Rule 68 Decisions Bolster Second Circuit's Latest Reversal
Citing the U.S. Supreme Court and its own decisions, the panel Monday again sent back down a suit Southern District Judge Katherine Forrest has twice now attempted to close out.
April 09, 2018 at 01:41 PM
3 minute read
The U.S. Court of Appeals for the Second Circuit again revived an attempted class action suit that U.S. District Judge Katherine Forrest of the Southern District of New York has tried to close out twice now, most recently by entering judgment on a Rule 68 settlement offered by the defendants in Franco v. Allied Interstate.
On Monday, the panel of Second Circuit Judges Rosemary Pooler, Reena Raggi and Christopher Droney, armed with two recent decisions, vacated and remanded the suit back to Forrest via a summary judgment. The district judge had initially dismissed the amended complaint in the action over alleged violations of the Fair Debt Collection Practices Act. Gilberto Franco had sued Allied Interstate in 2013 over claims mailed to him by the company that warned debtors of a 15 percent pay garnishment, despite the FDCPA allowing the garnishment on disposable income.
When Franco attempted to bring a class suit, Allied Interstate said it was willing to pay $1,501, plus reasonable attorney fees and costs, pursuant to federal civil procedure rules—the most Franco was eligible for under the statute, as he sought no actual damages.
Forrest granted the dismissal—which also signaled the end of Franco's class certification—but the circuit reversed, finding that an unaccepted Rule 68 offer could not moot a claim in the absence of judgment. With judgment being the key, Allied Interstate sought judgment against it under Rule 54(b) in the case under virtually the same terms, which Forrest granted.
Armed with the U.S. Supreme Court's 2016 decision in Campbell-Ewald v. Gomez, as well as its own elaboration on the issue in last year's Geismann v. ZocDoc, the panel Monday reversed again, as an unaccepted Rule 68 offer doesn't moot a claim even if the court enters judgment in favor of the plaintiff at the defendant's bidding.
The panel also took up Franco's class certification issue. Despite Allied Interstate's arguments to the contrary, the panel noted that the “sole ground for the denial of class certification was vacated” by the previous decision. Forrest had noted then that class certification was revived. So, too, with the revival of Franco's individual claims comes the revival of the class issue.
Reed Smith partner Casey Laffey continued to represent Allied Interstate on appeal. He did not respond to a request for comment.
Stern Thomasson name attorney Andrew Thomasson was counsel for Franco. He likewise did not respond to a request for comment.
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