted offer made

pursuant to Rule 68, then, is to shift responsibility for

post-offer costs from the defendant to the plaintiff if

the plaintiff prevails in her claim but recovers less

than the unaccepted offer.

Campbell-Ewald repeatedly claims in its brief that

both its Rule 68 offer of judgment and its settlement

offer constituted tenders, but it is clear from the facts

presented that this is not correct. Campbell-Ewald

never provided Gomez with the money it offered or

deposited that money with the court in Gomez's name.

And, Campbell-Ewald conditioned both of its offers

upon Gomez's acceptance of the money offered in full

satisfaction of his claim. Neither offer, therefore, met

the basic elements of a tender.

Campbell-Ewald could have sought to moot

Gomez's claim by actually tendering him the money

it offered him or, in the alternative, by consenting to

the district court entering a default judgment against

the company. But because Campbell-Ewald did not

take either of these steps, and because Gomez de-

clined to accept both Campbell-Ewald’s Rule 68 offer

of judgment and settlement offer, this case is not

moot.

5

ARGUMENT

As we explain in detail below, the answer to the

first question presented by this case — “Whether a case

becomes moot, and thus beyond the judicial power of

Article ITI, when the plaintiff receives an offer of com-

plete relief on his claim{,]” Pet. Br. i—is “no.” An “offer

of complete relief,” ibid. (emphasis added), made pur-

suant to Rule 68 of the Federal Rules of Civil Proce-

dure or simply as part of a routine attempt to settle a

case, does not moot a plaintiff's claim unless it is ac-

cepted. For Article II] purposes, an unaccepted offer

changes nothing with regard to the plaintiff's interest

in the case; the same live controversy that existed be-

fore the offer was made persists after the offer is de-

clined or withdrawn.

In contrast, a tender of complete relief — which in-

volves the defendant's unconditional proffer of money

to the plaintiff or deposit of that money with the court

—can moot the plaintiff's case. Campbell-Ewald char-

acterizes the Rule 68 offer of judgment and the settle-

ment offer it made to Gomez as “tenders.” But the

facts of this case make clear that the company’s offers

did not involve “tenders” of the sort that can moot a

claim because the offers did not include the proffer of

money and were not unconditional. Campbell-

Ewald’s offers, therefore, were not tenders of com-

plete relief and, consequently, Gomez's case is not

moot.

6

I. A TENDER OF COMPLETE RELIEF CAN

MOOT A PLAINTIFF’S CASE, BUT NEITHER

CAMPBELL-EWALD’S RULE 68 OFFER OF

JUDGMENT NOR ITS SETTLEMENT OFFER

WAS A TENDER.

Campbell-Ewald repeatedly characterizes its Rule

68 offer of judgment and settlement offer as “tenders,”

rather than unaccepted offers, and argues that they

mooted Gomez's claim. As we explain below, Camp-

bell-Ewald is correct that a tender for complete relief,

unlike an unaccepted Rule 68 offer or unaccepted set-

tlement offer, could render a plaintiff's case moot. But

Campbell-Ewald did not tender any relief to Gomez in

this case. As a result, Campbell-Ewald’s arguments

regarding tender simply do not apply here.

A. A tender is “[t]he act by which one produces

and offers to a person holding a claim or demand

against him the amount of money which he considers

and admits to be due, in satisfaction of such claim or

demand, without any stipulation or condition.”

BLACK’S LAW DicTIONARY 1467 (6th ed. 1990). See also

28 SAMUEL WILLISTON, A TREATISE ON THE LAW OF CON-

TRACTS § 72:27 (4th ed. 2003) (“[T]ender’ is an uncon-

ditional offer of payment consisting of the actual

production of a sum not less than the amount due on

a particular obligation{.]”). “[T}]he principle of the plea

of tender is that the defendant has always been ready

to perform the contract, and that he did perform it as

far as he was able by tendering the requisite money|.}”

Colby v. Reed, 99 U.S. 560, 561 (1879). The two es-

sential elements of a tender, therefore, are “[t}he ac-

tual proffer of money, as distinguished from [the]

mere proposal or proposition to proffer it,” and that

7

the proffer be unconditional, “without any stipulation

or condition.” BLAck’s LAW Dictionary 1467.

As to the first element, it is black-letter law that

“[tlo constitute a valid tender the money must be ac-

tually produced and offered to the person who is en-

titled to receive it.” Mondello v. Hanover Trust Co.,

148 N.E. 136, 137 (Mass. 1925). See also ibid. (col-

lecting state supreme court cases holding same). “A

mere offer to pay or a statement that the party has the

money and is ready and willing to pay, without actual

production of it, is not sufficient to constitute a valid

tender.” Ibid. “[P}roduction of [the] subject matter

of [the] tender” is, therefore, an “essential character-

istic[] of tender.” BLack’s Law Dictionary 1467 (citing

Collins v. Kingsberry Homes Corp., 243 F. Supp. 74),

744 (N.D. Ala. 1963)).

In Peugh v. Davis, 113 U.S. 542 (1885), this Court

confirmed the requirement that, to constitute a ten-

der, a defendant must “actually produce[] and offer{}”

the money owed “to the person who is entitled to re-

ceive it.” Mondello, 148 N.E. at 137. Peugh involved

a dispute in which Peugh, who had conveyed the use

of certain lots of land to Davis in exchange for a loan,

sought to have the interest on the loan set aside on

the ground that Davis had refused an offer of repay-

ment. In rejecting Peugh’s request to set aside the in-

terest, the Court explained,

“The short answer to all this is, that Mr. Peugh

owed the money he had borrowed from Davis.

Nothing hindered during all this time that he

should pay this money; and if, as he alleges, Davis

denied his right to do so, then he should have made

a regular and lawful tender of the amount due.

8

“A lame attempt is made to show that he did make

this tender. Some evidence is offered that he told

Davis he was ready to account with him and pay

what was due, and that he had the money with him.

“But in order to make a tender that would have

caused the interest to cease, he should have as-

certained for himself the sum due, or have fixed

upon asum which was sufficient, and then made a

formal tender by counting out or offering that sum

to Davis distinctly and directly as a tender.” Peugh,

113 U.S. at 544-45.

What is clear from Peugh, then, is that it is not a

tender when a defendant “t[ells) [the plaintiff] he [i]s

ready to account with him and pay what [i]s due, and

that he ha[s] the money with him.” /bid. That isa

mere offer. To constitute a tender, the defendant must

“count[] out or offer{] that sum to [the plaintiff] dis-

tinctly and directly.” [bid.

The second element of a tender is that the “tender

of money .. . must be unconditional.” 13 CorBIN ON Con-

TRACTS § 67.7(6) (Joseph M. Perillo ed., rev. ed. 2003).

For example, “a condition that a payment shall be taken

in full discharge or as a compromise of the debtor's ob-

ligation . . . invalidates the tender.” 28 WILLISTON, A TREA-

TISE ON THE LAW OF CONTRACTS § 72.39. To constitute a

tender, the defendant must provide payment to the

plaintiff unilaterally, without stipulations, conditions, or

demands for reciprocal action from the plaintiff in ex-

change for the payment. At bottom, then, a tender in-

volves “simply writing [the plaintiff] a check, with no

strings attached.” Poteete v. Capital Engineering, Inc.,

185 F.3d 804, 807 (7th Cir. 1999). Thus, where a defen-

dant “condition{s] [its] offer to pay [the plaintiff] on his

9

surrendering his other claims,” “|t|hat is . . . an offer of

settlement,” not a tender. /bid.

A tender, properly made, may render the plaintiff's

claim moot. However, because a tender is by definition

unconditional, a “tender cause[s] the [plaintiff's] in-

terest to cease” only when it is equivalent to the entire

“amount due” to the plaintiff. Peugh, 113 U.S. at 544-45.

In that regard, it is important to emphasize that, in the

event the tender is “made after [the] action [is] brought,”

complete relief of the sort that would moot a plaintiff's

claim “must include the costs to that time as well as the

debt.” Colby, 99 U.S. at 565. Cf. California v. San Pablo

and Tulare R.R. Co., 149 U.S. 308, 313 (1893) (defen-

dant’s payment of “the sums sued for in this case, to-

gether with interest, penalties and costs, extin-

guished” “[a]ny obligation of the defendant to pay

the State”). So, for example, a tender that includes the

amount of the plaintiff's claim but not the attorney’s fees

and costs to which the plaintiff is statutorily entitled if

she prevails is insufficient to require dismissal of the

plaintiff's suit. Barron Chiropractic & Rehabilitation,

P.C. v. Norfolk & Dedham Group, 17 N.E.3d 1056, 1064

(Mass. 2014).

Where a plaintiff refuses a tender despite the fact

that it provides her with complete relief, the proper

course is for the defendant to make “payment of the

money into court,” Colby, 99 U.S. at 565, as permitted

by Rule 67 of the Federal Rules of Civil Procedure and

28 U.S.C. § 2041. See 12 CHARLES ALAN WRIGHT &

ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE

§ 2991 (3rd ed. 2014) (explaining that Rule 67 “is use-

ful in cases of tender of an undisputed sum.”).

Such a deposit, after the plaintiff has refused the ten-

der, has the same effect as the defendant’s tender to

10

the plaintiff herself. See, e.g., Rothe Development

Corp. v. Department of Defense, 413 F.3d 1327, 1331-

32 (Fed. Cir. 2005) (to constitute “a valid tender” de-

fendant must either “provid[e] [the plaintiff] with a

check or deposit{] such a check with the court”);

Riley-Stabler Constr. Co. v. Westinghouse Electric

Corp., 396 F.2d 274, 278 (5th Cir. 1968) (stating same).

That is so because a “payment into court in support

of a prior tender” “constitute[s] a final irrevocable

transfer of title to the fund by the party making the

tender, regardless of the outcome of the action and ir-

respective of any acceptance by the party to whom a

tender is made.” WILLISTON, A TREATISE ON THE LAW OF

CONTRACTS § 72:44.

B. In this case, Campbell-Ewald refers throughout

its brief to its Rule 68 offer of judgment and settlement

offer as “tenders.” See, e.g., Pet. Br. 11 (“Campbell-

Ewald made its tender of complete relief before any

class was certified”); id. at 25 (“defendant had already

tendered Plaintiff all the relief he could possibly secure

through this action”). See also Pet. Br. 2, 6, 19, 20, 20 n.

5. That is simply not an accurate characterization. Nei-

ther offer meets the essential elements of a tender.

In both its Rule 68 offer of judgment and its settle-

ment offer, Campbell-Ewald offered to pay Gomez

$1,503 and costs. Gomez v. Campbell-Ewald Co., 2:10-

cv-02007 (C.D. Cal.), docket entry 31 (Rule 68 offer of

judgement) & docket entry 49, exhibit 5 (settlement

offer). But Campbell-Ewald never tendered any money

to Gomez or deposited any money with the district

court in Gomez’s name. Indeed, as Campbell-Ewald ac-

knowledges, “[t]he offers made explicit that Campbell-

Ewald would ‘arrange for prompt payment{,}”” Pet. Br.

7 (quoting settlement offer, p. 2) (emphasis added), they

11

did not include payment. Neither offer, therefore, met

the basic requirement of a tender that “the money

be actually produced and offered to the person who is

entitled to receive it.” Mondello, 148 N.E. at 137.

Both of Campbell-Ewald’s offers also conditioned

payment upon Gomez's acceptance of the offered

amount in full satisfaction of his claim and his agree-

ment to terminate the lawsuit. The Rule 68 offer spec-

ified that “[t]his offer shall be deemed withdrawn

unless written notice of acceptance is received within

fourteen days of service,” and made clear that it was

“intended to fully satisfy the individual claims of

Gomez asserted in this action or which could have

been asserted in this action.” Gomez, 2:10-cv-02007 at

docket entry 31 ¥ 6-7. Similarly, the settlement offer

explicitly conditioned “prompt payment” of the prom-

ised funds on Gomez’s acceptance and stated that

“(t]he offers extended in this letter are intended to

fully satisfy the individual claims of Mr. Gomez or

which could have been made in his suit.” Jd. at docket

entry 49, exhibit 5, p. 2. Because they were condi-

tional, both of Campbell-Ewald’s offers constituted

“offer[s] of settlement,” Poteete, 185 F.3d at 807, rather

than tenders.

In light of these facts, it is passing strange that, in

its brief, Campbell-Ewald relies heavily on this Court's

decision in California v. San Pablo & Tulare R.R.

Co., 149 U.S. 308 (1893), as support for its claim that

its unaccepted Rule 68 offer of judgment and unac-

cepted settlement offer mooted Gomez's claim.

Campbell-Ewald correctly states that San Pablo

stands for the proposition that “a defendant’s tender

of the relief sought eliminates an Article III contro-

versy.” Pet. Br. 16. But the facts of San Pablo, as de-

12

scribed by Campbell-Ewald in its brief, make clear

that neither of Campbell-Ewald’s offers to Gomez

were tenders.

San Pablo involved a suit by the State of Califor-

nia against a railroad company to recover unpaid

taxes. 149 U.S. at 308. As Campbell-Ewald correctly

observes, “[w]hile the case was pending, ‘the defen-

dant offered and tendered to the plaintiff a sum of

money equal to the taxes, penalties, interest, and at-

torney’s fee, to recover which this action was brought,

and costs of suit.”” Pet. Br. 17 (quoting San Pablo, 149

U.S. at 311-12) (emphasis added). After California re-

jected the railroad’s tender, the railroad “deposit(ed]

the money in a bank, which by a statute of the

State ha[d] the same effect as actual payment and re-

ceipt of the money.” San Pablo, 149 U.S. at 314.

Based on that deposit, which functioned as a tender

by operation of state law, this Court held that “[a]ny

obligation of the defendant to pay to the State the

sums sued for in this case, together with interest,

penalties and costs, has been extinguished.” /d. at

313.

In strong contrast, in this case, Campbell-Ewald

never “tendered to the plaintiff’ any money at all, id.

at 311, or deposited the money it admitted it owed to

Gomez with the district court. Therefore, unlike in

San Pablo, Campbell-Ewald did not tender Gomez

Section 1500 of the Civil Code of California at the time

stated: “An obligation for the payment of money is extinguished

by a due offer of payment, if the amount is immediately de-

posited in the name of the creditor, with some bank of deposit

within this State of good repute, and notice thereof is given to

the creditor.” San Pablo, 149 U.S. at 312.

13

complete relief and “[a]ny obligation of the defendant

to pay to the [plaintiff] the sums sued for in this case,”

most certainly was not “extinguished,” id. at 313, by

either Campbell-Ewald’s Rule 68 offer of judgment or

settlement offer.

II. FOR MOOTNESS PURPOSES, AN UNAC-

CEPTED RULE 68 OFFER OF JUDGMENT

OR UNACCEPTED SETTLEMENT OFFER

LEAVES THE PLAINTIFF IN THE SAME PO-

SITION AS BEFORE THE OFFER WAS

MADE.

“A case becomes moot only when it is impossible

for a court to grant ‘any effectual relief whatever to

the prevailing party.’ As long as the parties have a con-

crete interest, however, small, in the outcome of the

litigation, the case is not moot.” Knoa v. Serv. Em-

ployees Int'l Union, 132 S. Ct. 2277, 2287 (2012) (quot-

ing City of Erie v. Pap’s A.M., 529 U.S. 277, 287

(2000)). Because an unaccepted Rule 68 offer leaves

the plaintiff in the same position as before the offer

was made — other than the possibility of costs being

shifted to the plaintiff - an unaccepted Rule 68 offer

has no effect on whether the plaintiff retains a “con-

crete interest in the outcome of the litigation.”

Ibid. °

By its terms, the plain language of Rule 68 makes

clear that an unaccepted offer of judgment does not

permit the district court to enter judgment in the case,

but rather such an offer expires by its own terms and,

thereafter, is a nullity. The Rule permits a defendant

to “offer to allow judgment on specified terms, with

the costs then accrued.” Feb. R. Civ. P. 68(a). If the

plaintiff “serves written notice accepting the offer’

14

within 14 days, “either party may then file the offer

and notice of acceptance” with the court and “[t]he

clerk must then enter judgment.” /bid. If the plaintiff

declines to accept the offer — or if the plaintiff simply

takes no action “within 14 days after being served” -

the “unaccepted offer is considered withdrawn.” Feb.

R. Crv. P. 68(a) & (b).

There is no ambiguity in the Rule. Nothing in Rule

68’s text states or suggests that a district court may

enter judgment based on an unaccepted offer. And,

this Court has previously stated that, in interpreting

Rule 68, the Court should “limit [its] analysis to the

text of the Rule itself.” Delta Air Lines v. August, 450

U.S. 346, 348, 352 (1981) (construing the words “judg-

ment finally obtained by the offeree” in an earlier ver-

sion of Rule 68 as “appl[ying] only to judgments

obtained by the plaintiff,” not to judgments obtained

by a defendant who makes a Rule 68 offer). Indeed,

the language of the Rule is so clear that Campbell-

Ewald does not even cite Rule 68 or discuss the Rule’s

text in its brief, see Pet. Br. xiii (Table of Authorities);

id. 13-22 (Argument), much less attempt to offer an

alternative interpretation of the Rule’s meaning.

The text of Rule 68 also makes clear that the sole

effect of a plaintiffs decision to decline a Rule 68 offer

of judgment is that “[i]f the judgment that the offeree

finally obtains is not more favorable than the unac-

cepted offer, the offeree must pay the costs incurred

after the offer was made.” Feb. R. Civ. P. 68(d). As

this Court has explained, “[i]f a plaintiff chooses to re-

ject a reasonable [Rule 68] offer,” “he [is] not [] al-

lowed to shift the cost of continuing the litigation to

the defendant in the event that his gamble produces

15

an award that is less than or equal to the amount of-

fered.” Delta Air Lines, 450 U.S. at 356. But nothing

in Delta Air Lines or this Court’s other precedent sug-

gests that a court can prohibit a plaintiff from reject-

ing a Rule 68 offer of judgment, even if it constitutes

“a reasonable offer.” bid.

This reading of the Rule 68's operative effect as

limited to “‘sav[ing]’ a defendant from having to reim-

burse the plaintiff for costs incurred after the offer

was made,” id. at 360, is further confirmed by the

Rule’s provision stating that “[e]vidence of an unac-

cepted offer is not admissible,” except for the limited

purpose of “a proceeding to determine costs.” FED. R.

Civ. P. 68(b). This provision — which generally ac-

cords with the evidentiary rule that “offer[s) lof)

valuable consideration to compromise [a] claim”

are inadmissible with regard to a determination of the

merits, Fep. R. or Evip. 408 — strongly suggests that

the limited purpose of the Rule is “to encourage the

settlement of litigation,” Delta Air Lines, 450 U.S. at

352 & n.8 (citing Advisory Committee's Notes on FED.

R. Crv. P. 68, 28 U.S.C. App., p. 499) (emphasis added),

not to allow a defendant to forcibly moot a plaintiff's

case. Thus, because “[e]vidence of an unaccepted

offer is not admissible,” Feb. R. Crv. P. 68(b), a defen-

dant may no more rely on an unaccepted Rule 68 offer

of judgment as a basis to seek dismissal of a plaintiff's

case than it could rely on an unaccepted settlement

offer for that same purpose.

In this case, Campbell-Ewald relied on its unac-

cepted Rule 68 offer of judgment and unaccepted set-

tlement offer as the ground for its motion to dismiss

Gomez's suit for lack of jurisdiction. Gomez, 2:10-cv-

16

02007, docket entry 46 (Def's Memo. in Support of Mo-

tion to Dismiss for Lack of Jurisdiction). The court of

appeals correctly rejected that argument on the basis

that because“[aJn unaccepted Rule 68 offer that

would fully satisfy a plaintiff's claim is insufficient to

render the claim moot{,]’" Gomez, 768 F.3d at 875

(quoting Diaz, 732 F.3d at 950), this case still presents

a live controversy.

Ii. A DEFENDANT WHO WISHES TO MOOT A

PLAINTIFF’S CLAIM CAN EITHER UNCON-

DITIONALLY TENDER COMPLETE RELIEF

OR CONSENT TO A DEFAULT JUDGMENT.

Although an unaccepted Rule 68 offer of judgment

or unaccepted settlement offer is insufficient to moot

a plaintiff's claim, a defendant who wishes to avoid

the risks and expenses associated with continued lit-

igation by making the plaintiff whole still has ample

means to do so.

First, as we have already described, a defendant

can moot a plaintiff's claim by making an uncondi-

tional tender of complete relief. See supra Section I.

In this case, Campbell-Ewald could have sought to

moot Gomez's claim by unconditionally tendering

Gomez a check for $1,503 or by depositing a check for

that amount with the district court. Whether or not

Gomez accepted the tender, Campbell-Ewald could

move under Federal Rule of Civil Procedure 12(b)(1)

to dismiss Gomez's claim on the basis that Gomez no

longer had any “concrete interest. in the outcome

of the litigation,” Knoa, 132 S. Ct. at 2287, such that

his claim was moot. The court would then have had

to determine, as a factual matter, whether “[{a]ny obli-

gation of the defendant to pay to [the plaintiff] the

17

sums sued for , together with interest, penalties

and costs, has been extinguished” such that “the cause

of action has ceased to exist.” San Pablo, 149 U.S. at

313.

Alternatively, as Campbell-Ewald acknowledges,

“‘Ti]t is always open to a defendant to default and suf-

fer judgment to be entered against him without his ad-

mitting anything — if he wants, without even appearing

in the case.” Pet. Br. 24 (quoting Chathas v. Local

134 IBEW, 233 F.3d 508, 512 (7th Cir. 2000)). Like a

tender that fully satisfies the plaintiffs claims, where

“the defendant has thrown in the towel there is

nothing left for the district court to do except enter

judgment.” Chathas, 233 F.3d at 512. Accord Mc-

Cauley v. Trans Union, LLC, 402 F.3d 340, 342 (2d

Cir. 2005) (stating that a default judgment “would re-

move any live controversy from th[e] case and render

it moot”). Notably, a default judgment does not ordi-

narily have issue-preclusive effect in similar future

cases against the defendant by other plaintiffs be-

cause the merits have not been “‘actually litigated and

determined.” Arizona v. California, 530 U.S. 392,

414 (2000) (quoting 1 RESTATEMENT (SECOND) OF JUDG-

MENTS § 27, at 250 (1982)). See also 1 RESTATEMENT

(SECOND) OF JUDGMENTS § 27 cmt. e, at 257 (explaining

that, “[i]Jn the case of a judgment entered by de-

fault,” issue preclusion does not apply absent an

agreement to the contrary).

Campbell-Ewald suggests that “an offer of com-

plete relief puts the plaintiff in a far better position

than a default” because “[i]t grants him all the relief

he seeks without having to worry about spending time

and resources chasing after a defendant that has de-

18

faulted in order to secure any meaningful relief at all.”

Pet. Br. 24. Even assuming this is true — and there are

countervailing considerations since when a default

judgment is entered, unlike a Rule 68 offer, the extent

of damages is determined at the plaintiff's initiative,

see FED. R. Civ. P. 55(b) — Campbell-Ewald’s sugges-

tion has no bearing on Article III mootness. A default

judgment is a final judgment on the merits that ends

the case, whereas a Rule 68 offer remains just that —

an offer that only has effect if it is accepted by the

plaintiff within the time period and in the manner set

forth in the Rule.

CONCLUSION

The Court should affirm the judgment of the court

of appeals.

Respectfully submitted,

LYNN K. RHINEHART

HAROLD C. BECKER

JAMES B. CoPPESS

MATTHEW J. GINSBURG

Counsel of Record

815 Sixteenth Street, NW

Washington, DC 20006

(202) 637-5397