United States District Court, N.D. California
Lynn Slovin, Samuel Katz and Jeffery Price, individually and on behalf of all others similarly situated, Plaintiffs,
Sunrun, Inc., Clean Energy Experts, LLC, dba Solar America, and Does 1 through 5, Defendants.
ORDER GRANTING MOTION TO DECLARE INEFFECTIVE
DEFENDANTS' OFFER OF JUDGMENT DKT. NO. 89
GONZALEZ ROGERS UNITED STATES DISTRICT COURT JUDGE.
Lynn Slovin, Samuel Katz, Jeffery Price, and Justin Birkhofer
bring this putative class action alleging willful violations
of the Telephone Consumer Protection Act, 47 U.S.C. 227 (the
“TCPA”). (Dkt. No. 46.) Plaintiffs seek to
represent a putative class of individuals who received
unwanted calls from defendants SunRun, Inc. and Clean Energy
Experts, LLC, dba Solar America, allegedly in violation of
before the Court is plaintiffs' motion to declare
ineffective defendants' offer for judgment. (Dkt. No.
Having carefully considered the pleadings and the papers
submitted on this motion, and for the reasons set forth
below, plaintiffs' motion is Granted.
Relevant Factual Background
March 21, 2017, defendants made an offer of judgment pursuant
to Federal Rule of Civil Procedure 68 to each individual
plaintiff for $100, 000 apiece, “costs and prejudgment
interest now accrued, ” and “an injunction . . .
prohibiting Defendants and their officers and employees from
calling Plaintiffs without their prior express consent . . .
.” (the “Offer”). (Dkt. No. 89-2.) The
Offer was contingent on acceptance by all four individual
plaintiffs. (Id.) Plaintiffs did not accept the
Offer and “allowed the time to accept [the Offer to]
expire.” (Opposition at 5.)
Federal Rule of Civil Procedure 68
Federal Rule of Civil Procedure 68(a), a defendant may
“serve on an opposing party an offer to allow judgment
on specific terms, with the costs than accrued.” If the
offer is not accepted within 14 days the “unaccepted
offer is considered withdrawn, but it does not preclude a
later offer.” Fed.R.Civ.P. 68(b). If the ultimate
judgment that the “offeree finally obtains is not more
favorable than the unaccepted offer, the offered must pay the
costs incurred after the offer was made.” Fed.R.Civ.P.
“plain purpose of Rule 68 is to encourage settlement
and avoid litigation.” Marek v. Chesny, 473
U.S. 1 (1985) (citing Rules of Civil Procedure, Report of
Proposed Amendments, 5 F.R.D. 433, 483 n. 1 (1946)); see
also 12 Charles Allan Wright, Arthur R. Miller, et
al. § 3001 Fed. Prac. & Proc. Civ.
§ 3001 (2d ed. 2017) (explaining that “Rule 68 was
intended to encourage settlements and avoid protracted
litigation” and “the general principle [behind
Rule 68 is] that even a prevailing party could be denied
costs for persisting vexatiously after refusing an offer of
settlement . . . .”). The Supreme Court has explained
that Rule 68 seeks to achieve this purpose by
“prompt[ing] both parties to a suit to evaluate the
risks and costs of litigation, and to balance them against
the likelihood of success upon trial on the merits.”
Id.; See also Mavris v. RSI Enterprises
Inc., 303 F.R.D. 561, 562-63 (D. Ariz. 2014) (noting
that Rule 68 seeks to encourage “plaintiffs to accept
reasonable settlement offers rather than forcing defendants
through the expensive process of going to trial”).
Federal courts apply Rule 68(d)'s cost-shifting
provisions so long as the offer is made in “good
faith.” See Gay v. Waiters' and Dairy
Lunchmen's Union Local No. 30, 86 F.R.D. 500, 502
(N.D. Cal. 1980); Scheriff v. Beck, 452 F.Supp. 1254
(D. Colo. 1978); Dual v. Cleland, 79 F.R.D. 696
(D.D.C. 1978); Mr. Hanger, Inc. v. Cut Rate Plastic
Hangers, Inc., 63 F.R.D. 607 (E.D.N.Y. 1974).
“Some courts therefore have suggested that offers that
in form satisfied the rule might nevertheless be denied the
Rule 68 cost-shifting consequences because they were sham or
were made in bad faith.” 12 Charles Allan Wright,
Arthur R. Miller, et al., Fed. Prac. & Proc.
Civ. § 3002.1 (2d ed. 2017) (citing Gay,
86 F.R.D. at 502).
Federal Rule of Civil Procedure 23
to Federal Rule of Civil Procedure 23(a) “. . .[o]ne or
more members of a class may sue or be sued as representative
parties on behalf of all members . . . .” The class
action mechanism serves two primarily purposes. First, class
actions “promote ‘efficiency and economy of
litigation.'” In re Wells Fargo Home Mortg.
Overtime Pay Litig., 571 F.3d 953, 958 (9th Cir. 2009)
(quoting Am. Pipe & Constr. Co. v. Utah, 414
U.S. 538, 553 (1974)). Second, class actions “overcome
the problem that small recoveries do not provide the
incentive for any individual to bring a solo action
prosecuting his or her rights.” Amchem Prods., Inc.
v. Windsor, 521 U.S. 591, 617 (1997).
a class action may proceed the putative class must be
certified by a federal judge. See Fed. R. Civ. P.
23(a), (c)(1). The certification process first requires an
individual class representative to file a complaint that
raises claims on behalf of a group of similarly situated
persons. Fed R. Civ. P. 23(c)(1)(A). Thereafter the class
representatives may seek certification of the class under the
provisions of Rule 23. Id. The named plaintiffs bear
the responsibility to “represent the collective
interests of the putative class.” Deposit Guar.
Nat. Bank, Jackson, Miss. v. Roper, 445 U.S. 326, 331
(1980). Class representatives owe a duty to the putative
class to “prosecute the action vigorously on behalf of
the class.” Staton v. Boeing, 327 F.3d 938,
957 (9th Cir. 2003). As a “result of the special
obligations inherent in the role of class representative, the
plaintiff forgoes some ability to dispose of his individual
claim that an ordinary litigant enjoys.” Johnson v.
U.S. Bank Nat'l Ass'n, 276 F.R.D. 330, 336 (D.
argue that the Offer should be declared ineffective because
applying the Rule 68(d) cost-shifting mechanism to this case
would be contrary the purposes of Rules 23 and Rule
Defendants counter that (1) the Supreme Court's recent
holding in Campbell-Ewald Co. v. Gomez, 136 S.Ct.
663, 670 (2016), eliminates any potential conflict between
the two rules, (2) no authority exists for the relief
plaintiffs seek ...