District Court (Cal.) Takes Campbell-Ewald to the Next Step; Grants TCPA Class Plaintiffs’ Motion to Declare Rule 68 Offer Invalid

The Court finds that the individual plaintiffs could not accept the Offer without jeopardizing their duty to the putative class. In not accepting the $100,000 per plaintiff offer, the individual plaintiffs placed the interests of the putative class ahead of their personal interests, just as Rule 23 envisions. Individual plaintiffs simply complied with their duty under Rule 23(a)(4) by “fairly and adequately protect[ing] the interests of the class.” To subject such plaintiffs to personal liability for defendants’ post-offer costs would be unjust, especially given the restrictions on a class representative’s freedom to accept “a favorable settlement of his individual claim.” Johnson, 276 F.R.D. at 336. Perhaps more importantly, it would also run contrary to Rule 23’s policy of encouraging class representatives to protect putative class interests. Therefore, the Court finds that the Offer here runs contrary to the purpose of Rule 23 and is ineffective for the purposes of Rule 68(d) cost-shifting. . .

Defendants further argue that plaintiffs’ motion is premature because defendants have not brought a motion for costs under Rule 68(d). The Court disagrees. As discussed above, a pre-certification offer can have an “immediate adverse impact” on individual plaintiffs. See Johnson 276 F.R.D. at 335 (D. Minn. 2011). For example, each time plaintiffs move “the litigation forward on behalf of the class, the cost-shifting risk to Plaintiff individually ratchets up, thus disincentivizing Plaintiff from acting in the best interest of the class.” Id. Federal courts have found this issue ripe for adjudication even where defendants have not brought a Rule 68(d) motion because the existence of the offer creates a “current and meaningful legal dispute arising from the conflict of interests caused by the Rule 68 offer.” Id.; See also Lamberson v. Financial Crimes Services, 2011 WL 1990450 at *5 (finding that “a precertification offer of judgment has significant ramifications in a putative class action, long before a defendant seeks costs under Rule 68(d)”); Mavris, 303 F.R.D. at 566. This Court concurs and finds the matter ripe for adjudication.