What are the consequences of an unaccepted off of judgment?
In Tansai v. New Alliance Bank, the Second Circuit definitively addressed the issue of whether an unaccepted Rule 68 offer of judgment moots a case. Tansai v. New Alliance Bank, 2015 U.S. App. LEXIS 7932 (2d Cir. 2015).
After recognizing that courts of appeal are split on this question and that it has “not always been entirely clear on this subject,” the Second Circuit explicitly stated its position. An unaccepted offer of judgment does not moot a case: “[I]t remains the established law of this Circuit that a ‘rejected settlement offer [under Rule 68], by itself, [cannot render] moot [a] case.” Id. at *11 (quoting McCaulley v. Trans Union, LLC, 402 F.3d at 342 (2d Cir. 2005).
It is only when a court enters judgment is a case moot. But the Second Circuit cautioned district courts should only do so under one of two circumstances: if the parties agree that a judgment should be entered, or a defendant “unconditionally surrenders . . . [such that] only the plaintiff’s obstinacy or madness prevents her from accepting total victory.” (quoting Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1536 (2013) (Kagan, J., dissenting)).
Offers of judgment are a common tool employers use to stop a putative class action before it is certified as a class action. This decision sharply limits that strategy.