United States District Court, W.D. Pennsylvania
DALE A. KAYMARK, individually and on behalf of other similarly situated current and former homeowners in Pennsylvania, Plaintiffs,
UDREN LAW OFFICES, P.C., Defendant.
Bissoon United States District Judge
Cynthia Reed Eddy United States Magistrate Judge
before the Court is Plaintiff's motion to strike a Rule
68 offer of judgment made by Defendant on February 17, 2017.
(ECF Nos. 105, 106). The Rule 68 offer was made to both
Plaintiff and the putative class. Plaintiff filed this motion
fourteen days after the offer was made, which under Rule 68
is the final date that he could have accepted it.
Fed.R.Civ.P. 68. Defendant filed a brief in opposition to the
motion on March 9, 2017. (ECF No. 110). For the reasons that
follow, Plaintiff's motion will be denied.
motion, Plaintiff complains that Defendant inappropriately
made this offer before class certification, and that it is
incompatible with Rule 23. The Court notes that these policy
concerns are legitimate, as explained in Wright & Miller:
There is much force to the contention that, as a matter of
policy, the rule should not be employed in class actions.
Class actions can only be settled with the approval of the
court, and the judge is not required to acquiesce in the
desire of the class representative that the case be settled.
Thus, if Rule 68 is generally intended to galvanize
plaintiffs to settle cases or face adverse consequences if
they do not, it would not seem to work in class actions
because plaintiffs do not have unfettered power to do so. In
addition, the potential coercive impact of the rule on the
class representative could create a conflict of interest for
him or her since possible personal responsibility for
defendant's costs for a full class action may be far out
of proportion to the class representative's stake in a
possible individual recovery. Even the court would then be
hamstrung in proceeding by the need to consider the propriety
of class treatment as well as the reasonableness of the
settlement proposal. … Concerns of this character have
prompted reformers to propose excluding class actions
explicitly from the operation of Rule 68.
12 Charles Alan Wright & Arthur R. Miller, Fed. Prac.
& Proc. Civ. § 3001.1 (2d ed.) (footnotes omitted).
it is beyond this Court's function to decide matters
based solely on policy concerns, and Plaintiff has failed to
establish that the Court can strike Defendant's Rule 68
offer of judgment:
Despite these concerns, there is little authority for
invalidating Rule 68 in class actions. Rule 68 is designed to
insulate defendants willing to consent to judgment against
incurring the costs of further litigation, and there appears
no indication that protection should be denied defendants in
class actions, much as Rule 68's provisions fit poorly in
the class action context. Since the Supreme Court held Rule
68 inapplicable in cases in which the defendant prevails, the
risk that defendants will make minimal offers in class
actions in order to gain the advantages of Rule 68 does not
exist, and the rule provides at least some incentive for
defendants in those cases to make reasonable and substantial
offers. Settlement is not generically undesirable in class
actions, even though subject to court control, so Rule
68's inducement to defendants to make substantial offers
should apply in such cases. There is even some indication
that the Supreme Court would disapprove any effort to treat
class actions differently for Rule 68 purposes. Accordingly,
much as some policy issues might counsel creation of an
exception to Rule 68 for class actions, the reality is that
there presently is no such exception, and Rule 68 offers have
been employed in class actions.
Id. (footnotes omitted); see also Weiss v. Regal
Collections, 385 F.3d 337, 444 n. 12 (3d Cir. 2004),
abrogated on other grounds by Campbell-Ewald Co. v.
Gomez, 136 S.Ct. 663 (2016) (noting that although courts
“have wrestled with the application of Rule 68 in the
class action context, ” there is “[n]o express
statement limit[ing] the application of Fed.R.Civ.P. 68 in
class actions, ” and that proposed amendments to make
Rule 68 inapplicable to class actions have been rejected
that this case is now limited to a single FDCPA claim against
a single defendant, the maximum amount of damages available
to the putative class is the lesser of $500, 000 or 1% of
Defendant's net worth. 15 U.S.C. § 1692k(a)(2)(B).
This is true whether the putative class consists of 100 class
members or 100, 000 class members. This was discussed
extensively with the parties at the Case Management
Conference, although the attorney who filed the pending
motion did not attend said conference. In crafting the Case
Management Order in this case, the Court took into account
the parties' mutual desire to focus on the issue of
Defendant's net worth in an attempt to resolve this case.
See (ECF No. 101 at ¶ 3).
such, the Court disagrees with Plaintiff that Defendant's
offer “serves no valid purpose.” “The plain
purpose of Rule 68 is to encourage settlement and avoid
litigation.” Marek v. Chesny, 473 U.S. 1, 5
(1985). Defendant is willing to settle this case for what it
believes is the maximum amount that Plaintiff and the
putative class could recover based on its calculation of its
net worth, which, as discussed in the preceding paragraph, is
not impacted by the potential size of the class. Thus, under
the circumstances of this case, Plaintiff's concern that
he has “no information about the class and has had no
opportunity to develop those facts” is overstated.
Further, based on the Court's discussions with the
parties and in consideration of Defendant's response in
opposition to the motion, the Court rejects Plaintiff's
suggestion that Defendant's offer was frivolous.
Defendant understandably does not want to continue incurring
defense costs or be liable for a “runaway train”
of the other side's attorney's fees in a case that it
believes should be settled without any further litigation for
an amount that it believes is the maximum potential recovery.
(ECF No. 110 at 3). As Defendant notes, Plaintiff is
certainly free to reject this offer and pursue an alternative
calculation of Defendant's net worth; but if Plaintiff
chooses to go down this path, he cannot avoid the risk
specifically envisioned by Rule 68.
from the fact that Defendant did not file the Rule 68 offer
of judgment on the docket and therefore there is nothing for
the Court to strike, Plaintiff has provided no legal basis
for this Court to grant his motion to strike. As a result, it
is hereby ORDERED that Plaintiff's motion to strike
Defendant's Rule 68 Offer of Judgment (ECF No. 105) is
DENIED. Additionally, for the reasons stated in
Defendant's brief in opposition, it is further ORDERED
that the Clerk of Court remove Plaintiff's motion to
strike, brief in support thereof, and the attached exhibit of
Defendant's Rule 68 offer of judgment (ECF Nos. 105, 106,
106-1) from public view.
although this is not technically a discovery dispute, the
parties are hereby reminded of the Court's prior
instructions that they must first meet and confer regarding
any discovery disputes before involving the Court, and that
if the issue remains after meeting and conferring, they must
contact the law clerk to arrange a ...